Foreign and Commonwealth Office Main Estimate
2009-10 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;
— Section B: Peacekeeping and peace building
activity and on associated strengthening of international and
regional systems and capacity; and
— Section C: Provision of specialist, targeted
assistance in countries emerging from violent conflict.
RFR1 MAIN
ESTIMATES CHANGES
Machinery of Government transfer of the Science
and Innovation Network to DIUS
2. There is a machinery of Government change
comprising of £150,000 administration costs transfer to DIUS
in respect of running the overseas elements of the Science and
Innovation Network.
Budget cover transfers
3. There is a £1,122,000 transfer of other
current from DIUS offset by a transfer of £500,000 other
current to DIUS as part of the re-allocation of responsibilities
for the Science and Innovation Network that were not included
in the Machinery of Government change as they do not cover permanent
staff transfers; a £500,000 transfer of other current from
MOD for the Foreign Secretary's overseas travel costs; a £45,000
transfer of administration to the Office of Government Commerce
for Sustainable Procurement; a £40,000 transfer of other
current to the Cabinet Office for the Government Secure Zone;
a £40,000 transfer on behalf of the British Council of other
current to the Cabinet Office for the Government Secure Zone and
a £18,000 transfer of administration to DIUS for the FCO's
contribution to the Skill's Strategy.
RFR2 MAIN
ESTIMATES CHANGES
4. As discussed in previous correspondence
with the FAC we have updated the sub-head structure of RfR2 to
reflect the merger of the Global and Africa Conflict Prevention
Pools and the Peacekeeping Pools in the Comprehensive Spending
Review.
5. Subsequent to this the Foreign Secretary issued
a Written Ministerial Statement on 25 March, announcing arrangements
for conflict funding in 2009-10. DFID, FCO and MOD have set aside
£627 million for conflict funding in 2009-10, £171 million
of which is for discretionary conflict activity. This will fund
all discretionary conflict prevention, stabilisation and Peacekeeping
activity. It will be managed through five strategies: the SAF
Afghanistan and CPP South Asia programmes have been merged; so
too the SAF Iraq and CPP Middle East and North Africa programmes.
A new Wider Europe programme funds activity in Russia/Commonwealth
of Independent States and the Balkans (previously individual programmes).
The Africa programme continues. A separate programme has been
earmarked for thematic work, including support to international
institutions. The strategies continue to be managed tri-departmentally.
6. Expenditure is added to by other pool
partners through transfers between Departments in Main and Supplementary
Estimates. The effect of the transfers between pool partners to
the 2009-10 FCO Main Estimates is a net increase of £418,000,000.
Of the above amounts we have taken on £350,000,000 for Peacekeeping
(Section B), £40,000,000 for Conflict Prevention (Section
A) and £28,000,000 for the Stabilisation Aid Fund (Section
C).
RECONCILIATION OF
2009-10 MAIN ESTIMATES
TO SR2004 OUTCOME
7. The Comprehensive Spending Review 2007
settlement showed the FCO Resource Budget for 2009-10 as £1,608,000,000
and the capital budget as £216,000,000. Since October 2007
there have been a small number of changes to the FCO's Departmental
Expenditure Limits (DELs) which bring the current Resource DEL
figure for 2009-10 to £2,028,888,000 and the Capital DEL
to £216,060,000. The tables below show the main changes and
reconcile the DELs with the Main Estimates figures.
Table 1
RESOURCE 2009-10
| Resource DEL Baseline from CSR 2007 (£m)
| 1,608.000 |
Changes to Resource DEL (Chronological Order)
| |
| Changes effected in Main Estimates 2009-10
| |
| Machinery of Government transfer from MoD for Defence Export Sales
| 2.059 |
| Reserve claim for Peacekeeping | 350.000
|
| Transfer from DFID for Conflict Prevention |
40.000 |
| Transfer from MoD for Sustainability Aid Fund (SAF)
| 28.000 |
| Transfer from MOD for Foreign Secretary travel
| 0.500 |
| Machinery of Government transfer from DIUS for Science and Innovation Network
| 0.472 |
| Transfer to Cabinet Office for Government Secure Zone
| -0.080 |
| Transfer to Office of Government Commerce for Sustainable Procurement
| -0.045 |
| Transfer to DIUS for Skill's Strategy | -0.018
|
Resource DEL at 1 April 2009 |
2,028.888 |
Difference Between Resource DEL and Main Estimate
| |
| Remove non-Voted Expenditure in the OCS (Common Foreign Security Policy)
| -3.000 |
| Include BBCWS Capital Grant from Capital DEL (Resource in Estimates)
| 31.000 |
| Include British Council Capital Grant from Capital DEL (Resource in Estimates)
| 7.800 |
| Include International Subscriptions Capital Grant from Capital DEL (Resource in Estimates)
| 22.500 |
| Include Voted expenditure outside budgets (Reimbursement of certain duties, taxes and licence fees)
| 18.000 |
| Remove unallocated resource provision (DUP)
| -17.000 |
| Include Voted AME (impairments) | 20.000
|
2009-10 Main Estimate Resource Total
| 2,108.188 |
| |
Table 2
CAPITAL 2009-10
| Capital DEL Baseline from CSR 2007 (£m)
| 216.000 |
Changes to Capital DEL |
|
| Machinery of Government transfer from MoD for Defence Export Sales
| 0.060 |
Capital DEL at 1 April 2009 |
216.060 |
Difference Between Capital DEL and Main Estimate
| |
| Remove BBCWS Capital Grant from Capital DEL (Resource in Estimates)
| -31.000 |
Remove British Council Capital Grant from Capital DEL (Resource in Estimates)
| -7.800 |
Remove International Subscriptions Capital Grant from Capital DEL (Resource in Estimates)
| -22.500 |
2009-10 Main Estimate Capital Net Total
| 154.760 |
| |
DEPARTMENTAL EXPENDITURE
LIMIT (DEL) AND
ADMINISTRATION BUDGETS
8. The tables below show a comparison of the 2009-10
DEL (Table 3 and 3a) and Administration (Table 4) budgets with
the 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.
9. Table 3a 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 3 that are on a consistent basis year on year, including
reclassification by Treasury of expenditure across all years of
the Public Expenditure cycle.
Table 3
DEL COMPARISON
£m
| |
| | | |
| | |
| 2003-04 | 2004-5
| 2005-06 | 2006-07
| 2007-08 | 2008-09
| 2009-10 | 2010-11
|
| Actual | Actual
| Actual | Actual
| Actual | Forecast
| Budget | Plans
|
| Resource DEL1, 2 | 1,512.728 |
1,718.120 | 1,878.691 | 1,836.554
| 1,877,548 | 2,077.551 | 2,028.888
| 1,600.489 |
Capital DEL | 86.671 |
116.676 | 131.842 | 160.314
| 226.377 | 216.060 | 216.060
| 205.060 |
Less Depreciation 1, 3 | 64.060
| 67.156 | 108.725
| 81.555 | 73.220
| 85.050 | 103.050
| 100.050 |
Total | 1,535.339
| 1,767.640 | 1,901.808
| 1,915.313 | 2,030.705
| 2,208.561 | 2,141.898
| 1,705.499 |
1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
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| 2 Resource DEL figures from 2009-10 onwards are understated because they do not include all of the conflict prevention expenditure, which will be subject to a Reserve claim and transferred at the time of the 2009-10 Supplementary Estimates. In addition 2005-06 included expenditure on a number of one off items (Tsunami expenditure, Efficiency Challenge Fund & G8 & EU presidencies).
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| 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.
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Table 3a
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 |
2007-08
| 1,950.523 |
5.862 | 1,956.385 | 1895.961
| 60.424 |
Forecast outturn 2008-09
| 2,074.701
| 3.000 | 2,077.701 | 2,077.701
| 0 |
| 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
|
2007-08
| 243.567 | —
| 243.567 | 227.973 | 15.594
|
Forecast outturn 2008-09
| 216.060
| — | 216.060 | 230.060
| -14.000 |
| 1 Outturn in is based on the definition of DEL in the relevant year and so is not consistent with the outturn in Table 3 that includes subsequent classification changes effective across all years.
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Table 4
ADMINISTRATION BUDGET COMPARISON
£m
| 2003-04
| 2004-05 | 2005-06 | 2006-07
| 2007-08 | 2008-09 | 2009-10
| 2010-11 |
| Actual | Actual
| Actual | Actual | Actual
| Forecast | Plans | Plans
|
| Administration budget | 375.811
| 405.345 | 399.781 | 393.051
| 367.358 | 430.367 | 420.345
| 397.214 |
| 1 Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.
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DEPARTMENTAL UNALLOCATED
PROVISION (DUP) 2009-10
10. At the time of the Main Estimate, the FCO has £17,000,000
of unallocated resource.
Table 5
2009-10 DEPARTMENTAL UNALLOCATED PROVISION
| Resource | Capital
|
RfR1 DUP to met unforeseen
requirements arising in-year
| £17.0m | £0.0m |
| Total | £17.0m | £0.0m
|
| |
|
11. The DUP will be used to meet unforeseen pressures such
as unfavourable currency exchange rate changes since CSR 2007.
CHANGES IN
ACCOUNTING POLICIES
12. We are adopting hedge accounting in respect of forward
purchase of foreign currency.
END YEAR
FLEXIBILITY (EYF)
13. The Public Expenditure Outturn White Paper published
in July 2008 showed a total figure of £171,931 million for
carry forward of underspend into 2009-10 under the DEL EYF scheme.
14. We intend to spend resource EYF carried forward into 2009-10
on restructuring and any capital EYF on our ongoing programme
to increase the security and safety of our Estate and the people
using it.
Table 6
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 | 96.538 | 155.097
| 120.383 | 16.834 | 171.931
|
| EYF drawn down in Winter Supplementary | —
| — | — | —
| — | — |
| EYF drawn down in Spring Supplementary | —
| 17.300 | 17.300 | 17.300
| — | 17.300 |
Balance of Accumulated End Year Flexibility going into 2009-10
| 58.559 | 79.238 | 137.797
| 103.083 | 16.834 | 154.631
|
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PUBLIC SERVICE
AGREEMENTS
15. Full details of the FCO's Public Service Agreements
for 2009-10 will be published in the 2008-09 Departmental Report.
15 May 2009
|
