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FCO Performance and Finances - Foreign Affairs Committee Contents


Written evidence from the Foreign and Commonwealth Office

Winter Supplementary Estimate 2010-11

INTRODUCTION

1.  The Foreign and Commonwealth Office Estimate has two Requests for Resources (RfRs):

  1. RfR1: Promoting internationally the interests of the UK and contributing to a strong world community, that covers:
    1. Section A: Expenditure by the Foreign and Commonwealth Office (FCO), including UK Trade and Investment, on its administration, FCO Services, Wilton Park Executive Agency, hospitality and facilities; international organisations; grants in aid to bodies supporting FCO objectives; scholarships, information services and sponsored visits; special payments and assistance programmes to support foreign policy objectives including human rights, good governance, international security and the fight against the illicit drug trade; and international organisations; and on associated non-cash items;
    2. Sections B and C: Resource grant in aid to the BBC World Service for broadcasting and to the British Council, respectively;
    3. Sections D and E: Capital grant in aid to the BBC World Service for broadcasting and to the British Council, respectively.
    4. Section F: AME Provision for impairments and liabilities in relation to staff leave ; and
    5. Section G: The refund of certain taxes and duties paid by certain Foreign and Commonwealth governments.
  2. RfR2: Conflict prevention, that covers:
    1. Section A: Expenditure by the Foreign and Commonwealth Office on conflict prevention, early warning, crisis management, conflict resolution/peacemaking;
    2. Section B: Peacekeeping and peace building activity and on associated strengthening of international and regional systems and capacity; and
    3. Section C: Provision of specialist, targeted assistance in countries emerging from violent conflict.

RFR1 WINTER SUPPLEMENTARY ESTIMATES CHANGES

Take up of EYF

2.  We have taken up £15,000,000 DEL EYF administration costs in respect of modernising the core FCO.

Claims on the DEL Reserve

3.  We have made a claim on the DEL Reserve of £15,000,000 administration costs in respect of modernisation of FCO Corporate Services.

Take up of Departmental Unallocated Provision

4.  We have taken up of £17,000,000 administration DUP to offset adverse exchange rate movements.

Transfers of Budgetary Cover

5.  Transfers of budgetary cover include:

  1. Transfer of £1,850,000 administration from the Department for Education in respect of the Papal visit.
  2. Transfer of £1,850,000 administration from the Department for International Development in respect of the Papal visit.
  3. Transfer of £1,850,000 administration from the Department of Energy and Climate Change in respect of the Papal visit.
  4. Transfer of £1,850,000 administration from the Department for Environment, Food and Rural Affairs in respect of the Papal visit.
  5. Transfer of £1,850,000 administration from the Department for Communities and Local Government in respect of the Papal visit.
  6. Transfer of £100,000 programme from the Department for International Development in respect of the Strategic and Bilateral Fund in the Democratic Republic of Congo (DRC). DFID DRC are contributing to the funding of small-scale, catalytic development projects across the DRC to achieve British Embassy Kinshasa objectives within the framework of the One Embassy vision.
  7. Transfer of £180,000 administration from the Department for International Development in respect of the gratis visa operation in Chernobyl. This operation covers the costs of visas issued to Chernobyl children coming on medical recuperation breaks to the UK.
  8. Transfer of £40,000,000 programme from the Department for International Development in respect of support for British Council Official Development Assistance.
  9. Transfer of £200,000 programme from the Department for International Development in respect of a Police Training project in Tanzania.

Other Changes

6.  A Capital to Administration switch of £25,000,000 in respect of exchange rate pressures.

7.  A change in Annually Managed Expenditure (AME) due to an increase in Impairments of £20,000,000. Impairments are the loss of value on an asset (ie a building), due to the special requirement we have for the asset (ie enhanced security work), which will not be reflected in its overall market value.

8.  A Capital transfer of £265,000 to the Department for International Development as a contribution towards building a new office in Juba, Sudan.

RFR2 WINTER SUPPLEMENTARY ESTIMATES CHANGES

Transfers of Budgetary Cover To/From Other Government Departments

9.  Transfers of budgetary cover include:

  1. Transfer of £16,467,000 grants from DFID for conflict prevention and peacekeeping activities.

10.  The above transfer reflects the revised structure of RfR2. Conflict prevention activities are now managed through five strategies: the SAF Afghanistan and CPP South Asia programmes have been merged; so too the SAF Iraq and CPP Middle East and North Africa programmes. A new Wider Europe programme funds activity in Russia/Commonwealth of Independent States and the Balkans (previously individual programmes). The Africa programme continues. A separate programme has been earmarked for thematic work, including support to international institutions. The Strategies continue to be managed tri-departmentally.

  1. Transfer of £54,000 grants to the Security Intelligence Agencies for expansion and capability.

11.  No FCO activities are expected to be reduced as a result of the above transfers. Transfers between government departments such as these are a routine occurrence and are therefore incorporated in the normal budgeting process.

Table 1
DETAILED EXPLANATION OF CHANGES
End year flexibility
15.000RfR1 Section A1 administration EYF for FCO modernisation
15.000Resource Total Change to DEL
Transfers from capital to administration
25.000Section A1 increase from Section A7 to cover exchange rate pressures
25.000Resource Total Change to DEL
-25.000Capital Total Change to DEL
Transfers between sections within the Estimate
6.080RfR1 DEL Neutral transfer to Section B2 from Section A2 for Grant-in-Aid for the BBCWS
4.720RfR1 DEL Neutral transfer to Section C2 from Section A2 for Grant-in-Aid for the British Council
71.570RfR2 DEL Neutral transfer to Section A2 from Section A1 for conflict prevention to peacekeeping switch
0.000Resource Total Change to DEL
Transfers from Other Government Departments
1.850RfR1 Section A1 administration transfer from DfE for Papal visit
1.850RfR1 Section A1 administration transfer from DfID for Papal visit
1.850RfR1 Section A1 administration transfer from DECC for Papal visit
1.850RfR1 Section A1 administration transfer from DEFRA for Papal visit
 
1.850RfR1 Section A1 administration transfer from DCLG for Papal visit
0.100RfR1 Section A2 programme transfer from DFID for Strategic and Bilateral Fund in Kanshasa
0.180RfR1 Section A1 administration transfer from DFID for Chernobyl gratis visa operation
 
40.000RfR1 Section A2 programme transfer from DFID for British Council Official Development Assistance
0.200RfR1 Section A2 programme transfer from DFID for Tanzania Police Training Project
16.467RfR2 Section A3 grants transfer from DFID for Conflict Prevention and Peacekeeping
66.197Resource Total Change to DEL
Transfers to Other Government Departments
-0.054RfR2 Section A3 grants transfer to the Security and Intelligence Agencies for expansion and capability
-0.265RfR1 Section A7 capital transfer to DFID as contribution towards building a new office in Juba, Sudan
 
-0.265Capital Total Change to DEL
-0.054Resource Total Change to DEL
Transfers from Central Funds
15.000RfR1 Section A2 DEL Reserve claim for modernisation of FCO Corporate Services
15.000Resource Total Change to DEL
Transfers from non-voted Departmental Unallocated Provision
17.000RfR1 Section A1 take-up administration DUP to offset adverse exchange rate movements
Other budget neutral changes
7.000RfR1 An increase in capital fully offset by an increase in non-operating appropriations-in-aid
0.000Resource Total Change to DEL
121.143NET TOTAL CHANGE TO RESOURCE DEL
-25.265NET TOTAL CHANGE TO CAPITAL DEL

DEPARTMENTAL EXPENDITURE LIMIT (DEL) & ADMINISTRATION BUDGETS

12.  The tables below show a comparison of the 2010-11 DEL (Table 2 and 2a) and Administration (Table 3) budgets with the 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 outturn, and the forecast for 2010-11.

13.  Table 2a shows outturn on the definition of DEL used in the year concerned in order to be consistent with published Departmental Expenditure Limits. They do not therefore correspond to the outturns in Table 2 that are on a consistent basis year on year, including reclassification by Treasury of expenditure across all years of the Public Expenditure cycle.

Table 2
DEL COMPARISON
2004-052005-06 2006-072007-08 2008-092009-10 2010-11
ActualActual ActualActual ActualActual Forecast
Resource DEL 1,21,680.411 1,815.3021,770.9971,808.411 2,027.4272,126.8062,153.381
Capital DEL112.517133.340 160.786227.792226.803 200.732168.695
Less Depreciation 1,3 67.156108.725 81.55573.220 81.684100.980 99.050
Total1,725.7721,839.917 1,850.2281,962.9832,172.546 2,226.5582,223.026

1Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.

2 Resource DEL figures for 2010-11 are understated because they do not include all of the conflict prevention expenditure, which will be transferred at the time of the relevant Main and Supplementary Estimates. addition 2005-06 included expenditure on a number of one off items (Tsunami expenditure, Efficiency Challenge Fund & G8 & EU presidencies).

3 Depreciation, which forms part of Resource DEL, is excluded from the total DEL, since Capital DEL includes the purchase cost of capital assets. To add on the depreciation of those assets would double count their cost.

Table 2a
PREVIOUS YEARS' EXPENDITURE AGAINST DEPARTMENTAL EXPENDITURE LIMITS £M
YearVoted Non-votedTotal DEL Outturn1Variance
Resource
2004-051,607.192209.690 1,816.8821,736.18880.694
2005-061,999.2246.713 2,005.9371,916.19089.747
2006-071,924.91344.213 1,969.1261,852.024117.102
2007-081,950.5235.862 1,956.3851,895.96160.424
2008-092,074.7013.000 2,077.7012085.310-7.609
Final outturn 2009-102,237.987 3,0002,240.9872,224.375 16.612
 
Capital
2004-05101.5331.000 102.53371.23631.297
2005-06135.6971.000 136.69792.95943.738
2006-07157.7791.000 158.779160.747-1.968
2007-08243.567- 243.567227.97315.594
2008-09216.060- 216.060229.080-13.020
Final outturn 2009-10203.310 -203.310199.638 3,672

1 Outturn in is based on the definition of DEL in the relevant year and so is not consistent with the outturn in Table 2 that includes subsequent classification changes effective across all years.

Table 3
ADMINISTRATION BUDGET COMPARISON £M
2004-052005-06 2006-072007-08 2008-092009-10 2010-11
ActualActual ActualActual ActualForecast Plans
Administration budget402.676 388.191382.439356.319 383.492431.768484.698

1Figures for all years reflect the reclassification of impairment expenditure from DEL into AME.

DEPARTMENTAL UNALLOCATED PROVISION (DUP) 2010-11

14.  £17,000,000 FCO provision has been allocated in the Winter Supplementary Estimate leaving a balance of £15,000,000 to be taken up in the spring.

Table 4
2010-11 DEPARTMENTAL UNALLOCATED PROVISION
ResourceCapital
RfR1 DUP to offset adverse exchange rate movements £15.0m£0.0m
Total£15.0m£0.0m

END YEAR FLEXIBILITY (EYF)

15.  The Public Expenditure Outturn White Paper published in July 2010 showed a total figure of £110.017 million for carry forward of under spend into 2010-11 under the DEL EYF scheme.

16.  We have taken up £15,000,000 DEL administration costs EYF in respect of FCO core restructuring.

17.  In the Spring Supplementary Estimate we may take up resource EYF for RfR2 Conflict Prevention.

Table 5
ACCUMULATION OF EYF £M
Administration ProgrammeTotal Resource Of which
non-cash
Capital Total
Total FCO EYF Entitlement in Public Expenditure Provisional Outturn July 2010 (table 6—Cm 7911) 71.84634.779106.625 5.6233.392110.017
EYF drawn down in Winter Supplementary 15.000-15.000 --15.000
BALANCE OF ACCUMULATED END YEAR FLEXIBILITY GOING INTO 2010-11 56.84634.77991.625 5.6233.39295.017

15 November 2010



 
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Prepared 11 February 2011