Letter to the Chairman of the Committee
from Sir Peter Ricketts KCMG, Permanent Under-Secretary, Foreign
and Commonwealth Office
I am writing to update you on the latest FCO
management issues. This letter covers the period October to December
2009.
CORPORATE SERVICES
PROGRAMME
The programme is progressing with pace. We have
now removed over 50,000 days of processes from our systems and
introduced a number of technology improvements, freeing up staff
to do more frontline work. For example, we've moved from a subsistence-based
expenses system to a global one based on actual reasonable expenditure.
The Director of the new Corporate Services Centre
in Milton Keynes is in place, and the last remaining HR staff
moved into the Centre in December. We are implementing a new operating
model that will allow us to realise efficiencies and reduce headcount.
Recruitment and training plans are in place
to ensure we achieve localisation of over 100 Management slots
across our network of posts. Work on consolidating management
services in a few overseas posts continues, as does work on outsourcing
property services in parts of Asia/Pacific. The North West Europe
facilities management outsourcing contract has delivered over
£1 million in benefits to date, and recently received a green
rating from the OGC.
SERVICE LEVEL
AGREEMENT WITH
WHITEHALL PARTNERS
(WPS)—RECOVERY
OF COSTS
FROM WPS
ON OUR
NETWORK
The FCO Board decided to retain, for the rest
of this Comprehensive Spending Round (CSR), the existing charging
framework for Whitehall Partners (WPs) who use our platform. We
have agreed a simplified charging model with the UK Border Agency
(UKBA), our biggest partner, to provide budgetary certainty for
both parties. For other Departments, charges for central overhead
costs will remain capped at last year's levels for the rest of
this financial year. Work has begun on identifying how funding
for the overseas platform can be improved for the next Spending
Review with a view to moving away from the current charging framework.
We are engaging with WPs to identify a better way to recover costs
that will ensure that the FCO is fairly recompensed for the risks
and contingent liabilities it carries for others on the platform.
This will also facilitate work to improve the efficiency of the
Government's wider international operations through wider use
of shared services, in accordance with the recent White Paper
on Smarter Government.
ACTIVITY RECORDING
The Quarter 2 activity recording data for 2009-10
was collected successfully. In October the FCO Board agreed to
continue with the current set of 37 activity recording codes until
a new, simplified regime of 12 activity recording codes could
be introduced at the mid-point of financial year 2010-11.
TOP RISKS
REGISTER
The register was updated in December to include
four operational risks (Physical,Technical and Personnel Security;
Resources; IT Systems; and UKBA) and nine strategic risks (Iran,
Afghanistan, Pakistan, Terrorism, Middle East Instability, Horn
of Africa, Overseas Territories, Litigation and Copenhagen). The
FCO Board continues to discuss individual risks in depth at its
monthly meetings.
BUSINESS PLANNING/DEPARTMENTAL
STRATEGIC OBJECTIVES
(DSOS) AND
PUBLIC SERVICE
AGREEMENT (PSA) MONITORING
The Autumn Performance Report (APR) for our
eight DSOs and PSA 30 was published on 11 December. We have sent
copies to the Committee. There was "Strong Progress"
against DSOs 1, 2 and 3 and "Some Progress" against
the others and PSA30. We remain on track to achieve our "Value
for Money" target of £144 million by the end of 2010-11.
The APR was followed by our internal Mid-Year
Review of 2009-10 Business Plans in October. A balanced scorecard
was completed for the first time by posts at the mid-year review.
A similar scorecard was piloted by a number of London-based Directorates.
Assessment and feedback from both exercises was discussed and
endorsed by the FCO Board in early January.
VALUE FOR
MONEY (VFM) AND
EFFICIENCY SAVINGS
We remain on track to achieve our 2009-10 VfM
targets and thereby our overall CSR VfM target of £144 million
by end of financial year 2010-11.
The Operational Efficiency Programme (OEP) reductions
announced in Budget 2009 is in addition to the CSR efficiencies.
The FCO family (including BBC World Service and British Council)
is preparing to deliver a further £20 million as its contribution
to this wider government drive to deliver £5 billion savings
in 2010-11.
FIVE STAR
FINANCE CHANGE
PROGRAMME
We reached 4 stars in December 2009 and are
now working to build on and intensify this improvement. This wider
ambition is set within the current resource constraints and alongside
the transition to new ways of working in our Corporate Services
Centre and restructuring in the overseas network. We are retaining
the ambition to achieve 4.5 stars but extending the phase until
July 2010 to allow deeper embedding of the changes in the network.
We are confident that the 5 star Finance Programme
is delivering real change. The NAO will assess our progress at
the 4.5 star point and we will use that assessment to design the
5 star phase.
ESTATES
In November we moved into new offices in Boston
and Basra. The Consulate General in Boston moved to new premises
on 10 November. Following a decision by the landlord to offer
the space that we occupied to Microsoft, we found ourselves with
the difficult challenge of finding and fitting out an office in
a relatively short space of time. We made good use of local project
management skills and the project for the fit-out of the offices
came in on time and under the £2m budget set by the Investment
Committee (IC).
The Consulate in Basra moved into the "Red
Barn" on 22 November. The "Red Barn" is a hardened
concrete shell built by the MOD for use as a hospital. When the
MOD withdrew the compound was transferred to the US with the FCO
retaining use of the barn. Within the shell we have built a suite
of offices. The project was effectively managed by FCO Services
under difficult circumstances and delivered at a cost of £5
million. There is some surplus space that we are renting to British
companies.
In the same month, the United Kingdom Permanent
Representation to the European Union (UKREP) and the Embassy moved
into their fully refurbished offices in Brussels. The £13.5
million project to refurbish the existing offices was completed
in record time with our strategic partner, Mace. The project came
in under the £14 million budget approved by the IC.
The FAC will recall that, following the terrorist
attack on the US Embassy in Damascus in 2007, we have been looking
to provide a more secure office for staff. In spring 2009 we
began a project to convert two adjacent villas into a new mission
and ambassadorial residence. There have been problems with the
security management of the project and the MFA have since abandoned
their plan to establish a diplomatic quarter in the suburb where
our planned new mission would be located. We have therefore suspended
work on the project while we reconsider our options. The FCO Estates
Committee is due to consider the way forward at its meeting this
month. We will update the FAC in the light of the Estates Committee
decision.
I told the FAC I would keep them updated on
the estates progress in Moscow and a separate letter was sent
last month from the Parliamentary Relations Team.
I attach at Annex A our quarterly report for
properties sold and purchased in the second quarter of financial
year 2009-10.
FCO SERVICES
FCO Services have reacted positively and rapidly
to the budgetary pressures facing the FCO this year by delivering
a super dividend of £3 million, two years ahead of plan and
in addition to their scheduled commitments for dividend, interest
and loan re-payment. I am confident that FCO Services will be
able to continue to demonstrate the success of their transition
to Trading Fund and offer further support to the FCO through additional
accelerated benefits in 2010-11.
Customer satisfaction trends are regularly monitored
and continue to be a key focus for FCO Services. An interim customer
satisfaction survey was conducted recently which showed satisfaction
had improved by 6% among budget holders/service managers. This
reflects improvements in FCO Services' approach to the management
of relationships with key customers. FCO Services plan to conduct
another survey later in the year to ensure the improving trend
is maintained.
PASSPORT OPERATIONS
The integration of the domestic and overseas
passport operations into the Identity & Passport Service (IPS)
remains on track for 1 April 2011. Both the FCO and the IPS recognise
the need for a more radical but cost effective approach to integration
as recommended by the FAC. A joint FCO/IPS Team is now working
through options, which include: extending the lifespan of existing
FCO technology until IPS systems are ready to process applications
from abroad; the creation of a single passport processing centre
in the UK as soon as possible after April 2011 and maximising
opportunities for partnership with UKBA once biometric enrolment
becomes a requirement for customers overseas. A transition plan
is expected by February, when both IPS and FCO Boards will formally
approve the recommended option.
As a result of our ongoing rationalisation project,
we have established six Passport Processing Centres (PPCs) in
Washington, Wellington, Pretoria, Madrid, Paris, Dusseldorf, which
are processing nearly 2/3 of the 370,000
passports the FCO produces each year. The Programme Board recently
endorsed the decision to create a further (final) PPC in Hong
Kong to provide global coverage, maintaining a high level of service
but at significantly less cost to the FCO. The rationalisation
project will be completed by October 2010 when passport printing
will also start to be centralised in the UK. Transition to a single
PPC in the UK will be the next stage.
THIRD GENERATION
FIRECREST (F3G)
Installation of our new IT system F3G continues
apace. By 31 December, 69% of staff overseas were using F3G. We
have increased the rate of deployment to seven posts a week and
are on target to complete the global rollout in April 2010. A
few posts have been deliberately delayed until May 2010 for business
reasons. In the UK, the final phase of deployment commenced in
October, enabling increased mobile working options for staff.
We expect all UK departments to be on F3G by March 2010. The new
technology—including classified laptops and a single global
network for all staff—is already delivering tangible business
benefits. We continue to deliver performance improvements and
are working closely with our suppliers, Hewlett-Packard and FCO
Services, to upgrade on-going system support. The programme remains
within budget and on track to deliver within the timeframe set
out in 2007.
UK BORDER AGENCY
(UKBA)
As demonstration of our ongoing strong relationship,
the FCO and UKBA are planning a joint publication called Migration:
International Challenges, International Solutions. This sets
out how UKBA and the FCO work together at different points along
the migrants' journey to facilitate smooth entry to the UK for
legitimate visitors, workers and students, whilst also deterring
and intercepting those seeking to enter illegally and/or cause
us harm. We expect the publication to be launched in early 2010.
The FCO's partnership with UKBA is underpinned
by a Service Level Agreement (SLA) covering general principles
of interaction and HR, Finance and IT issues. We have agreed for
FY 2009-10 a more transparent and simplified mechanism for charging
UKBA for use of FCO resources. The SLA is due for further review
in FY 2010-11, but these new arrangements are expected to have
a positive impact on planning, for both the Agency and ourselves.
3 February 2010
Annex A
FCO PROPERTY SALES FOR THE PERIOD 1 JULY
TO 30 SEPTEMBER 2009
Date |
Post | Country |
Type of
Property | Exchange
Rate Pound
to Sterling
| Gross Sales Receipt Transation
CurrencySterling
|
| 11 September 2009 | Kingstown
| St Vincent & Grenadines
|
Office | 0.6167889965 | USD 400,000
| 246,716 |
| | |
| Gross Sales Proceeds
| £246,716 |
| |
| | | |
|
| 
