Adapting the Foreign and Commonwealth Office's global estate to the modern world - Public Accounts Committee Contents

Memorandum from Permanent Under Secretary of State, Foreign and Commonwealth Office


  1.  In preparation for appearing before the Committee on 1 March to discuss the recent NAO report on the FCO's global estate, I wanted to update the Committee on some issues which may be relevant to our discussion.

  2.  The first is the development of a new FCO Estates Strategy, which is designed in part to respond to the legitimate criticisms in the NAO report. The FCO Board will discuss the draft Strategy at our next meeting on 26 February. I would be willing to set out the main lines of the Strategy on 1 March, if the Committee wished.

  3.  Second, partly in response to the NAO report and partly based on lessons learned from previous estates projects, we have worked up a set of principles to govern major FCO estates projects in future to seek to ensure that we run them better, together with a statement of the roles and responsibilities of those running projects, based on OGC guidelines. I enclose a copy. We will be seeking to embed these in our practice in future.

  4.  Third, I wanted to update you and the Committee on recent developments in our estates programme.

  5.  In the last year we have:

    — Expanded the UKBA offices in Pretoria (March 2009)—on time and under budget.

    — Moved into our new Embassy building in Harare (March 2009), late and over budget. This was an exceptionally difficult project to manage, with a hostile Government and hyper-inflation.

    — Purchased land for a new Embassy build in Jakarta (April 2009)—after four years of sustained negotiation.

    — Built a new UKBA visa hub in Abu Dhabi very rapidly (April 2009)—on time and budget.

    — In London, opened a new Media Suite in the FCO Main Building in King Charles Street (May 2009), on time but slightly over budget. This was due to the unexpected discovery of asbestos.

    — Opened new Embassy offices in Algiers in (June 2009), late and over budget. This was due to exchange rate movements and a change in our liability to pay tax on the project.

    — Reconfigured our offices in Georgetown (July 2009)—on time and budget.

    — Opened a new Embassy building in Warsaw (July 2009)—on time but over budget. This was primarily due to the exchange rate, as well as changes in scope relating to planning permission.

    — Upgraded the Baghdad compound security and Residence (August 2009)—on time and under budget.

    — Upgraded our High Commission offices in Ottawa (November 2009)—on time and under budget.

    — Finished a new office fit-out at our Consulate in Boston (November 2009)— on time and budget

    — Relocated to a new site in Basra (November 2009)—on time and budget.

    — Co-located the Embassy and the UK Representation to the EU in Brussels in a refurbished set of offices (November 2009)—on time and under budget.

    — Reconfigured our consular and visa offices in Paris, and our OECD representation there (December 2009)—on time and budget.

    — Completed work (February 2010) on the refurbished historic Moscow residence. The Ambassador expects to move in shortly in Mar 2010. This is late and over budget, partly due to local planning and conservation issues.

  6.  I should also report two pieces of recent bad news:

    — There was a serious flood in our newly-opened Embassy Offices in Madrid on the upper floors of a new high-rise block. While the Embassy itself has managed to remain open, other parts of the block have experienced substantial damage. We are seeking to establish the facts and the size (if any) of any FCO liability.

    — We have had to suspend work on our new Embassy Offices in Damascus after evidence came to light that aspects of the security of the site may have been compromised. Our investigations have thrown up serious concerns about the way the project has been managed to date, and we have asked our Financial Compliance Unit to investigate and report. Meanwhile we are reviewing our options in Damascus: we are considering whether we will need to write off the current project and look for an alternative site.

  7. I would be happy to talk further about any of these issues on 1 March. A copy of this letter goes to the Chairman of the Foreign Affairs Committee.

19 February 2010


  The following principles will henceforth be applied to all FCO estates projects. It is the responsibility of the SRO for each project to ensure that they are.

  1.  Every project will follow the principles laid down in the Estates Strategy endorsed by the FCO Board in February 2010, in order to produce the modern, flexible and value for money buildings the FCO needs.

  2.  Every major project (over £2 million) will have a named SRO, Project Sponsor and Project Manager, and a Project Board. The roles and responsibilities of each are set out at annex. Their names will appear in all substantial documentation for each project.

  3.  There will be full transparency on each project: if there are problems, potential delays or potential overspends, the Project Sponsor will inform the SRO; and the SRO will inform the Project Board and Estates Committee in a timely fashion.

  4.  There will proper paperwork for each project. In addition to the standard gateway documents for the Estates Committee (initial proposal, full business case, final investment decision etc), and minutes of the Project Board, a proper record will be kept of all major decisions, with signed contracts for all major commitments.

  5.  There will be accurate management information for each project: including details of the original budget approval and planned completion date and any changes to these, when/whether milestones are met, names of SRO, Project Sponsor, Project Manager, etc. These will be collated in one central register of all major FCO estate projects.

  6.  Those running projects will seek to ensure the most realistic estimates possible of completion dates, overall costs and other potential risks to the project, bearing in mind the difficulty of operating in many overseas locations and the fact that estates projects have tended to be subject to disruption, delay and overspend.

  7.  Each project will seek to ensure the best possible value for money for the taxpayer, and to avoid any unnecessary waste or loss of public funds.

  8.  There will be regular monitoring during the lifetime of the project, with regular review by the Estates Committee of major projects' performance against budget, timetable and other relevant measures.

  9.  There will be a full assessment at the end of each major project of the extent to which it has delivered on budget, timeline and benefits. The lessons learned will be embedded in work on future projects.



  The SRO is the individual responsible for ensuring that a project meets its objectives and delivers the projected benefits. The SRO should be prepared to take decisions and should be proactive in providing leadership and direction throughout the life of the project. S/he should be the owner of the overall business change that is being supported by the project. They should ensure that the change maintains its business focus, has clear authority and that the context, including risks, is actively managed.

  The individual must be senior and must take personal responsibility for successful delivery of the project. They should be recognised as the owner throughout the organisation. Their responsibilities as an SRO should be explicitly included in their personal objectives and the individual should preferably remain in place throughout the project.

  For major FCO estates projects the SRO will normally be a senior figure in ESD, though others (eg the relevant FCO Regional Director) may be invited to take on the role in specific cases.

  The SRO will report on a quarterly basis to the Estates Committee on the progress of the project, including against the agreed budget and planned completion date.


  The Project Sponsor is responsible for:

    — Preparing the business case; appraising options and submitting for approval.

    — Securing resources and expertise as required.

    — Ensuring an appropriate project management framework is in place, incorporating the Gateway review process if required.

    — Determining the managing risks to the project.

    — Managing the project budget, include risk allowance.

    — Acting as the sole point of contact with the project manager.

    — Managing the project manager's performance of delegated responsibility.

    — Assisting the project manager in the resolution of problems.

    — Receiving and reviewing detailed reports on the project from the project manager.

    — Ensuring the project manager receives departmental decision on time.

    — Establishing with the project manager a common approach to major issues.

    — Establishing a mechanism to ensure regular dialogue with contractors to promote problem solving, teamworking and risk-sharing.

  For FCO estates projects, the Project Sponsor will be provided by ESD.


  The Project Manager is the individual responsible for delivering the project. S/he leads and manages the project team, with the authority and responsibility to run the project on a day-to-day basis. The Project Manager is responsible for:

    — Designing and applying an appropriate project management framework for the project.

    — Planning and monitoring the project, and preparing and maintaining the Project Plan.

    — Managing project risks, including the development of contingency plans.

    — Overall progress and use of resources, initiating corrective action where necessary.

    — Reporting through agreed reporting lines on project progress.

    — Identifying and obtaining any support and advice required for the management, planning and control of the project.

    — Conducting end project evaluation and preparing an end-project report, a Lessons Learned report and any follow-on action recommendations as required.

  For FCO estates projects, the project Manager will normally be outsourced to a delivery partner (eg FCO Services or a private contractor like Mace).


  The Project Board's remit is to assist the SRO in decision-making and ensuring the progress of the project. But ultimate authority and accountability resides with the SRO, who appoints Project Board members, will normally chair the Project Board, and takes executive responsibility for decisions relating to the project.

  For FCO estates projects, the Project Board will consist of senior representatives from the post concerned, the regional directorate, the project sponsor and project manager, ESD Security, ITD, Corporate Procurement Group, other FCO stakeholders (eg Consular Directorate and UKTI if there is a large consular or business element, FCO Services if they are involved in the project), and other Whitehall Departments with a direct interest (eg if they will be suing the building in question).

  The Project Board will meet at least quarterly and more frequently when necessary.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2010
Prepared 1 April 2010