Annex A
MEMORANDUM
1. When I wrote to the Committee previously on 18
March, I explained that budget allocations for overseas posts
was being undertaken and that I would write further in due course,
once we had clarity around the funding position. I also said I
would write further on the position regarding Business Ambassadors.
2. Following the Foreign Secretary's announcement
on 11 May 2011 which detailed the new strategic shift for FCO's
overseas network, I am now able to provide you with the following
update.
3. We recognise how complex UKTI budgets, and in
particular the funding for FCO posts, can be. With that in mind
UKTI's Finance Director, Curtis Juman, would be happy to meet
the Clerk of the Committee to discuss UKTI's funding settlement.
Perhaps you could let me know if you would like to take up that
offer.
To provide UKTI budget information along with
details of the individual allocation to countries
4. UKTI's budget profile for 2010-11 has now been
finalised and resources for 2010-11
to 2014-15 have been published in the new UKTI Strategy; Britain
Open for Business. Since the strategy was published, we have
obtained actual outturn figures for 2010-11
and these are included in the table below, which also includes
provisional FCO budgets for 2011-12 to 2014 -15, which are agreed
annually. Finally, we have included BIS overheads within the
BIS Admin figures.
5. UKTI's budgets are complicated as they include
directly voted money from Parliament, and resources provided to
UKTI by both FCO and BIS. The resources provided by BIS and FCO
comprise directly allocated budgets and attribution of overhead
costs over which UKTI has limited control. The directly allocated
sums are used to pay for staff. The overheads comprise costs such
as accommodation, IT, certain allowances, and the use of assets.
6. For savings on FCO funding, UKTI expects the majority
of savings to be delivered from reductions in overheads, rather
than a reduction in frontline delivery staff. The reduction in
BIS Admin is likely to lead to a reduction in UKTI HQ posts of
around 80 by the end of the Spending Review period. We have already
discussed the impacts of the cuts in resources for UKTI's directly
voted funding.
7. In addition, having completed our planning process
for 2011/12 I am now able to provide some specific information
by market.
8. Attached to this letter is a table which provides
a series of figures providing specific detail about UKTI support
in the 96 markets where we have trade teams. The Spending Review
2010 provided a flat cash settlement for FCO, which means that
there is no increase to cover inflation. UKTI's intention is to
maintain the overall overseas resource at current levels, although
we will move more resources from developed markets to high growth
and emerging markets over the lifetime of the UKTI Strategy, to
match both the opportunities and the demands from our customers.
We will also look to increase the proportion of locally employed
staff, thereby maximising available resources in order to maintain
levels of support.
9. The overseas market information contained in the
attached table is as follows:
Full Time Equivalent Staff (Trade & Foreign Direct
Investment (FDI)) -
The number of staff employed in market working either on supporting
Trade or FDI as at 31 March 2011. Please note that this reflects
UKTI dedicated resource, and does not include any wider FCO resource
that can be utilised in support of commercial diplomacy.
2010/11 Overseas Resources - This covers the full
economic cost of UKTI overseas delivery for 2010/11.
Business Developments Visits (BDV) - The primary
purpose of the BDV programme is to allow individual commercial
staff at post to travel to the UK or elsewhere overseas in support
of sectoral priorities. This can include visits to the UK to:
provide advice and assistance to business on their market's potential;
participate in major trade fairs or exhibitions; to accompany
an inward mission, foreign investor, etc.
Sector Specific Events - Funding which supports specific
sector events in overseas markets. This can include events where
delegates can learn about trade opportunities in particular markets
and meet potential partners and others to discuss opportunities
in more detail and network. Funding allocated in this way accounts
for a small percentage of Sector funding, since events are not
generally planned on a market basis. Events will often attract
interest from many markets, e.g. Technology World attracted c400
companies from 45 different countries.
To consider representation of the Creative Industries
across our Business Ambassadors
10. On 9 May 2011 Lord Marland was appointed Chairman
of the Business Ambassador's network. He aims to build on the
success of the Business Ambassadors and will wish to consider
options for how best to achieve that. This may include adding
some additional members to the network to increase the overall
sectoral coverage.
UKTI
19 July 2011
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