FCO Performance and Finances - Foreign Affairs Committee Contents

1  Introduction

1.  As part of its remit to examine the "expenditure, policy and administration" of the Foreign and Commonwealth Office (FCO), the Foreign Affairs Committee has for many years carried out an annual inquiry into the FCO's Departmental Annual Report (DAR), scrutinising how the FCO is managing its resources and the Department's overall performance. Our predecessor Committee in the last Parliament published its last such Report, dealing with the 2008-09 DAR, in March 2010.[1]

2.  In order to save money the FCO, like most other government departments, has not published a DAR for 2009-10 in its previous format of a full-colour hard-copy document containing extensive narrative. Instead, only key financial, administrative and policy performance data have been published, as a series of annexes to the FCO's resource accounts 2009-10, which were laid before Parliament on 30 June 2010.[2] The FCO has also followed Treasury guidance in not publishing an Autumn Performance Report, and in ending its public reporting on previous Public Service Agreements and Departmental Strategic Objectives.[3] The 2009-10 Annual Reports of the BBC World Service and British Council were laid before Parliament on 6 and 22 July 2010, respectively.

3.  On 21 July 2010, shortly after the Committee's membership was elected in the new Parliament, we agreed to continue to conduct an annual inquiry into the FCO's DAR (in whatever form in future it may be published). We further agreed that this would include an annual evidence session with the Permanent Under-Secretary and with the British Council and BBC World Service.

4.  On 13 October 2010, we decided that, given the anticipated scale of spending cuts to be announced in the Spending Review (SR2010), and the fact that the Spending Review would determine the FCO's budget for the expected duration of this Parliament, our inquiry this year would focus primarily on the Department's financial situation and the implications of SR2010 for the work and performance of the FCO and its associated bodies, particularly the British Council and the BBC World Service. (We are currently conducting a further inquiry into "The Role of the FCO in UK Government", which will take a longer-term view of the Department's position and purpose. We expect to report on this later in Spring 2011.)

5.  During this inquiry we took oral evidence from Vernon Ellis and Martin Davidson, Chair and Chief Executive respectively of the British Council, Peter Horrocks and Richard Thomas, Director and Chief Operating Officer respectively of BBC Global News, and Simon Fraser CMG, Permanent Under-Secretary, James Bevan, Director General Change and Delivery, and Keith Luck, Director General Finance, of the FCO. In addition, we have received 21 items of written evidence, including helpful briefing material produced for us by the National Audit Office (NAO).[4] We thank everyone who has contributed to this inquiry, including the House of Commons Scrutiny Unit which supplied us with detailed financial analysis.

6.  On 26 January 2011 the BBC World Service announced a series of service closures and other reductions in activity, aimed at meeting the Government's requirement for a 16% cut in spending on the World Service over the Spending Review period.[5] On the same day we decided to carry out a short inquiry into the implications of this announcement for the World Service. The present Report therefore deals only with the 'core FCO' and the British Council; we will take further written and oral evidence on the BBC World Service and report on this separately later in the year.

1   Foreign Affairs Committee, Fifth Report of Session 2009-10, Foreign and Commonwealth Office Annual Report 2008-09, HC 145 Back

2   Foreign and Commonwealth Office Resource Accounts 2009-10, HC 74 Back

3   Ev 36 [Simon Fraser] Back

4   The NAO briefing has, with our permission, been published separately by the NAO. It can be accessed at their website: http://www.nao.org.uk/publications/1011/foreign_affairs_committee.aspx Back

5   HC Deb, 26 January 2011, col 13WS Back

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Prepared 11 February 2011