Memorandum from Permanent Under Secretary
of State, Foreign and Commonwealth Office
THE FCO GLOBAL
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
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
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
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
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
FCO ESTATES PROJECTS: PRINCIPLES
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
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.
MAJOR FCO ESTATES PROJECTS: ROLES AND RESPONSIBILITIES
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
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
Determining the managing risks to the
Managing the project budget, include
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
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
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.