Estimates Memoranda

Foreign & Commonwealth Office Spring Supplementary Estimate 2011-12 Memorandum for the Foreign Affairs Committee

Introduction

1. The Foreign and Commonwealth Office Estimate has the following sections:

· 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; 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 on associated non-cash items;

· Section B: Grants to international organisations and other bodies supporting FCO objectives;

· Sections C and D: Resource grant to the BBC World Service for broadcasting and to the British Council, respectively;

· Sections E and F: Capital grant to the BBC World Service for broadcasting and to the British Council, respectively;

· Section G: The net expenditure of FCO sponsored Non-Departmental Public Bodies (NDPBs) in particular the Westminster Foundation for Democracy, the Marshall Aid Commemoration Commission and the Great Britain China Centre;

· Section H: Grant expenditure by the Foreign and Commonwealth Office on conflict prevention, early warning, crisis management, conflict resolution/peacemaking;

· Section I: Grant expenditure on p eacekeeping and peace building activity and on associated strengthening of international and regional systems;

· Section J: AME non-cash expenditure on impairments and provisions;

· Section K: AME grants to refund certain taxes and duties paid by certain Foreign and Commonwealth governments.

Spring Supplementary Estimates Changes

Reserve Claim s

2. There are two routine claims on the Treasury Resource Reserve:

· £3 7.0m programme expenditure for Consular Premiums collected in the UK by the Home Office that are transferred to the FCO via the Reserve (Section A) .

· £32 . 0 m grants expenditure arising from the FCO/HMT 40/60 International Organisations Subscriptions cost sharing agreement (Section B) .

There is also a benefit to the Reserve of £1.8m in respect of the Operation of the FCO Foreign Currency Mechanism (FCM) owing to appreciation in the value of Sterling overseas since the FCO baseline year of 2010-11 (Section A).


Take up of Departmental Unallocated Provision

3. We have taken up £10 m of administration DUP to cover a number of emerging pressures, including the need to cover a budget transfer to capital from resource arising from a possible shortfall in capital receipts.

Budget cover transfers

4. There are two major programme transfers for conflict prevention (Section H), one from the Department for International Development ( DFID ) of £ 8.5m (section H) and one from the Ministry of Defence of £ 6m. The majority of this transfer funded the Libya sub-programme (£9m), with the remainder going to top up other Programmes such as Afghanistan, Wider Europe and Africa.

5. Expenditure is added to by other pool partners through transfers between Departments in Main and Supplementary Estimates.

6. Other transfers include :

· A transfer of £3.0m programme resources to the Department for Business, Innovation and Skills (BIS) in respect of the GREAT campaign (Section A).

· A t ransfer of £ 2.2 m programme resources from DF ID in respect of the Returns and Reintegration Fund to increase the number of foreign national prisoners and failed asylum seekers who return to their countries of origin and to ensure that those who return voluntarily are effectively re-integrated (Section B) .

· Transfers of resource programme of £0.1m (Section H) and £0.5m (Section A ) to the security and Intelligence Agencies in respect of expansion and capability.

· A transfer of £0.5m from the Department for Business, Innovation and Skills (BIS) in to the British Council in respect of the GREAT campaign (Section D).

· An internal transfer from programme resources to capital of £12m (Section A) to cover a possible shortfall in the level of asset disposal receipts we intend to realise .

7. N o FCO programmes or other 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.

8. We continue to aim to achieve asset sales this financial year of £50m and s o have increased b oth our capital expenditure and receipts (Section A) by £40m to reflect the level of asset disposal receipts. The increase in capital expenditure is fully offset by receipts and so th is change is budget neutral.

Reconciliation of 2011-12 Spring Supplementary Estimates to the 2011-12 Main Estimate

9. The table below reconciles the budgets voted in the Spring Supplementary Estimate back to those voted in the Main Estimate as discussed above.

Table 1 Resource

20 1 1 -1 2

Resource DEL Baseline from Main Estimate (£m)

2 , 141 . 2

Changes to Resource DEL

Changes effected in Spring Supplementary Estimates 2011-12

Reserve c laim for Consular Premiums

37 .0

Reserve claim for International Subscriptions

32 . 0

Reserve credit for Foreign Currency Mechanism

-1.8

Transfer from DFID for conflict prevention

8.5

Transfer from MoD for conflict prevention

6 .0

Transfer to BIS for GREAT Campaign

-3.0

Transfer from DFID for the Returns and Reintegration Fund

2.2

Transfer s to SIA for expansion and capab i lity

-0.5

Transfer to the British Council from BIS for the GREAT campaign

0.5

Internal Transfer to Capital

-12.0

Resource DEL at Spring Supplementary 2011 -12

2,210 .1

AME (impairments and provisions)

75.000

2011-12 Spring Supplementary Estimate Resource Total (DEL+AME)

The FCO has no non-budget spending

2,285 .1

Table 2 Capital

20 11 -1 2

Capital DEL Baseline from Main Estimate (£m)

107 .0

Internal Transfer to Capital

12.0

2011-12 Spring Supplementary Estimate Capital Net Total

1 19 .0

Table 3 Administration

2011-12

Administration Baseline from Main Estimate (£m)

24 7 . 9

No Changes in Spring Supplementary Estimates 2011-12

Spring Supplementary Estimate Administration

247 . 9

Programmes

10. In a Written Ministerial Statement in February 2011, the Foreign Secretary informed the House of the Foreign and Commonwealth Office’s allocations for Programme spending for the FY 2011/2012.  Allocations remain broadly in-line with the budgets set out in that Statement.

11. All the FCO’s own direct programme spending scores against Section A of the Supply Estimate with Section B covering the corresponding grants to third parties.

12. In addition to the programme spend set out in the Written Ministerial Statement around £500m of spend in support of front-line activities has also been re-classified as programme from administration costs but these are not allocated to specific programmes. Also included in our programme budget is the tripartite £537.2m Conflict Prevention and Peacekeeping pools, changes to which are outlined above.


Budget comparisons

13. The definition of departmental budgets changes over time. Table 4 shows the FCO outturn on the definition of budgets used in the relevant financial year in order to be consistent with data published at that time. Data for each year may not therefore be strictly comparable.

Table 4 Previ ous years' expenditure against d epartmental budgets £m

Year

Voted

Non-voted

Total DEL

Outturn 1

Variance Per cent

Resource DEL

2008-09 Outturn

2 , 074.7

3.0

2,077.7

2 , 085.3

0.4

2009-10 Outturn

2,23 8.0

3. 0

2,241 . 0

2,224. 4

-0.7

2010-11 Outturn

2,2 21 .5

14. 0

2,235. 5

2,200 . 3

- 1.6

2011-12 Plans

2,210.1

2,210.1

2012-13 Plans

1,573. 4

1,573. 4

2013-14 Plans

1,54 4 . 4

1,54 4 . 4

2014-15 Plans

1,2 84 . 4

1,2 84 . 4

Of which Administration

2008-09 Outturn

430.5

430.5

412.8

-4.1

2009-10 Outturn

456.3

456.3

445.2

-2.4

2010-11 Outturn

489.1

1.6

490. 7

4 66 . 2

- 5.0

2011-12 Plans

247. 9

247. 9

2012-13 Plans

2 30 . 0

2 30 . 0

2013-14 Plans

21 3 . 0

2 13 . 0

2014-15 Plans

198 . 0

198 . 0

Resource AME

2008-09 Outturn

50.0

50.0

-30.0

-160.1

2009-10 Outturn

50.0

50.0

51.1

2.3

2010-11 Outturn

40.0

40.0

13.8

-65 . 6

2011-12 Plans

75.0

75.0

2012-13 Plans

75.0

75.0

2013-14 Plans

75.0

75.0

2014-15 Plans

75.0

75.0

Capital DEL

2008-09 Outturn

216.1

216.1

229.1

6.0

2009-10 Outturn

203.3

203.3

199.6

-1.8

2010-11 Outturn

167.9

167. 9

15 5 . 6

- 7.3

2011-12 Plans

107.0

107.0

2012-13 Plans

102.0

102.0

2013-14 Plans

102.0

102.0

2014-15 Plans

98.0

98.0


Departmental Unallocated Provision (DUP) 2011-12

14. The FCO has taken up its entire £10m of unallocated resource in the Spring Supplementary for to meet a number of in-year pressures in Section A as discussed above.

Table 5 2011-12 Departmental Unallocated Provision remaining

Resource

Capital

DUP to met unforeseen requirements arising in-year

£0.0m

£0.0m

Total

£0.0m

£0.0m

Budget Exchange

15. We have made no use of budget exchange.

Changes in Accounting Policies

16. In accordance with Clear Line of Sight project the FCO will consolidate the Westminster Foundation for Democracy, the Marshall Aid Commemoration Commission and the Great Britain China Centre Non-Departmental Public Bodies into its 2011-12 Accounts.

17. The Contingent Liability for de-mining in the Falkland Islands has now become a provision of £1.3m and so has been removed from Note K.

18. This memorandum has been seen and approved by the Accounting Officer.

Alison Currie,

Finance Director

3 February 2012

Prepared 22nd March 2012