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

4 Sharing space with others

15.  The Department's objectives commit it to providing a flexible global network serving the whole of British Government, but other UK government organisations operating overseas are not making full use of the empty space on the Department's estate, often preferring instead to lease their own properties.[38] The NAO found 175 teams from other government organisations operating in the same location as the Department, but not using their office space. In 63 of these locations, the Department reported having spare space.[39] The UK Border Agency, which is usually based in the Department's offices, is slimming down its operation and bringing its work into regional hubs. This has left many properties with empty visa offices, waiting rooms and interview booths, and it can be difficult, costly and time consuming for the Department to reconfigure these areas into usable space.[40] The Department invests a lot of money in the security of its buildings, so moving into smaller premises can be very expensive.[41]

16.  The Department currently shares office space with a number of British government and international organisations and agreed there may be further scope to do so in the future. The Department for International Development had moved back in to FCO compounds in India and in Africa.[42] The FCO had also co-located with UKRep in Brussels, and was looking at the scope to share offices in Vienna and Geneva.[43] The Department confirmed that it has no current plans to co-locate its representatives overseas with those of the proposed new European External Action Service. It would be willing to consider locating one or two British diplomats with an EU delegation in countries where it does not currently operate, as a cost effective way to establish a diplomatic presence. It may also be able to reduce costs by letting out space to other nations in its own facilities, as it had done already in Baghdad and Dar-es-Salaam.[44]

17.  Many organisations requiring public access choose not to use the Department's estate overseas because they consider a secure facility to be incompatible with their business needs. The inaccessibility of the embassy may be unsuitable for other potential users, such as trade associations, but these organisations do make use of official residences for business promotions.[45] The British Council prefers to locate separately to the Department, where security allows, as it requires maximum public access and minimum security for its students taking English classes or using the library facilities. In addition, in some countries the Council's status as a charitable body precludes it from operating from the Department's premises.[46] The Department agreed that in almost all cases, co-location was better than having a UK embassy and government offices in different locations in the same city, and that more could be done to overcome some of the barriers to other organisations using its estate.[47] Financial pressures may see a greater move towards co-location amongst government organisations over the next few years.[48]

18.  The Department is required to charge other users of its estate full economic cost in accordance with Treasury rules. This charging regime acts as a disincentive to other users of the estate, as it is often cheaper for them to lease their own premises elsewhere.[49] The charge is set according to the Treasury fees and charges guide, and is made up of direct costs such as water bills, local management costs, and a central overhead, which reflects the amount of time Department staff in London spend on administration.[50] The full economic cost of sharing space with the Department will always be more expensive than a commercial rate as it is expensive to provide a secure building.[51] The Department agreed that the idea of being able to charge a lower cost to fill its unused space would be attractive, and it would be better value for money for the taxpayer to have all government departments working together in the same place abroad as much as possible.[52] However, there is a risk that the Department could lose out financially were it to charge a lower cost to other users, as it would still have to meet the fixed costs of the its buildings. It would prefer instead to focus on reducing the overall cost of its operations overseas. Greater use of embassies by other departments would help it achieve this goal.[53]

19.  The Department is a member of the Treasury's Shared Services Group which deals with property management and is currently looking at the tensions between the full economic cost and the cost to the taxpayer.[54] The Treasury hoped that this group would place greater emphasis on other government organisations to use the Department's estate where appropriate, instead of entering into commercial deals which may be more costly to the taxpayer in the longer term.[55]

38   Qq 9 and 31; C&AG's Report, para 5.1 Back

39   Q 31; C&AG's Report, para 5.3 Back

40   Q 9 Back

41   Qq 9 and 11 Back

42   Q 11 Back

43   Q 28 Back

44   Qq 46, 65 and 76-81 Back

45   Q 55-59 Back

46   Q 31 Back

47   Qq 30 and 31 Back

48   Q 32 Back

49   Qq 9 and 60 Back

50   Qq 87-90 Back

51   Q 60 Back

52   Qq 9 and 64 Back

53   Q 64 Back

54   Qq 9 and 61-64 Back

55   Q 10 Back

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