The role of the FCO in UK Government

Written evidence from Dr Scott James

The Changing Role of the FCO in the UK EU Policy-Making Process

Introduction:

The research and recommendations contained in this report are drawn from a doctoral research project titled ‘Singing from the Same Hymn Sheet? Europeanisation and European Policy Making in the UK and Irish Core Executives, 1997-2007’ completed at the University of Manchester between 2005 and 2008, and subsequent research conducted at King’s College London during 2009. The findings are based largely upon the detailed testimonies of sixty serving and former ministers, senior and junior officials, and special advisors drawn from across the main departments of state. The interviews were conducted on a non-attributable basis according to Chatham House rules. The research was supported by the Economic and Social Research Council and is to be published as a monograph by Manchester University Press in 2011. [1]

Executive Summary:

· Since 2001 the EU policy making process in the UK has undergone fundamental reform, strengthening the strategic capabilities of the Cabinet Office to the extent that it has become the Prime Minister’s first source of advice and expertise on EU policy.

· Although the FCO retains important formal responsibilities for managing EU policy, its role and influence within Whitehall has been challenged by three developments: increasing EU expertise and networking by departmental policy leads; rationalisation and reorganisation within the FCO’s Europe Directorate; and the waning influence of the formal EU cabinet sub-committee.

· These changes are driven in part by longer-term structural developments that have undermined foreign ministries across Europe: the growing importance and frequency of European Council summits; the increasingly technical and specialist nature of EU policy dossiers; and the tendency to reach preliminary agreements through informal pre-Council discussions.

· The FCO has responded by developing a niche role which seeks to add value to UK EU policy in three respects: by reallocating resources to the UK Permanent Representation in Brussels (UKRep); maintaining and exploiting the UK’s wider diplomatic network of European embassies; and leading efforts to encourage departments to engage more effectively with EU counterparts.

· The reforms have had three unintended consequences: exacerbating the existing conflict of interest between the Cabinet Office’s coordination and strategic roles; further blurring the division of responsibilities for EU policy within and between the Cabinet Office and FCO; and contributing to bureaucratic overload by raising expectations beyond that which could be realistically met.

· The report recommends that the FCO should concentrate at what it is best at, namely strengthening its wider diplomatic network, renewing efforts across Whitehall to promote more effective strategic networking, and refocusing its activities on formulating and articulating a clearer strategic vision for European integration.

· It also recommends that collaboration between the Cabinet Office and FCO could be reinforced by convening a new inter-ministerial committee on EU policy strategy to be chaired by the Prime Minister; and by redefining the role and position of the Minister for Europe so that they are based in both the Cabinet Office and FCO.

Detailed Submission:

Prime Minister’s Office and Cabinet Office

1. The role of the Foreign and Commonwealth Office (FCO) in the management of national EU policy has changed fundamentally over the past decade. For most of the time since the UK’s accession in 1973, the FCO has been at the heart of the process and, crucially, has remained the principal source of foreign policy advice on EU affairs to the prime minister. Traditionally this has taken the form of two private secretaries seconded from the FCO to the Prime Minister’s Office (PMO). By contrast the European Secretariat (COES) and the Overseas and Defence Secretariat (ODS) in the Cabinet Office have traditionally focused on Whitehall coordination. [2]

2. In 2001 Tony Blair decided to establish a stronger ‘in house’ foreign policy capability within the PMO, leading to the merger of the positions of private secretary and head of the Cabinet Office secretariat. This created a new ‘Advisor on EU Affairs and Head of the Cabinet Office European Secretariat’ and an ‘Advisor on Foreign Affairs and Head of the Overseas and Defence Secretariat’. Both had offices located within No.10 and were promoted to the rank of permanent secretary. In addition, a small team of four foreign policy advisors was established within the PMO composed of secondees from the FCO and experts from outside government. By contrast arrangements for domestic policy remained largely unchanged.

3. The real significance of these changes has been the extent to which they have reshaped patterns of power dependency at the centre of the Whitehall EU policy network. The COES now serves as the Prime Minister’s first source of advice and expertise on EU policy. Around two thirds of its workload is now prescriptive and devoted to delivering the Prime Minister’s priorities across government, with only one third expended on traditional coordination or dispute resolution. Although departments have become less reliant on COES for coaching, monitoring and advice, its capacity to provide strategic direction has been greatly enhanced as a consequence of the perception that it is much closer to the PMO than other Cabinet Office secretariats and is viewed as an instrument of the Prime Minister’s will across Whitehall. As a result, departments increasingly look towards it for a guide as to what policy line to pursue in Europe. [3] The increasing burden and expectations that this generates has in turn necessitated a near doubling in the size of the secretariat since the late 1990s.

Foreign and Commonwealth Office

4. The FCO retains important formal responsibilities in the management of UK EU policy, including: outlining the government’s overarching European strategy, providing briefings for ministers prior to key Council meetings, and chairing the cabinet sub-committee on EU policy. In several important respects however this traditional coordinating role has been challenged as a consequence of three developments.

5. First, the continued value of the FCO to other departments is inversely related to their internal capacity for diplomatic expertise. For well-resourced departments with extensive bilateral connections and experience of lobbying (notably the Treasury, BIS and DEFRA) interaction with home-based FCO officials is minimal. But as engagement and networking by other departments has increased over the past decade (driven, in part, by the 1998 Step Change programme [see below]), so their dependency on the FCO for advice and support has declined.

6. Second, this trend has contributed to a major reorganisation of European business within the FCO. Since 2004 the internal and external aspects of EU policy have been centralised within a single Europe Directorate organised around thematic rather than geographical structures. The introduction of this ‘lead unit’ system means that responsibility for managing bilateral relations with EU member states are divided between several policy-focused groups. But it has also led to the further rationalisation of country-specific expertise. This is reflected in the fact that although the Europe Directorate briefly expanded in response to the 2005 UK EU Presidency, staff numbers have since been cut back significantly and resources redeployed to ‘front line’ diplomats based in overseas embassies.

7. Third, the cabinet sub-committee on EU policy is widely perceived as a ‘rubber stamp’ for decisions effectively taken elsewhere: not least through the informal Joint Ministerial Committee (Europe) which incorporates representatives from the devolved governments, and the Cabinet Office ‘Friday’ meeting which is chaired by the Prime Minister’s EU policy advisor to serve as a ‘clearing house’ for all EU-related issues. By 2004 the committee was struggling to attract a high level of attendance from cabinet ministers, and was henceforth convened in ‘virtual’ form as a mechanism through which EU policy was formally cleared through written correspondence. Since then however the sheer pace and volume of EU-related correspondence has caused the system to become severely overloaded and detrimental to effective decision making.

8. Far from being an isolated example, the changes at the heart of the UK EU policy making process reflect three longer-term structural developments at the European level which have served to empower prime minister’s/cabinet offices and disempower foreign ministries across the EU. First, the pace of integration in areas of ‘high’ politics (such as defence, security, economic, employment and immigration policy) has forced heads of government to play an increasingly prominent role in the management of EU policy across government. The growing frequency of European Council summits since 2002 has also served to usurp the role of the General Affairs Council, which is composed of national foreign ministers, in coordinating EU business. [4] Second, the reach of EU competence into highly technical areas of domestic policy (driven by the Lisbon Strategy) means that policy leads are far less amenable to having their preferences subsumed to those of wider diplomatic prerogatives. Third, although foreign ministries continue to brief ministers prior to Council meetings, this masks the extent to which the real decisions are increasingly taken in informal pre-Council discussions led by national permanent representatives or prime ministerial ‘sherpas’ (commonly a senior official that serves as EU policy advisor to a head of government). This is a response to the unwieldy and inefficient nature of formal ministerial Councils and COREPER meetings since the 2004 enlargement. [5]

Added value

9. The FCO has proved relatively relaxed about the encroachment of the Cabinet Office and other departments on its traditional diplomatic territory. This is for two reasons. Firstly, the sheer volume and complexity of EU business today limits the capacity of any single department to steer substantive policy. Second, the FCO lacks the authority and legitimacy within Whitehall to guide policy, intervene in negotiations and/or arbitrate in disputes.

10. The FCO has responded to this new reality by trying to carve out a niche role for itself. It increasingly seeks to ‘add value’ to UK EU policy by contributing a distinct diplomatic perspective, rather than attempting to claw back the strategic and advisory functions that have been lost to the Cabinet Office. It does so in three main ways: supporting and strengthening the role of permanent representatives; maintaining a wider diplomatic network; and facilitating networking by policy leads with EU counterparts.

11. Firstly, the FCO’s most important role in UK EU policy making today is through the management of the formal interface between Whitehall and the rest of the EU. Paradoxically the main beneficiary of the FCO’s declining role within Whitehall has been the UK Permanent Representation to Brussels (UKRep). It has doubled in size since the mid-1990s as resources have been reallocated away from London in order to keep pace with four demands: further enlargement (which increases the number of countries the UK must lobby), pressure from the devolved governments for increased representation, expanding EU competence into new areas of policy, and enhanced EU engagement by home departments. It has also been indirectly strengthened as a consequence of the changes within the Cabinet Office. Although formally accountable to the Foreign Secretary, the Permanent Representative tends to answer directly to the Prime Minister’s Office as a result of the weekly meeting that is convened with the Prime Minister’s EU policy advisor. This has been reinforced by the fact that the two now meet as ‘equals’, ostensibly because the head of the COES has been promoted to the same rank (permanent secretary).

12. Second, the FCO’s wider network of European embassies have become more, not less, important in the EU decision making process. As a consequence of further enlargement, key discussions and deal making is increasingly conducted in national capitals prior to formal meetings in Brussels. Overseas attaches therefore serve as a vital source of access (to other governments), intelligence (on member state negotiating positions) and assistance (with lobbying activities). At home departments compete for their time and attention – copying them into intra-departmental communications, providing them with regular briefings, and/or arranging periodic meetings – thereby integrating them further into the domestic policy process. This has been reinforced over recent years through advances in new communication technology (email and videoconferencing).

13. Finally, the FCO’s role was enhanced in 1998 as it gained responsibility for driving forward the ‘Step Change’ programme, aimed at underpinning the development of a more constructive European policy by strengthening networking between Whitehall policy leads with their EU counterparts. This entailed monitoring, encouraging and occasionally cajoling ministers and officials to engage more intensively with their opposite numbers. In practical terms this involved monitoring progress through the use of ‘grids’ which listed the number of bilateral trips departments had made or planned, and the use of peer pressure through the circulation of informal league tables. Within Whitehall the programme also took the form of training seminars and roadshows which sought to raise awareness of the importance of networking for strengthening the UK’s influence. It has also continued to provide important logistical support to departments – such as expertise on member states and the EU institutions, assisting with the development of lobbying and negotiating strategies, and through the promotion of public diplomacy at home.

Unintended consequences

14. The reform of EU policy making has given rise to three unintended consequences that risk undermining the UK’s capacity to exert influence in Brussels. First, the potential conflict of interest that exists between the European Secretariat’s traditional coordinating role and its enhanced strategic role has been exacerbated. This necessitates treading a fine line between impartial inter-departmental brokerage and driving forward the Prime Minister’s agenda, particularly where No.10’s views are at odds with the wider Whitehall consensus.

15. Second, the division of responsibilities for EU policy within and between the Cabinet Office and FCO have become increasingly blurred. On the one hand, the strengthening of the former’s capacity to provide EU policy strategy and advice duplicates the traditional role of the FCO. On the other hand, the reorganisation of business within the Europe Directorate around policy lead units simply mirrors the role of desk officers in the COES. Moreover, rather than fully integrate bilateral responsibility into the new policy teams, the FCO has simply opted to overlay the new vertical thematic division of labour with the old horizontal geographical division of labour. Because policy teams are also responsible for relations with different member states, two teams can often appear responsible for a particular issue at the same time (such as a ministerial visit), based either on their policy specialism or bilateral responsibility. This failure to clearly define responsibility for strategy, coordination and communication contributed to the duplication of functions and bureaucratic overload during the 2005 UK EU Presidency.

16. Third, by attempting to create a prime minister’s department in all but name, the reforms have raised expectations beyond that which could be realistically met. Although the Cabinet Office’s role has been increased, its resource base has failed to keep pace with the demands of integration and policy leads. It also remains too focused on short-term political imperatives and prone to being buffeted by day-to-day events to provide effective strategic direction for EU policy. This has had the effect of reinforcing its relationship of dependency with the PMO. Yet the latter’s capacity to provide the necessary political leadership is itself contingent on the limited time and attention that the Prime Minister can devote to EU issues. Again, many of these failings were apparent during the 2005 EU Presidency as the Cabinet Office tended to over-plan but under-prepare: focused on agreeing and monitoring the delivery of departmental presidency objectives at the expense of strategic preparation, risk management and ‘horizon scanning’ for potential problems.

Recommendations

The FCO should focus on what it is best at

17. The FCO should concentrate on specialising at what it is good at, rather than seeking to challenge or duplicate the Cabinet Office. This means strengthening existing methods and finding new and innovative ways of adding value to substantive EU policy within Whitehall. It can do so in three main ways. First, the FCO should seek to maintain and exploit its wider diplomatic network, in both Brussels and other national capitals, as a valuable source of access, intelligence and expertise on other EU member states. This necessitates raising awareness across Whitehall of the strategic benefits that the embassy network can provide, strengthening existing communication systems between home-based policy leads and overseas attaches, and ensuring that the latter have the requisite policy expertise in order to actively contribute (rather than simply serve as gatekeeper) to technical policy dossiers. It is also likely to require the further reallocation of resources away from London towards ‘front line’ embassy staff.

18. Second, the FCO can take the lead across Whitehall in promoting engagement and networking with EU counterparts. Although the Step Change programme undoubtedly helped to normalise the UK’s relations with Europe, it was flawed in several respects. First, too many officials continue to view Brussels as an obstacle to policy development rather than an opportunity for policy learning or resolving intractable policy problems. Second, departments tend to pursue a strategy of ‘promiscuous bilateralism’ [6] : forging relationships with particular member states on particular issues, but which can over time serve as a source of irritation to other governments. Thirdly, the UK remains relatively poor at high-level political networking by ministers, leaving us isolated from the informal but highly influential political networks within which preliminary Council deals are increasingly forged. A concerted effort at tackling these impediments necessitates a renewed programme of networking, using a combination of awareness-raising and peer pressure, which emphasises the longer-term strategic advantages of relationship-building as a way of fostering trust and confidence, rather than simply as a channel for securing short-term tactical victories. Only the FCO has the expertise and resources to generate sufficient momentum to drive this wider process of cultural change.

19. Finally, the vacuum of strategic thinking on EU policy remains a serious weakness of the UK policy process. Although lead departments regularly reflect upon the medium and longer-term prospects, opportunities and risks associated with the development of particular policy dossiers at the EU-level, there is little attempt to construct a more joined-up approach across Whitehall. This requires answering several questions. Which policies does the UK consider to be strategic priorities? How can the UK play a more constructive role in driving developments in these areas? What future decisions and events are likely to affect the UK’s aims and ambitions? How does the UK government see the EU developing over the next 5, 10 and 20 years? By failing to address these questions, successive governments have continued to frame the UK’s contribution to Europe almost entirely in terms of defending the national interest. More effective influence in Brussels can only be secured by formulating a clear and concise strategic narrative that defines a positive vision for European integration (on foreign policy cooperation, tackling climate change or liberalising energy markets for example) and sets out a constructive role for the UK within it. With its broad strategic overview of UK EU policy, the FCO could maximise its added value by restructuring its home-based Europe Directorate around crafting and articulating just such a vision.

Closer coordination between the Cabinet Office and FCO is essential

20. At present the division of labour established between the Cabinet Office and FCO remains ambiguous, contributing to bureaucratic overload at the centre. Moreover, strategic coordination of EU policy is hampered by two problems: the Cabinet Office has become over-dependent on the Prime Minister for political leadership in order to drive and steer EU policy; while the FCO is constrained from performing this role because longer-term developments at the EU-level have undermined the influence and authority of Foreign Ministers more generally. Effective management of UK EU policy can only come through closer collaboration between the Cabinet Office and FCO, not through the further centralisation of EU responsibilities in one location or the other. This can be achieved through two significant reforms.

21. First, the Prime Minister should in future chair a high-level inter-ministerial committee on EU policy. This could be achieved either by replacing the Foreign Secretary as chair of the formal cabinet-subcommittee on EU policy (as is the case in several other EU member states) or through an informal ministerial grouping (as Tony Blair briefly attempted in the run-up to the 2003 review of the ‘five test’ euro assessment). Crucially this would provide more effective political momentum and coordination of the UK government’s broader EU strategy, facilitate the steering of EU policy by providing departments with a much clearer policy lead on key issues, and add much needed weight behind the FCO’s efforts at facilitating engagement and networking with EU counterparts. This ‘strategic’ EU committee should remain separate from the system of correspondence for approving EU policy, which also needs to be streamlined. It should also be mirrored at senior official level through the reinstatement of a European Strategy Group (chaired by the Prime Minister’s EU policy advisor), designed to engage in medium and longer-term strategic thinking and planning on EU policy. This activity tends to be marginalised within the Cabinet Office’s ‘Friday’ meeting at present because it is overburdened as a ‘clearing house’ for EU-level negotiations.

22. Second, the position of Minister for Europe could be greatly strengthened. Quite apart from the rapid turnover of incumbents, the position has traditionally suffered from having an ill-defined role and inadequate departmental support base. As has been attempted in the past, the position should be re-focused towards facilitating the domestic coordination of EU policy: with responsibility for monitoring and scrutinising departments on the transposition of EU legislation, leading the government’s EU public diplomacy, and driving the FCO’s efforts at promoting engagement and networking with EU counterparts. In order to strengthen their influence within Whitehall, the UK government could emulate best practice from Ireland by restructuring the position so that the minister is henceforth based in both the Cabinet Office and FCO. By effectively spanning the two departments, the minister would be able to draw upon the wider authority and legitimacy that derives from having direct access to the Cabinet Office, while taking advantage of the FCO’s superior knowledge, resources and expertise. They would also greatly facilitate cooperation and collaboration between the two, help to foster joined-up thinking on strategy and networking, and serve as an early warning system for potential problems by guarding against wasteful duplication or competition. The shared ministerial position therefore constitutes an innovative solution to an age-old problem: EU policy is neither domestic nor foreign policy, but a complex hybrid of both.

11 November 2010