DR 1:
Letter to the Committee Specialist from the Head of the Parliamentary
Relations Team, Foreign and Commonwealth Office
In the memorandum
which we sent to the Foreign Affairs Committee on 6 April we said
that we would provide some further information on recommendations
36 and 46 in the FAC's Report of 21 March. I am pleased to enclose
this information which I hope you will find useful.
RECOMMENDATION
36
We conclude that
there appears to be significant scope for the FCO to improve its
procurement practices. We recommend that in its response to this
Report the FCO should update us on its progress in implementing
its procurement improvement plan, and in particular set out whether
all elements are now back on track for completion on time by February
2011. We further recommend that the FCO should provide its estimates
for the savings achieved so far and likely to be achieved by the
end of the project.
FCO response:
Following the FCO's Procurement Capability Review (PCR) in September
2008, we recognised that the FCO had more opportunity to improve
our procurement capability. In response to the PCR, a Procurement
Improvement Plan (PIP) was agreed in February 2009. This set out
a detailed range of activities and measures, with a clear set
of milestones, to be overseen by a dedicated project manager,
in order to address the issues identified and bring significant
transformation to FCO's procurement, over a period up to February
2011. The milestones included the recruitment of a new Commercial
Director, a new Commercial Strategy and changes to the FCO's procurement
organisational structure.
In March 2010 the
Office of Government Commerce (OGC) conducted a 12-month milestone
(stock take) assessment that focused on the progress made by the
FCO against both its original PCR and its PIP - basically a half-way
point in the change programme. We received the draft of the
Report at the end of March. It sets out a positive position, concluding
that during the first year solid foundations have been laid on
which the FCO can build and continue to make improvements to its
commercial and procurement capabilities, and which indicates that
the programme is generally on track.
The report highlights
a number of particular points that demonstrate progress and development,
the most notable of which are as follows:
- FCO Board has
demonstrated support for the development of our procurement capability
by endorsing a commercial strategy and supporting the appointment
of a new Commercial Director, as well as through the establishment
of a Commercial Board that sets out a clear governance structure
to oversee FCO's procurement activities, to manage risk and to
track progress against the commercial strategy.
- The recruitment
of the new Commercial Director, supported by her senior team,
has been instrumental in raising the profile of procurement and
injecting vigour and pace in the implementation of the PIP with
solid progress being made.
- The procurement
team was restructured and organised around teams that focused
upon the FCO categories of procurement spend, prioritising the
key categories. This was a radical change. As such there is a
Category Team specifically working on Estates Category of Spend,
one dealing with Security Category of spend, Travel category of
spend and so on. This means the teams are aligned to the relevant
FCO Directorates and embedded into them. Category management means
truly understanding the business needs, managing demand, selecting
the appropriate procurement approaches and managing the markets
and supplier base to best serve these needs.
- Improvements
to the management and reporting of procurement performance and
spend.
We currently estimate
a cumulative saving, up to end of FY 09-10, of £15.3m. We
cannot at this stage provide a projected estimate up to the end
of FY 10-11, but we keep the cumulative savings figure under regular
review and shall therefore be able to update the Committee at
a later date.
RECOMMENDATION
46
We recommend that
in its response to this Report the FCO should provide a breakdown
of its 2009 Staff Survey results between UK-based and locally-engaged
staff, as it did for its 2008 Survey; or explain why this data
was not produced, at a time when local staff morale is of particular
importance. (Paragraph 206)
FCO response:
We are happy to provide you with the attached spreadsheets
which show a breakdown of the 2009 Staff Engagement Survey
results for UK-based and locally-engaged staff for all survey
questions (Annex A). There is guidance at the top of each spreadsheet
on how the data should be interpreted. The FCO took part in the
newly launched Civil Service wide staff survey in 2009.
The results are in
the form of the percentage positive (strongly agree and agree),
the percentage neutral (neither agree nor disagree) and negative
responses (strongly disagree and disagree). For ease of interpretation,
we have presented the findings (positive, neutral and negative)
for UK-based staff separately from locally-engaged staff.
The FCO places a
great deal of importance in the staff survey results and we demonstrate
that we act on what our staff have said. We achieved a response
rate of 85%, which was a great achievement for an organisation
with staff located across a global network. We achieved an Employee
Engagement Index of 69%, which placed the FCO above the Civil
Service benchmark (58%), above the High Performance benchmark
(63%) and first among large Government departments (of more than
10,000 staff). The Employee Engagement Index measures advocacy,
motivation and commitment to the organisation. Our locally-engaged
staff are slightly more engaged (70%) than our UK-based staff
(67%). This demonstrates that our locally-engaged staff are highly
motivated and committed to the organisation.
17 May 2010
Annex A
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