Foreign and Commonwealth Office Winter
Supplementary Estimate 2008-09 Memorandum
INTRODUCTION
1. The Foreign and Commonwealth Office Estimate
has two Requests for Resources (RfRs):
— RfR 1: Promoting internationally the
interests of the UK and contributing to a strong world community,
that covers: — Section A: Expenditure by the Foreign and
Commonwealth Office (FCO), including UK Trade and Investment,
on its administration, FCO Services, Wilton Park Executive Agency,
hospitality and facilities; international organisations; grants
in aid to bodies supporting FCO objectives; scholarships, information
services and sponsored visits; special payments and assistance
programmes to support foreign policy objectives including human
rights, good governance, international security and the fight
against the illicit drug trade; and international organisations;
and on associated non-cash items;
— Sections B and C: Resource grant in aid to
the BBC World Service for broadcasting and to the British Council,
respectively;
— Sections D and E: Capital grant in aid
to the BBC World Service for broadcasting and to the British Council,
respectively;
— Section F: AME Provision for impairments;
and
— Section G: The refund of certain taxes
and duties paid by certain Foreign and Commonwealth governments.
— RfR 2: Conflict prevention, that covers:
— Section A: Expenditure by the Foreign
and Commonwealth Office on conflict prevention, early warning,
crisis management, conflict resolution/peacemaking in Sub-Saharan
Africa;
— Section B: Expenditure by the Foreign
and Commonwealth Office on conflict prevention, early warning,
crisis management, conflict resolution/peacemaking globally;
— Section C: Peacekeeping and peace building
activity and on associated strengthening of international and
regional systems and capacity in Sub-Saharan Africa;
— Section D: Peacekeeping and peace building
activity and on associated strengthening of international and
regional systems and capacity globally; and
— Section E: Provision of specialist, targeted
assistance in countries emerging from violent conflict.
RFR1 WINTER
SUPPLEMENTARY ESTIMATES
CHANGES
Machinery of Government Changes
2. Transfer of £326,200,000 of
other current provision and appropriations-in-aid in respect of
the UKBA International Group (formally known as UK Visas) to the
UK Borders Agency of the Home Office that took effect on 1 April
2008. We have not yet moved any balance sheet items, these are
to be discussed further in time for inclusion in the Spring Supplementary
round.
MACHINERY OF GOVERNMENT CHANGES £m
| Description | RfR: section
| Date of transfer | Amount £000
| Transferring Dep | Receiving Dept
|
| Transfer of programme expenditure | RfR1: A2
| 01/04/2008 | 326,200 | FCO
| Home Office |
| Transfer of appropriations-in-aid | RfR1: A5
| 01/04/2008 | 326,200 | FCO
| Home Office |
Take up of Departmental Unallocated Provision
3. We have taken up all of our £17,000,000 administration
DUP to offset adverse exchange rate movements.
Transfers of Budgetary Cover
4. Transfers of budgetary cover include:
— Transfer of £5,000,000 from the Home Office
for work on supporting managed migration to the UK.
— Transfer of £4,000,000 other current from DFID
in respect of the Returns and Reintegration Fund to increase the
number of foreign national prisoners and failed asylum seekers
who return to their countries of origin and to ensure that those
who return voluntarily are effectively re-integrated.
— Transfer of £11,000 from the Cabinet Office
in respect of legal work undertaken by the Office of the Parliamentary
Counsel.
— Transfer of £2,800,000 to MOD for counter-narcotics
work in Afghanistan.
— Transfer of £400,000 other current to the
Security and Intelligence Agencies for expansion and capability.
— Transfer of £45,000 to the Office of Government
Commerce for our contribution towards the Centre of Expertise
in Sustainable Procurement.
— Transfer of £40,000 to Cabinet Office for
the Government Secure Zone.
— Transfer from British Council of £40,000 to
Cabinet Office for the Government Secure Zone.
5. No FCO activities are expected to be reduced as a
result of the above transfers. Transfers between government departments
such as these are a routine occurrence and are therefore incorporated
in the normal budgeting process.
Neutral and Other Changes
6. The following minor internal transfers are budget
neutral and essentially arise from the need to align the Estimate
with internal budget allocations:
— We have transferred £43,000 other current
expenditure to bring the BBC World Service's grant in aid in line
with agreed allocations.
— We have transferred £3,000 other current expenditure
to bring the British Council's grant in aid in line with agreed
allocations.
— We have transferred £200,000 to bring the
British Council's capital grants in line with agreed allocations.
— We have transferred £4,710,000 from capital
to capital grants for contributions to UN and NATO capital projects.
7. We have increased capital expenditure of £42,000,000 fully
offset by non-operating income from asset sales, this includes
the sale of the Madrid Embassy. The increase in capital expenditure
is not linked to individual programmes and/or projects. Rather
we have assessed the expected overall level of capital expenditure
across all FCO capital budget holders, and anticipated the total
demand for funds.
RFR2 WINTER
SUPPLEMENTARY ESTIMATES
CHANGES
Claims on the DEL Reserve
8. Claims on the DEL reserve will be used to meet the
UK's share of assessed (obligatory) costs for UN, EU and OSCE
peacekeeping operations and the secondments of UK military, policing
and civilian personnel to a range of international peacekeeping
operations. We intend to make a further claim for the balance
in the Spring Supplementary Estimate. The claim on the reserve
is comprised of:
— £100,000,000 programme expenditure for peacekeeping
activities in Africa. — £31,300,000 programme
expenditure for peacekeeping activities in the rest of the world.
Transfers of Budgetary Cover
9. Transfers of budgetary cover include: — Transfer
of £16,000,000 from MOD for the 2nd tranche of Stabilisation
Aid Fund (SAF) for work in Afghanistan.
— Transfer of £2,400,000 to MOD in respect of
global peacekeeping activities in the Balkans.
— Transfer of £738,000 to DFID for SAF managed
job slots in Afghanistan which assist with management of several
SAF projects.
10. As with the RfR1 transfers no FCO activities
are expected to be reduced as a result of the above transfers.
Transfers between government departments such as these are a routine
occurrence and are therefore incorporated in the normal budgeting
process.
Table 1
DETAILED EXPLANATION OF CHANGES
Machinery of Government Changes
|
| |
| 0.000 | RfR1 | Section A2 and A5 MoG transfer of £326.200 programme and appropriations-in-aid to Home Office for UKBA International Group
|
Transfers from non-voted Departmental Unallocated Provision
| | |
| 17.000 | RfR1 | Section A1 take-up administration DUP to offset adverse exchange rate movements
|
Transfers between sections within the Estimate
| | |
| 4.710 | RfR1 | Section A3 increase in capital grants from Section A7 for UN and NATO capital projects
|
| 0.200 | RfR1 | Section A7 increase from Section E3 to align British Council's capital grants
|
| 0.043 | RfR1 | Section B2 increase from Section A2 to align BBC World Service's, grant-in-aid
|
| 0.003 | RfR1 | Section C2 increase from Section A2 to align British Council's, grant-in-aid
|
Transfers from Other Government Departments
| | |
| 16.000 | RfR2 | Section E3 programme transfer from MOD for Stabilisation Aid Fund
|
| 5.000 | RfR1 | Section A2 programme transfer from Home Office for work on migration
|
| 4.000 | RfR1 | Section A2 programme transfer from DFID for Returns and Reintegration Fund
|
| 0.011 | RfR1 | Section A1 administration transfer from Cabinet Office for Office of Parliamentary Counsel legal work
|
| 25.011 | Resource Total Change to DEL
|
Transfers to Other Government Departments
| | |
| -2.800 | RfR1 | Section A2 programme transfer to MOD for counter-narcotics work in Afghanistan
|
| -2.400 | RfR2 | Section D3 programme transfer to MOD for planned Global peacekeeping activities
|
| -0.738 | RfR2 | Section E3 programme transfer to DFID for management of Stabilisation Aid Fund projects in Afghanistan
|
| -0.400 | RfR1 | Section A2 programme transfer to the Security and Intelligence Agencies for expansion and capability
|
| -0.045 | RfR1 | Section A1 administration transfer to the Office of Government Commerce for sustainable procurement
|
| -0.040 | RfR1 | Section A2 programme transfer to Cabinet Office for Government Secure Zone
|
| -0.040 | RfR1 | Section C2 programme transfer from British Council to Cabinet Office for Government Secure Zone
|
| -6.463 | Resource Total Change to DEL
|
Transfers from Central Funds
|
| |
| 100.000 | RfR2 | Section C3 Resource Reserve claim for peacekeeping funds for Africa
|
| 31.300 | RfR2 | Section D3 Resource Reserve claim for peacekeeping funds for rest of the world
|
| 131.300 | Resource Total Change to DEL
|
Increases in gross spending offset by Appropriations in Aid
| | |
| 42.000 | RfR1 | Section A7 increase in capital offset by Section A8 increase in non-operating appropriations in aid
|
149.848 | Net total change to Resource DEL
|
| |
|
DEPARTMENTAL EXPENDITURE
LIMIT (DEL) AND
ADMINISTRATION BUDGETS
11. The tables below show a comparison of the 2008-09 DEL
(Table 2 and 2a) and Administration (Table 3) budgets with
the 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 and 2007-08 outturn,
the forecast for 2008-09 and plans for 2009-10 and 2010-11.
12. Table 2a shows outturn on the definition of DEL used in
the year concerned in order to be consistent with published Departmental
Expenditure Limits. They do not therefore correspond to the outturns
in Table 2 that are on a consistent basis year on year, including
reclassification by Treasury of expenditure across all years of
the Public Expenditure cycle.
Table 2
DEL COMPARISON
£m
| |
| | | |
| | | |
| 2002-03 | 2003-04
| 2004-05 | 2005-06
| 2006-07 | 2007-08
| 2008-09 | 2009-10
| 2010-11 |
| Actual | Actual
| Actual | Actual
| Actual | Actual
| Forecast | Plans
| Plans |
Resource
DEL1, 2 | 1,477.982
| 1,511.272 | 1,710.233 | 1,876.593
| 1,827.287 | 1,895.961 | 1,979.547
| 1,609.934 | 1,617,903 |
| Capital DEL | 102.021 | 86.671
| 116.676 | 131.842 | 160.314
| 226.377 | 206.060 | 216.060
| 205.060 |
| Less Depreciation1, 3 | 67.122
| 64.060 | 67.156
| 108.725 | 81.555
| 73.220 | 105.050
| 103.050 | 100.050
|
| Total | 1,512.881 | 1,533.883
| 1,759.753 | 1,899.710 | 1,906.046
| 2,049.118 | 2,080,557 | 1,722,944
| 1,722,913 |
1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
| | | |
| | | |
| |
| 2 Resource DEL figures for 2009-10 onwards are understated because they do not include all of the conflict prevention expenditure, which will be transferred at the time of the relevant Main and Supplementary Estimates. In addition 2005-06 included expenditure on a number of one off items (Tsunami expenditure, Efficiency Challenge Fund & G8 & EU presidencies).
| | | |
| | | |
| |
| 3 Depreciation, which forms part of Resource DEL, is excluded from the total DEL, since Capital DEL includes the purchase cost of capital assets. To add on the depreciation of those assets would double count their cost.
| | | |
| | | |
| |
| | |
| | |
| | | |
Table 2a
PREVIOUS YEARS' EXPENDITURE AGAINST DEPARTMENTAL EXPENDITURE
LIMITS
£m
| |
| | | |
| Year | Voted |
Non-voted | Total DEL
| Outturn1 | Variance
|
| Resource | |
| | | |
2004-05
| 1,607.192 |
209.690 | 1,816.882 | 1,736.188
| 80.694 |
2005-06
| 1,999.224 |
6.713 | 2,005.937 | 1,916.190
| 89.747 |
2006-07
| 1,924.913 |
44.213 | 1,969.126 | 1,852.024
| 117.102 |
Final outturn 2007-08
| 1,950.523
| 5.862 | 1,956.385 | 1,895.961
| 60.424 |
| | |
| | |
| Capital | | |
| | |
2004-05
| 101.533 | 1.000
| 102.533 | 71.236 | 31.297
|
2005-06
| 135.697 | 1.000
| 136.697 | 92.959 | 43.738
|
2006-07
| 157.779 | 1.000
| 158.779 | 160.747 | -1.968
|
Final outturn 2007-08
| 243.567
| — | 243.567 | 227.973
| 15.594 |
1 Outturn is based on the definition of DEL in the relevant year and so is not consistent with the outturn in Table 2 that includes subsequent classification changes effective across all years.
| | | |
| |
| | |
| | |
Table 3
ADMINISTRATION BUDGET COMPARISON
£m
| |
| | | |
| | | |
| 2002-03 | 2003-04
| 2004-05 | 2005-06
| 2006-07 | 2007-08
| 2008-09 | 2009-10
| 2010-11 |
| Actual | Actual
| Actual | Actual
| Actual | Actual
| Forecast | Plans
| Plans |
| Administration budget | 353.296
| 375.961 | 405.495 | 399.931
| 393.201 | 367.508 | 430.535
| 420,513 | 411.482 |
1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
| | | |
| | | |
| |
| | |
| | |
| | | |
DEPARTMENTAL UNALLOCATED
PROVISION (DUP) 2008-09
13. All FCO provision has been allocated in the Winter
Supplementary Estimate.
Table 4
2008-09 DEPARTMENTAL UNALLOCATED PROVISION
| Resource | Capital
|
RfR1 DUP to meet unforeseen
requirements arising in-year
| £0.0m | £0.0m |
| Total | £0.0m | £0.0m
|
| |
|
14. We have taken up £17,000,000 DUP to offset adverse
exchange rate movements.
END YEAR
FLEXIBILITY (EYF)
15. The Public Expenditure Outturn White Paper published
in July 2008 showed a total figure of £171.931 million
for carry forward of underspend into 2008-09 under the DEL
EYF scheme.
16. We have not taken up any EFY. In the Spring Supplementary
Estimate we may take up resource EYF for restructuring and to
offset adverse exchange rate movements, and capital EYF for our
ongoing programme to increase the security and safety of our Estate
and the people using it.
Table 5
ACCUMULATION OF EYF
£m
| |
| | | |
|
| Administration | Programme
| Total
Resource | Of
which
near
cash
| Capital | Total |
| Total FCO EYF Entitlement in Public Expenditure Provisional Outturn July 2008 (table 6—Cm 7419)
| 58.559 | 6.538 | 155.097
| 120.383 | 16.834 | 171.931
|
| EYF drawn down in Winter Supplementary | —
| — | — | —
| — | — |
| BALANCE OF ACCUMULATED END YEAR FLEXIBILITY GOING INTO 2008-09
| 58.559 | 96.538 | 155.097
| 120.383 | 16.834 | 171.931
|
| |
| | | |
|
PUBLIC SERVICE
AGREEMENTS
17. The bulk of the increase in expenditure in this Supplementary
Estimate is take-up monies for peacekeeping to further the conflict
reduction PSA on which we are the lead department. We have increased
capital expenditure by £42 million fully offset by appropriations-in-aid
as part of our ongoing programme to increase the security and
safety of our Estate and the people using it. This up-take of
EYF is designed therefore to improve delivery against all of the
FCO's Departmental Strategic Objectives and PSA targets. We have
also had transferred in amounts of £5 million from the
Home Office and £4 million from DFID to facilitate work
in furtherance of the shared migration PSA.
IFRS TRIGGER POINT
1
18. In view of the uncertainty in forecasting the value
of open contracts as at 31 March, the HMT Spending Team agreed
that the FCO should defer making its estimation of the impact
of IFRS on FCO budget, in particular the impact on budget of FRS26 in
respect of Financial Instruments Measurement, until the Spring
Supplementary Estimate.
Keith Luck
Director General Finance
10 November 2008
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