Foreign and Commonwealth Office Departmental Report - Foreign Affairs Committee Contents

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.


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.


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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