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HC 522 Published on 8 March 2006

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House of Commons

Foreign Affairs Committee

Foreign and Commonwealth Office Annual Report 2004–05

Second Report of Session 2005–06

Report, together with formal minutes, oral and written evidence

Ordered by The House of Commons to be printed 15 February 2006

Foreign Affairs Committee

The Foreign Affairs Committee is appointed by the House of Commons to examine the administration, expenditure and policy of the Foreign and Commonwealth Office and its associated agencies.

Current membership

Mike Gapes (Labour, Ilford South), Chairman Mr Fabian Hamilton (Labour, Leeds North East) Rt Hon Mr David Heathcoat-Amory (Conservative, Wells) Mr John Horam (Conservative, Orpington) Mr Eric Illsley (Labour, Barnsley Central) Mr Paul Keetch (Liberal Democrat, Hereford) Andrew Mackinlay (Labour, Thurrock) Mr John Maples (Conservative, Stratford-on-Avon) Sandra Osborne (Labour, Ayr, Carrick and Cumnock) Mr Greg Pope (Labour, Hyndburn) Mr Ken Purchase (Labour, Wolverhampton North East) Rt Hon Sir John Stanley (Conservative, Tonbridge and Malling) Ms Gisela Stuart (Labour, Birmingham Edgbaston) Richard Younger-Ross (Liberal Democrat, Teignbridge) The following member was also a member of the committee during the parliament.

Rt Hon Mr Andrew Mackay (Conservative, Bracknell)

Powers

The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk.

Publication

The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at http://www.parliament.uk/parliamentary_committees/foreign_affairs_committee.cfm.

Committee staff

The current staff of the Committee are Steve Priestley (Clerk), Sarah Ioannou (Second Clerk), Ann Snow (Committee Specialist), Kit Dawnay, (Committee Specialist), Kevin Candy (Committee Assistant), Catherine Jackson (Secretary) and Chintan Makwana (Senior Office Clerk).

Contacts

All correspondence should be addressed to the Clerk of the Foreign Affairs Committee, House of Commons, London SW1A 0AA. The telephone number for general enquiries is 020 7219 6394; the Committee’s email address is [email protected]

Foreign and Commonwealth Office Annual Report 2004–05 1

Contents

Report Page

Conclusions and recommendations 3

1 Introduction 9 Background to the inquiry 9 Form of the annual Departmental Report and related papers 9 Assessing performance 11 A year of two presidencies 12

2 Transparency and openness 13 Relations with Parliament 13 Freedom of Information (FoI) 15

Classified PSA scorecards 16

3 Efficiency and effectiveness 17 The Collinson Grant Report 17

Management 20 Leadership 21 Project management 22 Financial management 22 Performance review 23

Staff 25 The need for professional skills 25 Efficiency measures directly affecting staff 28

Prism 29 Other IT projects 33 ‘Rationalising’ the home estate 33 Reinvesting efficiency savings 34 Conclusion: the FCO’s response to Collinson Grant 34

4 Consular Services 38 Emergency response 40

The Indian Ocean tsunami 40 Hurricanes Katrina and Rita 42 Paying the bills 43 Conclusion 43

5 Diplomatic representation overseas 46 ‘Alternative representation’ 46 The overseas estate 49

6 FCO personnel issues 54 Security of FCO personnel 54 Disciplinary procedures 54 Publication of memoirs 55

2 Foreign and Commonwealth Office Annual Report 2004–05

Senior diplomatic appointments 57 Diversity 58

7 BBC Monitoring 60

Formal minutes 64

List of witnesses 73

List of written evidence 74


Conclusions and recommendations

Form of the Annual Departmental Report and related papers

1. We conclude that the presentation of the FCO’s performance against its Public Service Agreement targets in the Autumn Performance Report is an improvement over the presentation of similar information in the annual Departmental Report. (Paragraph 5)

2. We conclude that the delay of over two months in signing off and publishing the FCO’s Resource Accounts for 2004–05 was excessive and that it had the unacceptable consequence of depriving Parliament and the public of an important tool for exercising scrutiny. We recommend that the FCO explain in its response to this Report what caused this delay and why it missed even the revised target for signing off its accounts. (Paragraph 6)

Assessing performance

3. We conclude that performance targets defined in terms of inputs and outputs may often be more appropriate for the FCO than targets based on outcomes, particularly where a target is based on outcomes which it is beyond the capacity of the FCO to deliver. We recommend that the FCO discuss with the Treasury the potential for redefining some of its targets and performance indicators accordingly. (Paragraph 12)

4. We recommend that in its response to this Report the FCO publish a summary of the results of the NAO’s review of the data systems underlying its PSA targets, together with its commentary on how it proposes to implement any conclusions reached by the review. (Paragraph 13)

A year of two presidencies

5. We recommend that in its response to this Report the FCO provide a full breakdown of the costs of the G8 and EU presidencies, how they were met, and whether the diversion of resources to service the presidencies led to any adverse consequences for its other work. (Paragraph 15)

Transparency and openness

6. We conclude that the failure of the FCO to share with Parliament the reports prepared for its Board by Collinson Grant Ltd and by Norman Ling is evidence of a disturbing aversion on the part of FCO management to proper scrutiny of its activities. Accountability of the executive to Parliament is a fundamental feature of the United Kingdom’s constitution. We therefore welcome recent undertakings by the FCO to be more open with this Committee in future; we will evaluate this new policy in the light of experience. (Paragraph 23)


7. We congratulate the Foreign Office on being one of the better departments at dealing with freedom of information requests in a timely manner, but we are concerned that the FCO is also one of the departments most likely to withhold information from enquirers. We recommend that in its response to this Report the FCO publish a statistical analysis of its handling of FoI requests, showing the grounds on which requests were not met or were only partially met. (Paragraph 26)

8. We accept that where there are good reasons for PSA scorecards to be classified according to the usual criteria, they should not be published, but we recommend that the classification of such scorecards be reviewed regularly, with a view to timely publication where possible. In cases where classification of scorecards remains essential, we recommend that consideration be given to publishing a declassified summary. (Paragraph 29)

Efficiency and effectiveness

9. We are disappointed and concerned that the FCO apparently takes the view that, because a study costing hundreds of thousands of pounds and with potentially huge implications for the FCO’s management of its resources was intended for internal consumption only, there was no need to ensure that it was error-free. (Paragraph 35)

10. We recommend that in its response to this Report the FCO list the additional frontline activities which are being funded by efficiency savings and asset sales, giving the amount of funding in respect of each such activity. (Paragraph 36)

11. We recommend that in its response to this Report the FCO provide further details of the restructuring of its Human Resources Directorate, including full information on the reduction in its size and of any consequences for performance of the HR function in the FCO. (Paragraph 40)

12. We welcome the FCO’s commitment to changing aspects of its culture and to giving leadership and management skills their appropriate place in the organisation. We recommend that in its response to this Report the FCO set out how it intends to advance this agenda. (Paragraph 42)

13. We conclude that the FCO failed seriously in its duty to the Committee in not informing the Committee about what the National Audit Office has described as “the largest identified loss by fraud in the Department’s history” and about other frauds. We are extremely concerned that the Tel Aviv fraud continued undetected for at least four years as a result of weaknesses in financial control and involved clear breaches of long standing accounting procedures. We recommend that the FCO in its response to this Report set out the other significant frauds which have taken place in the last five years, and the specific steps it has taken to prevent any recurrence. (Paragraph 48)

14. We welcome the FCO’s new focus on reform of its finance function. We recommend that in its response to this Report, the FCO provide a detailed explanation of the nature of these and related reforms and of the timescale for implementing them. We further recommend that in future the FCO inform this Committee promptly of any incident involving major fraud or financial mismanagement. (Paragraph 50)


15. We recommend that the FCO keep this Committee informed of the progress of the ‘capability to deliver’ review being carried out by the Prime Minister’s Delivery Unit and, in due course, of its results. (Paragraph 52)

Staff

16. We conclude that the FCO needs to catch up with the rest of Whitehall, by recruiting professionally qualified, experienced people to the top roles in finance, human resources and estate management. We recommend that it do so without delay. (Paragraph 57)

17. We recommend that in its response to this Report, the FCO list the senior management jobs which will be cut or downgraded during the SR04 period, and that it state the net increase or reduction in staff numbers that it expects to result from this exercise. (Paragraph 60)

18. We recommend that in its response to this Report the FCO provide full information on the work of its PROSPER group. (Paragraph 61)

Prism

19. We conclude that the Ling report has exposed a woeful lack of professional skills and a disturbing series of failings in senior FCO management. We welcome acceptance of the conclusions of the report and we recommend that the FCO Board remain fully seized of the need to implement them. We further recommend that the FCO keep this Committee fully informed of the state of play on progress with putting each of the Ling report’s recommendations into practice; that it provide us with updates on the continuing implementation of Prism; and that it supply us with copies of Gateway reviews of further large, high-risk programmes. (Paragraph 69)

20. We recommend that in its response to this Report the FCO set out how it proposes to achieve its targets for prompt payment of invoices. (Paragraph 72)

Other IT projects

21. We recommend that in its response to this report the FCO provide full information on how refusal and fraud rates for on-line visa applications compare with those for conventional applications. (Paragraph 73)

Reinvesting efficiency savings

22. We support the FCO’s efforts to reclassify more of its expenditure on front-line services as programme rather than administrative expenditure and we recommend that it present a strong case to the Treasury for making this change. (Paragraph 79)

The FCO’s response to Collinson Grant

23. We recommend that in its response to this Report the FCO identify all those observations, conclusions and recommendations in the Collinson Grant report that


it does not accept, in each case with a full explanation. We also recommend that the FCO state in that reponse what stage it has reached in implementing each recommendation in the report that it does accept. We further recommend that the FCO publish in its response the list of activities classified as red, amber or green, which is referred to in the report. (Paragraph 84)

24. We congratulate FCO managers on their decision to invite external consultants to carry out a study of their efficiency, effectiveness and control of costs, although we have concerns about the lack of thoroughness with which the review was carried out and about the lack of seriousness with which the FCO regarded and appears still to regard the project. We conclude that, having commissioned the study, the FCO must deal with it seriously: this suggests that the FCO should change some of its management practices and its efficiency savings targets or it should defend and justify them, explaining where and how the consultants are mistaken in their conclusions. So far, we have seen no evidence that it is succeeding in doing either. (Paragraph 85)

Consular services

25. We conclude that the FCO’s failure in 2004–05 to achieve four out of the six Public Service Agreements for its consular services is disappointing, although we recognise that the targets are demanding and that activities carried out at Posts overseas will always be subject to pressures or to events which may be more extreme than those which apply in the United Kingdom. We recommend that in its response to this Report, the FCO set out in detail the goals, work programme and achievements to date of its new Nationality and Passports Best Practice Unit. We further recommend that the FCO identify those Posts which have registered failures in respect of consular services PSAs in financial years 2004–05 and 2005–06 and that it supply this Committee with full details of the Board’s proposal on the future of issuing passports overseas. (Paragraph 92)

26. We conclude that it would be wrong in principle for the FCO to be required to fund its response to unpredictable disasters such as the Indian Ocean tsunami. We recommend that the FCO take a strong line in its discussions with the Treasury and that Ministers accept the need for additional funding to be made available in such circumstances. We further recommend that consideration be given to increasing the resources available through the Emergency Disaster Reserve. (Paragraph 102)

27. We conclude that in recent years excessive and unrealistic expectations have arisen of what the FCO is able to do for people who get into difficulties abroad, including in circumstances such as natural disasters. We recommend that Ministers take a firm line in explaining to the public, not only through their official publications but also through the media, that there are practical limits to the consular support that British citizens who choose to travel abroad are entitled to receive, not least because of the FCO’s duty to make efficient and effective use of public funds. We nonetheless recommend that in the case of a further natural disaster on the scale of the Indian Ocean tsunami, exceptional assistance should be provided, tailored to the circumstances. (Paragraph 107)


28. We conclude that in most respects the FCO’s response to the immense challenge posed by the Indian Ocean tsunami was timely and successful. We conclude that the same can be said of the response to Hurricanes Katrina and Rita. It is important, however, that the FCO learns from the experience of responding to these major incidents and, in particular, from the mistakes which were undoubtedly made. We therefore welcome the FCO’s very informative and helpful progress report on how it is implementing the lessons learned from its handling of these disasters and we recommend that in its response to this Report the FCO provide an updated version of that table. (Paragraph 109)

Diplomatic representation overseas

29. We conclude that although co-location of a British sovereign Post with or within the post of another country is in general undesirable, it is almost always likely to be preferable to outright closure. We recommend that the FCO consider very carefully the case for co-location when adjusting its international priorities or when looking to achieve financial savings from its overseas operations. (Paragraph 118)

30. We conclude that the forthcoming referendum on Montenegro is likely to add to the case for the FCO to upgrade its Post in Podgorica to one headed by its own British Ambassador and appropriately staffed, and we recommend that this be done without further delay. (Paragraph 119)

31. We recommend that the FCO make the opening of an Embassy in Bishkek a priority. (Paragraph 120)

32. We conclude that there is no clear basis for the FCO’s projected receipts of £10 million from estate sales over the next three financial years. We recommend that in its response to this Report the FCO explain how it arrived at this projection, whether it regards the figure as a target, and if so how it expects to achieve it without “further large sales or other deals”, particularly involving properties of special architectural or historical importance. (Paragraph 128)

33. We conclude that the provision of information on the FCO’s management of its overseas estate has improved in recent years. We welcome the quarterly reports which the Committee now receives from FCO, and we will continue to scrutinise these and the policies which underlie them closely. (Paragraph 130)

FCO personnel issues

34. We continue to be concerned for the welfare of staff who serve their country in the more dangerous parts of the world. We recommend that the FCO maintain its commitment to ensuring that adequate safety and security measures are put in place, with an appropriate level of funding. This funding should be in addition to the FCO’s agreed public expenditure allocation, in recognition of the exceptional nature of the cost of protecting personnel and property from terrorist attacks. (Paragraph 132)


35. We strongly support the decision by Sir Michael Jay to write to Ambassadors and High Commissioners, reminding them of the importance of maintaining the trust and confidence of Ministers. We conclude that the breaking of trust or breaching of confidence on either side is against the best interests of officials and politicians alike and that it can be inimical to the conduct of effective foreign policy. However, we also conclude that where FCO officials comply with the Radcliffe rules and criteria, they should remain free to publish if they so choose. (Paragraph 141)

36. We recommend that the FCO provide the Committee with full details of any representations made by the Holy See, by the outgoing British Ambassador to the Holy See, or by the British Ambassador to Italy, about the propriety or acceptability of locating the Embassy to the Holy See or the residence of the Ambassador to the Holy See within the campus of the British Embassy to the Republic of Italy. (Paragraph 145)

37. We conclude that the FCO Board is absolutely right to recognise the need to address urgently such gender and ethnic minority imbalances as remain. We recommend that in its response to this Report the FCO provide further information on what it is doing to remedy this situation. (Paragraph 150)

BBC Monitoring

38. We recommend that in its response to this Report the FCO explain how the reduction in its funding of BBC Monitoring has contributed to its efficiency savings targets; and whether the Treasury has accepted this. (Paragraph 158)

39. We conclude that it is reassuring that BBC Monitoring has finally been given the financial stability it has been seeking and we believe that this should enable it to plan more strategically up to 2011. We also conclude that the quid pro quo for this certainty should be a continuing drive by BBC Monitoring to maximise its efficiency. We recommend that the FCO and the other sponsoring departments maintain their close interest in the operations of BBCM, to ensure that BBCM continues to offer excellent value for money. (Paragraph 159)


1 Introduction

Background to the inquiry

1. The annual Departmental Report of the Foreign and Commonwealth Office (FCO) for the period 1 April 2004 to 31 March 2005 was published in June 2005.1 Scrutiny of the FCO’s expenditure and administration is an important part of the work of the Foreign Affairs Committee (FAC). When, following the general election of 5 May, the Committee was appointed on 11 July, one of our first priorities was therefore to look at the FCO’s Departmental Report. We heard oral evidence on 26 October 2005 from the Permanent Under-Secretary and FCO officials and followed up numerous points in writing. The oral and written evidence is published with this Report.

2. We also heard oral evidence from the British Council, from the BBC World Service and, in February 2006, from Lord Carter of Coles, who at the invitation of the FCO and the Treasury carried out an inquiry into public diplomacy. It had been our intention to publish that evidence and our observations on it with this Report. However, due to the late publication of Lord Carter’s report, we were obliged to decide whether to delay our own Report, or to produce two Reports. We have chosen to publish a separate Report on Public Diplomacy in the coming weeks.

Form of the annual Departmental Report and related papers

3. Overall, we welcome the format of the FCO Departmental Report 2004–05 as being largely in line with the Foreign Affairs Committee’s previous recommendations and generally fit for purpose. We note, however, that over the past six years, the report has doubled in size, from 119 pages in 1998–99, to 240 in 2004–05. Less than one quarter of this increase can be attributed to changes sought by the FAC: the inclusion of cost-benefit analyses and ‘lessons learned’ sections, which in total account for 27 pages of the latest report. The bulk of it appears to be due to a tendency for the narrative parts of the report to expand year by year, and to the consequent need to break up this dense prose with yet more photographs. Unfortunately, this can detract from the report’s main function, which is to inform Parliament and the public about the FCO’s performance against its objectives and to account for its stewardship of public funds.2 We are not unhappy with the quality of the report, which is well-written and which rewards the inquisitive reader. We do, however, believe that clearer presentation of information could make the report more fit for purpose.

4. The annual Departmental Report is not the only document produced by the FCO to convey important information about its use of public resources. Chief among the others are the Autumn Performance Report (discussed above), the Resource Accounts, the Efficiency Technical Note, and memoranda on main Estimates and on supplementary Estimates. We note that in its first Autumn Performance Report, reviewing progress

1 Foreign & Commonwealth Office, Foreign and Commonwealth Office Departmental Report 1 April 2004–31 March

2005, Cm 6533, June 2005

2 The Departmental Report does not contain a statement of its purpose.


towards Public Service Agreement (PSA) targets, the FCO—in common with other Whitehall Departments—has adopted a ‘traffic light’ presentation of its performance: green for “fully on course;” amber for “generally on course;” and red for “not on course.”3 This gives a commendably clear and immediate indication of progress, which is backed up by more detailed explanations of exactly what is being achieved or, in some cases, what is not being achieved, and why. In some ways, the Autumn Performance Report is a more user-friendly document than is the Departmental Report. In just 64 pages, it communicates all the key information.

5. We conclude that the presentation of the FCO’s performance against its Public Service Agreement targets in the Autumn Performance Report is an improvement over the presentation of similar information in the annual Departmental Report.

6. Publication of the Resource Accounts for 2004–05 was considerably delayed by problems with the new management information system, Prism. We discuss these problems in greater detail below.4 The FCO told us that “issues relating to the implementation of the [Prism] system led to a slippage in the timetable we set ourselves”.5 The timetable originally set by the FCO was to sign the Accounts off at the end of September. We were informed of the slippage in early October and the timetable was adjusted by one month, which meant that signing-off was then expected in late October. However, further ‘slippage’ occurred. Eventually, the Accounts were signed off on 30 November, laid before the House on 19 December and printed copies were available only in mid-January.6 Unfortunately, this was too late for us to scrutinise them closely, without delaying our own exercise further. We conclude that the delay of over two months in signing off and publishing the FCO’s Resource Accounts for 2004–05 was excessive and that it had the unacceptable consequence of depriving Parliament and the public of an important tool for exercising scrutiny. We recommend that the FCO explain in its response to this Report what caused this delay and why it missed even the revised target for signing off its accounts.

7. The FCO’s latest Efficiency Technical Note was published at the end of November 2005.7 The Note sets out how the FCO envisages making the 2.5 per cent efficiency savings in its core (i.e. excluding British Council and BBC World Service) expenditure agreed as part of the 2004 Spending Review. It describes 21 separate efficiency projects, including in respect of each a summary of the scale of savings expected, how they will be achieved and how they will be monitored. This is a useful document, and it should be increasingly useful for anyone seeking to track the FCO’s efficiency savings over time.

8. Estimates memoranda are supplied to, and published by, this Committee. In these memoranda, the FCO explains to Parliament why it is seeking authority to spend or appropriate sums of public money. Historically—and the FCO is not alone in this—government departments’ Estimates memoranda have been uninformative and difficult to

3 Foreign & Commonwealth Office, Autumn Performance Report 2005, Cm 6709, December 2005

4 See paras 62–72.

5 Ev 8

6 Foreign & Commonwealth Office, Resource Accounts 2004–05, HC 776, December 2005, available at www.fco.gov.uk

7 See Foreign & Commonwealth Office, Technical Note, available at www.fco.gov.uk


understand. The FCO’s memoranda have been less clear and helpful than those of some other departments. The Committee has previously corresponded with the FCO, seeking improvements in these memoranda.8 We are pleased to note that there have been some improvements in recent Estimates memoranda, although we think they could be made more helpful still.9

9. Each year, the Foreign Affairs Committee looks closely at the Departmental Report produced by the FCO and also at these other reporting documents. On this occasion, we have also been able to use the report of an efficiency and effectiveness study commissioned by the FCO from Collinson Grant Limited, a firm of management consultants, and an internal FCO report on lessons learned from the Prism management information project (the ‘Ling report’). We consider both documents in section 3 of this Report, Efficiency and effectiveness.

Assessing performance

10. As we have already noted, the FCO is responsible for reporting to Parliament its performance against its Public Service Agreement targets. However, the FCO faces considerable challenges in doing this. Most of its work is difficult to assess using quantifiable targets. Although most of its public service work—performing functions such as the issuing of visas and passports—can be assessed in that way, the successes or failures of the United Kingdom’s diplomacy cannot be measured by numbers. Many of the FCO’s PSA targets can only be ascertained by making, as the FCO itself admits “subjective, qualitative assessments of progress.”10 Moreover, in the majority of its targets the FCO is far from being the only—or even the main—actor exerting influence. In many cases, there are so many pressures and influences being brought to bear on a target that it is difficult if not impossible to have any certainty over whether achievements or failures can be attributed to action or inaction by the FCO itself or to other actors and other factors. For example, the following indicator applies to PSA target 3 (“An international system based on the rule of law, which is better able to resolve disputes and prevent conflicts”).

Nepal: By end 2007–08: A stable Nepal with a durable ceasefire in place with the Maoists, democratic institutions restored with respect for human rights and significant progress towards a constitutional settlement11

The ‘data source’ for this indicator is described in the following terms:

Largely diplomatic reporting. However, it is also supported by a conflict analysis, which has been independently verified by an academic with a long-standing interest in Nepal. Some of the information is corroborated by (or even drawn directly from) NGOs and human rights groups, such as ICG, ICRC, OHCHR etc.12

8 Written evidence to the Foreign Affairs Committee, Miscellaneous matters, HC (2004–05) 489, Ev 14, 15, 22, 23

9 Ev 82, 86

10 Ev 12

11 Foreign & Commonwealth Office, Autumn Performance Report 2005, Cm 6709, December 2005, p 16

12 Ibid


11. As anyone who has followed events in Nepal would expect, this indicator is currently set at ‘red’—not on course. The APR states that “The King’s efforts to consolidate his grip on power have reduced the prospects for peace. However, the Maoists have announced a cease-fire […]”.13 We do not suppose that either of these developments can be attributed to the efforts of the United Kingdom’s diplomats. This calls into question the utility of the indicator—if not of the target itself, in relation to which two indicators stand at red, eight at amber and only two at green. In our view, it really is not within the gift of the FCO to secure achievement of this target; the best the FCO can do is to work with others towards it. The same applies to many other targets.

12. The unsatisfactory nature of this tick-box approach to PSA targets is, moreover, exacerbated by an increasing tendency for the targets to be measured by outcome rather than by input or output. We question whether such targets always provide an appropriate mechanism for measuring the FCO’s performance. We conclude that performance targets defined in terms of inputs and outputs may often be more appropriate for the FCO than targets based on outcomes, particularly where a target is based on outcomes which it is beyond the capacity of the FCO to deliver. We recommend that the FCO discuss with the Treasury the potential for redefining some of its targets and performance indicators accordingly.

13. The FCO told us last October that a review by the National Audit Office of the data systems underlying its PSA targets was still under way.14 We recommend that in its response to this Report the FCO publish a summary of the results of the NAO’s review of the data systems underlying its PSA targets, together with its commentary on how it proposes to implement any conclusions reached by the review.

A year of two presidencies

14. The Foreign Affairs Committee in the 2001–05 Parliament looked at all the FCO’s Departmental Reports during that period, and reported on each of them. In its Report on the 2003–04 report, the Committee looked ahead to the forthcoming United Kingdom presidencies of the G8 group of nations and of the European Union. The Committee was concerned lest the expense of administering these presidencies should lead to cuts elsewhere in the FCO’s budget.15 The Government responded to the Committee that “Through a combination of prudent financial management and additional resources provided by HM Treasury, we are confident we can do this without cutting other work on our strategic priorities.”16

15. The two presidencies ended on 31 December 2005, so now is the time to take stock. We recommend that in its response to this Report the FCO provide a full breakdown of the costs of the G8 and EU presidencies, how they were met, and whether the diversion of resources to service the presidencies led to any adverse consequences for its other work.

13 Ibid

14 Ev 12

15 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Office Annual Report 2003–04, HC 745, para 34

16 Foreign & Commonwealth Office, Government Response to the Foreign Affairs Committee's Eighth Report: Foreign and Commonwealth Office Annual Report 2003-04, Cm 6415, November 2004, p 2


2 Transparency and openness

Relations with Parliament

16. In a Report on the work it undertook in 2004, the Foreign Affairs Committee in the last Parliament made the following comment on its relationship with the FCO:

Although we appreciate the FCO’s willingness to share some types of classified information with us, we are concerned, first, that information provided to us is too often given an unnecessary classification and, second, that by receiving such information we as a committee of Parliament are drawn inside the web of secrecy, which may inhibit our ability to scrutinise areas of policy from outside. The second of these concerns is for us as a Committee to deal with: we may have to decide not to accept a paper if we feel that it will compromise our independence from the executive. The first concern, however, is one which we have raised with the FCO, as is evident from the published exchanges between Committee and Department concerning the provision of information on asset sales. We hope that the eventually satisfactory outcome of those exchanges will inform the FCO’s wider policy on provision of information to the Committee, and lead it to question both the need for and the utility of security and other classifications on a case by case basis.17

The Committee appointed after the 2005 election looked forward to a time of greater openness by the FCO and of improved access to information.

17. Things did not get off to a good start when shortly after our first meeting in July 2005 news filtered through to Parliament of the content of a consultants’ report on efficiency and effectiveness in the FCO. The fact that Collinson Grant Ltd were carrying out such a study had been referred to in the FCO’s Departmental Report, published the previous month, where it was described as

[…] a process activity analysis of the FCO’s operations and a comparative analysis of the expenditure across the organisation as a whole to help ensure that savings are made through genuine improvements in efficiency rather than through cuts in the budget.18

When this was written, the FCO had already been in possession of Collinson Grant’s report for some months.19 However, it was only when a member of this Committee learned something of the contents of the report that Ministers accepted Parliament had a right to be informed. The report was placed in the House of Commons Library as the House rose for the Summer recess in July.

18. We find it disappointing that the body which Parliament has charged with examining the administration, policy and expenditure of the FCO should not have been supplied with a copy of a report entitled Efficiency, effectiveness and the control of costs in the Foreign and

17 Foreign Affairs Committee, First Report of Session 2004–05, The Work of the Committee in 2004, HC 112, para 54

18 Foreign & Commonwealth Office, Foreign and Commonwealth Office Departmental Report 1 April 2004–31 March 2005, Cm 6533, June 2005, p 198

19 The report is dated 14 January 2005; see also HC Deb, 12 September 2005, col 2402W


Commonwealth Office. Bearing in mind what our predecessor Committee said in 2004, it seems to us that the FCO’s failure to disclose the existence, let alone the contents of such a key document, was a desire to avoid proper scrutiny by Parliament. Such an attitude is wholly unacceptable.

19. If the failure to share the Collinson Grant report with us had been an isolated incident, it would still have been viewed as a serious lapse. Unfortunately, it was not a one-off. We have just heard of the existence of the Hogarth Report, another report commissioned by the Foreign Secretary into the running of the FCO. We are now seeking access to this. In June 2005, the FCO Board received a further report from a senior manager in the FCO, Norman Ling, who had been commissioned by them to draw lessons from the experience of introducing the new Prism information management system. We discuss the Ling report in the next chapter, but for the purposes of this discussion we note that Mr Ling found that the Prism project had been badly mismanaged by the FCO: there was poor planning; support was inadequate; risks were understated; benefits were exaggerated; professional skills were lacking; the Board itself had been insufficiently engaged; security requirements had handicapped the project.20

20. Commendably, the Board placed a summary of the Ling report on the FCO intranet, where it could be viewed by most FCO staff, many of whom had been expressing strong dissatisfaction with Prism. Reference was then made to the availability of the Ling report in a FCO staff magazine which we routinely receive.21 It was only this chance reference which alerted us to the existence of a document which was obviously going to be highly relevant to our scrutiny function. Again, we find this very unsatisfactory. In November 2003, the Committee had asked the FCO to publish the lessons learned from a previous failed ICT project, Focus.22 The FCO knew very well of our interest in these matters.

21. In response to our initial request, the FCO supplied us with a copy of the Ling report in confidence, although most of it was unclassified. We wrote to the FCO, asking them to publish the unclassified summary of the report.23 This they have now done, and the report summary is available on the FCO website, together with a full list of its unclassified recommendations.24

22. Following these failures, we asked the FCO to tell us what criteria it uses when deciding whether to volunteer a document to the Committee. We were somewhat surprised to be told that there have been no such criteria.25 The FCO asserted that it always seeks to ensure that it takes into account the need to keep this Committee informed of its work. Clearly, either this procedure was not followed in relation to the Collinson Grant and Ling Reports, or it was followed and the wrong conclusion was reached. Prompted by our question, the FCO has now reviewed its approach and will in future expect staff to consider “proactive

20 Foreign and Commonwealth Office, Prism Lessons Learned, available at www.fco.gov.uk

21 Connect, September 2005, p 2

22 Foreign Affairs Committee ,Twelfth Report of Session 2002–03, Foreign and Commonwealth Annual Report 2003, HC 859, para 45

23 Ev 44, 52

24 Foreign and Commonwealth Office, Prism Lessons Learned, available at www.fco.gov.uk

25 Ev 44, 52


disclosure” of documents prepared for the Board. Sir Michael Jay wrote to us that “The presumption will be that such information should be volunteered, but we would always have to take into account personal and commercial confidences, and any impact on the conduct of international relations.”26 We welcome this new attitude on the part of the FCO and we will certainly wish to evaluate how it is working in practice over the coming months.

23. We conclude that the failure of the FCO to share with Parliament the reports prepared for its Board by Collinson Grant Ltd and by Norman Ling is evidence of a disturbing aversion on the part of FCO management to proper scrutiny of its activities. Accountability of the executive to Parliament is a fundamental feature of the United Kingdom’s constitution. We therefore welcome recent undertakings by the FCO to be more open with this Committee in future; we will evaluate this new policy in the light of experience.

Freedom of Information (FoI)

24. It is, of course, not only to Parliament but also to the public that government departments are accountable. One aspect of this accountability was codified in the Freedom of Information Act 2000. The Act came into force on 1 January 2005 and this is our first opportunity to comment on the FCO’s response to what Parliament intended to be a new era of openness.

25. We asked the FCO for statistical information on its handling of requests made under the provisions of the Freedom of Information Act. They told us that in the period 1 January to 30 September 2005, the FCO received 1,059 requests under the Act.27 Of the cases where the request was not met in full and the inquirer appealed to the FCO, 58 refusals were upheld, seven were partially overturned and three were overturned. Six cases were referred to the Information Commissioner, none of which was overturned. Statistics maintained and published by the Department for Constitutional Affairs show that among Whitehall departments, the FCO is one of the best performers at providing a timely response, but that it grants a lesser proportion of requests in full than any department except the Scotland Office and the Treasury.28 This could be seen as confirmation of the culture of secrecy in the FCO or it may be simply a reflection of the number of secrets the FCO legitimately holds.

26. We congratulate the Foreign Office on being one of the better departments at dealing with freedom of information requests in a timely manner, but we are concerned that the FCO is also one of the departments most likely to withhold information from enquirers. We recommend that in its response to this Report the FCO publish a statistical analysis of its handling of FoI requests, showing the grounds on which requests were not met or were only partially met.

26 Ibid

27 Ev 51

28 Department for Constitutional Affairs, Freedom of Information Act 2000, Statistics on Implementation in Central Government, available at www.foi.gov.uk


Classified PSA scorecards

27. As we have previously acknowledged, much of the information held by the FCO is necessarily classified, in accordance with criteria and procedures which apply across government. We were concerned, however, to note how many of the ‘scorecards’ against which the FCO’s performance is assessed are classified. These include performance indicators relating to the Millennium Development Goals and other areas of policy which might be regarded as being of very legitimate public interest, where publication might be made without compromising security. We asked the FCO to comment on this.

28. In his reply, Sir Michael Jay told us that some of the scorecards contain sensitive information, which, if made public, would risk damaging the United Kingdom’s international relations. He also referred to the need to ensure that the United Kingdom’s negotiating positions are not prematurely disclosed, because that “would risk getting a worse deal for the UK in the future.”29 Sir Michael confirmed that it was this latter consideration which had led to the Millennium Development Goals PSA scorecard being classified. He agreed, however, to declassify the scorecard, because the danger to the United Kingdom’s negotiating position had diminished over time. We welcome this step.

29. We accept that where there are good reasons for PSA scorecards to be classified according to the usual criteria, they should not be published, but we recommend that the classification of such scorecards be reviewed regularly, with a view to timely publication where possible. In cases where classification of scorecards remains essential, we recommend that consideration be given to publishing a declassified summary.

29 Ev 51


3 Efficiency and effectiveness

The Collinson Grant Report

30. In August 2004, the FCO asked Collinson Grant Ltd to conduct phase 2 of a study to examine its efficiency, effectiveness and control of costs. Phase 1 had consisted of a pilot project carried out in June and July 2005. Collinson Grant submitted an initial report of its phase 2 study on 19 November and the full report was produced on 14 January 2005.30 The cost of the phase 2 study was £367,000 plus expenses.31 As we have noted above, the report remained unpublished until July, following pressure from a member of this Committee.

31. The methodology adopted by Collinson Grant is described in detail in their report. In summary, the consultants surveyed 1,882 staff in the United Kingdom, 230 United Kingdom-based staff overseas and 595 locally-engaged staff. The response rate was 89% from staff in the United Kingdom and 93% from those overseas. Crucially, there was a poor response rate from the Finance Directorate and from Estates Services. Senior managers at one of the largest Posts, Paris, failed to co-operate fully. Other senior managers failed to collaborate with Collinson Grant. This in our view should attract the severest censure, particularly when one has regard for the considerable public expenditure involved in the report’s preparation. Nevertheless, Collinson Grant had sufficient confidence in their data to draw some strong conclusions. The executive summary of their report is reproduced in full here:

• We have analysed the work of 2,934 employees, using a consistent framework of Processes, Activities and Tasks, which was thoroughly tested before the survey.

• These data on the application of effort have been supplemented by a thorough review of comparative costs at Posts, by an analysis of the organisational structure, and by the development of an overall model for the FCO’s costs.

• Wherever possible, these investigations have been undertaken in partnership with the staff of the FCO. There have been very many opportunities to observe working practices, to discuss the opportunities for improvement, and to review current initiatives for efficiency savings.

• We have identified potential opportunities for an annual reduction in costs of £66.1 million by the end of 2005, the full benefits of which would be realised in 2006/2007. This would remove 533 positions based in the UK, 427 UK-based positions overseas, and 307 local staff positions.

30 Collinson Grant Limited, Efficiency, effectiveness and the control of costs in the Foreign and Commonwealth Office:

Phase 2–Analysis and the development of opportunities for change, 14 January 2005, see www.fco.gov.uk

31 Ibid, Appendix 1


• It is not realistic to assume that all the potential savings could be realised. Accordingly, we have reassessed each element and proposed a revised ‘Target’ of £48.0m, 73% of the opportunity.

• The savings that we identified could help to secure and enhance the FCO’s existing Efficiency Savings Plan. We have reconciled the degree of overlap and calculated a revised, combined total that should be realised at the end of 2005/2006 of £65.8m, freeing up resources that can, potentially, be redeployed.

• In addition to these numerical targets, we have made a number of observations about how work in the FCO is managed, the underlying cultural tone of consensus, which inhibits change, and the structural constraints on efficiency and effectiveness. Our conclusion is that the organisation is not well suited to managing change.

• We have achieved all the success criteria identified at the outset of our work, but there is far more to do. We have only just begun to develop full options for change and to build consensus on the way forward. The FCO will need to adopt and practise stringent project management disciplines in order to achieve the very challenging targets ahead. Many changes will require imposition from senior managers who have properly delegated authority and the will to achieve a consensus.

32. The Collinson Grant report highlights what it suggests could be many possible savings over and above those already envisaged in the FCO’s efficiency savings plans. However, it also states that the FCO has scaled back its own forecast of efficiency savings from £10.7 million to £6.3 million in 2004–05, and from £55.8 million to £32.7 million in 2005–06.32 These figures do not tally with those presented in the FCO’s Efficiency Technical Note (ETN) of November 2005.33

33. Before the ETN was published, we asked the FCO to explain the figures in the Collinson Grant report. In their response, the FCO told us that,

The Collinson Grant report was not originally intended for external publication. Thus, resources were not devoted to ensuring that it was completely error free, providing those errors were not critical to the conclusions of the report or detrimental to its value as a management tool. The section referred to above is one area where the Collinson Grant report contained inaccuracies.34

They then argued that Collinson Grant had double-counted some proposed savings and had used out-of-date figures in respect of others. The figures according to the FCO are that the forecast savings in 2004–05 were £4.7 million and the outturn £6.6 million; and the


Phase 2–Analysis and the development of opportunities for change, 14 January 2005, p 28

33 Foreign and Commonwealth Office, Efficiency Technical Note, see www.fco.gov.uk

34 Ev 45


forecast for 2005–06 is £38.7 million, which the FCO is confident it will exceed.35 If this is correct, we welcome this reassurance. However, we are somewhat alarmed that it was necessary. We are also mindful of Collinson Grant’s complaints about lack of co-operation by some parts of the FCO and the possibility that they were not supplied with all the data they required.36

34. The admission by the FCO that resources were not devoted to adequately checking the report before it was presented to the Board is remarkable when set against the statement in the Departmental Report that “The Collinson Grant study is an integral part of the FCO reorganisation”37 and Sir Michael Jay’s evidence to us that he takes the report “extremely seriously”.38 It appears to back up the claim made by Collinson Grant that:

Unfortunately, the difficulty in engaging relevant people [in the FCO] to review and challenge the emerging findings has meant that our opportunity [sic] has not been developed or scrutinised by managers within the organisation.39

If the Collinson Grant report contains errors that the FCO failed to check and correct then that is the FCO’s fault. They could and should have challenged these errors with Collinson Grant, as is normal with consultants’ reports, prior to final publication.

35. We are disappointed and concerned that the FCO apparently takes the view that, because a study costing hundreds of thousands of pounds and with potentially huge implications for the FCO’s management of its resources was intended for internal consumption only, there was no need to ensure that it was error-free.

36. The Efficiency Technical Note states that at least £43 million will be released by savings made in the period to 2007–8, to be reinvested in the FCO’s priority programmes, although these programmes are not listed.40 In response to one of our written questions, the FCO confirmed that “efficiency savings and returns from the sale of FCO properties will be used to fund additional frontline activities in pursuit of the FCO’s strategic priorities.”41 Like the Efficiency Technical Note, this response did not provide any information on what these additional frontline activities might be. We recommend that in its response to this Report the FCO list the additional frontline activities which are being funded by efficiency savings and asset sales, giving the amount of funding in respect of each such activity.

35 Ibid

36 Collinson Grant Limited, Efficiency, effectiveness and the control of costs in the Foreign and Commonwealth Office: Phase 2–Analysis and the development of opportunities for change, 14 January 2005, pp 4 and 5

37 Foreign & Commonwealth Office, Foreign and Commonwealth Office Departmental Report 1 April 2004–31 March 2005, Cm 6533, June 2005, p199

38 Q 16

39 Collinson Grant Limited, Efficiency, effectiveness and the control of costs in the Foreign and Commonwealth Office: Phase 2–Analysis and the development of opportunities for change, 14 January 2005, p 5

40 Foreign and Commonwealth Office, Efficiency Technical Note, see www.fco.gov.uk

41 Ev 7


Management

37. Collinson Grant concluded that the FCO’s managerial structure, with eleven layers between the Permanent Under-Secretary and the lowliest staff, is “too deep and too narrow.”42 Among many criticisms, their report suggests that this contributes to a slowness to act, a lack of delegation, avoidance of responsibility, unnecessary work being carried out, and over-supervision.

In the FCO, senior managers operate as highly promoted desk officers, their efforts duplicating work that should only need to be done once and to a satisfactory standard by subordinates, assuming that clear directions have been given. The lack of proper delegation through the many organisational layers prevents senior managers from freeing time to contribute effectively to the development of policy.43

The report goes on to state that the effect of this is for work to be re-done repeatedly at different levels in the organisation; activity levels may be very high, but effectiveness is diminished.44

38. The consultants suggest that FCO managers “need to learn new skills and to adjust their approach.”45 In particular, they criticise the consensus culture of the FCO and the unwillingness of managers to criticise subordinates. “Multiple layers of managers also stifles the innovative, perceptive research and analysis that challenges established thinking. Brave new ideas rarely survive repeated filtering, but are desperately needed if the FCO is to become more effective.”46

39. The report states that FCO managers lack the necessary tools to do their job effectively and that they have no incentive to reduce costs. It calls on the FCO to reduce the size of its human resources (HR) directorate: at present, there is one member of staff engaged in HR work per 20 employees; Collinson Grant suggest that it should be possible to halve this ratio, to 1:40.47 They also propose a “comprehensive overhaul” of the directorate and “the injection of a number of experienced HR professionals.” Speaking in November 2005, the FCO’s Director of Human Resources, David Warren, told us that Collinson Grant had made a “perfectly fair point” about the size of the directorate and that its size would be reduced “by at least 100 positions over the course of the next six to seven months.”48

40. We recommend that in its response to this Report the FCO provide further details of the restructuring of its Human Resources Directorate, including full information on the reduction in its size and of any consequences for performance of the HR function in the FCO.



43 Ibid, p 8

44 Ibid, p 18

45 Ibid, p 9

46 Ibid, p 18

47 Ibid, p 17

48 Q 20


Leadership

41. Collinson Grant also criticised the leadership of the FCO, which they see as weak and unwilling to make changes which do not have the full support of the organisation. They concluded that:

The leaders of the FCO focus primarily on their diplomatic and political duties, rarely on the efficient management of the organisation. There is a clear vision of Strategic Priorities, but the need for robust management to allow core duties to be conducted effectively is neither accepted nor properly understood. People are frustrated and impeded in the execution of critical tasks by the weaknesses of the organisation, yet are unwilling to tackle the root causes that are entrenched in and reinforced by the established culture. The entire organisation needs to be challenged and reformed, but the leadership lacks the skills needed and the will to upset the status quo.49

This is strong comment, which we invited Sir Michael to respond to. He reaffirmed his personal commitment to making “the kind of reforms and changes, including culture changes, which we now need to do if we are going to adapt to new circumstances.” He then described in detail the steps the FCO has taken:

As for the leadership, what are we doing? We have reformed our corporate management. We now have a board structure which reports clearly to ministers and a quarterly meeting between the board and the Foreign Secretary in order to ensure that we are clear on the strategic priorities that he wants us to implement. We have a series of subcommittees underneath the board which are focusing on human resources, investment decisions, finance decisions and so on, which is a much more coherent structure than there was before. I am working much more closely now with the key ambassadors and high commissioners overseas because they need to be brought into part of the corporate leadership. We now have every three months a meeting between the board and the top most senior 20 ambassadors and high commissioners, plus a representative also of a smaller overseas post, in order that we can get the concept of leadership and change management imbued, not just in the centre of London but more widely. Every year we now also have what we call a leadership conference, a conference of all our top management in London and all our ambassadors and high commissioners overseas, who come once a year again with a view to really focusing on the change and modernisation issue which, as an organisation, we have to embrace. This is a conscious attempt to change the culture and to get people to realise that management and leadership are absolutely key to running a really complicated organisation these days.50

42. We welcome the FCO’s commitment to changing aspects of its culture and to giving leadership and management skills their appropriate place in the organisation. We recommend that in its response to this Report the FCO set out how it intends to advance this agenda.



50 Q 30


Project management

43. The consultants were particularly critical of the FCO’s poor performance in project management. They concluded that few FCO managers have sufficient experience or training in the necessary skills and that this, when combined with the poor management structure and practices referred to above, meant that projects rarely meet their objectives within budget or on time: “Projects tend to drift, consuming resources without realising the required benefits. […] A radically different approach to project management will be needed if the potential [for improvements] is to be secured.”51

44. We asked the FCO how it intends to rectify the lack of project management skills within its staff. Sir Michael Jay replied that a “dedicated Programme and Project Management team within Finance Directorate [is] responsible for policy in this field.”52 The team provides access to a range of relevant training courses. It is of some interest that Sir Michael’s answer deals entirely with training as the method of addressing the skills in the FCO; nowhere is there any mention of importing skills from outside, by employing experienced professionals from other sectors. We accept that it is desirable and even necessary for senior FCO staff, in common with those elsewhere in the public sector, to acquire and to maintain project management skills, but we are surprised that there is apparently no intention on the part of FCO to recruit people with particularly well-developed skills in this area. We consider this point in relation to a wider range of professional skills below.53

Financial management

45. The Collinson Grant report is critical of the FCO’s resource management systems. The consultants suggest that the budgetary system lacks teeth and expenditure is based too much on precedent. Sir Michael Jay acknowledged that the report had “focused our attention on some new areas of work which we had not focused on sufficiently, like the need for further reform of the finance function, which we are now carrying out with the Treasury and the NAO.”54

46. Collinson Grant noted that completion of the implementation of the new information system, Prism, should release resources for the FCO, but they also called for managers generally to spend less time dealing with routine financial tasks, and for members of the Finance Directorate to spend less time on non-financial tasks. “This, combined with radical reform of the purchase-to-pay procedures and other financial processes, would save significant effort both in the Finance Directorate and throughout the organisation.”55


Phase 2–Analysis and the development of opportunities for change, 14 January 2005, pp 22 and 12

52 Ev 50

53 See para 53–57

54 Q 13



47. In the course of this Inquiry, we became aware of what the National Audit Office has described as “the largest identified loss by fraud in the Department’s history”, 56 and which had continued undetected for at least four years. In July 2004, it was discovered that the British Embassy in Tel Aviv, Israel had been defrauded of more than £790,000 by a locally-engaged employee. However, we did not learn of this from the FCO, even though we visited the Embassy concerned in November 2005. The fraud came to our notice only following publication of the report by the National Audit Office. This incident raises concerns both about the FCO’s financial controls and its detection systems, and about the FCO’s duty to inform the Committee charged with scrutinising its expenditure and administration. We raised these issues with the FCO, who in February 2006 sent us a copy of a paper dated November 2005, in which they set out the lessons learned from this and from other, unidentified, fraud incidents.57 The paper sets out a number of sensible procedures and safeguards which should already have been in place at the Post in Tel Aviv and elsewhere. The Public Accounts Committee is now conducting a detailed scrutiny of the NAO report and will produce its own report in due course. We await that report with interest.

48. We conclude that the FCO failed seriously in its duty to the Committee in not informing the Committee about what the National Audit Office has described as “the largest identified loss by fraud in the Department’s history” and about other frauds. We are extremely concerned that the Tel Aviv fraud continued undetected for at least four years as a result of weaknesses in financial control and involved clear breaches of long standing accounting procedures. We recommend that the FCO in its response to this Report set out the other significant frauds which have taken place in the last five years, and the specific steps it has taken to prevent any recurrence.

49. In its response to our written questions, the FCO described a new Prism-based reporting system—Oracle Financial Analyser—which will provide budget-holders in FCO managers with monthly financial management information.58 The system is already in use at FCO headquarters in London, but its full implementation will have to await a successful introduction of Prism in Posts overseas.

50. We welcome the FCO’s new focus on reform of its finance function. We recommend that in its response to this Report, the FCO provide a detailed explanation of the nature of these and related reforms and of the timescale for implementing them. We further recommend that in future the FCO inform this Committee promptly of any incident involving major fraud or financial mismanagement.

Performance review

51. In his first appearance before our colleagues on the Public Administration Select Committee last October, the new Cabinet Secretary and Head of the Civil Service, Sir Gus

56 National Audit Office, 2004–05 Resource Account: Foreign and Commonwealth Office: Fraud at the British Embassy,

Tel Aviv, September 2005

57 Ev 89

58 Ev 25


O’Donnell, announced a series of performance reviews of Whitehall departments. Sir Gus described his initiative in the following terms:

In terms of policies, I talked to the Prime Minister about ensuring that we have proper Cabinet committee procedures for the various reform initiatives on health, education, welfare reform and the like, and that we ensure that the Civil Service provides good advice not just on policy but on how deliverable policy is. That is one particular area where I think we need to strengthen things. I wanted to mention this to the Committee today that I feel that we need to enhance central government departments’ capability to deliver policies. As you know, the Prime Minister’s Delivery Unit looks at delivery in the sense of achievement of PSA targets. What I want the Prime Minister’s Delivery Unit to do is to enhance its role by looking at the capability of departments to deliver. The idea of this would be capability reviews run out of the Prime Ministers Delivery Unit but using external people as well—people like, for example, the private sector, the Audit Commission, people who have been good at these from the Audit Commission with experience of comprehensive performance assessments (CPAs), and use them to assess departments’ capabilities on a range of functions like HR, finance, ability to run IT projects, with the idea that we would publish the results of the performance of departments in specific categories. […] The idea is that we would do these reviews and with external input publish the results and then there will be an action plan to ensure that the permanent secretary and I were happy about and agreed on what the steps forward were, and I would then hold the permanent secretary to account for improvements in that department. I have put this idea to my permanent secretary colleagues and to the Prime Minister and received enthusiastic support so I am pleased to say that everybody is behind this and we will now start to consult on how to do it, with a view to getting the first pilot departments around December or January.59

The Government announced in December that the reviews will be carried out under the direction of the Head of the Prime Minister’s Delivery Unit (PMDU), Ian Watmore.60

52. We note from the published minutes of the meeting of the FCO Board held on 5 December 2005 that it appears that the FCO is to be one of the first Whitehall departments to be scrutinised under the new arrangements.61 We find this significant, especially given how recently the Collinson Grant review was carried out. We recommend that the FCO keep this Committee informed of the progress of the ‘capability to deliver’ review being carried out by the Prime Minister’s Delivery Unit and, in due course, of its results.

59 Oral evidence taken before the Public Administration Select Committee on 11 October 2005, HC 513–i, Q 1

60 Cabinet Office, Prime Minister’s Delivery Unit, see www.cabinetoffice.gov.uk

61 Foreign and Commonwealth Office, FCO Board Minutes, see www.fco.gov.uk


Staff

The need for professional skills

53. The FCO employs over 6,000 people in the United Kingdom and overseas, most of whom are generalists but many of whom are working in specialist roles.62 The Foreign Affairs Committee and the FCO have previously exchanged views on the lack of staff with appropriate specialist skills. In the most recent such exchange, the FCO told the Committee that:

The numbers of specialist staff we recruit varies year on year, but on average we have brought in around 15 per annum in recent years. These people have been recruited at various levels from Band B to SMS and have included accountants, IT specialists, legal advisers, librarians, purchasing specialists, research analysts, medical staff, science and technology specialists and a variety of ad hoc appointments.63

We did not find this response reassuring. It suggested a reluctance on the part of the FCO to recruit from outside the organisation. Our unease increased when we saw the conclusions of the Collinson Grant report, that the FCO still lacks staff with appropriate skills in the project management, finance and human resources fields.64 According to the report, “Employees are seen as generalists, so that a lack of professional competence or experience in (say) finance or HR (or even in specific political or diplomatic skills) is accepted, even where it acts as a significant drag on the effectiveness of a department.”65

54. A member of the Committee tabled parliamentary questions to a number of government departments, asking Ministers to list the professional qualifications and experience of their human resources, finance and estates directors.66 The results are collated below:


2005, Cm 6533, June 2005, p 218; Ev 23

63 Foreign & Commonwealth Office, Government Response to the Foreign Affairs Committee's 8th Report: Foreign and Commonwealth Office Annual Report 2003-04, Cm 6415, November 2004, p 11

64 Collinson Grant Limited, Efficiency, effectiveness and the control of costs in the Foreign and Commonwealth Office: Phase 2–Analysis and the development of opportunities for change, 14 January 2005, pp 9 and 11

65 Ibid, p10

66 HC Deb, various dates in November and December 2005


Finance Human resources EstatesDfIDStudying for accountancy qualification

Post-graduate diplomas Health and Safety certificate

“Range of finance roles” Formerly HR Director of an NHS Trust 20 years experience in Govt Depts

dtiNo relevant specialist qualifications

Member of relevant chartered body Chartered engineer

“Wide experience” of the dti 25 years experience in HR roles in private sector

Formerly estates manager for Dept of Health

Home OfficePost-graduate degree Chartered surveyorFormerly head of HR in Prisons Service “Extensive experience”

HealthMember of relevant chartered body

Member of relevant chartered body

Extensive public sector experience, including with NAO

Formerly worked in HR in NHS

DEFRAFellow of relevant chartered body

Member of relevant chartered body BSc in Land Administration and Chartered surveyor

Similar posts elsewhere in public sector

Formerly in senior HR roles in local government

Relevant experience in both public and private sectors

DCMSHas a relevant specialist qualification (not specified)

MA in Human Resource Strategy and Change

Not stated 8 years HR experience in public sector

Work and PensionsMember of relevant chartered bodySimilar posts elsewhere in public sector

Education and SkillsMA in Labour EconomicsFormerly seconded to Treasury, dti and private sector

FCONo relevant specialist qualifications

No relevant specialist qualifications No relevant specialist qualifications

Senior positions in FCO and UKTI

5 years experience in Treasury Economist with experience in both private sector and FCO

City & Guilds in Mechanical Engineering and Building Maintenance; Fellow of

Fellow of relevant chartered bodyFormerly in local government and further education


It can be seen that, when compared with other government departments, the FCO has, literally, an amateurish approach to filling some of its senior posts. In particular, the FCO is one of only two departments among those surveyed with a finance director who does not hold a relevant specialist qualification and it is the only department whose director of human resources lacks such a qualification. We have previously drawn attention to the need for a more professional approach to all these specialist functions—particularly to management of the overseas estate, in the light of the poor decisions taken by the FCO’s Estates Strategy Unit on the sales of residences in Dublin and in New York.67

55. We raised with Sir Michael Jay the question of whether certain post-holders should have a relevant professional qualification or outside experience when he appeared before us in November 2005. Sir Michael defended the practice of posting experienced diplomats to very senior administrative roles, pointing out that those currently in post had had some relevant previous experience within (and, in one case, outside) government, that their deputies or assistants are in many cases professionally qualified, and that running a large Embassy is in some respects not unlike running a business.68 He also reminded us that the FCO has signed up to the Civil Service’s Professional Skills for Government agenda, which means that,

[…] people who are going to move to the higher reaches of the Foreign Office need to have a balance of skills. […] We need professional skills and a knowledge of our business because with professional skills without the knowledge of our business we will not get it right. If you have knowledge of the business without professional skills, you will not get it right. You need a balance of those two.69

Finally, Sir Michael informed us that it will increasingly be the case that senior positions in the FCO are filled by open competition.70

56. The FCO may be moving slowly towards the practice which most other government departments appear already to have adopted, of recruiting well-qualified people with outside experience to fill some of the more senior specialist roles. Sir Michael confirmed that in seeking such a development the Committee is pushing at an open door, then added, rather ominously, “but the speed at which the door opens is something over which we have to have some control.”71 We expect to see the door open without delay.

57. We conclude that the FCO needs to catch up with the rest of Whitehall, by recruiting professionally qualified, experienced people to the top roles in finance, human resources and estate management. We recommend that it do so without delay.

67 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Annual Report 2003–04,

HC 745, paras 137–139

68 Q 24 [Sir Michael Jay]

69 Ibid

70 Q 28

71 Q 29


Efficiency measures directly affecting staff

58. Collinson Grant claimed to have identified 533 posts in the United Kingdom, 427 posts overseas filled by United Kingdom-based staff and 307 posts overseas filled by locally-engaged staff which could be cut, producing an annual saving of over £66 million from the end of 2005.72 The FCO’s own Efficiency Technical Note, produced some months after the Collinson Grant Report, proposes a reduction in the UK-based staff pay-bill of £5 million in 2005–06, rising to £15 million in 2007–08.73 Its projected figure for additional cashable savings on UK-based staff posted overseas is £1 million in 2005–06, rising to £6 million in 2007–08; this will be achieved by a mixture of reductions in numbers and changes to conditions of service.74 By “refocusing” the work of its locally-engaged staff, the FCO hopes to save another £2 million in 2005–06, and twice that in 2007–08.75 At the same time as reducing staffing numbers, the FCO also aspires to cut its overtime costs by £1 million in 2007–08.76

59. Taken together, the FCO’s savings targets are very modest when set against those proposed by Collinson Grant. Neither is Collinson Grant the first to suggest that more substantial savings might be made: a previous study by KPMG suggested that the Finance Directorate alone could save 10% of its budget by cutting “non-critical functions” and reducing routine processing.77

60. In response to a written question from us, the FCO confirmed that it has identified over 60 jobs in its senior management structure to be cut or downgraded over the current planning period, 2004–07.78 It has also (as at November 2005) accepted 283 applications from staff for early retirement or severance, as part of its contribution to overall staff savings of 310 required under the 2004 Spending Review. However, in response to our question, how many of the jobs vacated by those taking early retirement or severance will be refilled, the FCO told us that due to the frequent rotation of staff, “There will no exact match between staff departures and job reductions.”79 We recommend that in its response to this Report, the FCO list the senior management jobs which will be cut or downgraded during the SR04 period, and that it state the net increase or reduction in staff numbers that it expects to result from this exercise.

61. Not all job cuts will be among senior management, most of whom are able to obtain generous severance terms. In its response to the Committee’s Report on its 2003–04 Departmental Report, the FCO suggested total cuts needed to be in the order of 350–400 posts, most of which could be achieved through natural turnover and early retirement.80 As



73 Foreign and Commonwealth Office, Efficiency technical note. See http://www.fco.gov.uk

74 Ibid, table 8

75 Ibid, table 10

76 Ibid, table 9

77 Ibid, table 16

78 Ev 25

79 Ev 50



a responsible employer, the FCO has a duty of care to these people. The FCO told our predecessors that those leaving its employment had access to advice on retirement and re-employment options from its ‘PROSPER’ group, but gave no details. We recommend that in its response to this Report the FCO provide full information on the work of its PROSPER group.

Prism

62. In common with many large organisations, the FCO needs to be able to generate, process, store and access key financial and other management data, to enable its managers to take well-founded decisions and to be effective administrators. The FCO’s chosen vehicle for achieving this purpose is known as Prism. Prism is not ‘just’ an information technology package; it entails changes in management practice and in working practice. Practically nobody who works for the FCO, including those working in its overseas Posts, will be untouched by the changes embodied in the project. Unfortunately, Prism has gone wrong.

63. To understand what has gone wrong with Prism, it is important to realise the enormous scale of the project. Prism is intended to replace 30 separate existing systems. New software and hardware has to be installed, and new working practices introduced, not only at each Post but throughout the London and Milton Keynes FCO estates. The staff training requirements for this project are huge. It is disappointing, but not surprising, that this important project is substantially behind time.

64. In the overseas Posts where Prism has been implemented, there has been great dissatisfaction. FCO staff publications have received anguished letters for publication. Here is one example: “in the FCO’s long history of ineptly implemented IT initiatives, Prism is the most badly-designed, ill-considered one of the lot.”81 Such letters give only a hint of the true scale of anger in the ‘ranks’; anyone who has visited a Post where Prism has been ‘rolled out’ knows that many staff are at their wits’ end about it.

65. The message that there was something wrong with Prism got through to the FCO Board, who tasked a senior diplomat, Norman Ling, “to draw lessons from the Prism experience.”82 Mr Ling produced his report in June 2005. He did not pull his punches. This is an edited version of his summary of what went wrong:

Planning and Resources The FCO greatly underestimated the requirement for business change when introducing Prism. It continues to do so. Too little forward planning led to hasty and bad decisions. The funding was adequate but the programme was poorly resourced in other areas. When it got into difficulties, it was inadequately supported.

Risk Prism was identified as high risk in early consultancy studies because of its size and the need for a radical shift in FCO culture and working practices if the system was to achieve all that was expected of it. Not enough account was taken of those assessments or the Prism team’s own concerns when the programme got underway.

81 Letter in FCO News and Views, Issue 60, November 2005

82 Foreign and Commonwealth Office, Prism lessons learned, see www.fco.gov.uk


The decision to rate Prism only medium risk meant the review process was not as robust as it might have been. This error was compounded by the choice of system and the failure to adopt a phased approach to implementation.

Benefits If the risks were under-stated, the benefits of Prism were consistently exaggerated. The promised cashable savings were never likely to be realised. Apart from resource accounting, the higher level benefits were vague. The business case was not regularly reviewed after contract signature. Responsibility for benefits was left in the hands of the contractor or over-looked. Many potential benefits were lost through excessive customisation and a failure to assess what impact changes elsewhere in the organisation would have on Prism.

Professionalisation Prism has exposed a shortage of FCO skills in project and programme management. This means the FCO must draw effectively on outside skills and experience. Those parts of the FCO with a clearer focus or a background in finance and procurement have realised Prism’s benefits sooner. The structural changes demanded by a more business-oriented approach (hub and spoke, combined policy and resource units, a reduced level of service from the centre) also demand more professionalism.

Governance, change and communications – the role of the FCO Board Until recently, the FCO Board has not been as actively engaged on Prism as it should have been. Given that the programme is business critical, the Board should have appointed one of its own as Senior Responsible Owner (SRO) and monitored progress more closely. In addition, it should have ensured that the important changes to working practices that Prism introduced were properly communicated and fully accepted. The Board should also have recognised the impact of change across programme boundaries sooner and taken action to ameliorate it.

Security Prism has been seriously affected by specific security requirements. If left unchanged, they will continue to handicap Prism and all future programmes that aim to introduce more order and transparency into the way the FCO goes about its business.83

66. The Ling report must have been hugely embarrassing, not only for the project’s managers but for the FCO Board, who had failed to become sufficiently engaged with it. And this was despite the debacle of just a few years earlier over the abortive Focus project, which was intended to achieve some of the same goals as Prism. It is also worth noting that some of Mr Ling’s conclusions echo those of the Collinson Grant team—for example, the lack of specialist skills, the unwillingness to accept risk, and the resistance to change.

67. Mr Ling backed up his analysis of what went wrong with a set of recommendations for action. All 26 unclassified recommendations have been published.84 However, we note with some concern that the scope of Prism is understood to include the Secret Intelligence Service as well as the FCO. These are some of the more significant recommendations:

83 The full summary is available at www.fco.gov.uk.

84 Foreign and Commonwealth Office, Prism lessons learned, see www.fco.gov.uk


• The FCO should only appoint programme managers who have the requisite skills and experience for the job or who are assisted by someone with those qualities.

• The FCO Board should appoint a Director General as Senior Responsible Owner (SRO) for large, high risk programmes.

• The FCO Board should strengthen its capacity to oversee IT enabled change management programmes.

• The FCO should recognise project management as a core skill.

• The Business Systems Team (BST), the FCO’s designated centre of excellence for programme and project management, should be given more powers of oversight to ensure best practice is observed.

• The FCO must allow the health of the programme to dictate the pace of implementation. Health checks should include more robust Gateway reviews and closer questioning of the consultant and the contractor.

• The FCO should establish more substantial relationships with contractors on future programmes. This should include regular contact at Board level.

• The FCO should make a realistic assessment of the staff it can make available before the start of any programme. If there is a shortfall in the numbers or the requisite skills, it should hire the extra people it needs, either in its own right or through the contractor.

• Major IT enabled change programmes require an effective communications strategy. The FCO Board should monitor the effectiveness of the strategy closely.

• Training and other forms of support for users should be seen as a fundamental element in the success of any IT-enabled change management programme.

• SROs should ensure that new working arrangements such as hub and spoke are tested, agreed and implemented in advance of global roll out.

• The SRO should ensure there is a full re-assessment of the business case and thus the benefits of the programme at each Gateway review. In the case of high risk/business critical programmes, the SRO should get FCO Board approval of the business case before moving to the next stage of the programme.

Again, there is a strong degree of correlation between these recommendations and some of those made in the Collinson Grant report.

68. We asked the FCO, what action it has taken in respect of each of the 26 unclassified recommendations. In a letter to our Chairman, Sir Michael Jay wrote that:

All major ICT programmes are now required to assess their performance against each of the recommendations in the Ling report. The assessments are scrutinised by


the FCO Investment Committee and follow up action commissioned where deficiencies have been identified.”85

We are disappointed that the FCO responded with this general statement, rather than provide information in respect of each of the recommendations, as we had requested. We reiterate our desire for a specific and detailed response in respect of each of the 26 unclassified recommendations.

69. We conclude that the Ling report has exposed a woeful lack of professional skills and a disturbing series of failings in senior FCO management. We welcome acceptance of the conclusions of the report and we recommend that the FCO Board remain fully seized of the need to implement them. We further recommend that the FCO keep this Committee fully informed of the state of play on progress with putting each of the Ling report’s recommendations into practice; that it provide us with updates on the continuing implementation of Prism; and that it supply us with copies of Gateway reviews of further large, high-risk programmes.

70. The FCO’s Departmental Investment Strategy 2004–07 states that Prism “will improve the financial, personnel and procurement information available to FCO decision-makers, enabling them to improve resource and personnel management and achieve procurement savings.”86 Due to the problems already described with the programme, these improvements are yet to be realised. In the short-term, difficulties with Prism have also caused delays in the process of signing-off the FCO’s Resource Accounts.87

71. It appears that the poor performance and late introduction of Prism may also be the cause of the FCO’s position at the bottom of the league table of 46 government departments’ timeliness in paying bills. According to official statistics published by the Department for Trade and Industry in November 2005, the FCO paid only 68% of its invoices on time in 2004–05.88 The next-worst performing department, the Northern Ireland Office, paid over 85% of invoices on time, and the average across Government was just over 97%.

72. Undue delay in paying bills is unacceptable, regardless of who is the supplier or contractor. However, we feel the FCO has a special duty when it comes to paying the bills of individual contractors, small businesses and retailers, whether they be in the United Kingdom or abroad. Additionally, delay in paying bills overseas can be a source of considerable embarrassment to diplomatic staff in overseas missions. The Secretary of State for Trade and Industry, Alan Johnson MP, told the House that “The Government take this issue very seriously.”89 So do we. We recommend that in its response to this Report the FCO set out how it proposes to achieve its targets for prompt payment of invoices.

85 Ev 52

86 Foreign and Commonwealth Office, Departmental Investment Strategy 2005, See http://www.fco.gov.uk

87 Ev 8

88 HC Deb, 8 November 2005, col 14WS

89 Ibid


Other IT projects

73. The Departmental Report for 2004–05 lists 20 overseas Posts which now accept on-line applications for visas for entry to the United Kingdom.90 The FCO later informed us of a further five Posts which now offer this facility, and told us that others are being added.91 According to the FCO, “take-up of this service continues at a steady pace.”92 In principle, we welcome the efficiency gains which this service ought to provide, and the comparative ease of use for applicants who may live some distance from a visa-issuing centre. We would, however, welcome further information. We recommend that in its response to this report the FCO provide full information on how refusal and fraud rates for on-line visa applications compare with those for conventional applications.

74. The FCO has also been replacing its desktop IT system, known as Firecrest. The Future Firecrest programme is scheduled to be completed in 2012.93 The FCO told us that “Recent changes in central government technical security policy have required some re-design of the system, which may impact on both the timetable and budget. This impact is still being assessed, but it is expected to have no significant impact on the capability of the project to meet its objectives.”94 It is crucial to the success and efficiency of the FCO that the new system works no less well than the first-phase Firecrest system, and we intend to monitor its progress.

‘Rationalising’ the home estate

75. The FCO operates a number of buildings in London, including its main Whitehall accommodation at King Charles Street and the Old Admiralty Building, and the UKVisas building on the Albert Embankment. A further 1,100 staff are based at Hanslope Park, near Milton Keynes.95 Another 450 staff are being transferred to Hanslope Park; this, together with ‘rationalising’ the central London estate by locating all London staff in the two main buildings, is expected to generate savings of about £1.1 million in 2007–08.96

76. Two very prominent and historic buildings in central London are leased by home departments on behalf of the FCO, who pay the costs: 1, Carlton Gardens, and Lancaster House. Negotiations on a new lease for the former property, effective from 1 April 2005, were still ongoing as we carried out this inquiry.97 The lease on Lancaster House expires in July 2007. Both properties are used in support of the FCOs diplomatic work.

77. The FCO also rents various premises in London and elsewhere. Wiston House, which is used by the Wilton Park agency for conferences, cost £94,000 in rent in 2004–05. The

90 Foreign & Commonwealth Office, Foreign and Commonwealth Office Departmental Report, 1 April 2004–31 March

2005, Cm 6533, June 2005, p 203

91 Ev 7

92 Ibid

93 Ev 11

94 Ibid

95 Foreign and Commonwealth Office, Departmental Investment Strategy 2005, para 6, see http://www.fco.gov.uk,

96 Ev 8, Ev 86

97 Ev 49


total FCO bill for rental charges in the United Kingdom that year was £1,540,374.98 Any potential for efficiency savings is, therefore, modest.

Reinvesting efficiency savings

78. Under Treasury classifications which apply to public expenditure by government departments, spending may be classified as either administrative or programme expenditure. We note that 43% of the FCO’s expenditure is classified as administrative.99 This is an abnormally high figure for a Whitehall department.100 We are also aware that the Treasury has encouraged departments to reclassify expenditure as programme, so that programme savings can be reinvested across a wider range of services.101 When he gave oral evidence, Sir Michael Jay noted that he is not allowed to transfer resources from programme to administrative expenditure—for example, to keep open an Embassy threatened with closure.102

79. We therefore asked the FCO, what work it has done to identify those parts of its administrative expenditure that could be reclassified as programme expenditure. The FCO replied that it had already discussed this with the Treasury as part of the 2004 Spending Review, but that the Treasury had only agreed to the reclassification of consular and visa work.103 It is not clear whether responsibility for the failure to reclassify more expenditure rests with the FCO—because it has not made a sufficiently strong case—or the Treasury is being obstructive. The FCO has expressed the hope that it will be possible for this issue to be reconsidered in the context of the forthcoming Comprehensive Spending Review.104 We support the FCO’s efforts to reclassify more of its expenditure on front-line services as programme rather than administrative expenditure and we recommend that it present a strong case to the Treasury for making this change.

Conclusion: the FCO’s response to Collinson Grant

80. The Collinson Grant Report was commissioned by the FCO’s Director General (Corporate Affairs), Dickie Stagg. Commenting on the lack of enthusiasm which the process had encountered among some of his colleagues, Mr Stagg told us that “it is inevitable that, if you bring in people who are clearly seen as being something of a threat to the status quo, there are people who are unenthusiastic about that process.”105 Sir Michael Jay, however, assured us that he and his colleagues on the Board took their duty to consider the report’s findings “extremely seriously”.106 The FCO told us what it has been doing to implement the report’s findings:

98 HC Deb, 13 December 2005, col 1950W

99 Calculation based on 2003–04 FCO resource accounts.

100 Only the Treasury has a higher proportion of administrative expenditure.

101 HM Treasury, Public Expenditure Statistics (2002) 38, paras 17–19

102 Ev 67

103 Ev 46

104 Ibid

105 Q 16

106 Ibid


The FCO Board considered the Collinson Grant report at its meeting on 28 January 2005. It re-committed itself to achieving the £87 million target and agreed to incorporate the Collinson Grant work as far as possible into the FCO’s existing Efficiency Plan. In addition, based on the findings, the Board agreed to review the Finance function in the FCO, both in London and overseas; identify resources that could be reallocated from low to high priority activity using the Collinson Grant comparative analysis of expenditure; and monitor, at Board level, the FCO’s efforts to re-prioritise resources. The Board does not accept that the FCO lacks appropriate political and diplomatic skills.

Since the Board decisions a number of actions have been taken to deliver the efficiency targets. These include: substituting locally engaged for some UK-based staff; rationalising the various change programmes in the FCO; reducing the number of people in the Corporate pool; improving the workings of the internal market; and reducing administrative costs. Work on the finance function will be taken forward in the light of the Treasury and NAO review […]

The staff reductions, agreed with the Treasury as part of the FCO’s Efficiency Plan, are being achieved by adjusting recruitment targets and a programme of early retirement. The FCO is committed to increasing both the skills base of its employees and to better utilising the skills already available, including through active engagement in the Professional Skills in Government initiative. We intend to manage changes in our workforce in ways that will support these policies.107

81. The FCO’s response to Collinson Grant is defensive and may not convey the full extent to which the consultants’ conclusions were either anticipated or taken on board. When he appeared before us, the Permanent Under-Secretary was robust in his defence of the institution he heads:

I am proud to lead this organisation. I believe we have reformed a lot in the last three or four years. We have further to go. I think we and our staff do an extraordinarily good job in very difficult circumstances. I want to get that on the record because I think it is important to do so. […] I accept many of the conclusions but not the analysis of that report and I do not accept the root and branch criticism.108

Later in the same session, however, Sir Michael agreed that there needs to be fundamental change in the FCO:

We do need a culture change in the organisation. Introducing major culture changes and other major changes at the same time as managing and maintaining the morale and the ability of a highly complicated organisation is not easy. I do think there has to be a pace in introducing these changes, which makes sense given the challenges that we face, but the general direction in which you want us to go is right.109

107 Ev 50

108 Q 16

109 Q 28


At our invitation, Sir Michael later supplied us with a more detailed critique of the Collinson Grant report.110 We also invited him to identify those parts of the report that he does not accept, or that he regards as unfair comment.111

82. Closely paraphrasing his oral evidence, Sir Michael wrote that “I accept many of the conclusions but not all of the analysis […] I do not accept the root and branch criticism of the FCO. […] I reject the proposition that the FCO lacks the necessary core diplomatic and political skills”112 In his letter, Sir Michael goes on to state that the FCO believes “some” of the recommendations made by Collinson Grant to be “ill-founded” but he does not identify which recommendations these are. Instead, one example is given: a recommendation to reduce the resource deployed on briefing Members of Parliament and businesses. We have scoured the Collinson Grant report for this recommendation, but have been unable to find it. Possibly, it is based on an unpublished list of “certain high-profile activities” that the FCO itself has identified as those that could be curtailed or even discontinued completely.113

83. We can only conclude from this that Sir Michael is part of the problem. Under his stewardship, the report was originally suppressed. It criticised the management he was supposed to lead. He acquiesced in a situation where some senior managers failed to collaborate with Collinson Grant’s proper inquiries. His senior managers did not contest or seek to correct prior to publication errors which they now allege are contained in the Collinson Grant report. When asked what he deems to be “ill founded” in the recommendations of Collinson Grant, he failed to give a specific example. This is all wholly unacceptable from a Permanent Under-Secretary.

84. We had every expectation, having invited the Permanent Under-Secretary to tell us which parts of the Collinson Grant report he disagrees with, or regards as unfair, that we would receive a lengthy and well-referenced list. Instead, we received a general comment, supported by a single, somewhat gratuitous reference to one aspect of the FCO’s work. We recommend that in its response to this Report the FCO identify all those observations, conclusions and recommendations in the Collinson Grant report that it does not accept, in each case with a full explanation. We also recommend that the FCO state in that reponse what stage it has reached in implementing each recommendation in the report that it does accept. We further recommend that the FCO publish in its response the list of activities classified as red, amber or green, which is referred to in the report.

85. We congratulate FCO managers on their decision to invite external consultants to carry out a study of their efficiency, effectiveness and control of costs, although we have concerns about the lack of thoroughness with which the review was carried out and about the lack of seriousness with which the FCO regarded and appears still to regard the project. We conclude that, having commissioned the study, the FCO must deal with it seriously: this suggests that the FCO should change some of its management practices

110 Ev 45

111 Q 15

112 Ev 45



and its efficiency savings targets or it should defend and justify them, explaining where and how the consultants are mistaken in their conclusions. So far, we have seen no evidence that it is succeeding in doing either.


4 Consular Services 86. The FCO’s Public Service Agreements 9 and 10 cover the main services it provides to members of the public: entry clearance services, and consular services. Our predecessor Committee looked at entry clearance services is some detail in its Report on the FCO’s 2003–04 annual report; this year, we turn our focus to consular services.

87. The new traffic light system used in the FCO’s Autumn Performance Report 2005 shows red for the performance indicator relating to issuing of passports overseas. This is a major activity of the FCO—about half a million passports are issued to British citizens overseas annually.114 The target for 2004–05 was for 95% of these passports to be issued within five working days from receipt of the correct fee and a correctly completed application. Performance against this target was 73.3%.115 This represented a considerable deterioration over the achievement in 2002–03, when, against the same target of 95%, performance was 88.1%.116 A new target of 90% of passports to be issued within ten days of receipt of applications has been introduced for 2005–06, following the introduction of new, lengthier passport-issuing procedures designed to increase security.117

88. In a recent report on FCO consular services, the National Audit Office considered the reasons for the failure to meet this target.118 It found three main causes of delay:

• the introduction of a process whereby passport applications are received at smaller “spoke” Posts and then transferred to a larger “hub” Post in a neighbouring country or region for processing and issuing, which takes between two and five weeks

• the difficulties faced by passport operations in some parts of the world and the need to spend more time checking applications

• problems with information technology systems

89. In its Autumn Performance Review, the FCO states that it has set up a new Nationality and Passports Best Practice Unit “to ensure that posts are operating in the most efficient manner possible whilst still carrying out rigorous checks on applicants.”119 We remain to be convinced that this unit will be able to tackle the three factors identified by the NAO as being responsible for the poor performance. The cost savings associated with a ‘hub and spoke’ arrangement, and the need to apply a consistently high standard of security to applications, are arguments in favour of persisting with that approach and accepting that there will inevitably be delays. We trust that the new unit will take steps to minimise these delays, without compromising security. However, the problems with information

114 ‘Challenges to deliver Consular Services have never been greater', speech by FCO Minister Lord Triesman, 27 October

2005, available at www.fco.gov.uk


116 Foreign & Commonwealth Office, Foreign and Commonwealth Office Departmental Report 1 April 2004–31 March 2005, Cm 6533, June 2005, p 160


118 National Audit Office, Report by the Comptroller and Auditor General, Consular Services to British Nationals, HC 594, Session 2005–06, 24 November 2005

119 Foreign & Commonwealth Office, Autumn Performance Report 2005, Cm 6709, December 2005, p 57; Ev 21


technology give serious cause for concern, providing as they do an echo of the difficulties experienced with Prism. It is far from clear how the new unit—which will conduct a series of reviews of the performance of the larger passport-issuing Posts120—will deal with this.

90. We asked Sir Michael Jay about the reasons for the FCO’s failure to meet this target when he appeared before us.121 Neither he nor Mr Stagg, the Director-General (Corporate), was able to give us full details then, but Sir Michael subsequently wrote to us. His letter appeared to ascribe the cause of the underperformance almost entirely to the GenIE computerised passport issuing system, which “has enabled us to produce fraud-resistant, machine-readable passports overseas but at the price of extended processing times.”122 He was confident that in 2005–06 the FCO would be able to meet its new target of issuing 90% of passports within ten working days. However, the FCO itself states in its Autumn Performance Review that it would have failed by a margin of 7.5% to achieve this new target in 2004–05, 123 so it appears unlikely that moving the target will of itself turn the traffic light to green. Sir Michael did not mention the new Nationality and Passports Best Practice Unit in his letter. Neither did he anticipate a decision taken on 5 December by the FCO Board, over which he presides, to propose to Ministers a move to providing these services based on “need not want”, which represents a potentially significant shift in practice.124

91. The Autumn Performance Review also shows that of the five other performance targets in consular services, the FCO failed to achieve three: registration of births; registration of deaths; and contact with detainees. Each of these has been given an amber light, meaning that they are ‘generally on course’. In each case, a number of Posts recorded failures, but they are not listed, although in a letter following his oral evidence Sir Michael did note that documentation problems are a particular problem when registering births in Pakistan, China and Turkey, and that the large number of British citizens detained in Spain causes difficulties for the Posts there.125 We do not see why the Posts recording failures should not be listed, along with an explanation of the reasons for those failures.

92. We conclude that the FCO’s failure in 2004–05 to achieve four out of the six Public Service Agreements for its consular services is disappointing, although we recognise that the targets are demanding and that activities carried out at Posts overseas will always be subject to pressures or to events which may be more extreme than those which apply in the United Kingdom. We recommend that in its response to this Report, the FCO set out in detail the goals, work programme and achievements to date of its new Nationality and Passports Best Practice Unit. We further recommend that the FCO identify those Posts which have registered failures in respect of consular services PSAs in financial years 2004–05 and 2005–06 and that it supply this Committee with full details of the Board’s proposal on the future of issuing passports overseas.

120 Ev 21

121 Qq 49–53

122 Ev 47


124 Foreign and Commonwealth Office, FCO Board Minutes, December 2005, see www.fco.gov.uk

125 Ev 48


Emergency response

The Indian Ocean tsunami

93. In November 2002, the FCO wrote to our predecessor Committee, informing them that it was setting up three rapid deployment teams, to respond to consular emergencies overseas.126 In that letter, the FCO noted that the contingency plans it had previously developed for these situations “focused very largely on events such as natural disasters (earthquakes, floods, hurricanes)” but that the impetus for its new initiative came from the increased danger of terrorist attack. It was ironic that the Indian Ocean tsunami of 26 December 2004 which followed a massive underwater earthquake should have provided the severest test of the new arrangements to date.

94. Our predecessors in the last Parliament commented on the FCO’s response to the tsunami in a Report published in March 2005. 127 In that Report, the Committee concluded that the FCO had generally performed well in appalling circumstances. Lapses—although they had affected families and individuals who had, understandably, been bitterly disappointed—were few, given the scale of the disaster. The Committee recommended that the FCO make further improvements in its procedures for dealing with catastrophic emergencies, and that it keep Parliament informed. The Government fully accepted this recommendation.128 On 28 June 2005, the Foreign Secretary made a Written Statement to the House and published a summary of the FCO’s internal review of its response to the tsunami.129

95. The FCO response to the Indian Ocean tsunami was considered in some detail by the National Audit Office, in its wide-ranging review of consular services.130 In October 2005, the FCO and the NAO also produced a joint paper on the lessons learned from their analysis of the response.131 In summary, the FCO and NAO found that “success in delivering consular support is determined by getting the right, suitably experienced people with the right skills, equipped with the right systems and support, into the right places, at the right time. […] in the case of the tsunami not all these elements were always achieved, and […] on occasions mistakes were made.”132 The mistakes as listed in the joint report were as follows:

• There was insufficient capacity at the Metropolitan Police’s call handling centre to deal with the volume of calls from members of the public and there was no system in place for sifting out non-urgent calls

126 Foreign Affairs Committee, Twelfth Report of Session 2002–03, Foreign and Commonwealth Office Annual Report

2003, HC859; Ev 28

127 Foreign Affairs Committee, Fourth Report of Session 2004–05, Human Rights Annual Report 2004, HC 109, paras 55–62

128 Foreign & Commonwealth Office, Response of the Secretary of State for Foreign and Commonwealth Affairs to the Fourth Report from the Foreign Affairs Committee, Session 2004–05, Cm 6571, May 2005, p 10

129 HC Deb, 28 June 2005, col 53WS

130 National Audit Office, Report by the Comptroller and Auditor General, Foreign and Commonwealth Consular Services to British Nationals, HC 594, Session 2005–06, 24 November 2005

131 National Audit Office/Foreign & Commonwealth Office, Joint findings on lessons to be learned from the handling of the response to the Indian Ocean tsunami, 24 November 2005

132 Ibid, Summary, para 3


• No rapid deployment team was sent from London to Thailand until 8 January

• It was 29 December before British officials arrived in one of the badly affected Thai resorts, Khao Lak

• The resources available to the FCO in Thailand were inadequate to the task

• The Rapid Deployment Team sent to Sri Lanka failed to work sufficiently closely with locally-based officials, it did not contain people with the necessary skills and its members had not received appropriate training

• FCO contingency plans for dealing with this type of disaster were cumbersome and difficult to use in a crisis

• The decision—taken largely on cost grounds—to operate only one evacuation flight almost a week after the tsunami meant that many British survivors were obliged to remain in the area in a distressed state, some of them for several days

• Co-ordination between the FCO and other government departments was not as good as it should have been

• FCO and police systems for recording casualty information were—and still are—incompatible

The Foreign Secretary apologised for these mistakes in an interview with the BBC on the first anniversary of the tsunami.133 Work continues across government, and particularly in the FCO, to remedy deficiencies. The FCO supplied us with a table, setting out progress on each aspect of this work as at December 2005.134

96. In January 2006, Sir Michael Jay and two senior FCO managers appeared before our colleagues on the Public Accounts Committee (PAC), to answer questions on the NAO report. Sir Michael told the PAC that the FCO’s emergency plans in 2004 were not fit for purpose when it came to dealing with the extreme circumstances of the tsunami.135 He assured the PAC that in future such plans will be adequate and that they will be rigorously tested.136 He also referred to “a much broader move towards a more professional diplomatic service than we have had in the past and consular work is an increasingly important part of that.” He added “our staff are becoming increasingly professional over time, better trained, more conscious of the duties which will fall on them in an emergency, working more closely with headquarters in London to ensure a consistent response.”137

97. An additional NAO-sponsored study related to the tsunami was under way as we prepared this Report. In November 2005, the Secretary of State announced that the NAO had commissioned the Zito Trust “to undertake a survey of British nationals affected by the

133 ‘Straw apology to tsunami families’, BBC News Online, 26 December 2005, http://news.bbc.co.uk/1/hi/uk/4559484.stm

134 Ev 64

135 Uncorrected transcript of oral evidence taken before the Public Accounts Committee on 11 January 2006, HC 813–i, Q 10

136 Ibid, Qq 64–70

137 Ibid, Q64


Tsunami.”138 The purpose of the study is to gain the views of those directly affected by the disaster, and their families, on the FCO response. We welcome the fact that this study is being carried out, and we await its report with interest.

Hurricanes Katrina and Rita

98. A further natural disaster occurred in late August 2005, when Hurricane Katrina struck part of the southern coastline of the United States and this was followed by Hurricane Rita, which struck a similar area in September. In many respects, these incidents differed significantly from the Indian Ocean tsunami: they were predicted; there were many fewer fatalities (including just one British citizen); fewer British nationals were directly involved; and they occurred in the most powerful, most well-resourced country in the world. Nevertheless, there were allegations of serious shortcomings in the British authorities’ response, particularly in respect of Hurricane Katrina.

99. We asked Sir Michael Jay to respond to these allegations, most of which related to the failure of consular officials to enter New Orleans, where a number of British nationals were in fear of their lives in the days immediately following the hurricane. Sir Michael was robust in his response. He told us that “Unlike in some aspects of the tsunami, I think the criticism of the response to Katrina was unjustified.”139 Consular and diplomatic staff had been instructed by the US authorities not to enter New Orleans, but to deploy to the towns some distance away, to which survivors were being evacuated. The FCO made strong representations, but felt obliged to comply with this request.140 The FCO’s Director-General (Corporate), Dickie Stagg, pointed out to us that only the previous month, American diplomats had been told to stay away from the scenes of the London bombings, in which US citizens were among the victims.141 We accept that compliance with such requests from a competent ally must be the default action, although in the case of Hurricane Katrina it became apparent at a fairly early stage that the local authorities in the affected area were unable to cope. By that time, FCO personnel had been allowed into the zone and were assisting people.142

100. The NAO’s report of November 2005 did not include its assessment of the FCO response to Hurricanes Katrina and Rita. However, the FCO itself sent us a full memorandum on this, in which the Secretary of State undertook to “use the experience gained from Hurricanes Katrina and Rita to improve our response further in future.”143 We will also study the report of the United States House of Representatives Committee on Homeland Security on the US response to Katrina, published on the day we agreed this Report.

138 Foreign and Commonwealth Office, News, NAO reports on consular services and tsunami response, see

www.fco.gov.uk

139 Q 35

140 Ev 57

141 Q 55

142 Ev 46

143 Ev 57


Paying the bills

101. The joint FCO/NAO report on the tsunami suggests that the cost of the FCO’s response to the tsunami was £2.5 million as at October 2005.144 Costs associated with Hurricanes Katrina and Rita had not yet been assessed.145 We asked the FCO how these costs would be met and were told that “The Treasury agreed on 2 December that tsunami costs may be met from a combination of Emergency and Disaster Reserve funds, a claim on the Treasury’s Central Reserve, and a contribution from the FCO’s 2005/06 end year flexibility. FCO and Treasury officials will agree exact proportions in time for the Spring Supplementary Estimates.”146 Discussions are continuing with the Treasury about how the response to any future disasters will be funded. However, it is clear from the FCO/NAO joint report that the Emergency Disaster Reserve, which is funded by a levy on each passport issued, is woefully inadequate—mainly due to demands made on it as a result of the various terrorist threats in the United Kingdom.147 Direct Treasury funding will be necessary.

102. We conclude that it would be wrong in principle for the FCO to be required to fund its response to unpredictable disasters such as the Indian Ocean tsunami. We recommend that the FCO take a strong line in its discussions with the Treasury and that Ministers accept the need for additional funding to be made available in such circumstances. We further recommend that consideration be given to increasing the resources available through the Emergency Disaster Reserve.

Conclusion

103. The FCO rightly provided a package of exceptional assistance to the victims of the Indian Ocean tsunami and to their families and we welcome the FCO’s undertaking to us that the Foreign Secretary will take an early decision on the scope of assistance to be provided following any future such disaster.148 The factors that the Foreign Secretary would consider in that instance might include the state of the local infrastructure, the availability of other support, and the numbers of British nationals involved. In more normal circumstances, however, there must obviously be limits on the assistance with which British nationals overseas can be provided.

104. In his interview with the BBC on the anniversary of the tsunami, the Foreign Secretary said that “British citizens [who travel abroad] these days, have very high expectations of what the British government can deliver—and fair enough.”149 When he appeared before us in November, Sir Michael Jay admitted that “There is a really difficult issue of what is the right level of expectation that people should have of the services which the Foreign

144 National Audit Office/Foreign & Commonwealth Office, Joint findings on lessons to be learned from the handling of

the response to the Indian Ocean tsunami, 24 November 2005, table following para 3.23

145 Ev 61

146 Ev 65

147 National Audit Office/Foreign & Commonwealth Office, Joint findings on lessons to be learned from the handling of the response to the Indian Ocean tsunami, 24 November 2005, para 23 and table following para 23

148 Ev 64

149 ‘Straw apology to tsunami families’, BBC News Online, 26 December 2005, news.bbc.co.uk


Office and the government can provide. There has been a rising level of expectation to the extent sometimes that we have not been able to deliver it.”150

105. Similarly, the NAO, in its report on consular services, refers in several places to a rise in public expectations of the assistance with which they should be provided by the FCO when they get into difficulties overseas. The report notes that:

The FCO believes that providing […] an intensive level of support in all cases is not sustainable, given resource constraints, but has acknowledged that an expectations gap has arisen and […] is working with some key lobby groups to explain its position and to reduce the expectation gap in some areas.151

The NAO goes on to note that as part of this work, the FCO is developing,

[…] greater publicity regarding the role of the FCO and the responsibilities of the individual, and maintaining a robust but defensible line in setting limits on the services provided, and in tailoring assistance according to transparent criteria based on need.152

106. We agree with this approach. We note, for example, that in its draft Guide to Consular Assistance, the FCO has included a section headed “The limits of what we can do.”153 Among the services which consular staff will not be expected to provide are obtaining work permits, giving legal advice, or searching for missing persons. Any of these circumstances is potentially distressing for the person placed in them in a foreign country, but we accept that in most cases it would not be appropriate for taxpayers to foot the bill for dealing with them. The draft Consular Guide sets out very clearly the help that can be given, and contains excellent advice on how people can help themselves.

107. We conclude that in recent years excessive and unrealistic expectations have arisen of what the FCO is able to do for people who get into difficulties abroad, including in circumstances such as natural disasters. We recommend that Ministers take a firm line in explaining to the public, not only through their official publications but also through the media, that there are practical limits to the consular support that British citizens who choose to travel abroad are entitled to receive, not least because of the FCO’s duty to make efficient and effective use of public funds. We nonetheless recommend that in the case of a further natural disaster on the scale of the Indian Ocean tsunami, exceptional assistance should be provided, tailored to the circumstances.

108. Our predecessor committee in the last Parliament reached the following conclusion:

We conclude that the response by the Foreign and Commonwealth Office to the appalling consequences of the tsunami was generally comprehensive, well co-ordinated and indispensable to those British nationals and their families affected by the disaster, both in the UK and the affected areas. We commend the strenuous

150 Q 33

151 National Audit Office, Report by the Comptroller and Auditor General, Foreign and Commonwealth Consular Services to British Nationals, HC 594, Session 2005–06, 24 November 2005, p 33

152 Ibid, p 42

153 Ev 56


efforts of FCO staff who worked selflessly in the aftermath of the event to help the victims and their families. We also commend the departmental crisis management structures which were in place before the disaster happened, and which were used so effectively in the event.154

Since that conclusion was made, further information has come to light about shortcomings in the FCO response. As we note above, the FCO has subsequently acknowledged that mistakes were made and it asserts that it has learned the appropriate lessons from those mistakes.

109. We conclude that in most respects the FCO’s response to the immense challenge posed by the Indian Ocean tsunami was timely and successful. We conclude that the same can be said of the response to Hurricanes Katrina and Rita. It is important, however, that the FCO learns from the experience of responding to these major incidents and, in particular, from the mistakes which were undoubtedly made. We therefore welcome the FCO’s very informative and helpful progress report on how it is implementing the lessons learned from its handling of these disasters and we recommend that in its response to this Report the FCO provide an updated version of that table.

154 Foreign Affairs Committee, Fourth Report of Session 2004–05, Human Rights Annual Report 2004, HC 109, para 61


5 Diplomatic representation overseas

‘Alternative representation’

110. The FCO’s Public Service Agreement 9 target requires it to provide “effective advice on, support for, and delivery of Government objectives through a viable and responsive network of diplomatic posts.”155 In its Departmental Report for 2004–05, the FCO explains that it “has been reorganising to deliver the priorities […] including closing eight sovereign and ten subordinate posts.”156 It is not clear, however, that this programme of closures has any particular rationale, beyond saving resources. The increased representation in some of the new EU member states, for example, is arguably less important given the EU single market and the number of decisions now taken in Brussels; whereas closures of Posts in small, relatively distant Commonwealth countries where a modest effort may generate a substantial diplomatic or trade return could incur real political and economic costs.

111. Our predecessors in the last Parliament pointed this out in their Report on the FCO’s Departmental Report 2003–04. They recommended that wherever possible the FCO should maintain its wide-reaching network of Posts.157 The FCO agreed that “The network is our greatest asset.”158 Sir Michael Jay also reminded us that “over the last seven years or so, [the FCO has] opened 29 posts and closed 25.”159 This is, as he pointed out, “a reflection of shifting priorities.” However, the latest announcements appear to reflect not so much a shifting of geographical or diplomatic priorities as a cost-cutting measure. We have no doubt that, given the choice, the FCO would have preferred to retain its network of Posts.

112. The most recent announcement of changes in overseas representation was made by the Secretary of State in a Written Ministerial Statement on 11 October 2005.160 The consolidated effect of these when taken together with the changes announced the previous December is as follows:


2005, Cm 6533, June 2005, p 158

156 Ibid

157 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Office Annual Report 2003–04, HC 745, para 50


159 Q 119

160 HC Deb, 11 October 2005, col 22–23WS


Region Planned changes

Africa 4 UK staffed Posts to close

Americas 2 UK-staffed Posts to close; 2 Trade Offices to close

Asia/Pacific 5 UK-staffed Posts to close; 1 locally-staffed Post to close

Australia/NZ 3 UK-staffed Posts to become locally-staffed Posts

Europe 4 UK-staffed Posts to close; 5 UK-staffed Posts to become locally-staffed Posts

India 1 Trade Office to close and 2 Trade Offices to open

United States 3 UK-staffed Posts to close; 1 UK-staffed Post to become locally-staffed Post

Total (net effect) 18 UK-staffed Posts to close; 1 locally-staffed Post to close; 2 Trade Offices to close; 9 UK-staffed Posts to become locally-staffed Posts

113. In its response to one of our written questions, the FCO confirmed that 35 UK-based diplomatic staff posts will be cut as the changes are implemented. These reductions are in addition to staff savings in the senior management structure previously agreed.161 The financial savings are expected to be of the order of £6 million, not including property disposals, almost half of this from the closures or localisations in Europe.162 The October 2005 statement shows that 23 Posts will be (in some cases, already have been) closed, nine will be downgraded and one will be opened. These changes, it seems to us, are somewhat more far-reaching than the “adjustments at the margins of the network” which we were assured in November 2004 were all that was expected.163

114. We are particularly concerned that a number of the affected Posts are in Commonwealth countries, with which the United Kingdom has had a long and particularly close association. These include closure of the High Commissions in Swaziland and in Lesotho, both of which are now covered from Pretoria, South Africa. Such Posts will be particularly missed.

115. We also received evidence that the closure of the British Embassy in Antananarivo last August164 took place at a time when Madagascar was emerging from a long period of

161 Ev 7

162 Ev 7; Q 60


164 HC Deb, 19 January 2006, col 1534W


misrule, with aid and trade opportunities opening up. The world’s second-biggest mining company, Rio Tinto, is reported as having written to the Foreign Secretary, expressing its disappointment at the closure of the Embassy.165 According to The Times, the Chief Executive of another British prospecting company active in Madagascar, Jubilee Platinum, said that embassies “are like insurance—they don’t matter until they matter.”166 A British visitor to Madagascar, Mr Thomas Rambaut, wrote to us to suggest that “The FCO have made a serious mistake in deciding to close the British Embassy in Antananarivo” and pointed out that the decision appears to be at odds with the Prime Minister’s declaration of 2005 as the Year of Africa.167 To these voices were added those of many eminent politicians—including the former Chairman of this Committee, Lord Anderson—Africa specialists, naturalists and others in a letter to The Times on 22 December 2005, calling on the Government to reverse the decision.168

116. We note that the FCO has taken a different approach in Liberia, where a full-time presence has been maintained by locating the sole United Kingdom-based officer in the US Embassy in Monrovia.169 In the Departmental Report for 2004–05, the FCO explains under the heading ‘Alternative representation overseas’ how it seeks efficiency savings by, “wherever appropriate”, sharing accommodation with an ally.170 Although this arrangement is not ideal, we believe that there are circumstances in which it makes good sense to co-locate, for example in countries where the United Kingdom has interests but they are not on a scale or of an importance sufficient to justify a free-standing Post, or where security considerations mean that it is impractical to maintain a separate Embassy. We were surprised that, given the Departmental Report’s endorsement of ‘alternative representation’ as a means of maintaining a diplomatic presence, co-location was not the preferred solution in respect of some of the other Posts which are being closed. We therefore asked the FCO what consideration had been given to this possibility.

117. Sir Michael Jay replied that the FCO had indeed considered co-location, either by having an ‘implant’ in another country’s embassy (as in Liberia) or by sharing premises (as is the case in a number of countries).171 Unfortunately, co-location did not prove to be a viable option in any of the cases this time. Sir Michael told us that the factors which determined this included a lack of opportunity (presumably, lack of a suitable partner or premises) and lack of potential for savings to be made. However, we note that since Sir Michael sent his reply, co-location has been chosen—on security grounds—as the preferred option for continued representation in Abidjan, Côte d’Ivoire.172

118. We conclude that although co-location of a British sovereign Post with or within the post of another country is in general undesirable, it is almost always likely to be

165 ‘Rio Tinto hits hout at closure of embassy’, The Times, 10 September 2005, p 65

166 Ibid

167 Ev 93

168 ‘Embassy in Madagascar’, The Times, 22 December 2005, p 16

169 Foreign and Commonwealth Office, Departmental Investment Strategy 2005, http://www.fco.gov.uk, para 8

170 Foreign & Commonwealth Office, Foreign and Commonwealth Office departmental report 1 April 2004–31 March 2005, Cm 6533, June 2005, p 201

171 Ev 48

172 Ev 82


preferable to outright closure. We recommend that the FCO consider very carefully the case for co-location when adjusting its international priorities or when looking to achieve financial savings from its overseas operations.

119. The Foreign Affairs Committee in the last Parliament recommended on more than one occasion the establishment of a United Kingdom-staffed Post in Podgorica, the capital of Montenegro. This recommendation was most recently re-stated in the Committee’s Report of February 2005 on the Western Balkans, when we drew attention to the likelihood that Montenegro will gain independence from Serbia.173 We raised this again when Sir Michael Jay appeared before us last October.174 In a subsequent letter, Sir Michael told us that “The Committee’s views will be given full weight” in the FCO’s deliberations on the future status of the Post in Podgorica.175 We conclude that the forthcoming referendum on Montenegro is likely to add to the case for the FCO to upgrade its Post in Podgorica to one headed by its own British Ambassador and appropriately staffed, and we recommend that this be done without further delay.

120. Our predecessors also consistently made the case for a full-time Post to be established in Bishkek, Kyrgyzstan, a friendly country which by the standards of its region has made some progress towards democracy.176 The absence of a British Ambassador in Kyrgyzstan’s capital, Bishkek, causes hurt and dismay among that country’s body politic and among those with whom the United Kingdom has a considerable interest in fostering closer relationships. The duties of Ambassador to Kyrgyzstan fall to the British Ambassador to Kazakhstan, some hundreds of miles away in Almaty. His responsibilities include representing British interests in an important and strategic country about the size of North West Europe. In addition, he is not based in that country’s capital but some thousand miles distant from it, which inevitably places an additional representative burden on him. The Committee has repeatedly urged Sir Michael, personally, when he has appeared before us, about the need for a small embassy in Bishkek. He confirmed that the FCO would wish to open a permanently-staffed Post in Bishkek but that it does not presently feel this is a priority for the resources it has available.177 Sir Michael undertook to keep this under review, which is a formulation often heard when something is kicked into the long grass. We recommend that the FCO make the opening of an Embassy in Bishkek a priority.

121. Regrettably, the British Council does not have an office in Kyrgyzstan either.

The overseas estate

122. Our predecessors in the last Parliament took a close interest in the FCO’s programme of selling off embassy, consulate and high commission buildings overseas, known in the FCO as ‘asset recycling’. In their final observations on this practice before the last general election, they reached the following conclusions:

173 Foreign Affairs Committee, Third Report of Session 2004–05, The Western Balkans, HC 87, para 96

174 Q 57

175 Ev 48

176 Foreign and Commonwealth Office, Country Profiles, Kyrgyzstan, available at www.fco.gov.uk

177 Q 66


[…] the “asset recycling scheme” has had a very serious impact on the Foreign Office’s property portfolio, with valuable buildings that were appreciating in value being sacrificed on the altar of short-term Treasury-inspired targets. […] these sales have left the Foreign Office more at risk from fluctuations in the international property market and exchange rates, and may have significantly damaged the long-term financial strength of its estate.178

[…] serious mistakes were made during the sale and purchase of the residences in Dublin and New York and should not have occurred. Such incidents serve to underline the importance of effective scrutiny of the Foreign Office’s property transactions by Parliament.179

The Committee also criticised in very strong terms the FCO’s refusal to publish details of its estate sales.180 This practice was reversed, following pressure from the Committee. We now receive quarterly reports from the FCO, listing the properties that have been sold.

123. The FCO’s overseas estate consists of some 4,300 properties, including embassy buildings and staff accommodation.181 Of these, about 60% by value are owned and the remainder are leased. The highest proportion by value (over 70%) of owned assets as against leased assets is in Africa and the lowest (under half) is in Central and South America.182 The value of each part of the overseas estate is calculated with reference to the value of buildings put to similar use in the vicinity. The FCO itself recognises this is “not ideal” and it therefore has an agreement with the Treasury to maintain an ‘impairments reserve’ to absorb the negative financial effects of revaluations.183 This reserve has fluctuated from £198 million in 2000–01 to £20 million in 2004–05 and has been set at £50 million for 2007–08.184

124. The FCO’s Estate Strategy Unit (ESU) administers 857 of its overseas buildings. The remainder, which are mostly staff accommodation, are managed directly by Posts.185 In financial year 2004–05, the following disposals were made by the FCO:186

178 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Office Annual Report

2003–04, HC 745, para 86

179 Ibid, para 92

180 Ibid, para 83

181 Foreign and Commonwealth Office, Department Investment Strategy, http://www.fco.gov.uk, para 7

182 Ibid, figure 2

183 Ibid, para 12

184 Ibid, Table 2

185 Ibid, Annex III para 11

186 Source: House of Commons Library, see HC Deb, 10 January 2006, col 462W


Sterling equivalentat time of sale (£000)

Beirut 373Budapest 298Bucharest 1059Buenos Aires 477Canberra 856Caracas 763Copenhagen 661Dublin 524Kampala 14Kiev 69Kuala Lumpur 203Lusaka 343Port Louis 77Pretoria 69St Georges 254San Salvador 1155Santiago 470Tashkent 19Tel Aviv 725The Hague 154Tunis 1,076Vienna 807Wellington 128

Post

Total gross income from property sales in 2004–05 was thus £10,574,000. It is, of course, important to bear in mind that there are costs associated with property sales; the FCO estimates its transaction costs at about 6 to 8%.187

125. The Departmental Investment Strategy 2004–07 records that the ESU’s estate sales or ‘asset recycling’ programme “has shifted into a lower gear. There are fewer under-performing properties to sell, and the reduction in the [Treasury’s] Test Discount Rate from 6% to 3.5% has shifted the value for money in favour of owning property.”188 However, the FCO’s Capital Plan for the period 2005–06 to 2007–08 projects a consistent annual income from estate sales of £10 million.189 It appears from the Efficiency Technical Note published in November 2005 that £4 million of these receipts may be cashable.190 The FCO intends that all of this income will be reinvested in the estate191—a list showing the considerable number of building and refurbishment projects overseas scheduled for financial years 2005–06 and 2006–07 was published in Hansard in December 2005.192 The

187 Ev 49


189 Ibid, Table 3

190 Foreign and Commonwealth Office, Efficiency Technical Note, See www.fco.gov.uk


192 HC Deb, 19 December 2005, cols 2474W and 2475W


list includes a substantial sum for redevelopment of the estate in Warsaw, an increasingly important EU Post which a number of us visited recently.

126. The FCO has also developed an Estate Strategy for managing its home and overseas estate.193 This strategy notes that “unless there are major changes of policy is respect of the nature and pattern of HMG’s overseas representation, we judge that further large sales or other deals are unlikely. We note that high-profile sales can be difficult to carry through successfully, and can be controversial.”194 We welcome this statement, but we note that notwithstanding the new estate strategy the intention remains to dispose of not less than £10 million of assets overseas in each of the next three financial years. This will be a considerable sum to amass from small, low-profile sales.

127. We are therefore concerned to note that when the strategy refers to an unspecified number of “properties accepted as of special architectural or historical importance”, including 40 residences, it suggests that the decision on whether to retain them may rest on a trade-off between the market value of the property and the “present importance of the country in question.”195 It is quite conceivable that the sale of a single historic property could deliver the FCO’s entire ‘asset recycling’ requirement for a year or more. If the worth of the property is to be assessed on the basis of the “present importance” of the country in which it is situated, there is the danger that short-term priorities may prevail over long-term interests. The ESU has undertaken to consult Ministers on major decisions affecting the historic properties; it does not state whether these include Treasury Ministers.

128. We conclude that there is no clear basis for the FCO’s projected receipts of £10 million from estate sales over the next three financial years. We recommend that in its response to this Report the FCO explain how it arrived at this projection, whether it regards the figure as a target, and if so how it expects to achieve it without “further large sales or other deals”, particularly involving properties of special architectural or historical importance.

129. In last year’s Report, our predecessors recorded their strong dissatisfaction with the FCO’s handling of the sale of the residence of the Ambassador in Dublin—Glencairn—and the purchase of a new residence—Marley Grange—followed by the decision to retain the original residence, which left the newly-purchased property surplus to requirements.196 The National Audit Office, too, reported its conclusions on this episode.

[…] in 2000 the Department gave insufficient consideration to retaining the Ambassador’s and Defence Attaché’s residences at Glencairn while selling the bulk of the estate. […] The Department embarked on the sale of Glencairn without real knowledge of the likelihood of being able to find the kind of replacement that it wished to purchase. Its criteria for seeking a replacement residence in Dublin 4 were initially too restrictive, and eventually could not be met […] The purchase of Marlay

193 Foreign and Commonwealth Office, Department Investment Strategy, http://www.fco.gov.uk, Annex III



196 Foreign Affairs Committee, Eighth Report of Session 2002–03, Foreign and Commonwealth Office Annual Report 2003–04, HC 745, paras 87–92


Grange for £6.4 million should not have gone ahead unless the owners had first agreed to a full survey of the general condition of the property.197

The FCO recognised that mistakes had been made, and undertook not to repeat them.198 We sought an update on the position with respect to these properties and were told by the FCO that “it remains our intention to repurchase Glencairn […] Pending completion of the re-purchase, we have not marketed Marley Grange.”199 We asked for a further update when Sir Michael Jay appeared before the Committee in November 2005. Sir Michael wrote that “Work continues on the repurchase” of Glencairn, but that meanwhile the residence is occupied free of rent.200

130. The Foreign Affairs Committee has been paying close attention to the FCO’s management of its overseas estate for some years now. Over that period, despite serious lapses such as the mishandled sale of the Dublin residence, we have begun to see some signs of improvement, particularly in the scope and quality of information presented to Parliament. We conclude that the provision of information on the FCO’s management of its overseas estate has improved in recent years. We welcome the quarterly reports which the Committee now receives from FCO, and we will continue to scrutinise these and the policies which underlie them closely.

197 National Audit Office Report, Foreign and Commonwealth Office Resource Accounts 2003–04: Rationalisation of the

Glencairn Estate in Dublin, HC (2003–04) 1088

198 Foreign & Commonwealth Office, Government Response to the Foreign Affairs Committee's Eighth Report: Foreign and Commonwealth Office Annual Report 2003-04, Cm 6415, November 2004, pp 6 and 7

199 Ev 10

200 Ev 48


6 FCO personnel issues

Security of FCO personnel

131. In their Report on the FCO’s Departmental Report for 2003–04, the Committee in the last Parliament condemned the bombing attack on the British Consulate-General in Istanbul, which resulted in four fatalities.201 They welcomed additional security measures being taken to protect those who work in the United Kingdom’s embassies, high commissions, consulates and other offices abroad and expressed satisfaction that the Treasury was releasing additional funding for these measures.202 In reply, the FCO described some of the work it was undertaking and reaffirmed that security of personnel is one of its highest priorities.203

132. The FCO’s Departmental Report for 2004–05 records that more than £21 million has been made available from the Treasury reserve for security measures at Posts overseas, with additional measures being put in place at 167 locations.204 In a memorandum to the Committee, the FCO informed us that £25 million has been set aside for expenditure on security in 2006–07 and £28 million in 2007–08.205 We greatly welcome the fact that the need for this work to be properly funded has been recognised. In some cases, we have been able to see the worthwhile results of the work for ourselves. We are also aware, however, that the threat to officials serving abroad is certainly not decreasing and we are concerned that the security works programme is apparently running behind time.206 We continue to be concerned for the welfare of staff who serve their country in the more dangerous parts of the world. We recommend that the FCO maintain its commitment to ensuring that adequate safety and security measures are put in place, with an appropriate level of funding. This funding should be in addition to the FCO’s agreed public expenditure allocation, in recognition of the exceptional nature of the cost of protecting personnel and property from terrorist attacks.

Disciplinary procedures

133. In January 2005, our predecessor Committee heard oral evidence from Sir Michael Jay on the FCO’s disciplinary procedures.207 We followed up this interest when Sir Michael appeared before us in October 2005 and Sir Michael wrote to us after his appearance with further information. He confirmed that no public money has been spent in any of the last

201 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Annual Report 2003–04,

HC 745, para 56

202 Ibid, paras 62 and 63


204 Foreign & Commonwealth Office, Foreign and Commonwealth Office Departmental Report 1 April 2004–31 March 2005, Cm 6533, June 2005, pp 199 and 200

205 Ev 6

206 Ev 9

207 Oral evidence taken before the Foreign Affairs Committee on 15 March 2005, HC (2004–05) 436


five years in settlement of grievance procedures brought against senior FCO staff by junior staff; he informed us of the amounts paid out as a result of Employment Tribunal claims in the last five years; he told us that £60,000 has been paid in damages following court cases in the last year; he provided details of disciplinary cases involving members of the FCO’s senior management service in the last three years; and he confirmed that members of staff leaving the service had received payments to which they were entitled, and no more.208

Publication of memoirs

134. Over the past months, several cases have illustrated the difficult issues which are thrown up when former senior public servants—specifically, former ambassadors—seek to publish books of their memoirs. The three cases which have featured prominently have been those of Sir Christopher Meyer, former Ambassador to Washington; Sir Jeremy Greenstock, former Permanent Representative at the United Nations; and Craig Murray, former Ambassador to Tashkent (Uzbekistan).

135. We asked Sir Michael Jay about the procedures for clearing these potentially very revealing personal records. He confirmed that all former public servants seeking to publish recollections of their time in post are expected to submit their work to the Government so that it may be vetted. He identified the three criteria that a would-be author should satisfy as “not crossing the line on issues of international relations or public security or […] the need to maintain the confidence of relationships between ministers and senior officials.”209 Finally, Sir Michael confirmed that “the ultimate decisions, the ultimate judgments, will be made by ministers.”210

136. The Public Administration Select Committee (PASC) has been undertaking an inquiry into political memoirs based on the author’s period in office, and has taken evidence from, among others, the former Cabinet Secretary, Lord Wilson of Dinton, Sir Christopher Meyer and Sir Jeremy Greenstock. Lord Wilson described for PASC the procedure he followed when in office for approving memoirs, including those of the former head of the Security Service, Dame Stella Rimington.211 Both Lord Wilson’s evidence to the PASC and Sir Michael Jay’s evidence to us describe what are known as the Radcliffe Rules, a voluntary code of conduct introduced in 1976 following the controversy over the Crossman diaries.

137. As he explained to the PASC in January 2006, Sir Jeremy Greenstock followed the procedures set out in the Radcliffe Rules when he submitted to the FCO draft chapters of his book covering the period he spent as Permanent Representative to the United Nations and as the Prime Minister’s Special Representative in Iraq.212 Sir Jeremy acknowledged that his book was unusual, in that it dealt with matters of current as well as of historical interest, but he pointed out to the Committee that this was not against the rules and, moreover, that

208 Ev 49

209 Qq 89–90

210 Q 91

211 Oral Evidence taken before the Public Administration Select Committee on 17 November 2005, HC 689–i, Qq 46 and 47

212 Uncorrected transcript of oral evidence taken before the Public Administration Select Committee, HC689–iii, Q 294


he was willing to accommodate changes suggested by the FCO as part of the vetting process.213 This process became quite protracted and eventually, Sir Jeremy withdrew his book, following an interview with the Foreign Secretary.214

138. Sir Christopher Meyer’s book was submitted to the Cabinet Secretary. In his case, this was done only after repeated requests from the Government. In a parliamentary written answer on 28 November 2005, the Foreign Secretary told the House that,

The Cabinet Office sent a copy of the book to the FCO and both Departments reviewed it against the standard criteria for clearing publications under the rules. The judgment, with which I agreed, was made on the particular facts of this case that no changes should be sought primarily because the book posed no national security risk; it contained nothing substantially new which we judged would harm relations with the US; and nothing was specifically identified that was considered so damaging as to require consideration of legal action.215

It appears from this answer that Sir Christopher’s book satisfied the first two Radcliffe criteria; it is less clear that it satisfied the third. However, no objection was raised by the Government, beyond a letter expressing disappointment about the disclosure of confidences. Sir Christopher told the PASC that he regarded the Cabinet Office’s reaction as giving him “a green light to publish” and he therefore went ahead.216

139. Craig Murray states on his website that he submitted the text of his book of memoirs to the FCO on 29 September 2005. In his covering letter, Mr Murray wrote “I rather hope that you do try to prevent publication, because you won’t succeed, and it may help me secure a publisher. Publishers in this country remain less than interested.”217 Following exchanges of e-mails between Mr Murray and the FCO, the FCO formally replied to Mr Murray on 8 February 2006, refusing to condone publication of the book, and reserving the rights of the Crown to take legal action. Mr Murray now intends to publish his book in June 2006.

140. Following all this, and in addition to the inquiry being conducted by our colleagues on the Public Administration Select Committee, both the FCO and the Cabinet Office are reviewing the relevant regulations which apply to serving or to former staff.218 We await the outcomes of those reviews, and the recommendations of our colleagues on the PASC, with considerable interest. Meanwhile, Sir Michael Jay has written to all Ambassadors and High Commissioners, stressing the importance of maintaining the trust and confidence of Ministers.219

213 Ibid, Q321

214 Ibid, Qq 288–293

215 HC Deb, 28 November 2005, col 165W

216 Uncorrected transcript of oral evidence taken before the Public Administration Select Committee on 15 December 2005, HC689–ii, Q 120

217 See www.craigmurray.co.uk


219 ‘Undiplomatic memoirs cannot be banned, says top civil servant’, The Times, 16 November 2005, p 38


141. We strongly support the decision by Sir Michael Jay to write to Ambassadors and High Commissioners, reminding them of the importance of maintaining the trust and confidence of Ministers. We conclude that the breaking of trust or breaching of confidence on either side is against the best interests of officials and politicians alike and that it can be inimical to the conduct of effective foreign policy. However, we also conclude that where FCO officials comply with the Radcliffe rules and criteria, they should remain free to publish if they so choose.

Senior diplomatic appointments

142. On more than occasion during the course of the last Parliament, our predecessor Committee recorded its intention to scrutinise any appointment of someone from outside the diplomatic service to a senior diplomatic post.220 The Government announced its intention to make two such appointments some time ago, but the appointments were actually made shortly after the general election of 2005. Two former Members of the House of Commons who had also been Cabinet Ministers were appointed: Rt Hon Helen Liddell as High Commissioner to Australia, and Rt Hon Paul Boateng as High Commissioner to South Africa. Both appointments were faits accomplis by the time the Committee was nominated in the new Parliament, so we did not hold hearings with them. It is our intention, should comparable nominations be made during this Parliament, to move with some expedition to hold ‘confirmatory hearings,’ hopefully before the appointments are formally made.

143. A further, if somewhat different case which arose at about the same time was the vacancy for a Head of Mission in the Holy See. In this case, the FCO chose to advertise the appointment last July in the following national newspapers:

• The Economist

• The Guardian and The Guardian Web page

• The Daily Telegraph

• The Independent

• The Times

• The Financial Times221

We are concerned that no advertisements were placed in national papers of Scotland, Wales and Northern Ireland. Ambassadors represent the whole of the United Kingdom. It should not be ignored that for many people the publications listed above can be seen as very London-oriented and ‘English’.

144. Sir Michael Jay told us that 120 applications were received for the post.222 Sir Michael subsequently wrote to our Chairman, informing him that a former diplomat, Mr Francis

220 See, for example, Foreign Affairs Committee, First Report of Session 2004–05, The work of the Committee in 2004,

HC 112, para 50.



Campbell, had been successful in the open competition.223 However, Sir Michael omitted from his letter any reference to the fact that it had already been decided that the new Ambassador should work from offices within the compound of the British Embassy to Italy and that the offices previously used by the Embassy to the Holy See had been closed—according to a newspaper report, in order to reduce costs.224 Sir Michael later wrote to us, stating that the move was in response to security concerns.225 He also confirmed that it had been planned to move the Ambassador’s residence to within the Rome Embassy compound, but that following representations by the Holy See these plans have been abandoned.

145. We recommend that the FCO provide the Committee with full details of any representations made by the Holy See, by the outgoing British Ambassador to the Holy See, or by the British Ambassador to Italy, about the propriety or acceptability of locating the Embassy to the Holy See or the residence of the Ambassador to the Holy See within the campus of the British Embassy to the Republic of Italy.

Diversity

146. In its Report on the FCO’s Departmental Report for 2003–04, the Committee in the last Parliament welcomed the FCO’s commitment to recruiting and retaining a diverse workforce, but noted that the Office still had a considerable way to go to meet its diversity targets.226 The FCO recognised this in its response, noting that it was “unlikely” to meet its diversity targets for 2005.227

147. At its meeting on 5 December 2005, the FCO Board noted that they continue to have a poor record in diversity compared to other government departments:

The Board agreed that there was a strong business case in favour of diversity: current lack of diversity was holding the FCO back. This had to be addressed urgently, within the proper legal framework, and emphasising that promotion continued to be on merit. Discussion focused on gender in the SMS, where we are performing worst […] .228

We asked the FCO to provide us with a breakdown of the diversity of its staff and received the following information in response.229

222 Q 65; see also HC Deb, 17 November 2005, col 1484W

223 Ev 80

224 ‘Britain risks row with Vatican over proposal to close embassy’, The Times, 9 January 2006, p 25

225 Ev 81

226 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Annual Report 2003–04, HC 745, para 130


228 Foreign and Commonwealth Office, FCO Board Minutes, December 2005, see www.fco.gov.uk

229 Ev 81


Total staff by grade, at 1 August 2005230

Grade Male Female % Minority

Ethnic % Disabled % Total

SMS 389 69 15.10% 6 1.30% 7 1.50% 458D7 178 53 22.90% 2 0.90% 4 1.70% 231D6 504 233 31.60% 14 1.90% 19 2.60% 737C5 464 165 26.20% 14 2.20% 17 2.70% 629C4 802 478 37.30% 30 2.30% 32 2.50% 1280B3 704 743 51.30% 94 6.50% 39 2.70% 1447A2 440 671 60.40% 120 10.80% 47 4.20% 1111A1 125 80 39% 17 8.30% 20 9.70% 205Totals 3606 2492 40.90% 297 4.90% 185 3% 6098 148. The figures for recruitment of permanent staff in 2004–05 reveal an interesting picture, which may explain the concerns now apparently felt by the Board. Although the proportion of all recruits who were women was very close to the proportion of existing staff who are women—41% as against 40.9%—only 33% of recruits to the mainstream graduate entry (C4) grade were women. For FCO Services the picture was a good deal worse: all 28 recruits to the C4 grade in 2004–05 were men.231 These figures certainly give us cause for concern.

149. The FCO has developed a new Race Equality Scheme (RES) in response to the challenges it faces in conforming with the requirements of the Race Relations (Amendment) Act 2000.232 The RES applies to the FCO not only as an employer but also as a service provider, both in the United Kingdom and overseas. However, as with the under-representation of women, the numbers of senior managers from ethnic minorities are disproportionately small.

150. We conclude that the FCO Board is absolutely right to recognise the need to address urgently such gender and ethnic minority imbalances as remain. We recommend that in its response to this Report the FCO provide further information on what it is doing to remedy this situation.

230 Note by Foreign & Commonwealth Office: these figures include FCO Services, UKVisas, UK Trade & Investment staff.

They do not include staff on special unpaid leave, additional maternity leave, sick nil pay, casual staff, fixed-term contracts and fee-paid officers.

231 Ev 24

232 Ev 25


7 BBC Monitoring 151. BBC Monitoring (BBCM), part of the BBC World Service, provides a service of international news and comment gathered from the mass media around the world. It supplies a range of public and commercial bodies, including the security and intelligence agencies, with recordings, transcripts and translations of foreign broadcasts. In 2004–05, BBCM kept track of national and regional developments across the world from the Middle East to Russia and Ukraine.233 For example, the World Service told us how the BBCM had helped to unravel a confused picture of events during the Beslan siege.234

152. BBCM’s four main stakeholders are the FCO, the BBC World Service, the Ministry of Defence and the Cabinet Office. In 2004–05, the FCO contributed £7 million to the BBCM out of its total funding that year of £22.1 million; the other three stakeholders made up the balance.235 The FCO, as the largest contributor, has been the sponsoring department for BBCM in Government.

153. As our predecessor Committee noted in its Report on the FCO Departmental Report for 2003–04, the FCO carried out a review of its funding of BBCM.236 In June 2004, the FCO wrote to the Committee to say that it planned to reduce its contribution to BBCM by £2 million per annum.237 Sir Michael Jay explained that BBC Monitoring’s overall funding would, however, remain at its then current level as the difference would be made up by the other stakeholders and from a BBC Monitoring Reserve.238 The Committee concluded that,

[…] it is utterly perverse that the future of BBC Monitoring should be placed in doubt at the very time when its services are arguably most important to the country's security and diplomatic needs, and when it is being almost universally praised by its users. We recommend that BBC Monitoring be given financial security by the FCO and its other stakeholders to ensure its future.239

The Government responded that,

The quality of BBC Monitoring’s output is not in question. However, faced with the continuing pressures on resources, the FCO has to determine which activities and products best contribute to delivery of the Strategic priorities, as outlined in the FCO’s Strategy. This has meant tough decisions.240

The message could hardly have been clearer: BBCM was no longer a priority for the FCO.

233 BBC World Service, Annual Review 2004–05, June 2005

234 Ev 99

235 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Office Annual Report 2003–2004, HC 745, para 166; Ev 112

236 Ibid, para 166

237 Ibid; Ev112;

238 Ibid; Ev 112

239 Foreign Affairs Committee, Eighth Report of Session 2003–04, Foreign and Commonwealth Annual Report 2003–04, HC 745, para 165



154. It is unlikely to have been a coincidence, then, that in 2004 the Cabinet Office instituted a review of BBCM’s future funding.241 In July 2005 Dr Christopher Westcott, Director of BBC Monitoring, wrote to inform us of its findings.242 The Review concluded that the partnership between the Government and BBCM represented “excellent value for money” and that it should be a “UK objective” to give BBCM stability and confidence, to allow it to focus on maintaining an operation that matches its customers’ needs.243 The Review also recommended that BBCM move to a “ring-fenced” funding arrangement, rather than receiving subscriptions from stakeholders, and that its sponsoring department should be the Cabinet Office, rather than the FCO.

155. It appears that BBCM’s ‘divorce’ from the FCO was less than amicable. According to Dr Westcott, at the outset of the Review the FCO proposed a “non-negotiable” reduction of £4.5 million in BBCM’s funding.244 He went on to say that achieving the final financial agreement took “considerable time and effort” by the reviewers following “extensive discussions” with the stakeholders and HM Treasury and that these discussions had been made difficult by the FCO insistence that it reduce its funding of BBCM’s by more than twice the £2 million reduction it had originally sought.

156. The Cabinet Office Review recommended an increase in average funding for BBCM to £24.6 million per annum for financial years 2006–07 to 2010–11, although ultimately the Treasury agreed an average settlement of £23.8 million per annum over the quinquennium.245 The first table below sets out BBCM’s funding for 2003–04 to 2010–11, and the second shows stakeholders’ individual annual contributions from 2006–07.

Cabinet Office funding review of BBC Monitoring246

Financial year Current Review Reviewstakeholder recommendation outcome

funding for funding

2003–04 22.1 — —2004–05 22.1 — —2005–06 21.1 — —2006–07 — 24.6 24.62007–08 — 24.6 24.62008–09 — 24.6 23.42009–10 — 24.6 23.42010–11 — 24.6 23.4

£ million

241 The review was carried out by Sir Quentin Thomas (a former senior civil servant) and Sir David Omand (a former

security and intelligence co-ordinator).

242 Ev 99

243 Ev 53

244 Ev 53

245 Ev 53

246 Ev 53


Stakeholder financial contributions from 2006–07247

£ millionMinistry of Defence 7.5World Service 6.1Cabinet Office 5.4FCO 3.1Total 22.1

Notes: 1. In addition to stakeholder contributions in FYs 2006–07 and 2007–08 the Treasury has agreed to add £2.5 million per annum to BBCM’s funding from the Counter Terrorism Reserve, making a total of £24.6m 2. From FY 2008–09 the Treasury will add £1.3 million per annum to BBCM’s baseline funding 157. Nigel Chapman, Director of the BBC World Service, told us that finally BBCM had been given a stable financial footing, though he recognised that it faced challenges ahead.248 He added:

I think the stakeholders have also realised the value to Britain of [BBCM’s] services, and that allowing it to wither on the vine, which was a fear many of us had, would have been a very bad thing to have allowed to happen, and it is not now going to happen.249

There will, however, be consequences from the reduction in funding. Dr Westcott told us that as a consequence of the £0.8 million per annum shortfall from 2007 the loss of up to 80 posts was likely to be necessary.250

158. When we took evidence from Sir Michael Jay we of course asked about the FCO’s reasons for reducing its funding of BBC Monitoring. Sir Michael told us that although the FCO valued the work of BBCM, he believed it had been paying too high a share of the overall cost.251 He suggested that reducing its contribution to BBCM was one way for the FCO to achieve its efficiency savings targets.252 We are not convinced that a transfer of responsibility from one government department to another does, in fact, represent an efficiency saving. We recommend that in its response to this Report the FCO explain how the reduction in its funding of BBC Monitoring has contributed to its efficiency savings targets; and whether the Treasury has accepted this.

159. We conclude that it is reassuring that BBC Monitoring has finally been given the financial stability it has been seeking and we believe that this should enable it to plan more strategically up to 2011. We also conclude that the quid pro quo for this certainty

247 Ev 50

248 To be printed with the Foreign Affairs Committee’s forthcoming report on Public Diplomacy, HC 903, Q 110.

249 Ibid, Q 110

250 Ev 53

251 Q 97

252 Q98


should be a continuing drive by BBC Monitoring to maximise its efficiency. We recommend that the FCO and the other sponsoring departments maintain their close interest in the operations of BBCM, to ensure that BBCM continues to offer excellent value for money.


Formal minutes

Wednesday 15 February 2006

Members present:

Mike Gapes, in the Chair

Mr Fabian Hamilton Mr David Heathcoat-Amory Mr John Horam Mr Eric Illsley Andrew Mackinlay

Sandra Osborne Mr Greg Pope Mr Ken Purchase Sir John Stanlay Richard Younger-Ross

The Committee deliberated.

Draft Report [Foreign and Commonwealth Office Annual Report 2004–05], proposed by the Chairman, brought up and read.

Ordered, That the draft Report be read a second time, paragraph by paragraph.

Paragraphs 1 to 17 read and agreed to.

Paragraphs 18 to 20 read, amended and agreed to.


Paragraph 31 read, amended and agreed to.

Paragraph 32 read and agreed to.

Paragraphs 33 and 34 read, amended and agreed to.

Paragraphs 35 and 36 read and agreed to.



A paragraph—(Mr Mackinlay)—brought up and read, as follows:

We understand that consideration of a successor to Sir Michael Jay as Permanent Under-Secretary is imminent. We urge the Prime Minister and the Foreign Secretary to pay heed to the criticisms of leadership and unwillingness to make changes by senior managers which are detailed in the Collinson Grant report, when the appointment to succeed Sir Michael is determined.

Question, That the paragraph be read a second time, put and negatived.




A paragraph—(The Chairman)—brought up, read the first and second time, and inserted (now paragraph 48).

Paragraphs 48 to 51 (now paragraphs 49 to 52) read and agreed to.

Paragraph 52 (now paragraph 53) read, amended and agreed to.










Paragraph 79 read, as follows:

The Collinson Grant Report was commissioned by the FCO’s Director General (Corporate Affairs), Dickie Stagg. Commenting on the lack of enthusiasm which the process had encountered among some of his colleagues, Mr Stagg told us that “it is inevitable that, if you bring in people who are clearly seen as being something of a threat to the status quo, there are people who are unenthusiastic about that process.” Sir Michael Jay, however, assured us that he and his colleagues on the Board took their duty to consider the report’s findings “extremely seriously”. The FCO told us what it has been doing to implement the report’s findings:

The FCO Board considered the Collinson Grant report at its meeting on 28 January 2005. It re-committed itself to achieving the £87 million target and agreed to incorporate the Collinson Grant work as far as possible into the FCO’s existing Efficiency Plan. In addition, based on the findings, the Board agreed to review the Finance function in the FCO, both in London and overseas; identify resources that could be reallocated from low to high priority activity using the Collinson Grant comparative analysis of expenditure; and monitor, at Board level, the FCO’s efforts to re-prioritise resources. The Board does not accept that the FCO lacks appropriate political and diplomatic skills.

Since the Board decisions a number of actions have been taken to deliver the efficiency targets. These include: substituting locally engaged for some UK-based staff; rationalising the various change programmes in the FCO; reducing the number


of people in the Corporate pool; improving the workings of the internal market; and reducing administrative costs. Work on the finance function will be taken forward in the light of the Treasury and NAO review …

The staff reductions, agreed with the Treasury as part of the FCO’s Efficiency Plan, are being achieved by adjusting recruitment targets and a programme of early retirement. The FCO is committed to increasing both the skills base of its employees and to better utilising the skills already available, including through active engagement in the Professional Skills in Government initiative. We intend to manage changes in our workforce in ways that will support these policies.

Amendment proposed, in line 5, to leave out from “process” to “us” and insert “We consider these comments to be, at their best, glib and complacent. It is unacceptable that the Collinson Grant review, or any comparable exercise, should face indifference and in some cases wilful obstruction by senior personnel. Consequently, we take some limited reassurance from Sir Michael Jay, when he told”.—(Mr Mackinlay.)

Question, That the Amendment be made, put and negatived.

Paragraph agreed to (now paragraph 80).

Paragraphs 80 and 81 (now paragraphs 81 and 82) read and agreed to.


We can only conclude from this that Sir Michael is part of the problem. Under his stewardship, the report was originally suppressed. It criticised the management he was supposed to lead. He acquiesced in a situation where some senior managers failed to collaborate with Collinson Grant’s proper inquiries. His senior managers did not contest or seek to correct prior to publication errors which they now allege are contained in the Collinson Grant report. When asked what he deems to be “ill founded” in the recommendations of Collinson Grant, he failed to give a specific example. This is all wholly unacceptable from a Permanent Under-Secretary.

Question put, That the paragraph be read a second time.

The Committee divided.

Ayes, 3 Andrew Mackinlay Mr Greg Pope Richard Younger-Ross

Noes, 2 Sandra Osborne Mr Ken Purchase

Paragraph inserted (now paragraph 83).


Paragraph 83 (now paragraph 85) read, as follows:


We congratulate FCO managers on their decision to invite external consultants to carry out a study of their efficiency, effectiveness and control of costs, although we have concerns about the lack of thoroughness with which the review was carried out and about the lack of seriousness with which the FCO regarded and appears still to regard the project. We conclude that, having commissioned the study, the FCO must deal with it seriously: this suggests that the FCO should change some of its management practices and its efficiency savings targets or it should defend and justify them, explaining where and how the consultants are mistaken in their conclusions. So far, we have seen no evidence that it is succeeding in doing either.

Amendment proposed, to leave out from beginning to “We” in line 5 and insert “We would normally congratulate managers who invite external consultants to carry out a study of their efficiency, effectiveness and control of costs. However, in this case there was clearly a rather arrogant assumption that the consultants would make a positive report about the stewardship and management of the FCO. In the event, the report was very adverse and we can only conclude that there was consequently a deliberate attempt to suppress and hide serious failings in the style, management and stewardship of the FCO”.—(Mr Mackinlay.)


Paragraph 83 (now paragraph 85) agreed to.


Paragraph 88 ( now paragraph 90) read, amended and agreed to.


Paragraphs 117 and 118 (now paragraphs 119 and 120) read, amended and agreed to.

A paragraph—(Mr Mackinlay)—brought up, read the first and second time, and inserted (now paragraph 121).



In any event, we are not comfortable with the fact that it would appear that Sir Jeremy Greenstock’s book may not now be published. We find it hard to countenance that Sir Jeremy would seek to publish anything that would prejudice national security or disadvantage any negotiating position of the United Kingdom. We feel that the publication of his recollections as to the decision-making process or policy formulation


towards Iraq (both before the conflict and subsequently) would help to inform public and parliamentary opinion.



Ayes, 3 Andrew Mackinlay Sir John Stanley Richard Younger-Ross

Noes, 4 Mr Eric Illsley Sandra Osborne Mr Greg Pope Mr Ken Purchase



Following all this, and in addition to the inquiry being conducted by our

colleagues on the Public Administration Select Committee, both the FCO and the Cabinet Office are reviewing the relevant regulations which apply to serving or to former staff. We await the outcomes of those reviews, and the recommendations of our colleagues on the PASC, with considerable interest. Meanwhile, Sir Michael Jay has written to all Ambassadors and High Commissioners, stressing the importance of maintaining the trust and confidence of Ministers.

Amendment proposed, at the end, to add “Whilst we accept that in the interim it is reasonable that former senior officials are encouraged to adhere to the spirit of the voluntary Radcliffe rules, we nevertheless hope that, within those rules, Sir Jeremy’s desire to publish could still be accommodated. Consequently, we would urge that further discussions be held between Sir Jeremy and the Government, with a view to reaching some agreement on those matters disclosed in his draft, thereby facilitating publication”.—(Mr Mackinlay.)

Question put, that the Amendment be made.


Ayes, 3 Andrew Mackinlay Sir John Stanley Richard Younger-Ross





We strongly support the decision by Sir Michael Jay to write to Ambassadors and High Commissioners, reminding them of the importance of maintaining the trust and confidence of Ministers. We conclude that the breaking of trust or breaching of confidence on either side is against the best interests of officials and politicians alike and that it can be inimical to the conduct of effective foreign policy.

Amendment proposed, in line 1, to leave out “strongly”.—(Mr Mackinlay.)


Another Amendment proposed, in line 3, to leave out from “Ministers” to the end of the paragraph. —(Mr Mackinlay.)


An Amendment made.

Paragraph, as amended, agreed to (now paragraph 141).


Paragraph 140 (now paragraph 143) brought up and read, as follows:

A further, if somewhat different case which arose at about the same time was the vacancy for a Head of Mission in the Holy See. In this case, the FCO chose to advertise the appointment last July in the following national newspapers: • The Economist • The Guardian and The Guardian Web page • The Daily Telegraph • The Independent • The Times • The Financial Times

Amendment proposed, at the end, to add “We are concerned that no advertisements were placed in national papers of Scotland, Wales and Northern Ireland. Ambassadors represent the whole of the United Kingdom. It should not be ignored that for many people the publications listed above can be seen as very London-oriented and ‘English’”—(Mr Mackinlay.)

Question put, That the Amendment be made.



Ayes, 4 Andrew Mackinlay Sandra Osborne Sir John Stanley Richard Younger-Ross

Noes, 2 Mr Eric Illsley Mr Greg Pope

Paragraph, as amended, agreed to (now paragraph 143).

Paragraph 141 brought up and read, as follows:

Sir Michael Jay told us that 120 applications were received for the post. Sir Michael subsequently wrote to our Chairman, informing him that a former diplomat, Mr Francis Campbell, had been successful in the open competition. However, Sir Michael omitted from his letter any reference to the fact that it had already been decided that the new Ambassador should work from offices within the compound of the British Embassy to Italy and that the offices previously used by the Embassy to the Holy See had been closed—according to a newspaper report, in order to reduce costs. Sir Michael later wrote to us, stating that the move was in response to security concerns. He also confirmed that it had been planned to move the Ambassador’s residence to within the Rome Embassy compound, but that following representations by the Holy See these plans have been abandoned.

Amendment proposed, at the end, to add “We have not been given any information as to where the newly-appointed Ambassador is to have his residence or about the nature of his accommodation. However, it appears from Sir Michael’s letter that the lease on the present, rather prestigious residence has been or shortly will be terminated. We therefore seek reassurance that the status of this post is not being diminished by the downgrading of accommodation as part of a cost-cutting exercise.”—(Mr Mackinlay.)

Question put, That the Amendment be made.


Ayes, 2 Andrew Mackinlay Richard Younger-Ross

Noes, 3 Mr Eric Illsley Mr Greg Pope Mr Ken Purchase




In any event, we have not been given any satisfactory explanation as to why, uniquely, this post was filled by public advertisement. Why was this done? We do not dismiss the possibility that posts could at some time in the future be filled this way. However, the case for altering the existing, traditional appointments system needs to be made to Parliament and should also be subject to extensive consultation with the representative organisations of diplomatic staff.






We recommend that in its response to this Report the FCO provide us with full details of the size and facilities of the new residence of the Ambassador to the Holy See. We also recommend that the FCO supply us with a fully detailed schedule of the type and cost of works and refurbishment carried out at the Embassy to the Holy See and at the Ambassador’s residence over the past five years.





A paragraph—(Mr Mackinlay)—brought up, read the first and second time, amended and inserted (now paragraph 145).


Resolved, That the Report, as amended, be the Second Report of the Committee to the House.

Ordered, That the Chairman do make the Report to the House.


Ordered, That the provisions of Standing Order No. 134 (Select Committees (reports)) be applied to the Report.

Several Papers were ordered to be appended to the Minutes of Evidence.

Ordered, That the Appendices to the Minutes of Evidence taken before the Committee be reported to the House.—(The Chairman).

The Committee further deliberated.

[Adjourned till Wednesday 8 March at Two o’clock


List of witnesses

Wednesday 26 October 2005 Page

Sir Michael Jay KCMG, Permanent Under-Secretary, Mr Richard Stagg CMG, Director-General (Corporate), Mr David Warren, Director, (Human Resources) and Mr Ric Todd, Director (Finance), Foreign & Commonwealth Office Ev 26


List of written evidence

FCO Annual Report

Foreign and Commonwealth Office

Written evidence Ev 1: Ev 6: Ev 43

Follow-up to oral evidence on 26 October 2005 Ev 45

BBC Monitoring

Dr Chris Westcott, Director, BBC Monitoring

Written evidence Ev 53

Consular services


Notifiable serious arrestable offences Ev 55

Consular guide consultation Ev 56

Hurricanes Katrina and Rita Ev 57

NAO report on tsunami Ev 64

Consular case – Craig Alden Ev 72

Contingency planning


Flu pandemic: FCO business continuity and contingency planning Ev 79

Diplomatic representation


Embassy to the Holy See Ev 80: Ev 81

Representation to Côte de Ivoire Ev 82

Representation to Equatorial Guinea Ev 82

Finance and estimates


FCO supply estimates Ev 82

FCO departmental investment strategy Ev 86

Winter supplementary estimates Ev 86

Spring supplementary estimates Ev 89

Fraud in Tel Aviv Ev 89


Global opportunities fund


GOF Annual Report Ev 92

Overseas Posts and FCO estate


Quarterly Sales Ev 94: Ev 96

Overseas network Ev 94

Thomas Rambaut


Miscellaneous

BBC World Service



IiP recognition Ev 97

UK International priorities Ev 99

Reports and Evidence from the Foreign Affairs Committee since 2005

The following reports and evidence have been produced in the present Parliament.

Session 2005–06 REPORTS

First Report Human Rights Annual Report 2005 HC 574

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Foreign Affairs Committee: Evidence Ev 1

Oral evidence

Taken before the Foreign Affairs Committee

on Wednesday 26 October 2005

Members present:

Mike Gapes, in the Chair

Mr Fabian Hamilton Sandra OsborneMr Eric Illsley Mr Greg PopeMr Paul Keetch Mr Ken PurchaseMr Andrew Mackay Sir John StanleyAndrew Mackinlay Richard Younger-Ross

Letter to the Clerk of the Committee from the Parliamentary Relations and Devolution Team,Foreign and Commonwealth OYce

The Committee will, as you know, be hearing oral evidence from the PUS on 26 October, as part of itsinquiry into the FCO Annual Report 2004–05.

As in previous years, the Committee wishes to raise a number of questions in writing, to which it desiresanswers before the oral evidence session. I therefore enclose a list of questions, to which it would be mosthelpful to receive answers on or before Monday 3 October. If it should be the case that by then the answersto most questions are ready, but those to a few are not, we would prefer to receive the bulk of the answerson time and the remainder as soon as possible thereafter.

The Committee will certainly wish to publish the responses to all the questions. If, for good reasons, it isnecessary to classify or to request confidentiality on any answer, we would therefore prefer that answer tobe sent as a separate paper.

If you require any clarification of the questions or wish to discuss any aspect of the inquiry, I will bepleased to do what I can to assist.

Steve PriestleyClerk of the Committee

25 August 2005

Questions from Foreign AVairs Committee for written answer by 3 October

Efficiency and Regulation

1. The National Audit OYce (NAO) and the Audit Commission have reviewed departments’ eYciencytechnical notes. What recommendations or conclusions aVecting the FCO have resulted from this work?What action has been taken in response to these findings?

2. In the 2004 Spending Review the FCO’s administration budget will increase by 16% from 2005–06 to2006–07 and then by 4.3% to 2007–08. These increases are significantly greater than the increase in the totalresource budget. Almost every other department has a decreasing administration budget over this period,reflecting the Government’s eYciency agenda. Why is the FCO’s administration budget continuing toincrease so significantly? What impact is this having on front-line services?

3. The OYce intends to make 2.5% year-on-year eYciency savings over the 2004 Spending Review period(DAR page 197). This target is unchanged from the 2002 Spending Review. Many other departments haveincreased the scope and extent of their intended eYciency savings. Why is the FCO’s eYciency savings targetnot more ambitious, in line with those of other departments?

4. The report by Collinson Grant on eYciency, eVectiveness and the control of costs in the FCOconcluded that 10% of the OYce’s posts could be abolished and identified over £60 million of potentialsavings, considerably more than the OYce’s current plans. The report also highlights the lack of appropriateprofessional skills, including finance, human resources, political and diplomatic skills. Does the FCO acceptthe findings of the Collinson Grant report? What plans does it have to implement the report’srecommendations? Given the lack of appropriate professional skills, how will the OYce ensure that staV cutswill not further reduce FCO’s skill base?

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Ev 2 Foreign Affairs Committee: Evidence

5. On 15 December, the Foreign Secretary announced the closure of eight UK-staVed sovereign posts,and moving from UK-based to locally-based staV in a further 11 subordinate posts. What has been the netreduction in FCO UK-based staV as a direct result of these changes? Is this in addition to, or included within,the reduction in SMS posts already announced?

6. Savings from eYciency measures will be reinvested in front-line services. What plans does the FCOhave to ensure that services are fully funded in the event that anticipated eYciency savings or returns fromsales of FCO properties are not realised or are delayed?

7. Appendix B of the DAR shows slippage of some long-term IT projects. What impact will theseslippages have on eYciency savings planned to arise from the increased use of IT?

8. The OYce planned to expand its i-visa service to another 35 posts by 2005. Has this happened? Whatis the timetable for introducing this service in all posts where it is viable?

9. Page 200 of the DAR outlines what plans the OYce has to relocate staV, but it does not quantify theplanned savings. How much will be saved annually from this initiative? What costs will there be, includingrelocation and redundancy costs?

10. The Treasury PES Paper (2004) 19 (revised) requires the DAR to make a number of disclosures onbetter regulation, including statistical figures on performance in meeting Regulatory Reform Action Plancommitments, delivering Regulatory Reform Orders, Compliance with the Regulatory Impact Assessment(RIA) process and the number of commitments made in final RIAs to review regulations. The only referenceto regulation in the FCO DAR is in Appendix J, which lists the two RIAs made in 2004. Can the FCOprovide the omitted information?

Financial

11. The OYce implemented a new financial system in April 2004 and the 2004–05 accounts will be thefirst produced using this system. How has the accounts production process using the new system worked?In particular will the FCO meet its planned timetable for signing the account? Has the system been fullyimplemented in all overseas posts?

12. The Treasury and the NAO are currently undertaking a review of the adequacy of financialmanagement in Departments. Have any conclusions or recommendations emerged from this work thus far?

13. The 2006 Spending Review has been postponed until 2007. Will this have any impact on the FCO’sspending plans as outlined in the DAR?

14. The 2004–05 figures given in Appendix A are estimates. Can the FCO provide the actual 2004–05figures for tables 10, 11 and 12 on pages 215 and 216 of the DAR?

15. The outturn total administration expenditure for 2003–04 in the 2005 DAR (page 217) is £168 million(17%) below the estimate given in the 2004 DAR (page 179). Income was underestimated by £99 (61%). Canthe FCO explain why its estimates were not more accurate?

16. HMT published Public Expenditure 2004–05 Provisional Outturn gives the OYce’s year-endflexibility figures (table 6, page 14). This is 6.6% of their total resource. In particular the carry-forward forthe capital budget is 30% of FCO’s capital DEL. Why is such a significant carry-forward needed against thecapital budget?

17. Paybill figures and an analysis of administration costs by activity are not given for 2004–05 or futureyears (page 217). There are also no figures for 2004–05 for analysis of resource budget by objective (page223). Why was the OYce unable to provide estimates for these? In particular the lack of paybill figures seemsto conflict with the claim that there is now greater focus on workforce planning and paybill control (page187). What is the explanation for this? Is the OYce now in a position to provide the committee with the abovefigures for 2004–05? What impact does the inability to produce budgets for staV costs and administrativeexpenditure by objective have on the FCO’s planning and budgeting, particularly in relation to deliveringits PSA targets and its eYciency agenda?

18. Analysis by objective as per Schedule 5 is currently done by an annual six-week exercise (page 205).This obviously does not provide data in time for inclusion in the DAR, nor can it provide the OYce withuseful in-year management information for monitoring purposes. What plans does the FCO have toimprove its systems, to enable more timely and frequent information on spend by objective?

19. The actual valuation at the end of 2003–04 of non-residential land and buildings in the 2005 DAR(page 216) is £96 million (16.7%) above the estimated valuation given in the 2004 DAR (page 178). Forresidential land and buildings the figure is £119 million (28%) below the estimate. The actual net currentassets are £54 million (83%) below the estimate. Why did the estimates diVer so significantly from the actualvalues? What plans does the OYce have to improve its year-end and month-end estimation exercises toenable more accurate financial monitoring by management?

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20. Are final figures now available on the repurchase of Glencairn and sale of Marlay Grange?

21. Appendix I states a provision of £2.3 million for disputed claims for rents payable on overseasproperties. This is a new provision. What is the nature of these disputes and why have they arisen?

22. Have costs associated with the UK’s presidencies of the G8 and EU been within forecast limits? Whatwas the cost of hosting the G8 summit at Gleneagles; and how much of this was borne on the FCO budget?

Long-Term Investment

23. Writing in e-Diplomacy last year, the then Minister Bill Rammel stated that “The Future Firecrestproject will deliver in 2005–06 the next generation of our Desktop system”. Appendix B of the DAR showsthat the current estimated date of completion of the Project is 2012. What is the reason for the apparentdelay in the Future Firecrest Project? What impact will the delay have on the FCO’s ability to meet its targetsand to deliver eYciency savings? In addition, the estimated cost of the Prism project has risen by 20%, from£24.5 million to £29.5 million; and the completion date has slipped from 2004–05 (FCO e-diplomacy strategydocument, 2004) to 2006 (DAR, Appendix B). What are the reasons for the delay and for the increase incosts?

24. The estimated costs of three estate building projects have risen significantly: the Chennai new oYcesby £574,000 (13%), the Kampala new oYces by £702,000 (10%) and the Belgrade electrical upgrade by£409,000 (33%) (Appendix B). Why this has happened? What impact will it have on the FCO’s operations?

Risk Management and Internal Control Systems

25. The Statement on Internal Control in the 2003–04 resource accounts indicates that the OYce’s riskmanagement and internal controls are still in their infancy. The FCO had only achieved the minimumstandard required by the Treasury (section 4). What progress has been made during 2004–05; and whatstandard of risk management is the FCO currently rated at? Has the FCO now made a full Statement onInternal Control?

26. The review of eVectiveness recommended a more cohesive IT governance structure and identified thatInternal Audit recommendations from previous years had not been implemented (section 5). Have theseissues now been addressed?

Performance Management

27. The NAO is reviewing the data systems underlying departments’ PSA targets. What stage has theNAO review of the FCO’s systems reached? Are any conclusions or recommendations available?

28. The Treasury PES Paper (2004) 19 (revised) says that “departments should describe the quality of thedata systems . . . limitations . . . should be identified and the implications for interpreting progress againstthe target should be brought out for readers”. There appears to be no reference to this in the DAR. Can theFCO provide details of the quality of the data systems, identifying any known or suspected limitations inthe data and explaining the implications for interpretation of progress against the targets?

Objective 1—Security

29. The scorecards for PSAs 1, 2 and 3 are classified. The progress box on page 39 mentions thatmilestones for 2004–05 will not be met. Can the Committee be provided with these scorecards? Is the FCOon course to meet each element of the three targets?

30. The technical note states that the three departments involved in PSA 4 (FCO, MoD and DfID) areattempting to measure the number of people whose lives are aVected by violent conflict but explains thesevere limitations to the quality of the data. As such, it is not yet possible fully to assess the progress againstthis target, although there is some discussion of the available statistics on page 55 of the DAR. When doesthe OYce expect to be able to make an assessment of progress towards meeting this target?

Objective 2—Trade and Investment

31. Performance against PSA 5 was below the target level for two of the three measures in 2003–04. Isthe OYce in a position to provide data for 2004–05, so that the Committee can see the most recentperformance? Where there has been slippage, what measures are being taken to improve performance?



Objective 3—Prosperity

32. PSA 6 had a deadline of 2005 but progress has been slow and the target has not been met. There isno similar target in the 2004 Spending Review. Does the achievement of a reduction in trade barriers remaina priority? By when does the FCO now expect the target will be met?

33. The measures underlying PSA target 7 relate to democracy and legal issues in other countries. A largenumber of factors can aVect whether these measures are achieved, including the actions of other countries.As such, the outcome of this target can be aVected by FCO only to a limited degree. How is the OYce ableto assess its own performance against PSA target 7?

34. The actual measures for PSA 7 are the number of functioning democracies in the world, ratificationof core human rights treaties, the number of countries with fully independent and impartial judiciaries andfour specific outcomes relating to international justice. The progress box on page 84 mentions free elections,projects and training, the millennium development goals and the Kyoto protocol. Whist these are allimportant in themselves, none of them are the measures set out in the FCO’s technical note for assessingthis target. Can the OYce provide information on progress towards meeting the measures specified in thetechnical note?

35. The Global Opportunities Fund (GOF) is putting in place eVective systems to establish whetherprojects have achieved their purpose and to measure the impact of programmes (page 126). By when doesthe OYce expect these systems to be fully embedded? When will the first results of this monitoring beavailable? When will the GOF annual report for 2004–05 be published?

36. What are the implications of the establishment of GOF for the funding of other bodies by FCO?

37. What plans are there to change the relationship between the FCO and the Westminster Foundationfor Democracy? What plans are there to increase or to change the basis of funding of WFD ?

Objective 4—Europe

38. Neither the box on page 76 nor the FCO’s technical note for 2002 targets details the specific measuresfor assessing PSA 8. It is therefore impossible to tell what progress has been made against this target. Canthe OYce provide details of the scorecards used for measuring this target and state for each element of thetarget whether it is on course to be met? Where there has been slippage, what measures are being taken toimprove performance?

Objective 5—Impact Abroad

39. The report on PSA target 9 on page 158 does not explain progress in terms of the measures set outin the technical note. For the BBC World Service and the British Council it does not explain what are theunderlying targets. It is therefore impossible to judge whether targets are on course or whether thoseelements with a deadline of 2005 have been met. Can the OYce please give specific details of progress againstthe measures given in the technical note? Where there has been slippage, what measures are being taken toimprove performance?

40. Lord Carter of Coles has been carrying out a review of public diplomacy in the first half of 2005 (page146). When does the FCO expect to receive Lord Carter’s Report? Will the Report be published?

Objective 6—Public Services

41. Are the statistics for 2004–05 for PSA 10 now available? Can the FCO provide these, to enable theCommittee to see how it has performed against the target?

42. Issuing overseas passports was considerably below target in 2003–04 due to increased securitymeasures. Has this trend continued? If so what measures has the FCO put in place to improve the service?

43. The visa and consular services are intended to be self-funding (page 196). Chapter 13 on consularservices uses data that are over a year out of date and the footnote on page 160 implies that statistics areonly on an annual basis. In addition, schedule 1 in the 2003–04 resource accounts shows that the demandfor consular and visa services was £31 million lower than expected and that demand is volatile and diYcultto predict. Given the diYculty in collecting data and predicting future demand for visa and consular services,can the OYce explain how it can eVectively budget to ensure these services recoup their costs but at the sametime do not over-charge? In particular how did the OYce arrive at the provision of £183.264 million for thefull cost of consular and visa operations for 2005–06 on page 220 of the DAR?

44. The NAO published a report on the FCO’s visa services in 2004. One of the recommendations fromthis report is that information on performance needs improving (page 181). In the light of this, how satisfiedis the OYce that the performance reported for PSA 10 is accurate?



Objective 7—Overseas Territories

45. The FCO does not expect to meet that part of the PSA target 11 which deals with constitutionalreform (page 143). It is not clear whether it is on course to meet the other elements of the target; in particular,there appears to be no mention of progress against the economic development element. Can the OYce statewhether it is likely to meet each element of the PSA target 11 and whether it has met those elements with adeadline of March 2005? Where there has been slippage, what measures are being taken to improveperformance?

46. There has been a review of human rights issues in the populated overseas territories and the FCO isconsidering ways to address the findings (pages 141 and 142). What were the main issues identified in thisreview and what is the timescale for addressing them?

Staffing

47. Table 14 on page 218 shows actual and projected staYng for FCO. Given that the long-term aim isan overall reduction in staV, why did the number of staV increase in 2004–05?

48. Overtime has reduced in 2004–05 and the plan is to reduce this still further so that in 2007–08 it willbe half the 2003–04 level. This is happening at the same time as a reduction in the overall staYng level andduring a time of change for the OYce. How will FCO ensure that this reduction is genuine and that therewill not be pressure for staV to work undeclared overtime?

49. The FCO has recognised that it needs to do more to promote diversity in its staV (page 188). The DARdoes not give specific diversity statistics. Can the FCO provide figures on women, staV from ethnicminorities and staV with disabilities as a percentage of total staV by grade? Can it provide similar figures forstaV recruited in 2004–05, indicating where these are permanent appointments?

50. Has the FCO now identified all the senior staV whose posts will be cut during the SR04 period? Havethere been any compulsory retirements as part of this programme?

51. The department had to review its race equality scheme by May 2005 (page 189). What were theoutcomes of this review?

52. FCO is still working with DfID to resolve the problems with diVerential local pay scales (page 193).When is this likely to be resolved? Why has it taken so long?

53. The DAR says that “better management information is a vital part of dealing with . . . complexissues . . .” but does not give any indication that management information has improved (page 193). Whatplans does the OYce have to improve its management information and what is the timescale for this?

BBC World Service/BBC Monitoring Service

54. When does the FCO cease to be the sponsoring department for BBC Monitoring? Is the FCO contentfor this responsibility to pass to the Cabinet OYce?

55. The review of the BBC Monitoring service concluded that there will be a reduction of 50–80 jobs. Dothese job cuts represent eYciencies or a cut in services?

56. The BBC World Service has been asked to develop a business case for an Arabic TV station. Thiswould be funded from its 2004 Spending Review allocation (response to the Committee’s report on the2003–04 DAR, response 38). How far advanced is this process?

The British Council

57. The Council is intending to use eYciency savings to fund on-going security costs (response to theCommittee’s report on the 2003–04 DAR, response 13). What contingency plans does the FCO have toensure that security of Council staV and premises is fully funded in the event that eYciency savings do notmaterialise or are delayed?



Letter to the Clerk of the Committee from the Head of the Parliamentary Relations and Devolution Team,Foreign and Commonwealth OYce

Efficiency and Regulation

Q1. The National Audit OYce (NAO) and the Audit Commission have reviewed departments’ eYciencytechnical notes. What recommendations or conclusions aVecting the FCO have resulted from this work? Whataction has been taken in response to these findings?

Answer: The NAO reviewed the FCO’s EYciency Technical Note in August 2005. They recommendedthat the FCO, like other Government Departments, should update their technical note by 31 October 2005,using a standard template, which would include measures of quality and specify what validation assurancemechanisms were in place. They also thought that the FCO’s EYciency Technical Note would benefit fromclearer description of how benefits from the individual projects that make up the FCO’s EYciency Plan willbe calculated and quantified—explaining the measurement methodology in broad terms.

In response to this, the FCO is currently examining its eYciency programmes on a project by project basisto ensure that these recommendations are worked into the execution of the projects. The results will be setout in the revised EYciency Technical Note due to be published on 31 October 2005.

Q2. In the 2004 Spending Review the FCO’s administration budget will increase by 16% from 2005–06 to2006–07 and then by 4.3% to 2007–08. These increases are significantly greater than the increase in the totalresource budget. Almost every other department has a decreasing administration budget over this period,reflecting the Government’s eYciency agenda. Why is the FCO’s administration budget continuing to increaseso significantly? What impact is this having on front-line services?

Answer: Unfortunately there is an error in the numbers shown in the HMT document “2004 SpendingReview, New Public Spending Plans 2005–08”. The correct figures for our planned admin budget are as inthe Departmental Report table 13 (£798 million 2005–06, £827 million 2006–07, and £833 million 2007–08).We have therefore received an increase of approximately 4.4% over the triennium (a 1% reduction in realterms). The largest single element in the increase was the money we received in SR04 for security costs, afterthe November 2003 attack on the Consulate in Istanbul (£25 million admin in 2006–07 and £28 million in2007–08). Under current Treasury classifications approximately 70% of the total expenditure on FCO main(that is, excluding British Council, BBC World Service, Conflict Prevention, etc) is counted as admin costs,even though much of this is what we would consider front line services. As a consequence, all our diplomaticwork (for example, our Ambassadors in Washington and Baghdad) count as admin expenditure.

Q3. The OYce intends to make 2.5% year-on-year eYciency savings over the 2004 Spending Review period(DAR page 197). This target is unchanged from the 2002 Spending Review. Many other departments haveincreased the scope and extent of their intended eYciency savings. Why is the FCO’s eYciency savings targetnot more ambitious, in line with those of other departments?

Answer: The Treasury agreed the FCO’s eYciency target (and those of other Government Departments)as part of the 2004 Spending Review. The Gershon Review highlighted the fact that the potential forincreased eYciency varied from Department to Department and depends to a great extent on the structureand work of each Department. For example, the fact that the FCO, unlike other Government Departments,operates on a global basis limits the scope to make eYciency savings envisaged in the Gershon Review.

Q4. The report by Collinson Grant on eYciency, eVectiveness and the control of costs in the FCO concludedthat 10% of the OYce’s posts could be abolished and identified over £60 million of potential savings,considerably more than the OYce’s current plans. The report also highlights the lack of appropriate professionalskills, including finance, human resources, political and diplomatic skills. Does the FCO accept the findings ofthe Collinson Grant report? What plans does it have to implement the report’s recommendations? Given the lackof appropriate professional skills, how will the OYce ensure that staV cuts will not further reduce FCO’sskill base?

Answer: The FCO has agreed with the Treasury an eYciency plan designed to achieve an £87 millionreprioritisation target as part of the SR 2004 settlement. The work of Collinson Grant was intended to helpdeliver that target. The report on eYciency, eVectiveness and the control of costs represents one of fourstrands of work that Collinson Grant were commissioned to undertake. The others were a Process ActivityAnalysis of the FCO’s operations; a comparative analysis of the FCO’s expenditure; and an analysis of theFCO’s organisational structures.

The FCO Board considered the Collinson Grant report at its meeting on 28 January 2005. It re-committeditself to achieving the £87 million target and agreed to incorporate the Collinson Grant work as far aspossible into the FCO’s existing EYciency Plan. In addition, based on the findings, the Board agreed toreview the Finance function in the FCO, both in London and overseas; identify resources that could be



reallocated from low to high priority activity using the Collinson Grant comparative analysis ofexpenditure; and monitor, at Board level, the FCO’s eVorts to re-prioritise resources. The Board does notaccept that the FCO lacks appropriate political and diplomatic skills.

Since the Board decisions a number of actions have been taken to deliver the eYciency targets. Theseinclude: substituting locally engaged for some UK-based staV; rationalising the various change programmesin the FCO; reducing the number of people in the Corporate pool; improving the workings of the internalmarket; and reducing administrative costs. Work on the finance function will be taken forward in the lightof the Treasury and NAO review, covered in question 12.

The staV reductions, agreed with the Treasury as part of the FCO’s EYciency Plan, are being achievedby adjusting recruitment targets and a programme of early retirement. The FCO is committed to increasingboth the skills base of its employees and to better utilising the skills already available, including throughactive engagement in the Professional Skills in Government initiative. We intend to manage changes in ourworkforce in ways that will support these policies.

Q5. On 15 December, the Foreign Secretary announced the closure of eight UK-staVed sovereign posts, andmoving from UK-based to locally-based staV in a further 11 subordinate posts. What has been the net reductionin FCO UK-based staV as a direct result of these changes? Is this in addition to, or included within, the reductionin SMS posts already announced?

Answer: There will be a net reduction of about 35 UK-based staV positions once the changes to ournetwork of overseas representation announced by the Foreign Secretary on 15 December 2004 arecompleted. These positions are in addition to the reduction in SMS positions agreed in September 2004.

Q6. Savings from eYciency measures will be reinvested in front-line services. What plans does the FCO haveto ensure that services are fully funded in the event that anticipated eYciency savings or returns from sales ofFCO properties are not realised or are delayed?

Answer: It is intended that eYciency savings and returns from the sale of FCO properties will be used tofund additional frontline activities in pursuit of the FCO’s strategic priorities. Consular and visa servicesare funded on a diVerent basis and so do not suVer risk from under-achievement of eYciency targets. If itwere felt that the EYciency Plan was slipping from its target, then the FCO would have to considercontingency eYciency projects to meet any shortfall.

Q7. Appendix B of the DAR shows slippage of some long-term IT projects. What impact will these slippageshave on eYciency savings planned to arise from the increased use of IT?

Answer: For the purpose of clarity, the first column of dates in table 16 of Annex B to the DAR refersto the year of start of each long-term capital project rather than to the original estimate of year ofcompletion. Only two of the programmes referred to under this subhead feature in the FCO’s eYciencyprogramme (Future Firecrest and Prism). The delay in implementation of Prism refers to the overseas roll-out of the project. The savings in the EYciency Plan are unaVected by that delay.

We do not therefore expect that any delays in these projects will aVect achievement of the eYciencysavings envisaged in the FCO’s EYciency Technical Note.

Q8. The OYce planned to expand its i-visa service to another 35 posts by 2005. Has this happened? What isthe timetable for introducing this service in all posts where it is viable?

Answer: Since the publication of the 2004–05 FCO Departmental Report, the electronic visa applicationsystem has now been rolled out to an additional five sites.1 A further five sites are being added in the nearfuture. The fact that the original, ambitious target was not met partly reflects the expansion of outsourcedvisa application centres at a faster rate than originally expected. UKvisas are continuing to advertise thebenefits of on-line applications, and take-up of this service continues at a steady pace. Work will alsocommence in the near future to improve accessibility of the i-visa website (visa4uk) for the visually-impaired.Not all countries have the technical capacity for an internet approach to visa services. However, a recentvisit to Kinshasa indicated that countries where internet penetration is low are still willing to embrace thesystem. We are considering options for this as a successful roll-out there would act as encouragement forexpansion in similar locations.

1 The original 20 posts listed in the 2004–05 FCO Departmental Report are: Australia, Bahamas, Belize, Bermuda, Canada,Costa Rica, Finland, Germany, Guatemala, Hong Kong, Ireland, Jamaica, Luxembourg, Monaco, New Zealand, SouthAfrica, Spain and three posts in the United States. The additional five sites added thereafter are: France, Iceland, Japan,Netherlands and Taiwan.



Q9. P 200 of the DAR outlines what plans the OYce has to relocate staV, but it does not quantify the plannedsavings. How much will be saved annually from this initiative? What costs will there be, including relocationand redundancy costs?

Answer: As the Report notes, the FCO is committed to moving a significant number of jobs from Londonto Hanslope Park, and to rationalising our central London estate which we estimate will generate eYciencysavings of the order of £1.1 million per annum. Our principal concern is to achieve value for money. Themajor “Future Firecrest” IT contract with Hewlett Packard (qv DAR p202), let in December 2005, willrequire the location of 150 additional staV at Hanslope Park. We are in the process of consulting the tradeunions on a managed relocation project for staV whose jobs move from London to Hanslope, so it is notpossible to give details at this stage; however, we think redundancy costs unlikely. The central Londonrationalisation referred to will include works to improve space utilisation in our King Charles Street building(total cost of £5.4 million), and re-configuring the Old Admiralty Building.

Q10. The Treasury PES Paper (2004) 19 (revised) requires the DAR to make a number of disclosures onbetter regulation, including statistical figures on performance in meeting Regulatory Reform Action Plancommitments, delivering Regulatory Reform Orders, Compliance with the Regulatory Impact Assessment(RIA) process and the number of commitments made in final RIAs to review regulations. The only referenceto regulation in the FCO DAR is in Appendix J, which lists the two RIAs made in 2004. Can the FCO providethe omitted information?

Answer: The FCO does not legislate in high volumes and produced just two pieces of regulation in2004–05. However, the following paragraphs highlight how the FCO has performed against the principlesof better regulation over the period.

Regulatory Impact Assessment (RIA) and Consultations

The FCO conducted two RIAs with consultations in 2004–05. Both RIAs included commitments tomonitor and review:

The International Organisation Bill. Consultations were held with interested UK GovernmentDepartments and the Devolved Administrations. There was minimal interest and no objections. Given thenature of the legislation, to confer diplomatic privileges on some international organisations based inLondon, it was not necessary to initiate a public consultation process.

The European Union Bill. Consultation took place across Government Departments and was widely heldwith business. Ministers and oYcials took part in the consultations with stakeholders, for example, the CBI,Chambers of Commerce, Small Business Federation, TUC. The voluntary and charity sectors were alsoconsulted.

The Government published a White Paper on the Treaty—A Guide to the European Union, and acommentary on the Treaty, comparing it with the current treaties. The FCO also published the Guide onthe FCO website, including the text of the treaty itself. The text of the draft European Constitution was alsopublished in the Welsh language.

Regulatory Reform

We are committed to preparing a simplification plan for submission in January 2006.

Financial

Q11. The OYce implemented a new financial system in April 2004 and the 2004–05 accounts will be the firstproduced using this system. How has the accounts production process using the new system worked? Inparticular will the FCO meet its planned timetable for signing the account? Has the system been fullyimplemented in all overseas posts?

Answer: We are making good progress with what is a challenging task, adapting to a new and complexsystem. The Resource Accounts for 2004–05 are based on information from both Prism, our new integratedmanagement information system, and our previous systems overseas. They are currently being audited bythe NAO and we await their comments. We had intended that the Permanent Under-Secretary would signthese oV at the end of September (a month earlier than the previous year’s account). However issues relatingto the implementation of the system led to a slippage in the timetable we set ourselves, and we now plan tosign the account oV at about the same time as last year.

Over 90 of our posts are now using the system (half of those that will receive it). Our target for completionof the roll out is May 2006.



Q12. The Treasury and the NAO are currently undertaking a review of the adequacy of financial managementin Departments. Have any conclusions or recommendations emerged from this work thus far?

Answer: No. The first meeting with the review team took place on 9 August; the team expect to producetheir final report in November.

Q13. The 2006 Spending Review has been postponed until 2007. Will this have any impact on the FCO’sspending plans as outlined in the DAR?

Answer: No. The Spending Review in 2004 set a three-year budget (2005–06, 2006–07 and 2007–08). Thepostponement of the next Spending review until 2007 means that the third year of the triennium, which inprevious spending reviews has been an overlap year (and therefore subject to review), will not be re-opened.

Q14. The 2004–05 figures given in Appendix A are estimates. Can the FCO provide the actual 2004–05 figuresfor tables 10, 11 and 12 on pp 215 and 216 of the DAR?

Answer: We are in the process of finalising the actual 2004–05 figures. The first draft was presented tothe NAO on Friday 2 September. They are due for sign oV on 18 November.

Q15. The outturn total administration expenditure for 2003–04 in the 2005 DAR (p 217) is £168 million(17%) below the estimate given in the 2004 DAR (p 179). Income was underestimated by £99 (61%). Can theFCO explain why its estimates were not more accurate?

Answer: Due to a printing error the formatting on Table 14 of the 2004 DAR was out of line, meaningthat the actual figures for estimated outturn for 2003–04 are somewhat diVerent from those stated in thequestion. The outturn total administration expenditure for 2003–04 in the 2005 DAR is in fact £287 millionbelow the estimate given in the 2004 DAR, and Income is £170 million less than the estimate.

The main reason for this diVerence, as stated in the notes below the table on p 217, is the reclassificationof Consular and Visa services from Administration to Programme as part of the 2004 Spending Review.This reclassification is retrospectively adjusted in the figures back to 1999–2000.

Taking into account this reclassification, outturn is £102 million below the 2004 estimate and income£31 million less than expected, a net underspend of £71 million. The major underspend elements are set outin the FCO’s 2003–04 Resource Accounts, but headline figures are:

— Spending on additional pressures projected for late in the year that did not occur before the year-end, such as in Iraq.

— Slippage on IT projects, mainly on Future Firecrest.

The shortfall in operating cost Appropriation-in-Aid reflects lower than estimated increased demand forconsular and visa services, which are inherently diYcult to forecast.

Q16. HMT published Public Expenditure 2004–05 Provisional Outturn gives the OYce’s year-end flexibilityfigures (table 6, p 14). This is 6.6% of their total resource. In particular the carry-forward for the capital budgetis 30% of FCO’s capital DEL. Why is such a significant carry-forward needed against the capital budget?

Answer: Some capital projects that were assigned funds for 2004–05 have not been able to reachcompletion within the year. Most significant were estate projects in Iraq and the security upgrades to ouroverseas network after the Istanbul bombing. The former has been delayed due to the diYcult securitysituation. The latter was funded by a special £14.5 million package, rather than from the regular budget,and it has not been possible to carry out all these upgrades within one year. It is important for these worksto be completed, thus the application to carry forward the funding.

There is also £1 million of unspent Departmental Unallocated Provision from 2004–05 and a £5 millionadjustment to the carry forward from FY 2003–04 based on audited outturn as the 2003–04 EYF carryforward was based on provisional outturn.



Q17. Paybill figures and an analysis of administration costs by activity are not given for 2004–05 or futureyears (p 217). There are also no figures for 2004–05 for analysis of resource budget by objective (p 223). Whywas the OYce unable to provide estimates for these? In particular the lack of paybill figures seems to conflictwith the claim that there is now greater focus on workforce planning and paybill control (p 187). What is theexplanation for this? Is the OYce now in a position to provide the committee with the above figures for 2004–05?What impact does the inability to produce budgets for staV costs and administrative expenditure by objectivehave on the FCO’s planning and budgeting, particularly in relation to delivering its PSA targets and itseYciency agenda?

Answer:

(i) Analyses of administration and resource budgets by objective are calculated using Schedule 5 datathat will be published in the 2004–05 Resource Accounts. The answer to question 18 addresses theissue of how we are exploring options for more frequent reporting of expenditure by objective.

(ii) The FCO, in line with some other government departments, does not publish a forecast of paybillexpenditure for future years to avoid assuming pay rises that have not yet been agreed. Paybillbudget forecasts are produced for planning and management purposes to enable paybill control.

(iii) The 2004–05 paybill figures are due to be published in the Resource Accounts in November.

(iv) The FCO budgets by input to enable budget holders to deliver PSA targets but does not currentlydraw up budgets by PSA targets. Strategic programme funds are linked directly to objectives butthe vast majority of administration budgets are allocated geographically which reflects the fact thatour network of posts are our main delivery mechanism. As Prism beds down we are exploring theoptions for budgeting by objective. See also questions 18 and 43.

Q18. Analysis by objective as per Schedule 5 is currently done by an annual six-week exercise (page 205). Thisobviously does not provide data in time for inclusion in the DAR, nor can it provide the OYce with useful in-year management information for monitoring purposes. What plans does the FCO have to improve its systems,to enable more timely and frequent information on spend by objective?

Answer: As part of the Prism programme the FCO is currently exploring options for more frequent,automated reporting of staV time spent by objective. Regular in-year objective budgeting reports, ratherthan the existing high-level retrospective annual report, will also be available. These reports, showing costsapportioned to objectives, should be available to users later this financial year. The introduction of morefrequent time recording will greatly improve the quality of the objective cost data. This will take longer asit is dependent on roll out of the Prism system to all FCO Posts around the world.

Q19. The actual valuation at the end of 2003–04 of non-residential land and buildings in the 2005 DAR(page 216) is £96 million (16.7%) above the estimated valuation given in the 2004 DAR (page 178). Forresidential land and buildings the figure is £119 million (28%) below the estimate. The actual net current assetsare £54 million (83%) below the estimate. Why did the estimates diVer so significantly from the actual values?What plans does the OYce have to improve its year-end and month-end estimation exercises to enable moreaccurate financial monitoring by management?

[FCO note: a correction to the Question. The actual valuation at the end of 2003–04 of non-residentialland and buildings in the 2005 DAR (page 216) is £96 million (16.7%) below the estimated valuation givenin the 2004 DAR (page 178). For residential land and buildings the figure is £119 million (28%) above theestimate.]

Answer: Forecasts of our net current assets at any given balance sheet date are subject to a number ofuncertainties; in particular, shifting values in the world property market. Other factors influencing theposition include that in our 2003–04 accounts we reclassified as “residential” property to the value of some£60 million that had previously been considered “non-residential”. This flowed from an analysis of thecomposition of compounds previously recorded as single property assets.

In addition, we extended the £33 million long-term balance sheet liability recognised in 2002–03 for theBerlin Embassy PFI project out to 2028, when the write-down of that liability ends. And we added£17 million to our 2003–04 provisions to cover staV tax liabilities in US, compensation to Istanbul victimsand prudent dilapidations cover at Lancaster House.

As described in Questions 11 and 18 we are investing a lot of resources in the modernisation of ourfinancial control and management systems, with a particular focus on accurate and timely reporting.

Q20. Are final figures now available on the repurchase of Glencairn and sale of Marlay Grange?

Answer: Final figures are not yet available but it remains our firm intention to repurchase Glencairn, andwe are actively discussing the matter with the owners, Park Developments. Pending completion of therepurchase, we have not marketed Marlay Grange. Meanwhile, the Ambassador continues to occupyGlencairn by agreement with the owners.



Q21. Appendix I states a provision of £2.3 million for disputed claims for rents payable on overseas properties.This is a new provision. What is the nature of these disputes and why have they arisen?

Answer: The response to Question 21 is confidential and is sent separately.

Q22. Have costs associated with the UK’s presidencies of the G8 and EU been within forecast limits? Whatwas the cost of hosting the G8 summit at Gleneagles; and how much of this was borne on the FCO budget?

Answer: The FCO was only responsible for the organisational costs of the G8 Summit at Gleneagles. Ourforecast for these costs is £12.1 million. The final costs will be made available when all invoices have beenreceived, but we expect it to be within the forecast. We do not hold details for the other costs of the Summit,for example policing and security—which were the responsibility of the devolved administration.

The EU Presidency will not conclude until December. We have a budget allocation of £10.4 million overthe two financial years (2004–05 and 2005–06). We will not be able to give a detailed out turn of expenditureuntil the end of the financial year, but at this stage we do not anticipate that overall demands on the FCOwill exceed our current forecast.

Long-Term Investment

Q23. Writing in e-Diplomacy last year, the then Minister Bill Rammel stated that “The Future Firecrestproject will deliver in 2005–06 the next generation of our Desktop system.” Appendix B of the DAR shows thatthe current estimated date of completion of the Project is 2012. What is the reason for the apparent delay inthe Future Firecrest Project? What impact will the delay have on the FCO’s ability to meet its targets and todeliver eYciency savings? In addition, the estimated cost of the Prism project has risen by 20%, from£24.5 million to £29.5 million; and the completion date has slipped from 2004–05 (FCO e-diplomacy strategydocument, 2004) to 2006 (DAR, Appendix B). What are the reasons for the delay and for the increase in costs?

Answer: Future Firecrest is a seven-year contract with Hewlett Packard, awarded in February 2005.Mr Rammell’s statement referred to the requirement under the contract for HP to start rolling out the nextgeneration of the Firecrest desktop in 2005–06, a milestone that remains on target for completion by thisdate. The date quoted in Appendix B of the DAR refers to a separate project milestone, which is thescheduled termination of the contract in 2012.

Recent changes in central government technical security policy have required some redesign of the system,which may impact on both the timetable and budget. This impact is still being assessed. But it is expectedto have no significant impact on the capability of the project to meet its objectives.

The capital costs of the Prism Programme have increased principally because of additional securityrequirements which were not fully factored into our original costings. Implementation of the Programmehas been delayed because we under-estimated the complexity of the design and the diYculty of introducingthe IT and associated change in our processes; we have subsequently slowed down the global roll-out toensure that Posts have the necessary support and guidance in using Prism to maximum eVect (See Question11 above).

Q24. The estimated costs of three estate building projects have risen significantly: the Chennai new oYces by£574k (13%), the Kampala new oYces by £702k (10%) and the Belgrade electrical upgrade by £409k (33%)(Appendix B). Why has this happened? What impact will it have on the FCO’s operations?

Answer: 55% of the increased costs in Chennai arise from accounting changes in the attribution of FCOServices charges. The remainder flow from additional costs for fire and lift consultants, and Clerk ofWorks costs.

In Kampala, the estimated costs increased as a result of enhanced security measures, including thepurchase of land to increase stand-oV, and increased physical protection.

Eighteen per cent of the increased costs in Belgrade arise from the charge attribution changes referredto above. The remainder flow from additional works, including a new standby generator and distributionswitchboard, roof works and a revised Incident Alarm system specification.

Increased building costs reduce the funding available for other projects. To minimise the operationalimpact of this funds are allocated to proposed projects in order of priority of need, assessed on the criteriaof security, health and safety and fitness for purpose.



Risk Management and Internal Control Systems

Q25. The Statement on Internal Control in the 2003–04 resource accounts indicates that the OYce’s riskmanagement and internal controls are still in their infancy. The FCO had achieved only the minimum standardrequired by the Treasury (section 4). What progress has been made during 2004–05; and what standard of riskmanagement is the FCO currently rated at? Has the FCO now made a full Statement on Internal Control?

Answer: The FCO’s Statement on Internal Control for the 2003–04 resource accounts set out in detail thesystems and processes that constitute the Department’s risk and control framework. The implementation ofthis framework was in response to the Treasury-led Risk Programme which aimed to improve the qualityof risk management across all Departments. The Programme concluded in December 2004 with a report tothe Prime Minister on progress across Whitehall. This demonstrated that the standard of risk managementin the FCO was comparable with the average level achieved across all Departments as measured against theTreasury’s Risk Management Assessment Framework. A full Statement on Internal Control will bepublished with the 2004–05 resource accounts. This is consistent with the Treasury standard.

Q26. The review of eVectiveness recommended a more cohesive IT governance structure and identified thatInternal Audit recommendations from previous years had not been implemented (section 5). Have these issuesnow been addressed?

Answer: The Internal Audit recommendations on a more eVective and cohesive IT governance structurehave now been addressed and are subject to regular review by senior management. The last majoroutstanding item was the recommendation of the creation of a Chief Information OYcer accountable forICT in the FCO. This will come into eVect on 1 October 2005 when the current Head of the IT Strategytakes on the role.

Performance Management

Q27. The NAO is reviewing the data systems underlying departments’ PSA targets. What stage has the NAOreview of the FCO’s systems reached? Are any conclusions or recommendations available?

Answer: The NAO has completed the necessary fact-finding field work and is currently drafting theirprovisonal findings. These findings will then be discussed with the FCO before any final conclusions orrecommendations are made. As such, there are no conclusions or recommendations presently available.

Q28. The Treasury PES Paper (2004) 19 (revised) says that “departments should describe the quality of thedata systems . . . limitations . . . should be identified and the implications for interpreting progress against thetarget should be brought out for readers”. There appears to be no reference to this in the DAR. Can the FCOprovide details of the quality of the data systems, identifying any known or suspected limitations in the data andexplaining the implications for interpretation of progress against the targets?

Answer: The nature and content of many of the FCO’s Public Service Agreement (PSA) targets meansthat we rely on forming often subjective, qualitative assessments of progress. This is especially true fortargets that are not public service related. However, limitations in data systems are explained in theintroduction to the PSA Autumn Performance Report and the FCO’s Technical Note. Both of these arepublished. Data limitations are also explained for each target within the Technical Note and more generallyin its preamble. Where the FCO has joint targets, statements on data limitations included in the TechnicalNote are cleared with relevant Government Departments.

To ensure that published assessments oVer a true interpretation of actual performance and progresstowards meeting our targets, the FCO maintains a robust system for analysing and verifying data.

Most of our data is sourced from the relevant diplomatic Post. Information from multiple sources iscompared and assessed for validity both at Post and by country desks in London. We crosscheck in-houseFCO reports with Whitehall and independent assessments, drawing on appropriate internationalorganisations. We feel confident in our assessments as a result.

The FCO has a rigorous system of clearing draft reports through senior management before publishing.This system draws on individual target monitors, departments responsible for delivering a target, DirectorsGeneral, the Permanent Under-Secretary and ultimately the Secretary of State. Assessments on joint targetsare reviewed in consultation with relevant Government Departments to ensure accuracy and validity. Forthe conflict prevention target, the exact performance text is trilaterally agreed.

Furthermore, all aspects of performance reporting are subject to regular scrutiny by the FCO’s InternalAudit Department. Their findings are submitted to the Audit and Risk Committee (ARC) which meetsquarterly. The ARC reports regularly to the Board, both on an ad hoc basis (where appropriate) andthrough an annual audit report.



The FCO has strengthened the PSA reporting process in light of recommendations included in the NAO’svalidation of data systems for the 2001–04 Public Service Agreement targets (July 2003). The FCO has alsoimplemented all recommendations made in an internal audit report on the FCO’s SR02 PSA targets carriedout in September 2004. Since the publication of the FCO’s Departmental Report, the FCO has revised theway in which performance data is gathered and reported on. This will be first evident in the FCO’s next PSAAutumn Performance Report (APR) published in November this year.

Objective 1—Security

Q29. The scorecards for PSAs 1, 2 and 3 are classified. The progress box on page 39 mentions that milestonesfor 2004–05 will not be met. Can the Committee be provided with these scorecards? Is the FCO on course tomeet each element of the three targets?

Answer: As requested, copies of the scorecards underpinning PSAs 1, 2 and 3 will be provided to theCommittee under separate cover.

PSA 1: The FCO PSA milestones relating to counter-narcotics work for 2004–05 were all met. As anInter-Departmental Unit, Afghanistan Drugs Inter-Departmental Unit (ADIDU) is expected to meettargets other than those defined by the FCO’s PSA milestones. The milestones referred to in the progressbox on page 39 of the Departmental Report were in fact those set by the Cabinet OYce in the UK’s CounterNarcotics Plan, “Turning the Tide”, agreed by the Prime Minister in November 2004 (copy attached). It isthese milestones that have been set for ADIDU and some of them have not been met. This distinction wasnot made clear within the PSA Performance Return in March 2005 when ADIDU declared that significantgaps had been identified that would prevent us from fully achieving our [Turning the Tide] milestones for2004–05, particularly with criminal justice reform.

PSA milestones for 2004–05 were also met resulting in a reduction in threat to the UK from theproliferation of weapons of mass destruction.

We have met our 2004–05 PSA Counter Terrorism milestones in large part. In particular, we have madenotable progress in reducing the risk of terrorist attacks overseas to British interests through considerablyenhanced political and operational cooperation with key partners in the Middle East, Asia and Africa. Ourpartners have demonstrated, publicly and privately, a clear increase in their support for eVective counter-terrorism. This cooperation has in great part been facilitated by additional UK CT capacity building. GOFCT expenditure rose from £3.3 million in FY 2003–04 to £7 million in FY 2004–05. The UK G8 Presidencyis improving further aviation security through the developing implementation of the Secure and FacilitatedTransport Initative (SAFTI).

PSA 2: There are over 35 elements and performance indicators underpinning PSA target 2. The FCOis on course to meet many of the indicators. Evidence of FCO performance can be seen on page 53 of theDepartmental Report and found on page 5 of the latest FCO PSA Autumn Performance Report.

It is however, too early to say whether the FCO will meet this target in full. Many of the underpinningtargets have been rolled forward into our SR 04 PSA targets and it will be possible to make a firmerjudgement after the FCO’s first public analysis of our SR 04 targets contained in the 2005 AutumnPerformance Report, published in November this year.

PSA 3: The FCO has met most of its milestones and is on track to meet those remaining for PSA 3.

Q30. The technical note states that the three departments involved in PSA 4 (FCO, MoD and DfID) areattempting to measure the number of people whose lives are aVected by violent conflict but explains the severelimitations to the quality of the data. As such, it is not yet possible fully to assess the progress against this target,although there is some discussion of the available statistics on page 55 of the DAR. When does the OYce expectto be able to make an assessment of progress towards meeting this target?

Answer: The Conflict Prevention Pools currently publish six-monthly reports on progress against thePSA 4 target, including both narrative assessment and assessment against statistical indicators. Assessmentagainst the statistical measurement indicators for the target relies on the publication of data by externalsources. The timing of the publication of this data means that there is a time lag between the period beingassessed and date at which an informed assessment can be made. That is why a complete assessment ofperformance against the PSA 4 target cannot be made until autumn 2006, which is when the StockholmInternational Peace Research Institute [SIPRI] is due to publish battle related fatalities data for 2005.Departments have agreed to publish this in their 2006 Autumn Performance Reports.



Objective 2—Trade and Investment

Q31. Performance against PSA 5 was below the target level for two of the three measures in 2003–04. Is theOYce in a position to provide data for 2004–05, so that the Committee can see the most recent performance?Where there has been slippage, what measures are being taken to improve performance?

Answer: The two measures, progress against them and plans for improvement are as follows:

At least 70% of firms receiving assistance with major projects overseas should report that UKTI’s helpwas a significant factor [actual performance in 2004 was 65%.]

UKTI’s performance has improved from 58% in 2003 to 70% in the first half of 2005. Following SR2004,this particular measure will no longer be a formal PSA target, but we plan to continue to track it to ensurewe provide ever more eVective support to firms pursuing major projects overseas. We are also improvingthe way we record and evaluate performance data across the organisation so that we can relate activities tooutcomes even more closely.

At least 50% of established exporters assisted improved their business performance within two years[actual performance in 2004 was 43%.]

As stated above, we are improving the way we record and evaluate performance data across theorganisation so that we can relate activities to outcomes even more closely and help drive continuousimprovement of our service quality. UKTI has also been undertaking new research to improveunderstanding of where and in what ways UKTI can add most value. On the sectoral side, we work closelywith business to identify specific opportunities and priority markets. Following a review of our sectorstrategy, we are now focusing on a smaller number of sectors, which were identified as ones where UKTIcan add most value.

Objective 3—Prosperity

Q32. PSA 6 had a deadline of 2005 but progress has been slow and the target has not been met. There is nosimilar target in the 2004 Spending Review. Does the achievement of a reduction in trade barriers remain apriority? By when does the FCO now expect the target will be met?

Answer: Reducing trade barriers remains a Government priority. HMG believes that the biggest gains,particularly for developing countries, are to be made if trade barriers are reduced at the multilateral-level.The current WTO Round of trade negotiations has not been progressing as quickly as it should. We areworking with our EU partners, the European Commission and other WTO members to ensure that weachieve an outcome to the WTO Ministerial meeting in Hong Kong in December which will allow us to meetour aim of concluding the Round in 2006. We must build on the progress achieved so far. For example,developed countries agreed in the WTO in July 2004 to negotiate an end date for agricultural exportsubsidies. This commitment was reaYrmed by G8 members at the Gleneagles Summit in July 2005. G8members also agreed at Gleneagles to increase the assistance that they provide to help developing countriesimprove their capacity to trade.

Q33. The measures underlying PSA target 7 relate to democracy and legal issues in other countries. A largenumber of factors can aVect whether these measures are achieved, including the actions of other countries. Assuch, the outcome of this target can be aVected by FCO only to a limited degree. How is the OYce able to assessits own performance against PSA target 7?

Answer: Factors beyond the FCO’s direct control aVect the achievement of many of our PSA targets. Toovercome the inherent diYculties in measuring performance, the FCO has developed a system of scorecardsto monitor progress towards our PSA targets. These set out the indicators that will be used to show whetherprogress is being made.

The scorecards do not show everything that the FCO is doing to achieve its targets, but they do give anindication of the main areas of progress and of the direction in which we want to head. Implicit within themis that the FCO will take action in support of the indicators—not just on the specific measures themselvesbut of the overall intention of the target—and in particular where there is a concern about possible failureor slippage of targets. For instance, we have twice resorted to Security Council Resolutions to deal with suchsituations.

Specific examples of how the FCO is able to assess our performance against indicators relating todemocracy and legal issues in other countries are as follows:

Performance Indicator: “International Criminal Court (ICC): 100 ratifications and 20 more States partiescomplete domestic implementation legislation by end-2003.”

The ratification of the ICC Statute is a straightforward measurement and it is easily monitored via opensource information. In order to support increased ratification/implementation, the FCO supports a numberof promotion activities and tracks which States attend these activities and then go on to ratify/implement.



Performance Indicator: “Satisfactory progress towards the completion strategy for the InternationalCriminal Tribunal for Yugoslavia (ICTY), with investigations completed by end-2004.”

The indicator relating to the ICTY is again easy to monitor as the ICTY has an agreed completionstrategy, the first step of which was completed at the end of 2004. Implicit is that the FCO will take actionif it has concerns that the strategy is or will be missed. This led the FCO to take action—including in SecurityCouncil Resolutions to limit slippage, including by limiting the range of new indictments. We also workedsuccessfully for language asking the Court to deliver six-monthly progress reports to ensure it was focussingon meeting the strategy and allowing us to monitor this more closely.

Performance Indicator: “Most trials conducted by the Special Court for Sierra Leone (SCSL) completedby end-2005.”

Our performance indicator on the SCSL is also measurable. But when it became apparent that the Court’scompletion strategy could be badly missed because of the UN diYculty in appointing a suYcientlyexperienced Trial Chamber in a timely way, the FCO took highly proactive action. We advertised in TheTimes using FCO funds allowing us an open and transparent system for putting forward a Britishnomination. It attracted attention from well-qualified foreign judges which we able to pass on forconsideration by the UN.

Performance Indicator: “African Court of Human Rights established and becoming functional by end2006.”

Lord Triesman raised this with senior figures in the African Union (AU), on behalf of the EU, when heattended the AU Summit in Libya at the beginning of July. The AU Summit Executive Council met at theSummit and agreed a draft legal instrument to establish the merged Courts. It is impossible to judge whatimpact Lord Triesman had in the AU’s decision to push on, but we are able to demonstrate that we arebriefing Ministers and that they are raising the issues with their interlocutors.

On rule of law, the FCO has supported a number of practical projects through the Global OpportunitiesFund, aimed at improving the independence of the judiciary, including:

— Human rights training to the judiciary in Turkey, cascaded to 6,000 judges and prosecutors,helping the judiciary to absorb and implement reform consistently.

— A three-year project in Afghanistan, implemented by the Bar Human Rights Committee ofEngland and Wales (BHRC) aimed at disseminating legal skills and knowledge in the legal sector.

— We have funded the International Commission of Jurists’ Centre for the Independence of Judgesand Lawyers (ICJ/CIJL) to produce the Practitioners’ Guide to International Principles on theIndependence and Accountability of Judges, Lawyers and Prosecutors which sets out internationalstandards on the independence of the judiciary, including on the security of tenure of judges,accountability and judicial corruption.

While it takes time for the impact of such projects to become clear, monitoring and evaluation can givean indication of the contribution the project has had.

But, as the Committee notes, it is clearly often diYcult to attribute broader results or developmentsdirectly to FCO intervention and this has been a significant weakness in these measures. Judgements aboutthe status of a given country as being a democracy or having an independent judiciary are often not clear-cut given the number of factors at play.

We have therefore produced a strategy for work on Human Rights, Democracy and Governance over2005–08 under FCO Strategic Priority 6 and intend to develop more detailed strategies to take forward workon democracy, governance and rule of law. Once we have these strategies in place we should be able to seemore clearly how far FCO work in these areas has achieved or helped to influence the desired outcomes. Wehave also changed the specific measures for the SR04 PSAs to some which reflect more directly FCO activity.

Identifying external factors that can aVect the FCO’s ability to deliver a target is an important elementof ensuring successful delivery. Risk assessments in our business plans for achievement of the targets includeexternal risks, such as the non-cooperation of other countries. This helps us to work out how to mitigatethose risks and develop management strategies where there is scope for the FCO to make a diVerence.Knowing where the FCO is best placed to make a diVerence is another important factor in promoting ourability to assess performance against all of our PSA targets.



Q34. The actual measures for PSA 7 are the number of functioning democracies in the world, ratification ofcore human rights treaties, the number of countries with fully independent and impartial judiciaries and fourspecific outcomes relating to international justice. The progress box on page 84 mentions free elections, projectsand training, the millennium development goals and the Kyoto protocol. Whist these are all important inthemselves, none of them are the measures set out in the FCO’s technical note for assessing this target. Can theOYce provide information on progress towards meeting the measures specified in the technical note?

Answer: FCO PSA 7 reads “Make globalisation work for sustainable development in the UK andinternationally (and particularly in Africa) by promoting democracy and the rule of law, good economicand environmental governance, and security of long-term energy supply, measured by specific underlyingtargets”.

This target is measured using scorecards (agreed between FCO and HMT) covering the five elements ofthe target:

(a) increased democracy and the rule of law;

(b) more eVective economic governance;

(c) more eVective environmental governance;

(d) enhanced security of energy supplies; and

(e) reformed and eYcient international organisations (the UN, OSCE, OECD and Council ofEurope), oVering better value for money for the UK.

The scorecards for (b)–(e) are classified and are therefore not published but are being sent to theCommittee under separate cover.

This target covers a vast array of work. We tried to represent a broad range of activity and performancein the Departmental Report, incorporating performance information against both the unclassified andclassified scorecards. This therefore included reference to the Millennium Development Goals and theKyoto protocol; indicators that do not appear on the unclassified scorecards for this target. Furtherperformance information can be found in the Department’s PSA Autumn Performance Report (APR) 2004.The FCO is currently revising the way in which we report on our PSA targets so that, in future, we are ableto release as much performance information as we hold. This will be evident in the Department’s next APRpublished in November this year.

Information on the FCO’s performance towards achieving the indicators specified in the Committee’squestion is as follows:

(i) Number of functioning democracies in the world increases from 95 in 2003 to 105 in 2006.

We judge that, while up to 140 countries have some attributes of democracy, there are currently99 countries which might be assessed as fully functioning democracies with a range of associatedcivil rights. The figure disguises the fact while some countries have improved, others haveregressed. It also does not capture positive trends (such as successful elections) in countries whichstill cannot presently be judged fully democratic. While we would not currently expect to achievethis measure, the overall trend over the period of the PSA has been positive and there has been asignificant increase in the number of countries implementing systems, processes and procedureswidely accepted to be necessary in a fully functioning democracy.

(ii) Ratification of any of the six core treaties by 25 additional states by 2006.

Achieved, with 28 new ratifications of core treaties by December 2004. We are currently focusingon encouraging ratification of Optional Protocols to the core treaties that will give them greaterforce through implementation mechanisms, in particular OPs to the Convention on theElimination of All Forms of Discrimination Against Women (CEDAW) and the ConventionAgainst Torture (which still requires a number of further ratifications to bring it into force).

(iii) The number of countries with fully independent and impartial judiciaries increases from 90 in 2003to 95 in 2006.

We judge that there are currently 91 countries which can be judged to have fully independent andimpartial judiciaries.

Below the headline figure there have been a number of positive developments in the review period whichillustrate a generally positive trend over the period of the PSA towards more independent and impartialjudiciaries in some countries. But these have also been oVset by negative developments elsewhere.

As noted in the answer to question 33 above, the FCO has supported a number of practical projectsthrough GOF, aimed at improving the independence of the judiciary and the rule of law more widely. Othercurrent projects in hand include:

— Promoting human rights in the administration of justice in Cameroon.

— Developing national monitoring mechanisms for human rights in Georgia.

— Phase 2 of improvements in prison management in Brazil.

— Training for judges and prosecutors working with the Human Rights Court in Peru.



Q35. The Global Opportunities Fund (GOF) is putting in place eVective systems to establish whether projectshave achieved their purpose and to measure the impact of programmes (page 126). By when does the OYceexpect these systems to be fully embedded? When will the first results of this monitoring be available? Whenwill the GOF annual report for 2004–05 be published?

Answer: The GOF has eVective systems in place at project level to establish whether projects haveachieved their purpose now. StaV are required to report quarterly on progress against success indicators setat the beginning of a project. This includes up-to-date expenditure against a financial profile and narrativeinformation on activities and outputs. On completion, all projects are evaluated to assess achievement ofpurpose.

To standardise this approach across the organisation a global project database goes live in November2005, which will compile all FCO (including GOF) project bids, progress and evaluation reports andenhance sharing of best practice and lessons learnt.

Systems that ensure programmes are able eVectively to measure their impact continue to evolve. This yeara concerted eVort has been made to ensure all programme strategies have realistic objectives withappropriate success indicators. Programmes are required to report internally against these indicators everyquarter as part of a mini-review with the Programme OYce (the former GOF Central Management Team).

An oYcial report is also laid before Parliament annually; the annual report for 2004–05 will be laid beforeParliament on 12 October. A launch event is being held the same day, when members of civil society will begiven an update on progress to date, and be given an opportunity to discuss future direction.

Existing project and programme progress reports are available now; a more formal review of GOF willtake place at the end of 2005–06 (a review not an evaluation since on current plans these programmes willcontinue to run for a number of years).

Q36. What are the implications of the establishment of GOF for the funding of other bodies by FCO?

Answer: GOF was created through a combination of new money and transfer of funds from existingprogramme budgets. Funding arrangements for non-departmental public bodies was not aVected andremains subject to the usual government criteria for such bodies: whether or not the task they perform isnecessary, and if so whether an NDPB is the best option for its delivery. However, in some casesmanagement of NDPBs has been moved to GOF teams in view of the synergies between their work and thatof the GOF programmes.

Public bodies whose remit includes project implementation are able to apply to GOF for project funds.Their proposals are appraised against the GOF criteria, including their contribution towards deliveringFCO strategic priorities and programme objectives.

Q37. What plans are there to change the relationship between the FCO and the Westminster Foundation forDemocracy? What plans are there to increase or to change the basis of funding of WFD?

Answer: There are presently no plans to change the arms-length relationship between the FCO and theWestminster Foundation for Democracy. However, Ministers are considering recommendations to improvethe eVectiveness of WFD, accountability for its expenditure and the working relationship between WFDand the British political parties. As announced on 4 April 2005 by the then FCO Minister, Bill RammellMP, Ministers will take into account the review undertaken by River Path Associates and WFD’ssubsequent response together with the contributions submitted during the three-month-long publicconsultation exercise that was completed in July 2005. Ministers intend to take decisions in the autumnfollowing further consultations with the Chairman and members of the WFD Board on their return fromthe summer break. There are no current plans to change the level or basis of grant-in-aid funding of WFD.

Objective 4—Europe

Q38. Neither the box on page 76 nor the FCO’s technical note for 2002 targets details the specific measuresfor assessing PSA 8. It is therefore impossible to tell what progress has been made against this target. Can theOYce provide details of the scorecards used for measuring this target and state for each element of the targetwhether it is on course to be met? Where there has been slippage, what measures are being taken to improveperformance?

Answer: The text of the classified scorecard for PSA 8 is being provided separately. Progress against thescorecard is as follows:

(a) Reform of the EU institutions—achieved: the new Treaty met all the objectives specified.

(b) EU Enlargement—largely achieved with more progress needed on Croatia, and Bosnia andHerzegovina. Rather than a new contractual relationship with Ukraine, the same eVect wasachieved through an Action Plan under the wider European Neighbourhood Policy in February2005, after the “orange Revolution.”



(c) CSFP—achieved in full. Examples include Solana’s “European Security Strategy”, adopted by theDecember 2003 European Council, which set out a framework to enhance the EU’s foreign policyand crisis management capacity; successful EU-US Summits in 2004 and 2005 building on theWashington summit in June 2003; more than 75% of 2003 and 2004 CFSP budget allocated forconflict resolution and prevention (EU Monitoring Mission, EU Police Missions in Bosnia andMacedonia).

(d) Economic reform: achieved in full. The EU collectively recommitted to the Lisbon agenda at theSpring 2005 European Council.

(e) CAP: Mostly achieved. Major reform packages agreed in June 2003 and April 2004 saw theprinciples of decoupling, compulsory modulation and cross-compliance adopted, althoughdegressivity was not agreed.

(f) Justice and Home AVairs: The Council Directive on minimum standards for the qualification andstatus of third country national and stateless persons as refugees or as persons who otherwise needinternational protection was adopted in March 2004. The Council reached a general approach inApril 2004 on the Council Directive on minimum standards on procedures in Member States forgranting and withdrawing refugee status. This proposal will be adopted once the EuropeanParliament has delivered its opinion on the Directive: this should happen soon. Work onstrengthening the protection capacity in or near regions of protracted refugee situations, throughpractical co-operation with third countries in these regions, included co-funding (with Denmarkand the Netherlands) of two UNHCR-led EU funded projects. The first is a preparatory study intoa comprehensive plan of action for Somali refugees. The second is a study of gaps in the protectioncapacity of four African countries. Both projects started in mid 2004 and are due to conclude by31 December 2005. Since 2002, EU Readmission Agreements have been signed with Macao,Sri Lanka and Albania.

(g) Public awareness: covered in the Departmental Report.

Objective 5—Impact Abroad

Q39. The report on PSA target 9 on page 158 does not explain progress in terms of the measures set out in thetechnical note. For the BBC World Service and the British Council it does not explain what are the underlyingtargets. It is therefore impossible to judge whether targets are on course or whether those elements with adeadline of 2005 have been met. Can the OYce please give specific details of progress against the measures givenin the technical note? Where there has been slippage, what measures are being taken to improve performance?

Answer: Progress against PSA target 9 is measured through three scorecards:

(a) Delivery of Government objectives overseas.

(b) Viable and responsive network of influence.

(c) Improved perceptions of UK and HMG policies.

These scorecards contain performance milestones and indicators that must be achieved if we are to assessthis target as “met”.

Each element of the PSA target is on course, and those with a deadline of 2005 have been met. Examplesof FCO performance are given on page 158 of the Departmental Report and further information can befound in the FCO’s 2004 PSA Autumn Performance Report. As requested in the Committee’s question,there follows an additional detailed break down of performance against the measures and underlying targetsfor scorecard (c) relating to Public Diplomacy, the BBC World Service and the British Council:

(c) (i) The Public Diplomacy Strategy was adopted by the key public diplomacy partners, through thePublic Diplomacy Strategy Board, in May 2003. A polling and evaluation expert was recruitedfrom MORI to assist the FCO and public diplomacy partners evaluate the impact of theirpublic diplomacy activity.

(c) (ii) The final report evaluating the “Think UK” campaign in China was published in February2004. The campaign was judged to have been a success and the report underlined some keylessons learned in the areas of planning, co-ordination, delivery and impact assessment thathave informed a subsequent campaign in North America and presently in India.

(c) (iii) The Public Diplomacy Challenge Fund has now completed two full Financial Years ofoperation. In FY 2003–04 it supported 86 projects in 53 countries with a total spend of£2.25 million. In FY 2004–05 some 70 projects were supported with a spend of £2.28 million.In the second year of operation activities were refocused towards imaginative and innovativepublic diplomacy activity delivering outcomes that supported the FCO’s Strategic Priorities,especially SP 3 (international system based on the rule of law etc) and SP 6 (sustainabledevelopment etc).

(c) (iv) FCO Internet activity is on course against a balanced scorecard. Specifically:

— average monthly page impressions across all websites on the FCO web platform 5 million(FCO website 3 million). Up 25% on figures for 2004;



— over 54,000 registered subscribers;

— 1 million e-mail alerts sent per month—41,000 email alerts can be processed in one hour;

— 500 consular registration forms submitted per month;

— 168 Posts’ websites live. EU Presidency websites are now live. Over 400 users of theContent Management System; and

— online survey published to gain feedback from website visitors.

(c) (v) We do not expect to meet the target of 3,000 Chevening scholars annually by 2005–06. TotalChevening numbers for 2004–05 were 2,211. Following an external review of FCOscholarships released in January 2004, we have focused on strengthening the impact of theChevening investment on government strategic priorities. In particular, through (i)development of a Fellowship programme (now in its second year), which oVers bespoke shortcourses that directly support the SPs and (ii) progressive prioritisation of Cheveningscholarships in countries of long term strategic importance, while maintaining a globalscheme.

(c) (vi) BBC World Service performance is measured against five targets. These are global weeklyaudience, shortwave audibility, quarterly online interactive forums per language, monthlyinternet page impressions and capital cities with BBCWS FM outlets. In 2004–05, BBCWS hasperformed strongly and is on track to achieve or exceed its overall performance target. Themost recent performance measurements were:

— Global weekly audience (2004–05): 149 million (target 153 million). Up from 146 millionin 2003–04.

— Shortwave audibility (2004–05): 81% (target 86%). Fall from 83% in 2003–04 .

— Quarterly online interactive forums per language (2004–05): 12 (target at least 12). Levelwith 2003–04.

— Monthly internet page impressions: 330 million in May 2005 (2004–05 target 170 million).Up from 279 million in December 2004.

— Capital cities with BBCWS FM outlets: 144 in June 2005 (2004–05 target 142). Up from143 in March 2005.

(c) (vii) The British Council measures its eVectiveness in improving perceptions of the UK through fivetargets taken from its global scorecard:

— Number of target audiences reached through purposeful participation in programmes andservices (excludes web-users);

— Number of high-level decision-makers and leaders significantly engaged with the Council;

— Customers that have improved perceptions of the UK as a result of interaction with theCouncil;

— Customers reporting long-term impact on perceptions of the UK following engagementwith the Council;

— Number of international students (excluding European students) in further and highereducation in the UK.

The scorecard was rolled out globally to all countries in April 2003 and the first set of data was collected inMay 2004. The FCO and Council agreed that, for the purpose of the PSA, their target should be to improveperformance year-on-year. The data from May 2005 shows that the Council improved its performance onfour of the five targets. On one target—engagement with high level decision makers/leaders—the numberhas dropped. This is because the Council has this year applied stricter definitions of high-level decisionmakers and leaders and of significant engagement.

Q40. Lord Carter of Coles has been carrying out a review of public diplomacy in the first half of 2005(page 146). When does the FCO expect to receive Lord Carter’s Report? Will the Report be published?

Answer: We expect Lord Carter of Coles to send his report to the Foreign Secretary at the end ofSeptember or early October. We anticipate that the report will be published. It will certainly be madeavailable to the FAC at the earliest opportunity.



Objective 6—Public Services

Q41. Are the statistics for 2004–05 for PSA 10 [“EVective and eYcient consular and entry clearance services,as measured by specific underlying targets”] now available? Can the FCO provide these, to enable theCommittee to see how it has performed against the target?

Answer: Consular Services

The 2004–05 figures for PSA 10 are now available from the Consular Annual Return.

Target Achieved Comment

1 95% of overseas passports issued 73.3% Target amended in SR04 to 90% within 10 dayswithin five working days from following introduction of a lengthier but morereceipt of correct fee and secure passport issuing process. Under thiscorrectly completed application. newer target an 82.5% success rate was achieved.

(The former 95% target within five days figure isused, as 2004–05 is within the SR02 reportingperiod.)

2 98% of notarial acts carried out 99.64% Notarial acts include witnessing oaths, attestingwithin one working day from signatures, preparing certificates and certifyingreceipt of correct fee and documents. In 2004–05 we carried out 85,074correctly completed application. of these activities at our overseas posts: only

303 failed the target thus we achieved a 99.64%success rate and passed this measure.

3 98% of birth registrations carried 95.78% There were 8,260 birth registrations in 2004–05out within five working days of which 8,256 were done within the time targetfrom receipt of correct fee and and 364 outside. This gives a success rate ofcorrectly completed application. 95.78% which means we failed this scorecard

measure. 29 overseas posts registered one ormore failures.

4 98% of death registrations 96.19% There were 446 deaths registered at overseascarried out within three working posts in 2004–05. 429 of these met the five-daydays from receipt of correct fee target and 17 did not. The success rate wasand correctly completed 96.19% which means we failed this measure.application. Eight posts failed to meet the target.

5 98% of detainees contacted 96.56% There were 5,975 detainee cases recorded inwithin 24 hours of notification of 2004–05 but 748 of them were not relevant toarrest, and detainee visited as the PSA target mainly because local police hadsoon as possible thereafter if the detained and released the individual withindetainee wishes. 24 hours before they notified the Consulate of

the case. There were therefore 5,227 relevantcases of which 180 did not meet the 24-hourcontact target. We achieved only a 96.56%success rate and therefore failed this measure.42 posts record failing on at least one occasion.

6 99% of hospitalised consular 99.31% Only 26 of the 3,766 hospital cases missed thiscases contacted within 24 hours target giving us a success rate of 99.31%.of notification.

Answer: Entry Clearance Services

Annual statistics for the entry clearance operation are published each year at the end of October,following a period of collection, data cleansing, analysis and evaluation. The statistics for 2004–05 for PSA10 for entry clearance services are therefore not yet available, as the data collation and validation processis currently under way. We will make them available to the Committee as soon as possible.

Q42. Issuing overseas passports was considerably below target in 2003–04 due to increased security measures.Has this trend continued? If so what measures has the FCO put in place to improve the service?

Answer: Consular Directorate has introduced greater security in relation to passports. This has extendedthe processing time. Action is in hand to introduce ways of improving and speeding up passport services.A new Nationality and Passports Best Practice Unit has been set up within the Directorate, with a remit toensure that posts are operating in the most eYcient manner possible whilst still carrying out rigorous checks



on applicants. They will carry out a rolling programme of reviews of larger passport issuing posts, beginningin October. In cases where posts are clearly not meeting targets, we are sending trouble-shooters out to assessand resolve the problems, in order to bring issuing times to within the PSA target.

We recognise that there has been a gap in terms of capturing management information electronically.Steps are being taken to address this prior to the rollout of the Biometric passport issuing system in 2006.These steps include:

— improved training and support for users of each IT system, to ensure maximum use of the systemsand that information is captured and maintained eVectively, delivered by a new Consular ICTOperations team;

— developing new software to generate more accurate reports from GenIE (current passport issuingsystem), and tasking contractors with extracting reports from Compass (the consular caseworkmanagement database);

— commissioning a feasibility study into available Reporting Tools with a view to developing anapplication which can be used on all Consular IT systems.

Q43. The visa and consular services are intended to be self-funding (page 196). Chapter 13 on consular servicesuses data that are over a year out of date and the footnote on page 160 implies that statistics are only on anannual basis. In addition, schedule 1 in the 2003–04 resource accounts shows that the demand for consular andvisa services was £31 million lower than expected and that demand is volatile and diYcult to predict. Given thediYculty in collecting data and predicting future demand for visa and consular services, can the OYce explainhow it can eVectively budget to ensure these services recoup their costs but at the same time do not over-charge?In particular, how did the OYce arrive at the provision of £183.264 million for the full cost of consular and visaoperations for 2005–06 on page 220 of the DAR?

Answer: As explained in the reply to Q18, we are exploring options for more frequent collection of theactivity data used to compile consular and visa service costings. Currently though we have to rely on themost recent data held. Where data collection exercises are annual the timing of subsequent costing exercisesmay mean that the data used is up to a year old. However, the public service costings which form part ofthe FCO’s published resource accounts are subject to scrutiny by the NAO to ensure they conform togovernment accounting rules and represent a true and fair view.

While demand is volatile and often diYcult to predict, nevertheless we have to make the best forecastswe can. Forecasts of demand and of the resources needed to meet it form the basis of periodic submissionsto HMT for changes in the consular and visa fee. Before these submissions are presented to Parliament forapproval, we have to satisfy HMT that the forecasts are as realistic and robust as possible. Analysis of seriesof monthly statistical returns from Posts detailing the level of demand for various consular and visas servicesis a key element in this process.

EVective budgeting for self-funding services is therefore challenging, especially as the lead-time for feechanges is usually around six months. HMT have therefore allowed the FCO to adopt a flexible approachto cost recovery. While normally consular and visas are expected to reach the end of each financial year asclose to break even as possible, HMT recognise that there will be occasions when costs may be underrecovered—due for example to an unforeseen reduction in passport issues as happened in 2001 following9/11—or over recovered due to income exceeding forecast while cost increases are contained. In bothcircumstances arrangements exist (Section 102 Orders) for spreading under or over recoveries oversucceeding years.

Additionally, where the cost of the services are expected to increase significantly, as a result for exampleof the introduction of biometric passports, it may be desirable to spread the change evenly over a numberof financial years rather than have a sudden step change in fees. There may therefore be a planned periodof over recovery followed by an oVsetting period of under recovery covering say five years.

The figure of £183.264 million given on page 220 of the DAR for FY 2004–05 is the amount of total FCOresource (set in Spending Review 2002) that would be consumed if public service levels of activity remainedat 2003–04 levels: the most recent activity data available when the DAR was written. Clearly neither theconsular or visa services are constrained by this figure since if they receive more income than originallyassumed they will be able to spend more in providing the services demanded.

Q44. The NAO published a report on the FCO’s visa services in 2004. One of the recommendations from thisreport is that information on performance needs improving (page 181). In the light of this, how satisfied is theOYce that the performance reported for PSA 10 [“EVective and eYcient consular and entry clearance services,as measured by specific underlying targets”] is accurate?

Answer: UKvisas’ specific underlying targets in support of PSA 10 are as follows:

— PSA 1: 90% of straightforward non-settlement applications processed within 24 hours;

— PSA 2: 90% of non-settlement applications requiring further enquiries to be decided within15 working days;



— PSA 3: 90% of settlement applications interviewed within 12 weeks (or target times for postsoperating 4 queue system); and

— PSA 4: 60% of visa applications to be processed by posts with Risk Assessment Units or visaassessment teams in 2005–06.

UKvisas obtains management information from the overseas posts’ IT system, PROVISO. Theinformation is downloaded every night into the Central Reference System (CRS). All posts also compile amonthly statistical return based on information from PROVISO, which is forwarded to UKvisas in Londonfor review, analysis and discussion of mitigating action where PSA targets are not being met byindividual posts.

As streamlining measures have been implemented and ways of working changed, data collection onPROVISO does not now systematically record information in line with current processes. Work is underway to revise the main system software, but in the meantime posts have adapted their data recordingprocesses in order to continue their provision of management information. This has led to some inaccuraciesand discrepancies between posts through diVerences in interpretation and procedures. However, UKvisascontinues to provide advice and guidance and through central monitoring remain satisfied that monthlymanagement information compiled locally at posts is suYciently accurate and robust to ensure that PSAtargets may be monitored eVectively.

A Data Analyst has now been appointed in UKvisas. He will have a dual role of (a) ensuring themanagement information collected by posts is relevant and adequately informs assessment of staYngrequirements; and (b) working with the raw data supplied by posts so that input errors and inconsistenciesmay be resolved. UKvisas further plans to improve the quantity and quality of data collection overseasthrough the provision of additional data entry resources and to establish Data Quality oYcers within poststo improve data input into the system at an operational level.

Objective 7—Overseas Territories

Q45. The FCO does not expect to meet that part of the PSA target 11 which deals with constitutional reform(page 143). It is not clear whether it is on course to meet the other elements of the target; in particular, thereappears to be no mention of progress against the economic development element. Can the OYce state whetherit is likely to meet each element of the PSA target 11 and whether it has met those elements with a deadline ofMarch 2005? Where there has been slippage, what measures are being taken to improve performance?

Answer: The indicators agreed with the Treasury as a measurement for meeting PSA target 11 andprogress in meeting them is as follows:

(a) Modernisation by 2006 of the constitutions of all populated territories (except Gibraltar andPitcairn).

As is suggested in the Departmental Report, this indicator will not be met. The 1999 White Paperplaced the onus for establishing review commissions on the territories. Commissions have been setup in six of the territories, but not all have yet come forward with proposals. To date discussionshave been held with the Cayman Islands, Montserrat, St Helena, and the Turks and CaicosIslands. A new draft constitution for St Helena was agreed at the discussions but then rejected ina consultative poll. Within the next few months we plan to have further discussions withrepresentatives of the British Virgin Islands, Montserrat and the Turks and Caicos Islands. Butsuccessfully concluding the discussions is dependent on striking a balance between the territories’proposals and the need for the UK to retain the necessary powers for it to deliver on itsresponsibilities as an administering state. In addition, the Bermuda Independence Commissionhas been preparing a report for public discussion on the option of independence. The FCO heldextensive talks with them and produced a paper covering issues that they raised.

(b) Improvement in Overseas Territories (OTs) participation in key multilateral environmentalagreements by securing extension by 2006 of three core agreements to named OTs.

There has been good progress on this indicator. Following an FCO-funded training workshop,Anguilla and the Turks and Caicos Islands are preparing draft legislation to enableimplementation of the Convention on International Trade in Endangered Species of Wild Faunaand Flora (CITES). Bermuda and the Falkland Islands are in the process of drafting legislationto enable implementation of the Convention on Biological Diversity (CBD). There has, however,been less progress in trying to persuade the Caribbean OTs to accept extension to them of theProtocol Concerning Specially Protected Areas and Wildlife (SPAW). As environmental issues arethe responsibility of the OT governments, the FCO’s role is one of encouragement. This iscontinuing, with help for projects being provided under the joint FCO/DFID-funded OverseasTerritories Environment Programme.

(c) Disaster management plans agreed for three OTs by the end of 2003–04 and for 10 OTs by the endof 2004–05.

This indicator has been fully met, with disaster management plans set up for all populated OTs.



(d) Agree borrowing guidelines in all Caribbean OTs by 2004–05 and develop new strategic plans inall COTs, Falkland Islands and St Helena by 2006 in order to improve financial planning andbudgetary discipline;

This is the main indicator for economic development. Borrowing guidelines have been agreed withthree of the four COTs. Agreement with the British Virgin Islands is close. Montserrat does nothave borrowing guidelines as it is in budgetary aid. The situation on Strategic CountryProgrammes (SCPs), which were drawn up as a result of DFID’s bilateral aid programme, haschanged since the PSA was drafted. SCP documents for Anguilla and TCI were not renewedfollowing cessation of DFID’s bilateral aid programmes, to which the plans were linked. Througha programme of visits by the Overseas Territories Department’s Economic Adviser, the FCO isencouraging those OTs not in receipt of budgetary aid to develop locally owned medium-termstrategic plans and to maintain budgetary discipline.

Q46. There has been a review of human rights issues in the populated overseas territories and the FCO isconsidering ways to address the findings (pages 141 and 142 [of the FCO’s Departmental Annual Report]).What were the main issues identified in this review and what is the timescale for addressing them?

Answer: The Reviews, on the Realisation of Human Rights, were wide ranging. They highlighted anumber of specific areas of concern (not all the same for each territory) including child abuse and domesticviolence, the status of immigrants and long-term residents, and labour rights. Each report set out a seriesof issues and actions for the Governments of the Territory and the UK Government to consider. Theoverarching recommendation to the UK Government was that we should provide further support to helpraise the territories’ institutional capacity to address human rights, and to help promote local ownership andinvolvement by civil society.

As the local governments have limited local capacity to act in the human rights field, they need to prioritisetheir eVorts. The UK Government is helping the territories in a number of ways. The FCO is working withDFID and the territories’ governments to identify how they and we can provide targeted assistance toimplement the findings of the reviews. As a first step we are consulting the Overseas Territories to discoverthe nature and training needs of their Human Rights Committees. We have recently sent questionnaires tothe Territories involved. We have also written to the Territories’ Attorneys General to identify the way inwhich the Territories currently tackle the process of extension and implementation of international humanrights treaties. Meanwhile, DFID are in the process of working up a four-year human rights strategy witha view to supporting the development of local institutional capacity.

We are already working with DFID on a four year DFID-funded child-protection programme, to helpraise awareness of child rights and to strengthen local institutional capacity in line with the requirementsunder the UN Convention on the Rights of the Child. The programme was launched in 2004 and oVerstechnical assistance and training to help the Territories develop an integrated approach to child protection.It will complement technical assistance provided under a four-year (2001–05) FCO-funded project inAnguilla, Montserrat, British Virgin Islands and Turks and Caicos Islands. The recently completed projectcovered child and family law reform and associated welfare standards and procedures.

Beyond these specific areas, the UK held a workshop in 2003 to provide training on the reportingrequirements under the core UN Human Rights Conventions, most of which have been extended to mostof the territories. Further training will be provided as necessary. Workshops have also been held onalternatives to custodial sentencing, and on the reporting requirements under the International LabourOrganisation Conventions. We have also funded a study on the provision of legal aid, with a view to securingwider public access to justice.

Staffing

Q47. Table 14 on page 218 shows actual and projected staYng for FCO. Given that the long-term aim is anoverall reduction in staV, why did the number of staV increase in 2004–05?

Answer: The FCO is committed to a reduction of 310 in its centrally funded staV by 1 April 2008, andwe are on course to achieve this target. At the same time, however, there will be an increase in the numbersworking in the service delivery areas of Consular and Visa services, where staV numbers depend on externalrevenue income. There is agreement with the Treasury that these areas will not therefore count against oureYciency targets. The increase in staV numbers during 2004–05 reflected growth in these two areas.



Q48. Overtime has reduced in 2004–05 and the plan is to reduce this still further so that in 2007–08 it will behalf the 2003–04 level. This is happening at the same time as a reduction in the overall staYng level and duringa time of change for the OYce. How will FCO ensure that this reduction is genuine and that there will not bepressure for staV to work undeclared overtime?

Answer: As part of the FCO’s SR04 eYciency plan, we are committed to reducing the overtime bill by£2 million in real terms from the 2003–04 baseline. To achieve this we are implementing a more robustbidding, allocation and monitoring system for overtime budgets, in conjunction with better managementpractices at department level, to ensure that managers devise more eVective working arrangements to reducethe need for long hours.

Q49. The FCO has recognised that it needs to do more to promote diversity in its staV (page 188). The DARdoes not give specific diversity statistics. Can the FCO provide figures on women, staV from ethnic minoritiesand staV with disabilities as a percentage of total staV by grade? Can it provide similar figures for staV recruitedin 2004–05, indicating where these are permanent appointments?

Answer:

Total staV by grade, at 1 August 2005

Grade Male Female % Minority % Disabled % TotalEthnic

SMS 389 69 15.1 6 1.3 7 1.5 458D7 178 53 22.9 2 0.9 4 1.7 231D6 504 233 31.6 14 1.9 19 2.6 737C5 464 165 26.2 14 2.2 17 2.7 629C4 802 478 37.3 30 2.3 32 2.5 1,280B3 704 743 51.3 94 6.5 39 2.7 1,447A2 440 671 60.4 120 10.8 47 4.2 1,111A1 125 80 39 17 8.3 20 9.7 205Totals 3,606 2,492 40.9 297 4.9 185 3 6,098

Note: These figures include FCO Services, UKVisas, UK Trade and Investment staV. They do not includestaV on special unpaid leave, additional maternity leave, sick nil pay, casual staV, fixed-term contracts andfee-paid oYcers.

Permanent staV recruited in 2004–05

FCO


A1 12 17 59 15 52 2 7 29B3 25 12 32 8 22 1 3 37C4 14 7 33 2 10 1 5 21C4 14 7 33 2 10 1 5 21Total 51 36 41 25 29 4 5 87

FCO Services


A2 13 2 13 6 40 2 13 15B3 5 1 17 4 67 0 0 6C4 28 0 0 7 25 0 0 28C5 5 2 29 0 0 0 0 7D6 2 0 0 0 0 0 0 2D7 1 0 0 0 0 0 0 1

These figures are for permanent staV only. Once we have full roll-out of our management informationsystem, we will be able to produce figures on all aspects of diversity for our temporary staV.



Q50. Has the FCO now identified all the senior staV whose posts will be cut during the SR04 period? Havethere been any compulsory retirements as part of this programme?

Answer: The FCO has identified over 60 jobs in its senior management structure to be cut or downgradedduring the SR04 period. Nearly 70 SMS oYcers have agreed to take early departure from the FCO and willbe leaving under the terms set out in the Civil Service Pensions Scheme for compulsory early retirement orcompulsory early severance. The need for further reductions in either staV or posts will be kept under reviewin line with progress towards our overall eYciency targets and the need to maintain an inflow of new staVinto the SMS.

Q51. The department had to review its race equality scheme by May 2005 (page 189). What were the outcomesof this review?

Answer: The FCO’s Human Resources Directorate led a thorough review of the FCO’s Race EqualityScheme (RES) in early 2005. This review included wide consultation within and outside the FCO. The mainoutcome of this review was the publication of a fully revised and updated RES which is available on theFCO’s website.

The new Scheme highlights the fact that race issues are very important in the FCO’s work. In the review,we assessed the FCO’s functions (Strategic Priorities (SPs) and Public Services) for relevance to the generalduty of the RR(A)A, as required by the Act. We found that all our SPs and Public Services except SP8(security and good governance of the Overseas Territories) were relevant to the general duty. We musttherefore continue to fully consider race issues in our work at all levels, and across our policies, services andemployment.

In the review we recognised that the FCO has made considerable progress in promoting diversity,including ethnic diversity, since the first Scheme was published in 2002. But we also acknowledged that westill have a lot of work to do. We face particular challenges in the following areas:

— How we apply the RR(A)A to our overseas work which may not directly aVect UK citizens;

— Ensuring that all staV throughout the FCO understand how the RR(A)A aVects their work; and

— Ensuring that we apply the RR(A)A to all areas of the FCO’s work, not only its employment.

Q52. FCO is still working with DfID to resolve the problems with diVerential local pay scales (page 193).When is this likely to be resolved? Why has it taken so long?

Answer: We have now had several meetings with DFID. The latest meeting at Director level took placeon 13 September 2005. The issue is complex. We are two diVerent Government Departments, workingwithin diVerent operational and financial frameworks. The scope for achieving complete parity across theboard is likely to be limited. Our aim is therefore to narrow as far as possible the pay diVerentials, wherethey exist, in particular in those missions where FCO and DFID are physically co-located.

As a first step both Directors are writing jointly to the respective Heads of Mission and DFID oYces inposts falling within this category, to encourage closer working and the establishment of a more systematicprocess for conducting pay reviews. This would involve greater consultation on the timing and scope ofreviews and the selection of markers. We are already working on a joint pay review in Jerusalem and hopeto learn lessons for the future from that exercise. We also agreed to explore further the idea of the FCO andDFID jointly establishing a broad pay range for junior staV in some locations. This would provide aplatform for undertaking further job analysis and the possibility of using the same or similar markers forfuture pay awards in the medium to longer term. Directors will meet again on 23 November.

Q53. The DAR says that “better management information is a vital part of dealing with . . . complexissues . . .” but does not give any indication that management information has improved (page 193). What plansdoes the OYce have to improve its management information and what is the timescale for this?

Answer: In consultation with its Board, the FCO’s Finance Directorate has developed a new monthlyreporting package designed to take advantage of the information available through the Prism system. OracleFinancial Analyser (OFA) is a component of Prism that makes a standard set of financial managementinformation available to all budget holders at home and overseas. This is already being used by staV inLondon, and will be fully accessible to staV overseas once the global roll-out of Prism is completed (plannedfor May 2006—see Question 11). Procurement Strategy Unit and HR Directorate are also receiving andusing management information from Prism.



BBC World Service/BBC Monitoring Service

Q54. When does the FCO cease to be the sponsoring department for BBC Monitoring? Is the FCO content forthis responsibility to pass to the Cabinet OYce?

Answer: The transfer of sponsoring department status from FCO to Cabinet OYce is likely to take placein the first half of 2006. The FCO is content for this responsibility to pass to the Cabinet OYce.

Q55. The review of the BBC Monitoring service concluded that there will be a reduction of 50–80 jobs. Dothese job cuts represent eYciencies or a cut in services?

Answer: BBC Monitoring are currently going through a consultation period with management and staVto attempt to minimise the impact on services of job reductions. While some reprioritisation may benecessary, BBC Monitoring are working towards delivering eYciencies aimed at ensuring minimumdisruption to core services.

Q56. The BBC World Service has been asked to develop a business case for an Arabic TV station. This wouldbe funded from its 2004 Spending Review allocation (response to the Committee’s report on the 2003–04 DAR,response 38). How far advanced is this process?

Answer: BBCWS prepared an updated business case for an Arabic TV channel in June 2005. This wassubsequently discussed at an annual ministerial meeting between BBCWS and FCO on 21 June. After aperiod of internal consultation, FCO Ministers gave approval for BBCWS to commence a 12-hour ArabicTV channel on 1 September. It is now for BBCWS to take this forward.

British Council

Q57. The Council is intending to use eYciency savings to fund on-going security costs (response to theCommittee’s report on the 2003–04 DAR, response 13). What contingency plans does the FCO have to ensurethat security of Council staV and premises is fully funded in the event that eYciency savings do not materialiseor are delayed?

Answer: The FCO and British Council hold regular meetings to discuss financial issues. At these meetingswe ensure that the Council’s eYciency plans are progressing on time. So far, the Council is on track to meetthe targets and cover increased security costs.

A condition of the Council’s settlement letter is that they should have 2% unallocated reserves each yearfor “new or unexpected demands”. These reserves could be drawn upon if eYciency savings provedinsuYcient to meet any essential security needs.

Chris StantonParliamentary Relations and Devolution Team

3 October 2005

Witnesses: Sir Michael Jay, KCMG, Permanent Under-Secretary, Mr Richard Stagg, CMG, Director-General (Corporate), Mr David Warren, Director, (Human Resources), and Mr Ric Todd, Director(Finance) Foreign and Commonwealth OYce, examined.

Q1 Chairman: Good afternoon. As you are aware, how it might be presented? What changes have youwe are discussing issues related to the FCO’s Annual made as a result of these representations orReport from 1 April 2004 to 31 March 2005. suggestions?Inevitably, this gives us the opportunity to raise Sir Michael Jay: We see the most importantalmost anything. I would be grateful, Sir Michael, if representations that we get as coming from thisyou could just introduce your colleagues. Committee and we do try to take those into accountSir Michael Jay: First of all, it is good to be back. On when we can. We do go through it ourselves and trymy far left is Ric Todd, finance director. On my to improve it each time, in particular to ensure thatimmediate left is Dickie Stagg, director general of it is readable, that it follows our evolving priorities,corporate aVairs. On my right is David Warren, the strategic priorities and objectives. I am not awaredirector for human resources. myself of other comments from outside the Foreign

OYce or the Committee but if there were any weQ2 Chairman: Can you begin by talking about the would certainly take them into account.format of the annual report? We as a Committeeover the years have made a number of suggestions

Q3 Chairman: You must put an enormous amountabout how it might be improved but for the recordof eVort into producing this document. How widelydo you get suggestions from others who read it as to

its format? What other suggestions do you get about is it read and do you feel that the eVort is worth it?



26 October 2005 Sir Michael Jay, KCMG, Mr Richard Stagg, CMG, Mr David Warren and Mr Ric Todd

Sir Michael Jay: It is an eVort. It is also a discipline demonstrators. That was a very unhappy experiencebecause it does get us to focus on what we have done again in 2001, notwithstanding the assurance thatduring the course of the year. The way in which it is Mr Hain had given to this Committee. Can I ask younow structured, partly as a result of this to give us a very categorical assurance that there hasCommittee’s suggestion, based on lessons learned been no deal done with the security policeand cost benefit analysis, the fact of having to do surrounding the Chinese State President; that thosethat for the report means, to be honest, that we tend who wish to demonstrate, including on behalf of theto do it more in the ordinary course of business. It is Falun Gong and on behalf of Tibet and indeednot just a report to read but the production of it is others who are protesting, with justification, aboutalso helpful in managing the business. abuses of human rights, that their protests are going

to remain invisible from the Chinese State Presidentwhilst he is here.Q4 Chairman: Is it available on the internet?Sir Michael Jay: I am not suYciently aware of theSir Michael Jay: Yes, it is.detailed negotiations either with the police or withdemonstrators to give you that absolute assuranceQ5 Sir John Stanley: You may recall that prior to thebut I can promise you that I will look into this afterlast state visit by the Chinese President it transpiredthis hearing and inform myself on where thethat there were, following the questions that werenegotiations have got to. Ultimately, this has to be aput by Members of this Committee and indeed onmatter for the police but we will work very closelythe floor of the House, a total of eight meetings nonewith them to ensure that we try to get a betterof which was minuted between the Foreign OYcebalance between the right to demonstrate and theand the police dealing with the securityright to security than was the case in 1999 or in 2001.arrangements for the visit and the programme. ItI have not, I am afraid, been reminded of the 2001was certainly a view which was shared in all parts ofevents.the House that the October 1999 visit was

accompanied by some of the most grosssuppressions of the right of peaceful protest in this Q7 Sir John Stanley: Could I ask that you reportcountry that most of us had ever seen in our political back to this Committee following your inquiries? Ilifetimes. When this was the subject of ministerial hope that your report back in writing will give us theexamination in front of this Committee, the then assurances which I think, in all parts of theForeign OYce Minister of State, Mr Peter Hain, Committee, we are seeking.said—I quote from his evidence on 19 December Sir Michael Jay: Ministers and senior oYcials do2000—“I think some hard lessons have been learnt. regularly raise human rights issues in their contactsCertainly I would not like to see anything like a with the Chinese authorities and that is an importantrepeat of that unhappy series of events and that is

part of our multifaceted relationship with China.1true for the government as a whole.” Can you assureus that there will be no repeat of those unhappyevents during the forthcoming state visit by the Q8 Chairman: Can I take you onto the wider issuesChinese President next month? about access and information from yourSir Michael Jay: It is certainly our intention that department? Do you apply the provisions of thethere should not be. We are, as you can imagine, Freedom of Information Act in practice, in eVect,working very closely with the police over security for when you make information available to thisthe visit. I know that the police are as well aware as Committee and to Parliament?we are of the lessons that we all need to learn from Sir Michael Jay: I am not sure I quite understand thethe 1999 visit. It is always a diYcult balance to get question.to allow demonstrators to make their views knownwithin the law, which they must be able to do, and to

Q9 Chairman: I will be specific. It is a widely heldpreserve the security of the visitor but I think we alllearnt lessons from last time. I hope very much when view in this House, not just amongst Members ofthis visit is over it will be shown that we have this Committee but other select committees, that itlearnt them. is easier to get information from some government

departments by invoking Freedom of Informationprovisions than it is from answers to inquiries byQ6 Sir John Stanley: I do not think there was veryselect committees.much diYculty experienced by Members in all partsSir Michael Jay: We are increasingly conscious inof the House last time that the balance had beeneverything we do now of the obligations under thestruck profoundly wrongly. Given that assurance,Freedom of Information Act and that wouldwhen the present President came to this country ascertainly apply to requests for information from thisvice-president in 2001 the assurance that thisCommittee. I would be surprised if there wasCommittee was given by Mr Hain did not appear toinformation which could be obtained under thehave been fulfilled. As was reported in TheFreedom of Information Act which we would not, ifIndependent on 15 October, when the then vice-

president Hu visited the United Kingdom in 2001, asked, release to this Committee. We take ourthe Chinese asked that supporters of the Falun Gong responsibilities to release information to thisand Free Tibet movements, both of which are Committee extremely seriously.banned in China, be kept away from him. TheMetropolitan Police obliged by blocking the 1 Please refer to Ev 43.




Q10 Chairman: We will come later to some questions of accountability and responsibility, a failure withabout the Collinson Grant Report but this regard to middle management decision making.”Committee was made aware of that and the Ling They say that there is significant redundancy ofReport to do with the Prism Project after the fact eVort in the managerial chain that leaves the Foreignthat these committees had been established for some OYce—which must mean you and yourconsiderable time, so clearly we were not put in the colleagues—rarely focused on eYcient managementloop at an early stage. We found out about these of the organisation. The entire organisation needs tolater on and that is the context in which I ask the be challenged and reformed. Leadership lacks thequestion. skills needed and the will to upset the status quo.Sir Michael Jay: The issue there, surely, is whether Accountability is poor. The changes required willwe should send this Committee automatically cause pain, and it goes on. Surely this is really aanything which we release under the Freedom of document which the Foreign OYce commissioned—Information Act. Anything we release under the I did not commission it—which really indicates thatFreedom of Information Act is immediately put on there needs to be a root and branch reform of theour website and indeed there is a special part of the organisation? It also goes on to indicate that savingswebsite now which is there just specifically for are not going to be made. Human resources areFreedom of Information Act requests, so once they inflated. They make comparisons with the Ministryare available they are available to anybody. There of Defence and the armed forces. What say you to allwill be classes of documents, particularly relating to those charges which are not mine but Collinsonour internal management, the day to day Grant’s?management, which would be releasable under the Sir Michael Jay: Let me start by getting a bit ofFreedom of Information Act but which we would context. You are right in saying that wenot release unless asked because they are not of any commissioned the report. We commissioned theintrinsic interest. That would explain perhaps why report because we are very conscious of the need tosomething would be submitted in response to a change, modernise and reform and have been for theFreedom of Information Act request which would last two to three years. I can go through some of thenot have been seen previously by the Committee. changes that we have made if that would be helpful.

We are also conscious that we have as a result ofQ11 Chairman: Is there not a wider issue here? It SR2004 an obligation to further improve ourwould be a bit bizarre, would it not, if select operations and our systems and to fulfil acommittees of this House had to invoke the demanding eYciency agenda. We believed that itFreedom of Information Act to get information would help us if we were to have a hard hitting reportwhen holding government departments to account? from a firm of consultants, pointing up some of theSir Michael Jay: Yes. areas in which there was room for development.

That is why we commissioned the report. TheQ12 Chairman: Surely we ought to have a better commissioned report is hard hitting. It concernedposition than would be available to any member of much of what we already knew about areas in whichthe public or any journalist invoking freedom of we need to improve. For example, delayering ininformation? London to reduce the number of senior staV, greaterSir Michael Jay: Over the years there have been large focus on risk management and on delegation ofamounts of information which have been made authority. We have learnt and we are implementingavailable to this Committee which would not have a number of those points. It also focused ourbeen made available under the Freedom of attention on some new areas of work which we hadInformation Act, information that we send you not focused on suYciently, like the need for furthersometimes in confidence so that you can have a reform of the finance function, which we are nowproper understanding of the way in which we work. carrying out with the Treasury and the NAO. WeI entirely agree with you. I think it would be bizarre commissioned the report. We do not accept all theif it was easier to get information from the public. analysis. We accept many of the recommendations.

A number of them we are implementing; some ofQ13 Andrew Mackinlay: Collinson Grant was them we were already implementing. There is alwaysreceived formally in February of this year. At no a risk. It would have been easy for us not tostage was the Committee made aware of this commission a report in which case I would not havecomprehensive report which was looking at savings to answer this kind of question, but I think it is betterand management style of the Foreign and if we do feel we need some support in managingCommonwealth OYce. The report castigates the ourselves to look for some outside help and thenmanagement of the Foreign OYce. It also indicates take it into account.that there was obstruction in its preparation. It saysthat the failure of some people to respond to

Q14 Andrew Mackinlay: I welcome the fact that youinquiries “detracted from the quality analysis,are saying you are going to adopt some of theircaused severe diYculties and significant delays.” Therecommendations but it condemns hook, line andreport goes on to use the National Audit OYcesinker the culture in the Foreign OYce. It says,criteria, seven warning signs, and it says, “The“poor leadership; closed culture; poor informationForeign OYce is deficient to some degree at least infor decision makers; low accountability; lack ofmany of these requirements. The Foreign OYce is

slow to act. There is lack of delegation, insuYciency clarity; poor management, poor worker relations.”




They are not my words; they are theirs. How are you Q16 Andrew Mackinlay: Can I go to two specificcharges, though? One suggests there was obstructiongoing to change the culture because it does confirmby some of your colleagues. It was also put to me,what a lot of us knew.though I am sure it is a tissue of atrocious lies, thatSir Michael Jay: It confirms what a lot of youyou yourself did not complete the questionnaire.believed, because I do not accept all of that. I acceptThat is completely untrue, is it?some of that. We have changed a lot in the last twoSir Michael Jay: If I did not complete theor three years because of a consciousness that wequestionnaire, I am remiss. I am not conscious ofneed to reform and modernise if we are going to beobstructionism. We discussed the report withas eVective as we need to be in a pretty complicatedCollinson Grant and they came and gave a veryworld. The Foreign OYce has a high reputationgood presentation to the board. After they hadaround the world with its peers, deservedly so in myreported we immediately set up a number of focusview, and there are plenty of examples of the way ingroups in the oYce in order to take forwardwhich we have been extraordinarily professional inspecifically the individual work streams. We tookwhat we have done. To take some examples recently,this extremely seriously. We would not have spentthe work on Turkey, saving the UN Millenniumthat money on it if we had not.Review Summit conclusions document, the work ofMr Stagg: On the question of opposition orour mission in New York. As this Committee knows,resistance, it is inevitable that, if you bring in peoplewe have a large number of people doing very highwho are clearly seen as being something of a threatgrade work in very diYcult and dangerous placesto the status quo, there are people who aresuch as Baghdad, Basra and Kabul. Let me start byunenthusiastic about that process. I think you wouldsaying that I am proud to lead this organisation. Ifind that anywhere in any organisation. It is notbelieve we have reformed a lot in the last three orgood but it is a reality. At the end, we got a goodfour years. We have further to go. I think we and ourreturn from staV on the questionnaire. I personallystaV do an extraordinarily good job in very diYcultcommissioned the report so I am seen as the person,circumstances. I want to get that on the record in some ways, to blame in the organisation. I thinkbecause I think it is important to do so. We have we have since then been able to do quite a lot in terms

always recognised that there are further changes we of altering some of our structures, reducing some ofneed to make. We have changed a lot. We have, by the layers. We have downsized quite significantlycomparison with what we had three or four years some of the departments in London by 20–25% andago, our strategic priorities. We are focusing our we have also introduced a much clearer system ofresources far more around strategic priorities. We corporate governance at the top which is now seenare much more flexible than we were, as we know as in line with Whitehall best practice, which franklyfrom the rapid deployment teams which we can the previous system was not.come to if we talk about consular work later on. Weare more adaptable in shifting resources to where

Q17 Andrew Mackinlay: We were told thatthey are needed. We have a much greater focus onCollinson Grant is engaged in three other strands ofservice delivery. We are much more open, workingwork. Would you be able to supply the Committeemore closely with other government departmentswith the reports on these strands and also let usand, in my view, we are increasingly professional,know whether the 2005–06 accounts are expected tonot just in the traditional forms of regional andbe signed oV before next summer’s recess. Given thatlinguistic expertise but also in the new professionalyou have been unable to move the timetable of yourexpertise we need to run a highly complex business.accounts forward this year, how likely is it that theThere are a lot of changes which have been made.deadline will be met? What systems are being put inWe need to change further. I accept many of theplace to improve the situation?conclusions but not the analysis of that report and ISir Michael Jay: On that second point, I have haddo not accept the root and branch criticism. long discussions with the finance director, with theboard and with the audit and risk committee. I amabsolutely determined to sign oV the accounts beforethe recess in 2006. This is not going to beQ15 Andrew Mackinlay: For fairness and forstraightforward because it is going to require all ourexpedition this afternoon, could you give us a noteposts around the world to manage their accounts oron those things with which you profoundlyat least to get the information in earlier. This isdisagree—your words, not mine. For instance, allcoming on top of quite a heavy programme of otherthe things that you think are unfair criticism. Couldchange, but I am determined to do that.you flag them up and rebut them perhaps in a note?

Sir Michael Jay: I will certainly do that.2 One ofthem I have already flagged up in response to one Q18 Andrew Mackinlay: I would like you to respondof the 57 questions which you asked us a couple of to the fact that the report castigates the scale, sizemonths ago when there was a suggestion that we did and nature of the human resources department butnot have professional, diplomatic skills, which I also, when I drew attention to this in the summer, Iprofoundly reject because it is simply untrue. There was assured by your oYce that Collinson Grant

would be put on the website. I am open to correctionare other areas where we do need to develop furtherbut I do not think it is there now and certainly wasskills and we are developing them.never volunteered to this Committee. It was neveruttered that such a report was being done. Perhaps2 Ev 45




taking the last point first, one, why is it not on the Q23 Mr Mackay: From my experience I think wepotentially have the best diplomatic and consularwebsite? Can it be on the website? Why were we not

acquainted with it and, two, if you can come back to service anywhere in the world and it is somethingthat you should be rightly proud of. You rightlyhuman resources again I would be grateful.defend it. The problems seem to be in other areasMr Stagg: It is on our intranet internally because wesuch as our estate management, finance, humanview it essentially as a matter of us trying to improveresources, and this is very much mentioned in theinternally and not something we are—report we have just discussed. I was alerted to it lasttime you came to this Committee when, as an aside,

Q19 Andrew Mackinlay: I was assured it was going you just happened to say about the previous financeon the internet, on the website, and I cannot see any director, “I am afraid he will not be with you nextlogic why it should not be, bearing in mind there is time because he is just going back to be ourconsiderable, legitimate interest in the stewardship ambassador in Athens” which I am sure was a veryof the Foreign OYce. good appointment. It caused me to start to look atSir Michael Jay: It should be if it has been released what other people did. If we take, for instance, Mrunder the Freedom of Information Act. It ought to Gillham who runs the estate strategy unit, there havebe and I am slightly surprised that it is not on our been endless problems about and bungling, financialwebsite. We will look into that.3 mismanagement which I do not want to go into here

because we discussed it with you before. You look athis very distinguished career and look at Caracas,Q20 Andrew Mackinlay: Human resources?Madrid, first secretary and later Counsellor in NewSir Michael Jay: We would accept some of theDelhi, a distinguished diplomat, who should becomments and analysis in the Collinson Grantdoing what he knows best; yet for some reason heReport. Our human resources operation has beenhas been put in charge of estate management oftoo large and we are now in the process ofwhich he, like you and I, will have had very limitedsubstantially reducing it and moving to a new systemexperience. Then we turn to your two distinguishedof managing our human resources.colleagues here today. Without wishing to undulyMr Warren: Collinson Grant made the perfectly fairembarrass Mr Todd who is in charge of finance, hepoint that we were too large as a human resourceshas just come back from being our ambassador inorganisation, with 270 staV for an organisation theSlovakia at a time—correct me if I am wrong—whensize of the Foreign OYce’s UK based staVSlovakia entered the European Union, an absolutelycomplement of around 6,000. We have already putvital time for us in Slovakia. One assumes that heinto place a change programme which should shrinkwas there because he is a damned good diplomat.the size of the human resources directorate of theHere again, it seems to me that he is wasted atForeign OYce by at least 100 positions over thefinance. Turning to Mr Warren, a distinguishedcourse of the next six to seven months. Thiscareer: Tokyo, Nairobi and back to Tokyo; yet forprogramme is in hand and indeed it answers onesome strange reason he seems to have been plonkedpoint, Mr Mackinlay, that you drew attention to, in charge of human resources. I want to make twoabout the delayering of the organisation, by points to you which I would appreciate yourreducing the number of assistant directors of human comments on. In any normal organisation, youresources from eight to three. This was in hand when would have professional experts dealing with these

Collinson Grant tabled their report. three areas. In any normal organisation, if you havediplomats as distinguished as these three gentlemen,you would be asking them to do what they are bestQ21 Chairman: The reply to us from the FCO whenat, in which they have had considerable training andyou answered our written questions referred to theexperience in cultivating their art. I think it is afact that there were four strands of work thatdouble blow. One, we are not getting best value asCollinson Grant were commissioned to undertake.has been proved by the report in these three areas.Can we be supplied, please, with copies of theSecondly, these three distinguished gentlemen arereports on the other three strands?completely wasting their time in areas in which theyMr Todd: There are not reports on these. What theyonly have limited expertise, which seems to bedid was to put together for us, for example, ahugely unfair on them when I would like to see themdatabase of costs. There is not a written report byeither posted up the road at the Foreign OYce or outthem. There is material which we are using in orderin the field, doing what they are really good at.to take forward Collinson Grant.Sir Michael Jay: Let me try to answer those points.

Q22 Chairman: Perhaps you could send us whatQ24 Mr Purchase: “Try” I think will be the word.material you can.4Sir Michael Jay: Let me answer those points. Firstly,Sir Michael Jay: Can we give you more informationwe very much share in the Foreign OYce theabout those very strands and what details we canProfessional Skills for Government agenda whichabout them?has been adopted in the Home Civil Service by SirChairman: We will consider what we get and decideAndrew Turnbull and subsequently Sir Gusif we need to write to you again.O’Donnell. What this means is that people who aregoing to move to the higher reaches of the Foreign3 Ev 45

4 Ev 45 OYce need to have a balance of skills. They need to




have skills in policy work, service delivery and Mr Stagg: I have just had a review done of our estatefunction by a very big firm of London surveyors andcorporate management, not least because when you

become an ambassador, as for example at the they made a lot of recommendations for change inthe structure but did not suggest changing the sort ofmoment our ambassador in Mexico City who is

down in Cancun helping British citizens get out of person at the head of the organisation.their shelters, you need to have people who have thediplomatic skills, the policy skills but also a real

Q25 Mr Mackay: We all know that New York andfocus and understanding of the service deliveryDublin were spectacular mistakes which, if they hadagenda and people who can also manage a businesshappened in the private sector, would have led to thebecause an embassy these days is quite a complicatedresignation of the board but we will leave that on onebusiness with a lot of staV and a lot of finance toside. I trust that Mr Todd is going back to what hemanage. We want people at the top of the Foreignknows best and I look forward to a seniorOYce who have all three of those skills. Secondly, inambassadorial appointment being made shortly.managing our business—let us take our estatesReturning to your two main points, Sir Michael, dobusiness—we need to have a balance of two things.you not see that, first of all, these are not really open?We need professional skills and a knowledge of ourIt was only open within Whitehall. It is thisbusiness because with professional skills without theimpression of a little closed shop. It does you suchknowledge of our business we will not get it right. Ifharm unnecessarily when so much that you do is soyou have knowledge of the business withoutgood. It is the impression that the Foreign OYceprofessional skills, you will not get it right. You needlooks inward. Nobody is capable of holding a topa balance of those two. That is what we have tried tojob there unless they have the ethos of the Foreigndo. I do not think we yet have the balance right andOYce. Do you not also understand that in otherI will go through, if I may, the various areas whichorganisations the top people in estate management,you have mentioned. First of all, Ric Todd waswhen you have an estate the size you have toindeed the last ambassador in Bratislava. Before thatmanage, in human resources, in finance, arehe was in the Treasury where he was managing theabsolutely expert in that field? You as—shall we callspending division. He was chosen by a selectionyou the chief executive for the sake of argument—board which included the then government chiefweigh along with your colleagues their advice andaccountant, against a Whitehall wide competitionmake the final decision because you have to see theinvolving people with professional skills. That is anwider picture. I entirely accept that, but it would beimpeccable credential. All his four deputies aremuch healthier if there was an open competition forprofessionals. The chief accountant and his twothese top jobs and there was not an assumption thatdeputies are professionally qualified accountants.your senior diplomatic colleagues would have theseThe finance, planning and performance departmentjobs, which as I pointed out earlier is neither fair onis headed by an economist who is a professionallyus nor British taxpayers.trained accountant. Our procurement strategy unitSir Michael Jay: I think that was the presumption.is headed by a qualified procurement specialist andI do not think it is the presumption any more. Thethe head of our internal audit department is ancompetition for Ric Todd’s finance directorauditor and accountant brought in two years agosuccession will be an open competition, outsideand his three deputies are qualified auditors. We willWhitehall.be having an open competition for a professionally

qualified finance director shortly to replace RicTodd. I do not want to give the impression that Q26 Mr Mackay: You did admit that the estatebecause the director himself has not all the management one was not.professional qualifications we would expect the Sir Michael Jay: That was not.finance function in the organisation has not, becauseit has. As far as human resources are concerned,there are 42 staV in the human resources directorate Q27 Mr Mackay: There has been a change of policywho hold or are working towards professional and now senior appointments which are not relatedqualifications in training, personnel practice, to diplomatic and consular work, like these threeemployment relations in law, management and positions I have been talking about, are openbusiness studies and pensions administration, for selection and not just selection within Whitehall?example. The head of our estate strategy unit you Sir Michael Jay: We will have to decide that case bymentioned. You are right about his career. He is a case, because I do think it is important to have thequalified economist with six years’ private sector right balance of people who have the professionalexperience as well. His deputy is an experienced basis to understand the business.chartered surveyor and there are five other charteredsurveyors and three qualified architects. I do not

Q28 Mr Mackay: I am trying to get us to where wethink it is easy to look at individuals in thehopefully all agree and move forward. In anyorganisation and deduce from that that thecompany, the finance director, the human resourcesorganisation as a whole does not have the rightdirector and the estates director would be hugelybalance of skills. We are trying to ensure we have theexpert in that field and probably have very littleright balance of skills. We will be making changes toknowledge or understanding of the company orsome of the positions which you have mentioned—about the field the company was in. Take BP, forin particular, the finance director and, as I said, open

competition for that will start shortly. instance: they would not be oil men. They would




know nothing about oil but the chief executive of BP Q30 Sandra Osborne: I accept the comments thatwould say, “This is all very well, Mr Finance Man. have been made about cultural change being veryYou are absolutely right on financial matters” or, diYcult to achieve in any organisation. The report“Mr Estate Management Man, you are right on does quite clearly state that leadership skills are oneestate management matters, but this will not work of the biggest problems that you have. It says thatbecause of what happens in the oil industry.” That is the entire organisation needs to be challenged andyour job, to weigh the professional advice on the one reformed but the leadership lacks the skills neededhand with your own expertise as the Permanent and the will to upset the status quo. Do you acceptSecretary in the Foreign OYce. Surely you should that criticism and, if so, what are you going to donot be afraid of having outside people in and should about it?welcome the best professionals coming in to do a Sir Michael Jay: I accept it in part. I think there isvery important job? a natural desire perhaps to stay with the status quoSir Michael Jay: Indeed. We have had an outside partly because the output of the oYce is very good.competition, for example, recently for the director of My point is—and this is a point I make constantly toUK visas. We will be having an outside competition our own staV and our own leaders, both at home andfor our Legal Adviser. We are about to have an abroad—it is only going to stay that way if we makeoutside competition for the director of FCO Services the kind of reforms and changes, including cultureand we will have one for the finance director. A changes, which we now need to do if we are going tocouple of years ago there had not been any. We also adapt to new circumstances. As for the leadership,have one director general on our board who has wide what are we doing? We have reformed our corporateexperience elsewhere in Whitehall. I think there is a management. We now have a board structure whichmove away from the kind of closed approach that reports clearly to ministers and a quarterly meetingyou have been describing. Mr Mackinlay was right between the board and the Foreign Secretary inearlier on to talk about the need for a culture change order to ensure that we are clear on the strategicin the organisation. We do need a culture change in priorities that he wants us to implement. We have athe organisation. Introducing major culture changes series of subcommittees underneath the board whichand other major changes at the same time as are focusing on human resources, investmentmanaging and maintaining the morale and the decisions, finance decisions and so on, which is aability of a highly complicated organisation is not much more coherent structure than there waseasy. I do think there has to be a pace in introducing before. I am working much more closely now withthese changes, which makes sense given the the key ambassadors and high commissionerschallenges that we face, but the general direction in overseas because they need to be brought into partwhich you want us to go is right. of the corporate leadership. We now have every

three months a meeting between the board and thetop most senior 20 ambassadors and highQ29 Mr Mackay: I am pushing at an open door,commissioners, plus a representative also of aam I?smaller overseas post, in order that we can get theSir Michael Jay: You are pushing at an open door,concept of leadership and change managementyes, but the speed at which the door opens isimbued, not just in the centre of London but moresomething over which we have to have some control.widely. Every year we now also have what we call aMr Purchase: Could I congratulate you on your veryleadership conference, a conference of all our topspirited and forthright defence of the department?management in London and all our ambassadorsWe know that people work extremely hard in yourand high commissioners overseas, who come once adepartment and elsewhere through Whitehall. I amyear again with a view to really focusing on thedelighted to hear the way in which you havechange and modernisation issue which, as andefended the department. I hope the people whoorganisation, we have to embrace. This is awork in that department do take real good spiritconscious attempt to change the culture and to getfrom what you have been able to say this afternoon.people to realise that management and leadershipI make no comment at all about management. Thereare absolutely key to running a really complicatedare so many books written about it. I cannot thinkorganisation these days.there is anything you do not know about good

management or how to structure any department.All is known, as Spike Milligan would have said. The

Q31 Richard Younger-Ross: I believe externaltruth is you are damn well short on politics at theappointments are absolutely vital to the health ofoYce because how on earth you come to organise aany organisation. If you look at the social servicesreport of this nature and how it ever got published indepartment in Orkney, they believed there werethis form beats the living daylights out of me. Now iswitches and warlocks running all over the islandthe time to put into place the monitoring and reviewbecause of ignorance within the organisation. Youprocedures that would avoid any repetitionobviously have a lot of pressures on the Civil Servicewhatsoever any further Collinson Grant finding. Inat the moment in terms of job cuts, not just in youra well organised management structure, it is vitaldepartment but in other departments as well. Whenthose checks and balances are there to avoid thisyou come to appointments, there is a lot of pressurekind of report ever appearing again. It is veryon you to appoint other people who might be beingharmful to morale and that is why I say I am

delighted at the way in which you defend it. displaced from elsewhere. Can I ask what




discussions you have had with the unions to try and Q33 Mr Pope: I would like to raise the issue of theForeign OYce response to emergencies overseas.overcome some of those problems and what tier ofThere has been some criticism of the response of theexternal appointments will you go down to? Is it justoYce to the tsunami disaster. Do you think that isthe top jobs? How far down the structure?because people have an unrealistic expectation ofSir Michael Jay: On the last point, we would go outwhat they can expect in terms of help from the FCOto external competition when we thought that thewhen an unprecedented disaster like the tsunamisubject matter required it and that was thehits?professionalism we needed, irrespective of the levelSir Michael Jay: I think it is partly that, yes. Therein the organisation. For example, in a lot of our ITis a very real and diYcult issue for us which is goingwork we are working very closely with outsideto be addressed now in the consultation which isprofessionals because we cannot possibly do thatstarting tomorrow, I think, on consular work. Thereourselves.is a really diYcult issue of what is the right level ofMr Warren: We have had no formal consultationexpectation that people should have of the serviceswith the unions on the specific point that Mrwhich the Foreign OYce and the government canYounger-Ross makes, which relates to our beingprovide. There has been a rising level of expectationpressed to accept people who are being moved out ofto the extent sometimes that we have not been ableother organisations, if I have understood the pointto deliver it. That is part of the answer. Part of thecorrectly.answer on the tsunami was that it was anunprecedented disaster. One forgets now just quitehow awful it was at the time and how diYcult it wasQ32 Richard Younger-Ross: You have other to handle with the uncertain knowledge there was,departments with job losses and people being but I think we also have to accept—and we do

moved. They are downsizing. You are looking to accept—that in the handling of the tsunami we mademake external appointments in some posts but that, some mistakes. We learned some lessons from thatI would have thought, would be resisted by the as we have done from all the crises we have handledunions. from the time of the first terrorist attack in BaliMr Warren: The unions have expressed reservations which we discussed particularly with Sir Johnabout a spread of external appointments, as you Stanley in other appearances before this Committee.would expect the trade unions to do. But the number We learn lessons from all these disasters and I thinkof appointments made to senior positions from we are getting better at the crisis response but we areoutside the Foreign OYce is currently very few. We never going to be perfect. There are always things wehave kept the unions informed about our specific have to learn.proposals to hold more open competitions, whichmay indeed result in external appointments. We

Q34 Mr Pope: I do not want to be unfair over thevalue the close consultation we have with the unionstsunami because, as you rightly say, it wason that point, although it has not taken the form ofunprecedented in scale. I do think though thatany formal negotiations. As far as other governmentwithin the report it does rather pull a punch on pagedepartments downsizing and our being required to171. It says that, for example, many people who triedtake staV, this has not been an issue of contentionto ring the emergency telephone number in the firstbetween us and the unions. The unions whofew days of the crisis were unable to get through.represent Foreign OYce staV, the three majorWhat we do know as well, which is not in the report,unions, are of course national unions, because our is that the relatives of some of the victims were inDiplomatic Service Association is aYliated to the some circumstances turned away. Would it be fair to

First Division Association, who have interests in the say that some victims or the relatives of some victimswork and fortunes of staV in all government were failed by the OYce in the immediate aftermath?departments. This is not an issue of contention Sir Michael Jay: I think it would be fair to say thatbetween us and the unions and we maintain close some were, yes, and some did not get the treatmentliaison with other government departments and the that they had the right to expect, but I would like toCabinet OYce as all departments do. The specific put it in context because I do think that the responsepoint you make is not a contentious issue for us with was extraordinary. From our point of view, we hadthe unions. a rapid deployment team at Sri Lanka the day afterSir Michael Jay: It is partly a question of scale, I the tsunami and we had redeployed our staV downsuspect. If it goes beyond a certain point then it to Phuket and elsewhere in Thailand on the day ofwould begin to have an eVect on morale. If it is clear the disaster and we had a huge response fromthat the reason for going for outside competition is volunteers and our own staV as well, who were notbecause of the need to have the right professional trained in this. This is another lesson we have learntskills, that is both readily understandable and also about handling natural disasters like this. If it is aincreases our own professionalism agenda. We can really huge disaster, it is not just your consular staVsay to our own people, “Look, you developed those who are handling it; it is everybody in the embassyprofessional skills through outward secondments, who is going to go and help out. That means that wethrough working elsewhere in the private sector, all need to have a degree of training in traumaelsewhere in Whitehall and that will both help you management and handling people who are in aand reduce the need perhaps for outside skills to desperately sad state. There were some very good

things that happened and I have been very impressedcome in.”




by the number of letters of appreciation that we have geographical spread as far as the FCO wasconcerned. Having said that, I am interested that thehad since the tsunami. I also think there are some

families who are right to feel they did not get the National Audit OYce is now conducting a formalinquiry. Could you tell us when the FCO was last thetreatment that they would expect from us and that is

a lesson that we have learnt for the future. subject of a formal NAO inquiry?Mr Stagg: This is a regular event. I think it happensalmost every year. It is called a value for moneyQ35 Mr Pope: I would place on record the thanks, Istudy done by the NAO. The previous one wasam sure, of the whole Committee for the work thatabout the global visa operation which you maywas done by many people in the aftermath of theremember ended up focusing a bit on the issues intsunami. It is appreciated. In terms of the lessonsRomania and Bulgaria in the context of the EEA.learnt—you have looked at the response and you sayThis study began towards the end of last year. Whenyou have learnt some lessons—why then was therethe tsunami occurred, they asked to do a specialso much criticism of the response to Hurricanestudy of our response to the tsunami as a goodKatrina, because it seems to me that there wasexample of the sort of crisis we needed to deal with,widespread criticism of the response of our consularan extreme example as you have said. This study wasservices. There were some reports in the newspapersunderway beforehand and they are now doing twoof British citizens being left without food, water andextra bits to it. One is on the overall response to theat the mercy of street gangs in New Orleans whilsttsunami and the other is the views of the victims,our consular services were not deployed quicklythose aVected, of the service we provided.enough into that area to provide help and support

for British citizens.Sir Michael Jay: Unlike in some aspects of the Q37 Sir John Stanley: Would it be correct to say that

the NAO would not have made this specifictsunami, I think the criticism of the response toKatrina was unjustified. What happened was that extension of its existing inquiry into the tsunami

response had it not been for very strongthere were indeed in New Orleans, in the ConventionCentre, a very large number of people of all sorts of representations it received at least from some

relatives of victims as to the inadequacy of thediVerent nationalities, including British, who werethere in very diYcult circumstances. They were at FCO’s response as they saw it?

Sir Michael Jay: I do not know whether that is true.the mercy of gangs and looters. Our consular peoplewere deployed in order to get to New Orleans as The original NAO value for money study into

consular work was done with our agreement. I thinksoon as they could. They were given very clearguidance and instructions from the United States when Sir John Bourn came and saw me and

suggested it I very much welcomed it. This is exactlyauthorities that consular oYcials were not welcomeand should not enter New Orleans. What they the kind of study we do need into our consular

operations because they are complicated, diYcult,should do is to go to the cities around other parts ofthe south where the American authorities intended evolving. There are lessons to be learnt and we

would welcome the NAO’s comments on them. Itto evacuate people. The issue for us as consularoYcials was we knew there were British people in seems to me that, whatever the response to the

tsunami, whether there had or had not beenthere. We knew they wanted help, but we are agovernment organisation and a friendly government criticism, it would have been an entirely sensible

thing for the NAO to say, “Look, we have just hadwas saying, “No, do not go there.” What do we doin those circumstances? I do not think we had any one of the most massive consular emergencies the

Foreign OYce has ever had to deal with. Let us takechoice except not to go there but at the same time allour consular staV who were in Houston, in New that as a case study as to how the broader consular

work is going.” I am afraid I do not know whetherOrleans, who had been deployed from Washington,the rapid deployment teams deployed also from it was their suggestion, our suggestion or whether it

came from the families, but in any event I think ithere, were going around all the areas outside NewOrleans in the other towns aVected looking for and was an entirely sensible thing to do. We are

genuinely looking forward to the NAO reports bothindeed finding and helping British citizens who didneed help. From those there have been many letters on consular work more generally and on the tsunami

because we do think it is important to learn lessonsof appreciation.Mr Stagg: We had exactly the same issue about and also to be open about it. I know there are risks,

as we discussed earlier in this hearing, inaccess to crisis centres over the 7 July bombings. Wehad huge pressure from the American embassy to commissioning reports and in a freedom of

information age having them widely read; but Iallow their consular people into the areas aVected bythe bombs immediately after. Our police were think we have to have the confidence in our own

systems and procedures to commission things andcompletely determined they should not go thereuntil they had managed the crisis to their own then to learn the lessons from them, even though

they may sometimes be tough.satisfaction. We therefore said no; they could not goin there. There is something of a parallel between thetwo situations. Q38 Mr Keetch: First, Sir Michael, may I say on the

tsunami that I had constituents there who reportedback to me that there had been a fantastic response,Q36 Sir John Stanley: I would like to say straight

away that I recognise that the tsunami event given that this literally came out of the blue onBoxing Day. Certainly I had reports of them beingpresented a challenge of unprecedented severity and




able to find the British tent, because it had the Sir Michael Jay: I thought that this was animportant point which you raised, Mr Keetch, ofbiggest Union Jack outside. Other tents did not havewhich I had not previously been aware. I asked Mrthe national flag, and so that was an extremely usefulStagg to look into it, in case you did raise it today.thing to do. On Katrina and your suggestion thatCould I ask him to say a bit more about it?British oYcials were told not to go there, I have toMr Stagg: Happily. On the question of deaths, Isay that has been countermanded—or, rather, it hasthink we have statistics for those who die overseas,been suggested it was not the case—by the mayor ofwhich is about 4,000 British citizens every year. I amNew Orleans, who said publicly that was not thenot sure if they are categorised exactly by the naturecase. If that was the case, perhaps you would write toof that death. In terms of standard guidance, I haveus, because certainly the mayor of New Orleans saidhere the standard guidance we have for our consularthat no instruction was given for consular staV, fromoYcials, Dealing with the death of a British citizenBritain or any other country, not to go in. Perhapsoverseas. So there are some quite carefully crafted—you could write to us on that specific point.

Sir Michael Jay: We will write to you about thatQ41 Chairman: Can you send that to us, please?point.Mr Stagg: I can even give a copy after this.

Q39 Mr Keetch: Can I come to a more specific point, Q42 Chairman: I think that the Committee shouldwhich we touched on briefly when we met with you have it formally.as a committee yesterday? That is, how consular staV Mr Stagg: Yes, I will happily do that. The seconddeal with individual tragedies abroad. Do you know thing to say is that, in the case of murders, we wouldhow many British citizens are murdered or killed normally communicate with the family in the UKaccidentally overseas every year? through the police, because they have anSir Michael Jay: I think that I have the information investigative interest in the case and they havehere. I do not have it in my hands. trained family liaison oYcers, who are the normal

channel through which we work. They are trained todeal with these issues and they have a network allQ40 Mr Keetch: It is an astonishingly large number.round Britain, which means they can deal withIn terms of people individually being murdered—aspeople face to face, which we obviously do not.opposed to Iraq or tsunamis or individual incidents

like that—it is a large number of people. WhatQ43 Mr Keetch: Are you aware of an organisationamazes me is that there is no standard procedure tocalled SAMM, Support for Murders anddeal with the murder of British citizens overseas,Manslaughters of British citizens overseas?when that dreadful thing happens when they are onMr Stagg: I have heard of it. I have never dealtholiday. You are aware that I raised, with both thewith it.minister and with you, the case of a constituent Mr

Richard Collins—and his family are aware that I amQ44 Mr Keetch: I would suggest that the Foreigngoing to mention this—who was murdered inOYce ought to inform next of kin of British citizensThailand on 9 March this year, and yet his body waswho have been murdered of the existence of thatallowed to decompose to such a degree that noorganisation, because certainly in this instance—proper coroner’s investigation was able to be carriedand I think in other instances—that does notout. What astonishes me about this incident is that normally happen. If we cannot support citizens back

there is no set procedure as to what information is at home in that respect, then I think that we aregiven to families; what information is given to the failing.insurance companies of the deceased concerned; in Mr Stagg: Thank you very much. We are very keenwhat way our consular staV overseas tries to deal to use these occasions to learn as well as to give youwith the family back in the UK, who are obviously our views. To conclude, in the tsunami we found agoing through very diYcult times; and to deal with number of organisations which we had not heard ofthe insurance company to try to ensure that the body before who were specialist in helping those who hadis repatriated as soon as possible. We see in our been bereaved. So this is a help to us.passport that Her Majesty’s Government demandsthat we are looked after. Surely if we, or our next of Q45 Mr Mackay: Sir Michael, as has beenkin, or our sons, fathers, brothers or sisters are mentioned earlier, the tsunami was geographicallymurdered, there ought to be a standard procedure widespread. When you are doing a post-mortem andwhereby our consulate staV keep us informed? If we learning lessons, you presumably will have a chancecannot do that correctly, then how can we deal with to compare best practice in diVerent embassies andsituations like tsunamis or Katrinas? I think that you high commissions, because it seems to me that someought to look as a matter of urgency at how that is did considerably better than others—and I am notdealt with, to ensure that when these appalling going to name them, because I think that would bethings happen—as they happen dozens of times a invidious at a public meeting like this. In oneyear, sadly, to British citizens travelling overseas, particular case there seemed to be severeand are more likely to increase as travel increases— shortcomings, and in one particular case a specificthere are standard procedures which are followed, to senior diplomat fell a long way below the standardsensure that these mistakes do not happen in the that should be expected. I gather that this is a matter

that has been and is being taken up. However, I dofuture.




hope that we can have an assurance that you will within five working days, and you only got 73.3%. Isthat acceptable? If it is not acceptable, can youcompare, because there seemed to be a vast

diVerence in performance. I am not on a witch-hunt; explain why it has happened and what you are goingto do about it?I am trying to ensure best practice thereafter.

Sir Michael Jay: Certainly we would look at the Sir Michael Jay: We have worked really hard tomeet the targets and it is not acceptable not to meetdiVering nature of the response from diVerent

embassies and high commissions, and draw lessons them, unless there are overriding reasons why wehave not. I am afraid I ought to, but I do not havefrom that. I do not want to get into the particular

case either, though there are, as you know, diVering the details of our consular targets at hand. I do notknow whether any of my colleagues do.views about that. The general point you make,

however, is an entirely valid one. Mr Stagg: To respond to your underlying question,I think that there have been problems overtechnology to a degree. We introduced, over the lastQ46 Richard Younger-Ross: Of course, with thetwo years, a new system.tsunami there are bodies that are recovered. That is

a closure, in a sense. There were many Britishcitizens in the tsunami whose bodies were never Q50 Chairman: This is Prism you are talking about?recovered: who are missing. There are others who Mr Stagg: No, Chairman. I would happily come onare kidnapped, presumed murdered or whatever. to Prism, but this is GenIE.You will know the case of the Popes, whose son waskidnapped, presumed murdered, in Angola, and

Q51 Chairman: More technology problems?there has been a long correspondence with theMr Stagg: I think not extremely diYcult, butdepartment.implementing these programmes around the worldSir Michael Jay: Yes. I have met the family inin quite diVering environments is quite a challenge.Luanda.

Q52 Chairman: What is the programme called?Q47 Richard Younger-Ross: One of the diYcultiesMr Stagg: It is GenIE.they face and others face is presumption-of-deathChairman: Is it still in the bottle?certificates, as I raised with you yesterday, and

advice given them at that time was contradictory andwrong. Advice was given on what the presumption Q53 Mr Keetch: Lamp!of death was in Angola, but of course most families Mr Stagg: We could easily give you an overview ofare not interested in what happened in Angola; they this in writing, because it is more than just theare interested in the death and how they register it in technology issues.5the UK. Do you have standard notes of howconsular oYcials should deal with people who are Q54 Chairman: Can I move on to some other areas?missing and presumption of death, both in terms of Diplomatic representation overseas. We have justabroad and in the UK? If so, could that be placed had a letter from the Foreign Secretary, listing thewith this Committee? Also, would you look at number of posts which are being planned to berevising your draft Support for British Nationals closed or already have been closed; also plansAbroad document, to include a little bit more on to localise some others and to change facilities inthat? I think that is an area which is perhaps weak at other places. I had a personal experience whenthe moment. I led a Commonwealth Parliamentary AssociationMr Stagg: I do not know exactly what you are delegation to Swaziland in September. As you arelooking for in our guidance, but I will find what we aware, we have closed our high commission and,have and send it to the Committee, and then if there while I was there, we were advertising the sale of theare other issues— residence in the local newspapers. This has gone

down extremely badly in Swaziland. I understandQ48 Chairman: We will write to you. that you are also closing Lesotho, and both are beingSir Michael Jay: If it would help the Committee, I run from Pretoria by our new high commissioner—think that we should try to look through—given the who is a very good high commissioner—in Southreal interest that you have in consular work and the Africa. There are similar concerns from the Pacific.importance for us of getting your suggestions—and We have had letters, representations to do withmake certain that the Committee has all the relevant closures in a number of the Pacific islands—all ofdocuments here. Even though this may be quite a them Commonwealth countries, as are Lesothobundle, I think it would be helpful for you to have and Swaziland—and similar concerns have beenthat. expressed for other parts of the world. Can you

explain why these decisions have been taken?Q49 Chairman: We will decide which ones we want Also, do you agree that for many, very small,to cover. Send us the lot! Before we move oV Commonwealth countries which have longconsular services, can I raise the question of your associations with the UK, this is being interpreted aspublic service agreement targets? I understand that our withdrawing from interest in their countries,the FCO failed to meet four of the six PSA targets on downgrading their significance, and they feel deeplyconsular services and that, specifically, you failed to hurt by this?meet the target with regard to issuing passportsoverseas. You were supposed to have 95% issued 5 Ev 47




Sir Michael Jay: The overseas network can never be honorary consul, then maybe having otherdepartments of government move in there, I am notstatic. We have, over the last seven years or so,

opened 29 posts and closed 25, and that is a sure, in the long run, will save a huge amount ofmoney. Certainly in terms of what the mayor andreflection of shifting priorities. One of the things that

we try to do is to ensure that our resources, which are other important people in that city think, theyconsider it to be a slap in the face to them—becauseconstrained, are allocated in accordance with our

priorities and, in particular, with the strategic they see HM Government is moving out. I wouldhope that, when we make these closures—priorities which were set out in the strategy

document which the Foreign Secretary and I particularly if we are going to localise them, as isdescribed—we see whether we are actually savingpublished a couple of years ago. That is the starting

point for where we want to put our resources. With any money in the long run, looking at the long-termconsequences as opposed to just making thatthe resources constrained, if you want to put your

resources into areas which have become a high decision.Sir Michael Jay: We do try to do that, Mr Keetch.priority, you have to take them from somewhere.

This inevitably means some hard choices and hard The decision to close the consulate-general in Seattlewas one which was taken as part of the restructuringpriorities—about places which are not unimportant

but which are not as important as the high-priority of the whole network in the United States, in orderto ensure that our resources were eVectivelyones. We would much rather not have had to close

any posts but, had we not closed some, we would not deployed across the United States, and taking intoaccount the relative importance of diVerent citieshave been able to put our resources where they

needed to be, or we would have run our network too and diVerent areas. It was taken in close conjunctionwith UKTI,6 because it is essentially a commercialthin across the board and been unable to achieve

what we need to do in the places that really matter. post. The judgment was made that it would meet ourinterests in Seattle if we were to move to having aWe judged that our interests in Swaziland and

Lesotho could be satisfactorily represented by our locally employed team there, supported by strongerUKTI representation elsewhere on the west coast.high commissioner in Pretoria and equally that, in

the Pacific, we could move to more of a hub-and- The decisions are not arbitrary; they are taken aftera really careful consideration of where our interestsspoke arrangement, making more use of our high

commission in Suva, in Fiji. These were not easy lie, what our resource constraints are, and how bestwe can allocate our resources over time. If I may saydecisions; they were decisions that were made after a

quite rigorous examination of where our interests so, your point about Scotland and Wales is a verygood one. I think I need to make sure that we arelay; they were as a result of quite lengthy discussions

with ministers, and taking into account various closely in touch—as I believe we are—with theScottish Executive and with the Welsh Assemblyother considerations. That is the explanation for it,

Mr Chairman. I accept that it is seen by those over their plans. As I think you know, in many partsof the globe the Scottish and the Welsh are indeedconcerned as being a withdrawal of interest, and to

an extent it is. It does not mean a complete co-located with our embassies and highcommissions, and we do work very closely together.withdrawal of interest. We will continue to have

relations with the countries and, in the case ofSwaziland, there will be an honorary consul there Q56 Sir John Stanley: Sir Michael, I return toand he will be supported by regular visits from the another matter that you and your department will behigh commissioner and his staV from Pretoria. familiar with. Instead of flying last night from

Belgrade to Podgorica, I chose to come back to havethe pleasure of this meeting with you.Q55 Mr Keetch: Again, this was mentionedSir Michael Jay: Thank you, Sir John!yesterday but I want to raise it in the case of Seattle,

where we are closing a consulate and we arereplacing that with an honorary consul, who I am Q57 Sir John Stanley: At the meetings I had insure will do a very good job. We are replacing that Belgrade on Monday and Tuesday, it was absolutelywith a trade post, which I am told will not have fewer clear that there will be a referendum in Montenegropeople in it than the consul’s oYce did, in a place next February/March. Nobody expects the result ofwhere there are so many ex-pats that they even have that referendum to be anything other thana cricket league, and where important decisions are independence for Montenegro, and the Serbianmade for Rolls-Royce and other companies about senior ministers that we met were absolutely cleartheir investment in the Boeing programmes; and at that, if that was the wish of the Montenegrins, Serbiaa time also, I am told, when other aspects of UK-plc, would not stand in the way of Montenegro’snamely the overseas oYces of the Scottish Executive independence. Against that, first of all is it not veryand the Welsh Development Agency, are regrettable that, at this extremely politicallyconsidering moving into that area because they important time, we still have no embassy inbelieve there is a very good trade reason to do so. I Podgorica? If you agree that the events inwould like to be assured that, when we make a Montenegro in the next few months will be as I havedecision to do this, we consult with other aspects of indicated, surely the Foreign OYce should now begovernment like the Scottish Parliament and the taking very early steps to establish an embassy inWelsh Assembly and that we also look at this over a Podgorica? This would be a country which will belong period of time. Closing a very small consulate,replacing it with a trade oYce, then having an 6 UK Trade and Investment.




looking for EU applicant status; it has an important amount. The only way you can do that is by reducingthe number of staV. So it contributes to that as well,position in the Balkans; it is not wholly unrelated to

the important issue of a settlement in relation to and allows you to have staV elsewhere.Kosovo. Surely this is an area which, certainly onpolitical grounds, most conspicuously should be

Q61 Chairman: That is salary savings. That is thehaving more attention on the ground from therecurrent annual expenditure.Foreign OYce?Sir Michael Jay: Yes, running costs.Sir Michael Jay: I will look into that question, Sir

John. Clearly Montenegro will have an importantrole to play in our overall Balkans policy. We have Q62 Chairman: What about capital? Are you likelyto consider whether we can represent it adequately to get capital receipts from all this?from elsewhere or whether we need to be represented Sir Michael Jay: We will get some capital receiptsthere. If we are represented there, of course, we will from the sale of buildings. I cannot tell you whathave to make a judgment as to where we take the those will be, because in not every case has theresources from. There are no free posts. We are building been sold; and it is a mug’s game trying tounder pressure to reduce our total number of staV estimate—and if we are to open up in places, we have to takethem from somewhere else. However, I will look

Q63 Chairman: Who gets that capital? Do you get itinto that.or does the Treasury have it?Sir Michael Jay: Yes, we get it.

Q58 Sir John Stanley: The root issue is perhaps thatthe Foreign OYce should have been tougher with the

Q64 Chairman: All of it?Treasury in accepting assumptions for eYciencySir Michael Jay: Yes. That counts as asset recycling,savings, and indeed assumptions of the benefits ofso we would get the benefit from that. Our policy asIT, than the department has actually been. It hasfrom, I think, the beginning of next year—thisbeen seriously salami-sliced by the Treasury.financial year—is that 100% of the money that wePerhaps you at senior oYcial level and yourget from asset recycling goes into the estate. So theministers need to do some more standing-up-issue which this Committee has been concernedtoughly to the Treasury’s demands.about in the past—that some of the money which weSir Michael Jay: We certainly felt at the time that wehave received from asset recycling has gone intowere standing up toughly, I can tell you, Sir John.IT—is no longer the case.Some of the outcome of the last spending round was,Andrew Mackinlay: Two matters I want to askfrom the Foreign OYce’s point of view, veryabout. The first one is the Holy See. We were told bysatisfactory, particularly in the amount of moneyyourself that there were going to be new ways,that the Treasury agreed to give us for the security ofalternative ways, of dealing with this and Iour overseas posts, following the attack on ourunderstand that the post is being advertised. I haveconsulate-general in Istanbul. At the time, that washeard what you say about the need for savings,a very high priority for us, because it was essential towhich you have elaborated on today. However, asbe able to reassure our staV that we were providingwell as an important post, it is a great honour to bethem with the security to enable them to operate.Ambassador to the Holy See. Am I correct that,That was a very high priority for our settlement, andfrankly, nobody could succeed in the advert for thisI personally was very glad that that money was givenpost unless he or she was of some private means and/to us. Like all government departments, however,or located at their expense in Rome? Put anotherwe were subject to the eYciency targets, which weway, is there any chance of working-class peopleare now aiming to meet—but I will look into that.being appointed?Chairman: Give him a job!Q59 Chairman: Before I bring in AndrewAndrew Mackinlay: Or do you have to be part of theMackinlay, can you tell us what annual savings inmagic circle which runs this country? Discuss. It is afinancial terms will be made by these closures andserious point though.localisations of posts which you have justMr Keetch: I will do Seattle!announced, and about which you have sent us a

memo.Sir Michael Jay: There are two issues here. One is Q65 Andrew Mackinlay: Can an ordinary personabout the savings in terms of money, and the other is apply? You have to have money, frankly. That isthe savings in terms of staV. I might ask either Dickie point A.Stagg or Ric Todd to say a bit more about that. Sir Michael Jay: I do not think that is the case. The

post has been advertised and there were a very largenumber of applicants—I think 120 applicantsQ60 Chairman: Perhaps when you have the figures

you can send us a note; but if you have some round altogether. There has been a competition, acandidate has been chosen, and agrement is beingfigure now, it would be helpful.

Sir Michael Jay: We expect to make about £6 million sought. An announcement will be made in the nearfuture. This will be, I think I am right in saying, asavings, which would contribute to the eYciency

target of £87 million. That is by 2007–08. However, normal diplomatic service appointment when made.What will be new is the method of appointment. Inthere are other targets which we also have to meet.

We have to reduce our local staV pay bill by a certain other words, an outside competition.




Q66 Andrew Mackinlay: We look forward to details Q68 Mr Mackay: And that is a Treasury rule thatyou have signed up to—or you have no choice?on that. Point B is not for ritual but seriousness—

Kyrgyzstan. Since we last met on the annual report Sir Michael Jay: As accounting oYcer, I get lettersfrom the Treasury explaining what I have to do.and in previous years, I have asked you about this.

Since then, we have had something of a velvetrevolution in Kyrgyzstan. There is now the problem Q69 Mr Mackay: That does seem a pity, because Iof refugees from Uzbekistan in Kyrgyzstan, and the would prefer you and the Foreign Secretary to beUnited States are moving from Uzbekistan to given a free hand to allocate your budget as you seeKyrgyzstan. Other key players are represented there. fit within your department, which clearly you cannotWe are not represented even on the cultural side, by quite do.the British Council. Is it not now time that you Sir Michael Jay: We can to a certain extent. What wereviewed your decision not to have anybody in can certainly do, and do try to do, is to find moreBishkek, bearing in mind that the ambassador who eYcient ways of doing things, so that we thereforedoes serve it is based in Almaty, which is not only not release resources to open a post or to keep a postthe capital of Kazakhstan but is also in a country open; but there are constraints on our ability to—thewhich is the size of western Europe? Discuss! technical term is—vire between one budget andSir Michael Jay: Again, I would like to have an another.embassy, we would like to have an embassy, inBishkek. It is a question of the proper allocation of

Q70 Mr Mackay: So there is ring-fencing, in otherresources. By far the most important of the centralwords?Asian countries in terms of British interests isSir Michael Jay: Yes, in that sense. There is alsoKazakhstan, which is why we plan to maintain anring-fencing, of course, in that very substantialembassy in the new capital, in Astana, but also aproportions of our overall budget are for the Britishsubstantial presence in what will remain theCouncil and the BBC World Service, which are ring-commercial centre, Almaty, which is about two orfenced and therefore are not accessible to us, eitherthree hours’ drive from Bishkek; and there will befor our capital or for our programme or forregular visits from the staV of the post in Almaty toadministration budget.Bishkek. For the moment, I suspect that is how itChairman: Can I just say to my colleagues that therewill stay, but I can assure you that we do keep theseare a number of areas we have to cover. I want to getconstantly under review. The views of thison to personnel issues but, before we do that, I wantCommittee on where we might have posts wouldto get Fabian Hamilton in on the BBC Worldclearly be a factor, if we are in the happy position ofService and to touch briefly on public diplomacy;being able to open more than we feel now we can.then we will deal with the personnel matters. I amvery conscious of time.

Q67 Mr Mackay: Sir Michael, clearly you would like Richard Younger-Ross: Very briefly?to keep more posts open and clearly it is a matter of Chairman: It has to be very brief. One question.balance—priorities, as you have pointed out. Weunderstand your budgetary constraints. We Q71 Richard Younger-Ross: It is one question onunderstand that you are having to make eYciency asset recycling in Dublin. Can you explain whethersavings right the way across your department. we are likely to get Glencairn back, when we areWould it be wrong to say, however, that every bit of likely to sell Marley Grange, how this debacle camesaving for a new post has to come out of closing an about, and how much it has cost us so far?existing post, or is there not a possibility of making Sir Michael Jay: We are of course in occupation offurther cuts in other things your department does? Glencairn and we are in touch with the owners—For some of us, one of the most important things constantly in touch with the owners—in the hopeyou do is to be represented in as many countries and that we can complete the purchase of Glencairn,as many commercial cities as possible. I do not want which we have not yet succeeded in doing. Until weto prejudge your answer, but I guess that if I were can, we think it is better to keep Marley Grange.looking at your budgets I might, in a slightly biased Whether you want me now to go into all theway, come up against other things that I think could background again—be cut out to ensure that our representation was notcut out.

Q72 Andrew Mackinlay: The background is in theSir Michael Jay: There are two answers to that. Thepublic domain.first is that we are always looking at doing thingsSir Michael Jay: I have been asked about it by thismore eYciently, in order to produce savings whichCommittee before, and I think it is in the publiccan then be put to higher priority activities. One ofdomain. If it would help the Committee, however, Ithe benefits of a lot of our IT will be, I hope, that itwould be very happy to write again to update it.7will release resources and release staV to go to higherAndrew Mackinlay: Presumably you are paying rent.priority tasks, including overseas posts. As for

cutting programmes, I think I am right in saying thatwe are not allowed to use capital or programme Q73 Chairman: Perhaps you could send us a notemoney for administrative expenses. So even if we updating us on the current position and, if necessary,were to reduce our programme expenditure, we we will pursue it with you.could not use that on our staV, to open or keep openan overseas post. 7 Ev 48




Sir Michael Jay: Certainly. I am very happy to do like, the job is done and now is the time to allocatethat, Mr Chairman. those resources to today’s priorities. We would, inMr Hamilton: Sir Michael, I want to ask you some the Foreign OYce, argue that one of today’squestions about the BBC World Service and the priorities is to have a stronger public diplomacychanges that are being planned there. I am well focus on the Arab world and that an Arab-languageaware, of course, of your deep involvement with the TV service would be a very good way of providingWorld Service. Yesterday, the Foreign Secretary, in that. That is the reason why we would support anda written ministerial statement, endorsed the do, and the Foreign Secretary did yesterday endorseproposed changes by the World Service and the the changes to the vernacular programme and therationalisation of some of their local language suggestion that this should go towards an Arabicservices. They are intending, as you know, to cut TV service.some of the language services in places like the CzechRepublic, Hungary, Kazakhstan, Poland, Slovakia,

Q76 Mr Hamilton: We know, do we not, thatBulgaria, Croatia—Chairman: And Thailand. satellite TV services are notoriously diYcult to start

up, especially in the Arab world? We also know howexpensive they are. I wondered whether you thoughtQ74 Mr Hamilton: Yes, and Thailand—which havethat £25 million, which I understand is the cost thatvery small audiences at the moment, and use thoseis being allocated and therefore being funded out ofsavings primarily to establish a BBC Arabicsome of these savings, is suYcient to do the jobtelevision service. I wondered what your reaction toproperly.this would be. Do you endorse what they are tryingSir Michael Jay: I do not have the expertise toto do? Do you feel that an Arabic TV service wouldcomment on that, Mr Hamilton.more accurately report what the British

Government is trying to do in its foreign policy, aswell as its interest in the Arabic countries? How do

Q77 Sir John Stanley: I have to say that I do mostyou feel that the BBC is best served, and is it in ourprofoundly disagree with you, Sir Michael, at leastinterest to drop these local language services, whichin respect of one country, and I am most disturbedhave been so important over the last 60 years?that you should have given a blanket endorsement toSir Michael Jay: These are essentially questions fora policy of going for English language services asthe BBC, but we have encouraged the BBC to lookopposed to vernacular language services. If I may,constantly at the profile of their vernacular services,there is a country I would want to make anto check that they really were focused on the areasexception. I am Chairman of the Britain-Nepalwhich are important today rather than, say, 40 or 50Parliamentary Group, and perhaps I may just putyears ago. We do endorse their judgment that this isthat on the record. Last week I had the benefit ofa good time or the right time to discontinue themeeting the President of the Institute of Journalistsvernacular services in these countries, bearing inin Nepal, who is in this country on an FCO-mind that the English language services willsponsored visit—and I am delighted that yourcontinue and that there will still be the availability of

BBC World and online BBC World Service services. department did sponsor his visit. He told me howSo they will have English language services; they will concerned they were in Nepal at the threat to Nepalihave BBC World; and they will have BBC online. language services. In that country, where somethingWhat they will not have is the vernacular services. like two-thirds of the country is in Maoist control,We endorse that judgment, though it is a judgment where the people of that country are utterlyby the BBC. dependent for information and for news on the BBC,

I think it is absolutely appalling that at thisparticular moment there should be a threat to NepaliQ75 Mr Hamilton: Of course I understand that theirlanguage services in that country.operating policy is a judgment for them, but mySir Michael Jay: I am not informed about the Nepaliquestion to you relates to British foreign policyservice, Sir John. Perhaps I could look into it.8interests, which I know the BBC is not there to

conduct fully, but that is why you fund them. Wehave an interest, do we not, in terms of our foreign

Q78 Chairman: We will no doubt pursue it ifpolicy in some of the countries in which the BBCnecessary. I think that we have dealt with someWorld Service broadcasts? I wonder whether youaspects of the public diplomacy side. May I ask youfeel—where, for 60 years in many of these countries,why we have not yet had Lord Carter’s review onwe have broadcast in those services—that we shall bepublic diplomacy? We were promised that it wouldbest served by dropping those local, vernacularbe completed by the summer. This Committee tooklanguage services?evidence from the British Council a couple of weeksSir Michael Jay: I think that the BBC would argue—ago. We had expected it before then; so had they. Itand we would not dispute this—that in a sense, 60did not happen. We had to ask them questions aboutyears on, the services have served their purpose. Theit in the absence of actually seeing it. It is notvast majority of these countries are now

democracies, liberal market economies, members of available today. We have not yet had any indicationthe EU or of NATO, with a much greater ability to of when it will be published. Can you tell us why not?speak English than was the case in the past. In asense, this is a good moment to recognise that, if you 8 Ev 50




Sir Michael Jay: My understanding is that Lord Q86 Chairman: In essence, is there not likely to be aconflict, a tension, between the way in which NDPBsCarter is still discussing one or two elements of the

report with one or two of the other stakeholders have traditionally operated—not just the BritishCouncil, because I think other NDPBs, including theinvolved.Westminster Foundation for Democracy which Iused to chair, also had some diYculties because ofQ79 Chairman: The British Council?this—and your desire, maybe driven by the TreasurySir Michael Jay: The British Council, yes.and public service agreements, to have more controlas accounting oYcer over the expenditure which is

Q80 Chairman: Predominantly, I guess. coming from your department?Sir Michael Jay: I am not sure whether he still is Sir Michael Jay: I hope that, if there are anydiscussing with the BBC World Service, but I think tensions, we can resolve them. I think it is entirelythat is really a question for him. right that I should, as accounting oYcer, be able to

satisfy myself that the funds are being properly spentand accounted for; but I do not see why that shouldQ81 Chairman: So you have no idea when it is goingbe inconsistent with the NDPBs concerned carryingto be concluded?out their functions, which we support. As you know,Sir Michael Jay: We look forward to it and we hopethe FCO very much values the role of thethat it will be published quickly and, when it is, weWestminster Foundation for Democracy inwant to get on with considering it and implementingdelivering a number of our strategic priorities; but atit—but I would hope very soon.the same time we do need to assure ourselves that theaccounting arrangements are as they should be. I do

Q82 Chairman: Presumably you have seen drafts in not see this as being a real diYculty, but we have notyour department. quite got there yet.Sir Michael Jay: We have seen drafts, yes.

Q87 Chairman: I think that you mentionedQ83 Chairman: Knowing the way these things work. governance arrangements. Do you believe that theSir Michael Jay: Yes. time has come for the FCO to have more direct roles

within the governing bodies, the boards, oforganisations which are funded by yourQ84 Chairman: Your oYcials will have been poringdepartment? Specifically, would you want to have aover those drafts closely, to see what therepresentative of a very high level on a board, forrecommendations are. Is there anything in theexample of the British Council? Would you want toreport, as you have seen it so far, which causes youhave someone there, if you like, as your eyes and earsconcern or that you are worried about?and mouthpiece when they are making decisions,Sir Michael Jay: We are broadly content with thebecause you would regard them as being toorecommendations, but I would not want to goindependent in the way that they have traditionallybeyond that, because we have not seen the finalapproached certain matters?version and we do not know precisely what it willSir Michael Jay: This is one of the issues which Isay. We are broadly content with thesuspect will be dealt with by the Carter review.recommendations which we believe will emerge from

the report.Q88 Chairman: I am sure that it will.Sir Michael Jay: I am myself an ex-oYcio memberQ85 Chairman: Do you believe that there should beof the British Council’s board, and that has been thea change in the relationship between the FCO andcase for as long as I can remember. That providesnon-departmental public bodies, and thatsome advantages in terms of arguing within theorganisations funded by the Foreign andboard for the British Council to reflect theCommonwealth OYce should be more closelyGovernment’s priorities. I do not think that can everaligned to the priorities and strategic choices of thebe the complete answer. I think that there needs toGovernment than has hitherto been the case?be a network of relationships between the BritishSir Michael Jay: Our ministers believe that theyCouncil and the FCO to ensure that theshould be able to show, and to show Parliament, thatGovernment’s priorities are carried forward, at leastthe money which is spent on non-departmentalin respect of the money that we give through ourpublic bodies is spent consistently with, ingrant-in-aid, which is of course only part of theconformity with, the Government’s objectives. ThatBritish Council’s operations.may lead to a consideration of governanceChairman: I suspect that we may have to come backarrangements for our non-departmental publicto this when we have seen Lord Carter’s report.bodies. There is also, as far as I am concerned as

accounting oYcer, a requirement that I sign astatement of internal control as part of the FCO Q89 Sir John Stanley: How are you getting on with

the censoring of Sir Jeremy Greenstock’s memoirs?accounts, which means that I have to satisfy myselfthat certain accounting practices are in place in all Sir Michael Jay: He, like all public servants, has an

obligation to submit his work, which he has doneour non-departmental public bodies. That too isrequiring some changes in the accounting and we are at the moment discussing that with him.

I hope that it will be possible to reach agreement onarrangements for some of our non-departmentalpublic bodies. the basis on which the book can be published,




subject to our being satisfied that he is not crossing Sir Michael Jay: May I just say that clearly we haveabsolutely no wish whatsoever that a reply should liethe line on issues of international relations or public

security or— on the table which a member of the House believesis wrong. So we would want to try to clarify that too.Chairman: We look forward to receiving a letterQ90 Sir John Stanley: Political embarrassment.from you. Then, if necessary, we will discuss it in theSir Michael Jay: No. I am sorry, there are three—orCommittee and take it further.the question of the need to maintain the confidenceAndrew Mackinlay: I think I am happy then, becauseof relationships between ministers and seniortime is pressing.oYcials, which is an important part of the obligation

that all of us have as public servants.

Q95 Mr Illsley: Following on from that, have anyQ91 Sir John Stanley: Sir Michael, could you clarify payments been made in respect of external claimsthis for us? Are you the ultimate censor or is the against the Foreign OYce, perhaps fromCabinet Secretary the ultimate censor or is the Prime employment tribunals or through other actions?Minister the ultimate censor? Mr Warren: I think I would need to confirm theSir Michael Jay: In this, as in other issues, the details of employment tribunals which have beenultimate decisions, the ultimate judgments, will be concluded in which the Foreign OYce has been amade by ministers. party, and advise the Committee.

Q92 Andrew Mackinlay: I had a parliamentaryQ96 Chairman: That is helpful. Can you, when youreply—for the record it is 21 July, column 2101W—do write to us, also let us know how many serving orfrom Jack Straw, and your colleagues would haveformer members of the senior diplomatic service areprepared a reply. I asked him, “. . . how much publiccurrently the subject of disciplinary investigationsmoney has been spent in each of the last five years inor actions?settlement of grievance procedures brought againstSir Michael Jay: Certainly.senior staV of his department by subordinate staV;

how much was paid in each case; and whether thepayment was in full and final settlement in each Q97 Chairman: There is one other area on which wecase”, and the reply is, “None”. I am advised that in have not yet touched, and I am very conscious of thefact there had been grievance procedures—quite a time and am grateful, gentlemen, that you havefew—where a settlement had been made and people stayed so long. Can we wrap up by asking abouthad perhaps subsequently signed confidentiality BBC Monitoring? We understand that there hasclauses. In other words, that on the basis of their been a change in its sponsoring departments and, aswithdrawing their grievances there has been a a result of the review, the funding problems that theypayment. I take quite seriously the parliamentary had have been sorted out, and it is now sponsored byreply. Clearly the Foreign Secretary has to get it the Cabinet OYce rather than the Foreign andfrom you and your colleagues. However, I put it to Commonwealth OYce. Can you tell us why did youyou that there are and have been grievance value the work of BBC Monitoring less than that ofprocedures, that sums have been paid, and people the review team, and why were you prepared, inhave signed confidentiality clauses to withdraw their eVect, to hand on the organisation to anothergrievance. Am I correct or am I wrong? I do not want government department?to split hairs, as it were, because I may not use the

Sir Michael Jay: We very much value the work ofcorrect terminology, but I am saying to you that thatBBC Monitoring, but we believe that we were payingreply is wrong and that payments have and are beinga higher than fair share of the overall cost of BBCmade. Is that correct?Monitoring, given the even greater interest thatSir Michael Jay: I am not aware of any suchsome other stakeholders had in it. There waspayments having been made.therefore a negotiation which resulted in a shift inthe balance of funding among the various

Q93 Andrew Mackinlay: You are absolutely sure? stakeholders, as a result of which we thought it wasSir Michael Jay: I am not aware of any and, had I sensible, along with others, that the sponsorship ofbeen aware of any, that answer would not have been BBC Monitoring should move to the Cabinet OYce.given, or we would not have given that advice to the As I understand it, the total funding for BBCForeign Secretary. I am not aware of any. Perhaps I Monitoring will continue to increase. So this is ancould ask the Human Resources Director. internal housekeeping issue, rather than an issueMr Warren: Nor am I in relation to internal which will lead to any reduction in the size or outputgrievance procedures against the Foreign OYce, of BBC Monitoring.which is what the question referred to. However, ifthe Committee wishes, we will send a note formallyconfirming the position.9 Q98 Chairman: But will that funding in any way

come from your own budget, or will it now befunded by its new sponsoring department?Q94 Andrew Mackinlay: I would like that, because ISir Michael Jay: We will continue to fund it, but atam advised that that parliamentary reply is wronga lower level than in the past. This is one way ofand I would like that to be clarified, please.achieving our eYciency savings without having to doso in other ways, such as cutting posts.9 Ev 49




Q99 Chairman: So you would still regard yourself as in the past, whatever convenient number of years—three years, five years, or whatever? I am not talkinga stakeholder?

Sir Michael Jay: Absolutely. about where people go—which I actually havereservations about throughout the public sector—

Q100 Chairman: Even though you are not the but where there has been a payment which is highersponsoring department? than what they should have got. This is people belowSir Michael Jay: We would see ourselves as being a retirement age.stakeholder and having an interest in BBC Mr Warren: We shall send the Committee a noteMonitoring, and in its output. in reply to Mr Mackinlay’s question, but I would

make the point that all early retirement or earlyQ101 Chairman: How much will you be contributing severance agreements that are reached with staV—to it? and we have reached a number recently, as part ofMr Todd: I think it is £21

2 million. the downsizing of the Foreign OYce—are reachedin terms of the framework that the Cabinet OYce

Q102 Chairman: So the other £2 million, or whatever imposes on all departments. So there is no questionit is, is coming from where? of our being able to oVer any diVerent terms.Sir Michael Jay: It is coming from otherstakeholders. I do not have the details with me at

Q105 Andrew Mackinlay: Indeed. So that if mythe moment.information is incorrect, there should be no peoplewho have had more advantageous terms than thoseQ103 Chairman: Could you send us a note?which they are entitled to.Sir Michael Jay: We could send you a note, MrMr Warren: Indeed.Chairman, certainly.10

Andrew Mackinlay: But it has been put to me thatthat has happened on some occasions, and noQ104 Andrew Mackinlay: Going back to mydoubt you would write to me and say, “Mackinlay,penultimate question, I am also told that there areyour information is wrong again”. It will not be thesome people who have retired early, not throughfirst time I have been humiliated but, on the othersickness, but are retired because—and I do not usehand, just remember that sometimes, on somethis in an emotive way—they are no longer wantedoccasions, I am right!or their face does not fit, but terms are reached underChairman: At that point, can we thank you, Sirwhich they are paid much higher sums than theirMichael, for your and your colleagues’ time withservice would justify. It is like a package. Could weus? It has been a long session. We are very grateful,be told on how many occasions that has happenedand no doubt we will be communicating with you

10 Ev 50 in future. Thank you, gentlemen, for coming today.

Letter to the Chairman of the Committee from the Permanent Under Secretary of State,Foreign and Commonwealth OYce

I undertook in my evidence to the Committee on 26 October to return to you on security and human rightsaspects of the forthcoming State Visit of President Hu Jintao of China.

Sir John Stanley sought assurances that an appropriate balance would be struck between security for thePresident’s party and the right of demonstrators to make their views heard; that no “deals” had been donewith the Police over security; and that the President would not be shielded from demonstrators.

As I said in evidence, we have of course been in discussion with the Police about security aspects ofPresident Hu’s visit. This is in line with normal practice. It is also what would be expected for any high-levelvisit. The role of the Foreign and Commonwealth OYce in this regard is to ensure the safety of visiting VIPsand make the necessary arrangements appropriate to the dignity of a major State Occasion. It is the Policewho have responsibility for security and the maintenance of public order during the visit. The operationaldetails of security arrangements are for them alone.

Protests in the UK are a domestic matter over which the Foreign and Commonwealth OYce has no directauthority. But we fully recognise the rights of individuals and groups who object to, or wish to influence,Chinese policies to make their views heard peacefully. It is not least for this reason that I believe it isimportant that the UK is able to show during the visit, as at other times, that we have a mature democracycapable of accommodating legitimate protest.

The Police recognise the sensitivities surrounding the handling of protests on occasions such as this visit.I have no doubt that they are fully aware of the expectation that the rights of individuals peacefully todemonstrate will be respected. At the same time, they have clear responsibilities for the safety and securityof the visiting Head of State.

It is of course impossible to predict all aspects of the handling of security surrounding a State Visit, andit would be foolish to suppose that all with an interest in the matter would be likely to agree after the eventthat every arrangement had been handled to their satisfaction. But I can certainly give Sir John and the rest



of the Committee the assurances sought. I am confident that the judgement of most observers of PresidentHu’s visit will be that the balance between security and the right of peaceful protest will have been respectedin a manner which reflects the democratic credentials of the UK.

Sir Michael Jay KCMG

3 November 2005

Letter to the Head of the Parliamentary Relations and Devolution Team, Foreign and CommonwealthOYce from the Clerk of the Committee

I know that the Committee found the session with the Permanent Under-Secretary and his colleagues onWednesday to be very useful. A lot of ground was covered, and we are expecting to receive a number ofnotes expanding on some of the oral answers. I will liaise with PRDT on the timing of these notes.

Meanwhile, shortage of time meant that there some issues which either were not raised at all, or werediscussed only briefly. I am therefore writing with some supplementary questions to which the Committeedesires answers. I hope that it will be possible for replies to these questions to reach us not later than22 November.

1. What criteria does the FCO use when deciding whether to volunteer a document to the Committee?Will the OYce consider in future sending the Committee important Reports that are clearly relevant to itswork, such as those by Collinson Grant and by Norman Ling, without waiting to be asked?

2. In how many cases since the Freedom of Information Act came into force has a decision by the FCOto withhold information sought under the Act been overruled on appeal?

3. The FCO’s classified scorecards include performance indicators relating to the MillenniumDevelopment Goals and other areas of policy which might be regarded as being of very legitimate publicinterest, without compromising security. Is the FCO satisfied that the classification of a very high proportionof its performance measures is consistent with its obligations to enable public scrutiny of its achievements?Will the OYce have another look at this, with a view to achieving greater openness and transparency?

4. Will the FCO publish the unclassified summary of the Ling Report on Prism? If not, why not?

5. What changes have been made to FCO procedures to avoid problems of the type experienced withPrism? Specifically, what action has been taken in response to each of the 26 unclassified recommendationsmade in the Ling Report?

6. Recent examples of failure in project management at FCO have included slippages in implementingPrism and i-visas and cost overruns on building projects. A lack of project management skills was alsohighlighted by the Collinson Grant Report. How does the FCO intend to rectify the lack of projectmanagement skills within its staV?

7. The Collinson Grant Report highlights considerable slippage in the eYciency programme to date. Theinitial plan was to deliver £10.7 million by the end of 2004–05, in September 2004 this was cut to £6.3 million.The target for 2005–06 was cut from £55.8 million to £32.7 million. Is the FCO confident that it will achieveits eYciency plans?

— What was the actual saving made in 2004–05?

— What is the current target saving for 2005–06?

8. How many applications from all grades for voluntary redundancy have been received; how many havebeen accepted; and how many have been rejected? In respect of the posts held by those whose applicationshave been accepted, how many will be refilled and how many will be scrapped?

9. 70% of FCO’s expenditure is classified as administrative expenditure, even though much of this relatesto front-line services. A Treasury PES a few years ago encouraged all departments and agencies to reviewtheir expenditure and to move anything related to front-line services into programme expenditure. Has theFCO done any work to identify which staV in its Posts abroad are directly involved in delivering front lineservices, with a view to reclassifying the expenditure as programme, thus allowing it to use programmeeYciency savings elsewhere to support the work of Posts?

10. When considering the need to close Posts overseas, has the FCO evaluated the possibility ofmaintaining a UK presence in the manner it has adopted in Liberia? Could sharing premises be in some casesa cost-eVective and preferable alternative to outright closure?

11. What is the final outturn for overseas property sales in financial year 2004–05? What is the FCO’sprediction for sales in the current financial year?

12. Has the lease on One Carlton Gardens been renewed? Will the lease on Lancaster House be renewed?If so, at what cost? Who is the leaseholder for each of these properties?

Steve Priestley

28 October 2005




Foreign and Commonwealth OYce Departmental Report 2004–05 evidence session—further information

I have seen Steve Priestley’s letter of 28 October to Chris Stanton. Our responses to the Committee’s oraland written questions are as follows:

1. Collinson Grant

Question 1. (a) With what elements of the Collinson Grant analysis do you disagree?

Answer: As I said to the committee, I accept many of the conclusions but not all of the analysis of theCollinson Grant report. I do not accept the root and branch criticism of the FCO. The FCO commissionedthe report because we are conscious of the need to change, modernise and reform and have been for the lastfew years We also commissioned the report to help the FCO meet its SR2004 commitments to furtherimprove our operations and our systems and to fulfil a demanding eYciency agenda.

We have made significant progress on change in recent years. We are focusing our resources more aroundstrategic priorities: We are more adaptable in shifting resources to where they are needed. We have a greaterfocus on service delivery. We are more open, working more closely with other government departments andexternal partners such as NGOs. As I said in my testimony to the committee, I reject the proposition thatthe FCO lacks the necessary core diplomatic and political skills. We have a large number of people doinghigh grade work in diYcult and dangerous places.

We accept many of the recommendations of the Collinson Grant Report. A number of them, such as thereview of the HR and Finance functions, we are already implementing. Some of them we believe to be ill-founded. The report, for example, proposes savings through reducing the resource deployed on briefing MPsbefore overseas visits, or providing briefing to British business.

Question 1. (b) What are the other “three strands of work” referred to in your Answer to Q4 received fromthe FAC on 25 August 2005. Can we receive reports on these strands?

Answer: The FCO has agreed with the Treasury an eYciency plan designed to achieve an £87 millionreprioritisation target as part of the SR 2004 settlement. The work of Collinson Grant was intended to helpdeliver that target. The report on eYciency, eVectiveness and the control of costs represents one of fourstrands of work that Collinson Grant were commissioned to undertake. The others were a Process ActivityAnalysis of the FCO’s operations; a comparative analysis of the FCO’s expenditure; and an analysis of theFCO’s organisational structures. These latter three strands were delivered by databases rather than byreports.

Based upon self-completed questionnaires from a large number of FCO staV in the UK and overseas, theProcess Activity Analysis breaks down the activities of staV in all grades into process activities (eg initiatingsubmissions, managing staV, budgeting). The comparative analysis of the FCO’s expenditure contains cashexpenditure broken down by type of expenditure and location (eg travel expenditure in Africa, electricityin New York). The analysis of the FCO’s organisational structure provides a database on managementworkloads, organisational spans (ie the number of subordinates managed by staV at each level and thenumber of management levels in each organisation) as well as a hierarchical breakdown of the FCO.

The information is in the form of a database. It is therefore not possible to send it to the Committee. Iam happy to invite members of the Committee to visit the FCO to look at the database itself and interrogateit as they wish. The database is held in Finance Directorate (contact Rod Bunten in FPPD on 020 7008 1058)

Question 1. (c) The Collinson Grant Report highlights considerable slippage in the eYciency programme todate. The initial plan was to deliver £10.7 million by the end of 2004–05, in September 2004 this was cut to £6.3million. The target for 2005–06 was cut from £55.8 million to £32.7 million. Is the FCO confident that it willachieve its eYciency plans?

— What was the actual saving made in 2004–05?

— What is the current target saving for 2005–06?

Answer: The Collinson Grant report was not originally intended for external publication. Thus,resources were not devoted to ensuring that it was completely error free, providing those errors were notcritical to the conclusions of the report or detrimental to its value as a management tool. The section referredto above is one area where the Collinson Grant report contained inaccuracies. These are explained below.



The targets specified in the Collinson Grant report against which they suggest the FCO eYciency planhas slipped were erroneous due to a mixture of incorrect calculations, double counting and includingprojects/savings figures that did not find their way into the final eYciency programme. In detail theseerrors are:

(i) The report refers to £55.8 million target in 2005–06 in its text, the detail for which is givenin the report’s Appendix 5. The corresponding figure given in this appendix is £50.8 millionsuggesting a typographical mistake of £5 million.

(ii) A further error appears in arriving at the £50.8 million quoted in Appendix 5. Totalling thesavings quoted for each project in the table actually sums to £47.3 million. The error appearsto be due to incorrect subtotalling of the 3 projects under “Elements with links to CG study”which add up to £16.5 million not the £20 million quoted.

The remaining diVerences between the “corrected” £47.3 million detailed in 2005–06 in the CG report andthe £38.7 million agreed with HMT in our eYciency plan are accounted for as follows:

(iii) Appendix 5 of the CG report lists projects “Major contract service”, “OGD” and “WorkforceeYciencies”. Earlier drafts of the eYciency plan did mention such projects, but those projectshave since been rolled into other projects, with which they overlap. Including them separatelyleads to £4 million of double counting.

(iv) Targets for a number of the projects quoted in the report are diVerent from (mainly higherthan) those towards which project managers are working. It is unclear the exact reasons forthis, but may be due to CG working to earlier drafts of the projects. The overall annual targetsas agreed with HMT have always remained constant, but targets for individual projectsfluctuated slightly in the early days of the eYciency programme as project planning advancedand it become clearer what individual projects could realistically deliver. Quoting the highertargets for individual projects leads to further double counting.

As part of the 2004 Spending Review the FCO agreed with HMT to make eYciency savings in its core (ieexcluding British Council and BBC World Service) expenditure of £4.7 million in 2004–05 and £38.7 millionfor 2005–06. The actual for 2004–05 was £6.6 million, thus exceeding the target. In 2005–06 we are confidentof reaching £39 million, which will be marginally above target.

Question 1. (d) Why is the CG report not on the internet and can it be published there?

Answer: The Collinson Grant report is on the Internet. It was published on the FCO website on 4 August2005. It can be found at http://www.fco.gov.uk/Files/KFile/CGReportFinal,0.pdf

Question 2. Seventy per cent of FCO’s expenditure is classified as administrative expenditure, even thoughmuch of this relates to front-line services. A Treasury PES a few years ago encouraged all departments andagencies to review their expenditure and to move anything related to front-line services into programmeexpenditure. Has the FCO done any work to identify which staV in its Posts abroad are directly involved indelivering front line services, with a view to reclassifying the expenditure as programme, thus allowing it to useprogramme eYciency savings elsewhere to support the work of Posts?

Answer: The question of reclassification of FCO expenditure overseas from administration toprogramme was raised with the Treasury in SR04. The FCO suggested that all overseas work should beclassified as non-admin, since all staV overseas are involved in service delivery. The Treasury have onlyagreed to allow us to re-classify Consular and Visa work. We hope that it will be possible to reconsider thisissue in the context of the Comprehensive Spending Review. (For the committee’s information 95% of thesavings in the FCO’s eYciency programme derive from the FCO’s administration budget rather than fromits programme spend.)

Question 3. Consular access to New Orleans after Hurricane Katrina

Answer: Consulate staV first sought access to New Orleans on 30 August, the day the levees broke andfollowed this up in the days thereafter. They were told by the Louisiana State authorities that advice fromthe Louisiana Police, the National Guard and the US State Department was that they should not seek toenter New Orleans. They did not speak to the Mayor of New Orleans as they considered the competence tolie with the State and Federal authorities. At that time there were serious law-and-order problems in NewOrleans and the authorities believed the risk of harm befalling our staV was too great, and they lacked theresource to provide the requisite protection. Nor would the US government relief agencies have welcomedforeign representatives on the ground there, potentially adding to their problems.

Our staV did, however, deploy to several other locations, in particular Baton Rouge, Houston and Dallas,where the authorities told us evacuees were being channelled. And as soon as they were allowed, staV beganmaking daily visits to New Orleans from the Baton Rouge oYce. The UK team was the first to enter New



Orleans on 4 September, when the US authorities gave permission to foreign missions to do so. We and theIrish were the only foreign consulates on hand in Dallas when 27 British and some 40 other foreign nationalsarrived there from the aVected area on 2 September.

The Foreign Secretary has written separately to you about our response to Hurricane Katrina. His letterincluded a detailed account of our eVorts to enter New Orleans.

Question 4. Request to see Consular Guidance

Answer: We enclose copies of our consular best practice publications, the Consular Handbook and theConsular Desk Guide, all of which are available to all consular staV on an internal basis, and a copy of ourEmergency Planning Guidance. The Consular Handbook has been produced for consular staV overseas.The Consular Desk Guide has been produced for consular oYcers based in the UK and is less detailed sinceUK-based staV benefit from a wider range of expertise in London. The best practice publications cover ourmost up to date policies on consular assistance issues and are the main foundation of our consular trainingcourses. The publications are underpinned by Diplomatic Service Procedure (DSP). However, parts of DSPare now out of date as they have eVectively been replaced by the best practice guides. Consular Directorateis therefore looking to set up a rolling exercise to review all our consular guidance and best practice volumesand create a more coherent, single volume. This is likely to be completed by spring 2006.

These documents are internal guidance for staV, and therefore have not been released to the public. Inthe interests of transparency, the Government made a manifesto commitment to set out in a comprehensiveguide to our consular assistance. The Guide, which the FAC has seen, was launched for consultation in draftform by the Foreign Secretary on 20 October 2005. The draft Guide was carefully reviewed by Governmentlawyers bearing in mind its status as a public document and the need to manage public expectations aboutthe consular assistance that we can provide. The same is not the case with these documents, which were notdrafted with the intention of publication—firstly because they focus on internal issues such as best practiceand specialist advice regarding delivery of assistance in particular situations rather than general policiesabout the assistance we provide, and secondly because they need to be frequently updated in order to reflectchanging circumstances, policy developments and lessons learned. In order for us to be consistent in themessage that we give to the public about the core assistance that we provide and to ensure that we do notraise public expectations unrealistically, we have taken a policy decision not to publish these documents,but I am happy to share them with the Committee on the understanding they will not be released.

Question 5. Failure to meet PSA Targets (i) Passports

Target: “to issue 95% of passports overseas within five working days”

Answer: The Committee noted that we had failed to meet our PSA target during 2004–05. Our GenIEpassport issuing system has enabled us to produce fraud-resistant, machine-readable passports overseas butat the price of extended processing times. We recognised at the time of the GenIE rollout in late 2003 thatwe would need more than five working days to process passport applications at peak times of the year at ourlargest passport issuing posts. Accordingly, we negotiated a revised 10-day PSA target with HM Treasury inthe summer of 2004 as part of the 2004 Spending Review. This enabled the FCO to begin working to thesame timeframe for passport issuing as the UK Passport Service (UKPS) from 1 April 2005. The 2004–05statistics before the Committee were produced under the five-day target agreed as part of the 2002 SpendingReview. With the revised target in place, we expect to meet the PSA target for GenIE passport issues duringthe current financial year.

PSA Targets: (ii) Births and iii) Deaths Registration

Target: “98% of birth registrations carried out within five working day from receipt of correct fee andcorrectly completed application” Result: 95.78%.

Target: “98% of death registrations carried out within three working days from receipt of correct fee andcorrectly completed application” Result: 96.19%.

Both targets are particularly challenging due to the relatively small number of registrations undertaken.It only takes a few failures to lead to an overall target miss (five days (births) and three days (deaths)respectively). And for these, the principal cause is:

— InsuYcient documentary evidence:

(a) Deaths (17 failed from 446)—for example, there may be a delay in receiving the deathcertificate issued by the local authorities; there may be a lack of evidence of the deceased’sclaim to British nationality, eg full birth certificate or full British passport or certificate ofnaturalisation or of registration as a British national. There may be a delay in obtaining theoriginal documents that are required.

(b) Births (364 failed from 8,620)—staV need to see satisfactory documentary evidence whichestablishes both the facts of the birth and the citizenship of the person whose birth is to beregistered. Delays (known to be a particular problem in Pakistan, China and Turkey, wherenearly half these failures occurred) may result whilst the original documents are obtained.



— If staV have reason to doubt the validity of supporting documentary evidence, eg marriagecertificate, they must refer to Passports and Documentary Services Group in ConsularDirectorate, London, before registering (even if the birth may be registered by virtue of themother’s citizenship). This will cause delays.

— Some Consular posts do not have a Registration OYcer who is able to carry out birth/deathregistrations. Such Posts have to forward applications to a larger hub Post to register and returnto the spoke Post to pass back to the customer. Delays will occur because of the travelling time;using FCO facilities or local postal services. Customers are given the choice to use express deliveryservices, eg DHL, but they have to cover the extra cost involved.

PSA Targets (iv) Detainees

Target: “98% of detainees contacted within 24 hours of notification of arrest, and detainee visited as soonas possible thereafter if the detainee wishes.” Result 96.67%.

In 2004–05, FCO consular staV contacted detainees within 24 hours of arrest in 96.67% of cases, narrowlymissing the target. Those cases when detainees were not contacted within 24 hours of arrest were spreadacross consular Posts throughout the world. Detainees were not contacted within the target time for avariety of reasons, including local conditions in some countries (eg diYculties in contacting detainee bytelephone or post due to poor facilities) and very large numbers of detainees at some Posts, eg in Spain.Where we experience diYculties in contacting detainees due to local conditions, we will always subsequentlyraise our concerns with the local authorities.

Question 6. What annual savings in financial terms will be made by these closures and localisations of postswhich you have just announced, and about which you have sent us a memo?

The Written Ministerial Statement issued by the Foreign Secretary on 11 October was an update,including some minor changes, of the package of proposals of closures and localisations announced on 15December 2004. Our estimate of savings remains as stated in the original Statement. The savings will cometo some £6 million at 2004–05 prices and exchange rates. Of this figure £2.7 million will result from closuresand localisations in Europe, £0.7 million from the Americas, £0.9 million from Africa and £1.4 million fromAsia. In addition to these cash savings, human and other resources will be released for redeploymentelsewhere. There will be some revenue from asset sales, although these will take time to realise.

Question 7. Dublin—The Committee would like an update on the current position [on the Residence]

Answer: As the Committee will be aware, we currently occupy Glencairn. Work continues on therepurchase. We believe that it is better to retain Marlay Grange until the repurchase terms are finally agreed.It may also be worth clarifying that, under an agreement made at the time of sale, we are not paying renton Glencairn.

Question 8. When considering the need to close Posts overseas, has the FCO evaluated the possibility ofmaintaining a UK presence in the manner it has adopted in Liberia? Could sharing premises be in some casesa cost-eVective and preferable alternative to outright closure?

Answer: The package of closures and localisations announced in December 2004 was the outcome of acareful consideration of possible changes to our overseas network in order to align our resources moreeVectively to our priorities. We looked at the option of moving to an implant in a partner country’s embassy(as in Liberia) or sharing premises in a number of cases but it did not prove to be a viable option. Amongthe factors were lack of opportunities and that for these, generally small, posts the net savings in runningcosts would have been negligible. Given the overriding need to realign resources we therefore either kept tothe status quo, in cases where there remained an operational necessity to retain a presence, or closed. We willcontinue to look for opportunities for collocation. We are already collocated with the following partners:

Germany — Almaty, Ashgabat, Dar es Salaam, Pyongyang, Quito, ReykjavikFrance — Almaty, AshgabatItaly — MinskThe Netherlands — Dar es Salaam, ChisinauEuropean Commission — Dar es Salaam

Question 9. Why is there no UK representation in Montenegro?

Answer: We recognise that the 2005 FAC report on the Western Balkans concluded that independencefor Montenegro in 2006 is probable, and this adds to the case for a Post headed by a UK-based diplomatin Podgorica. As circumstances change, the shape of the network of posts is continuously reviewed to alignresources more eVectively to priorities. Following the 2001 FAC report that recommended a permanent postin Podgorica, we established an oYce there, headed by a locally-engaged member of staV who is highly



eVective. The Embassy staV in Belgrade work very closely with the British oYce in Montenegro and HMABelgrade pays regular visits to Podgorica. These arguments work well enough for our needs in the presentcircumstances.

If a referendum results in an independent Montenegro that has been achieved through a free and fairprocess, then the question of opening an Embassy in Podgorica will need to be revisited. We have noted theCommittee’s interest in and concern about the level of our representation here. The Committee’s views willbe given full weight in our deliberations.

Question 10. What is the final outturn for overseas property sales in financial year 2004–05? What is the FCO’sprediction for sales in the current financial year?

Answer: As notified to the Committee through our quarterly returns, the gross proceeds for FCOproperty sales in FY 2004–05 was £10.574 million. The net outturn figure is not yet available. Transactioncosts vary, but average 6–8%. During the 2004 Spending Round negotiations, we agreed a ceiling of £15million for asset recycling for the SR2004 period, although in most years we expect receipts closer to £10million.

Question 11. Has the lease on One Carlton Gardens been renewed? Will the lease on Lancaster House berenewed? If so, at what cost? Who is the leaseholder for each of these properties?

Answer: The One Carlton Gardens lease has not yet been renewed. We are holding over on an interimrent. The FCO’s agents, Debenham Tie Leung, are currently in negotiation with The Crown Estate for itsrenewal from April 2005. The new rent and lease terms have not yet been agreed. The tenant has been theSecretary of State for the Environment. Should a new lease be signed the tenant would be the First Secretaryof State. This decision will be for Ministers.

The Lancaster House lease, also held in the name of the Secretary of State for the Environment, expiresin July 2007. No decision has yet been made on whether to renew. This decision will be for Ministers.

Question 12. the Committee asked for confirmation that the Foreign Secretary’s reply to Mr AndrewMackinlay’s Parliamentary Question 14400, relating to money paid by the FCO following grievance procedureswas correct. Mr Mackinlay asked how much public money had been spent in each of the last five years insettlement of grievance procedures brought against senior staV of the Department by subordinate staV; howmuch was paid in each case; and if he would indicate in each case whether the payment was in full and finalsettlement.

Answer: We can confirm that the Foreign Secretary’s answer to this question, namely that no publicmoney had been spent in this way, was correct.

Question 13. Have any payments been made in respect of external claims against the Foreign OYce, perhapsfrom employment tribunals or through other actions?

Answer: The amounts paid as a result of settling some Employment Tribunal cases were given in theanswer to a Parliamentary Question in June 2004 from Mr Malcolm Bruce MP. The amounts paid as a resultof Employment Tribunal claims over the last five years is as follows:

2001 £5002002 £38,7502003 £5002004 £5,0002005 £6,000

As is standard practice in the process of settling a legal claim, confidentiality clauses are included wherethe case has not yet been heard by a tribunal. The Committee also asked about other actions brought againstthe FCO. The Committee may like to know that in the last 12 months, there have been three awards ofdamages made by the courts against the FCO, amounting to a total of £60,000.

Question 14. How many serving or former members of the senior diplomatic service are currently the subjectof disciplinary investigations or actions?

Answer: Our current records start in 2003, from the promulgation of the FCO’s new disciplinaryprocedures. To provide details prior to this date could only be done at disproportionate cost. In 2003, therewere two cases of misconduct involving serving members of the SMS. Both oYcers received writtenwarnings. In 2004, there were two disciplinary cases involving a member of the SMS who has since left theService. One case resulted in a written warning, the other was discontinued on the oYcer’s retirement fromthe Service. There have been no disciplinary cases involving members of the SMS to date in 2005.



Question 15. The Committee asked whether any former members of staV had been paid more than theirentitlement in early retirement or severance terms.

Answer: OYcers leaving the FCO on early retirement or severance, including those who volunteered forearly departure as a result of the reduction in size of the Service following the 2004 Spending Review, havebeen paid the amounts due to them under the provisions of the Civil Service Pensions Scheme. We have norecord of any oYcer receiving payments in excess of these entitlements.

Question 16. Recent examples of failure in project management at FCO have included slippages inimplementing Prism and i-visas and cost overruns on building projects. A lack of project management skills wasalso highlighted by the Collinson Grant Report. How does the FCO intend to rectify the lack of projectmanagement skills within its staV?

Answer: There is a dedicated Programme and Project Management team within Finance Directorateresponsible for policy in this field. The team manages their own in-house website, which oVers links to arange of internal and external programme and project management training courses. Internal trainingcourses include an introduction to programme and project management for all staV, with priority beinggiven initially to new entrants, and two courses aimed specifically at those running Global OpportunityFund programmes. To support the Global Opportunity Fund programmes we have established a regionalProgramme Management OYce in Delhi. This oVers training to staV based in the region. We are currentlyreviewing all training on oVer for Professional Skills for Government core skills, which of course includesprogramme and project management, and looking at the possibility of obtaining accredited programmes.FCOServices are the main providers of professional project management to the FCO. As part of the moveto trading fund status, they aim to establish a centre of excellence for programme and project managementto improve delivery through further staV training.

Question 17: How many applications from all grades for voluntary redundancy have been received; how manyhave been accepted and how many have been rejected? In respect of the posts held by those whose applicationshave been accepted, how many will be refilled and how many will be scrapped?

Answer: 402 members of staV applied for early retirement or severance to help the FCO meet the staVsavings required under the 2004 Spending Review. Of these 269 were accepted. We are continuing toconsider applications from members of the Senior Management Structure, until 31 March 2006. So far afurther 14 applications have been successful. There will be no exact match between staV departures and jobreductions. This is inevitable in an organisation where staV move jobs regularly. But the FCO is committedto a staV reduction of 310, to be found mostly from administrative support functions, by 1 April 2008. Weare on course to achieve this target. There will be an increase in the numbers working in the service deliveryareas of consular and visa work, where staV numbers reflect external revenue income.

Question 18. BBC World Service—is there a threat to the Nepali service?

Answer: BBC World Service’s Nepali language Service was not part of the changes to BBCWSannounced on 25 October. The BBCWS has no plans to close the Service. There has been some disruptionto the rebroadcasting of the Nepali service. But this is a result of the political situation in Nepal, rather thanany changes implemented by BBCWS—the Nepalese government has barred FM stations frombroadcasting news.

Question 19. What is the financial breakdown of stakeholder contributions to BBC Monitoring?

Answer: There are four BBC Monitoring stakeholders. These are Cabinet OYce (who will assume thelead stakeholder role for BBC Monitoring in 2006), MOD, BBC World Service and the FCO. Under theterms of the new funding settlement, the financial contributions from 2006–07 onwards will be as follows:

MOD £7.5 millionCabinet OYce £5.4 millionWorld Service £6.1 millionFCO £3.1 million



In addition to the stakeholder contributions, in FY 06/07 and 07/08 the Treasury have agreed to add £2.5million pa to BBC Monitoring from the Counter Terrorism Reserve. From FY 08/09, the Treasury will add£1.3 million pa to BBC Monitoring’s baseline funding. This will deliver an average funding level for the five-year period of £23.8 million pa. This amount is augmented by some income derived from BBC Monitoring’scommercial sales.

Question 20. What criteria does the FCO use when deciding whether to volunteer a document to theCommittee? Will the OYce consider in future sending the Committee important Reports that are clearlyrelevant to its work, such as those by Collinson Grant and by Norman Ling, without waiting to be asked?

Answer: We always seek to ensure that the Parliamentary aspects of our work are taken fully into accountas it is progressing, including the need to keep the FAC informed. This is particularly true of areas in whichwe know the FAC has an active interest. But we have not in the past had formal criteria for volunteeringdocuments.

We have therefore reviewed our approach and will incorporate guidance to staV in writing submissionsor presenting reports to the Board that proactive disclosure to the FAC of decisions or activity should alwaysbe considered. The presumption will be that such information should be volunteered, but we would alwayshave to take into account personal and commercial confidences, and any impact on the conduct ofinternational relations.

Question 21. In how many cases since the Freedom of Information Act came into force has a decision by theFCO to withhold information sought under the Act been overruled on appeal?

Answer: In the period since the Freedom of Information Act came into force on 1 January this year until30 September, the FCO has received a total of 1,059 requests. Of the 68 cases that were subject to internalreview within the FCO, three were overturned, seven were partially overturned, and the remainder wereupheld.

In the same period, the FCO has received and responded to six complaints from the InformationCommissioner, none of which has so far led to a decision to withhold information sought under the Actbeing overruled.

Question 22. The FCO’s classified scorecards include performance indicators relating to the MillenniumDevelopment Goals and other areas of policy which might be regarded as being of very legitimate public interest,without compromising security. Is the FCO satisfied that the classification of a very high proportion of itsperformance measures is consistent with its obligations to enable public scrutiny of its achievements? Will theOYce have another look at this, with a view to achieving greater openness and transparency?

Answer: The FCO agrees all of our PSA performance scorecards with the Treasury.

Under the 2002 Spending Review (SR), the FCO and Treasury agreed to classify certain scorecards toensure that the FCO’s strategy for achieving our targets would not be compromised, and that the UK’sposition in international negotiations would not be prematurely disclosed. If the FCO made public itsnegotiating position, it would risk getting a worse deal for the UK in the future. Some of the classifiedscorecards also contain sensitive information, which, if made public would risk damaging UK’sinternational relations.

We do however recognise the importance of transparency in order to allow proper public scrutiny of ourperformance and achievements. We have therefore declassified the performance scorecard relating to SR 02PSA 7 which included our activity in respect of the Millennium Development Goals. We were mindful thatas time has elapsed the risks to the UK’s negotiating position have diminished.

Having learned from our experience following SR02, we sought to reduce the number of classifiedscorecards underpinning our SR04 PSA targets. Hence, only one of our SR04 PSA targets (PSA3 relating toNATO and European Security, shared with the Ministry of Defence) is completely underpinned by classifiedscorecards.

To promote transparency, the FCO has also changed the way in which we report against our targets. Wewill in future routinely publish our unclassified scorecards and indicators alongside performanceassessments, starting with publication of the 2005 Autumn Performance Report.



Question 23. Will the FCO publish the unclassified summary of the Ling Report on Prism? If not, why not?

The unclassified summary of the Ling report on Prism has now been published on the FCO Website.

Question 24. What changes have been made to FCO procedures to avoid problems of the type experienced withPrism? Specifically, what action has been taken in response to each of the 26 unclassified recommendationsmade in the Ling Report?

Answer: All major ICT programmes are now required to assess their performance against each of therecommendations in the Ling report. The assessments are scrutinised by the FCO Investment Committeeand follow up action commissioned where deficiencies have been identified. A report summarising theimpact of the Ling report on ICT programmes will be submitted to the FCO Board in January 2006.The Future Firecrest Programme were the first to carry out an assessment, a copy can be made available forthe FAC if required.

Sir Michael Jay KCMGPermanent Under Secretary of State

22 November 2005

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Written evidence

BBC MONITORING

Copy of an email sent to the Chairman of the Committee from Dr Chris Westcott, Director,BBC Monitoring

As you know the FAC has engaged closely with the future of BBC Monitoring since the FCO publiclystated that they intended to remove £2 million pa from our funding. You commented favourably on BBCMonitoring’s work and impact in your Report on the FCO’s Annual Report (HC 745 para 167):

167. We conclude that it is utterly perverse that the future of BBC Monitoring should be placed indoubt at the very time when its services are arguably most important to the country’s security anddiplomatic needs, and when it is being almost universally praised by its users. We recommend thatBBC Monitoring be given financial security by the FCO and its other stakeholders to ensure its future.

Following the FCO decision to reduce its contribution to our funding the Cabinet OYce commissioneda Review of BBC Monitoring which got underway last summer. That Review has now concluded andreported.

I’m pleased to report that the FCO signed oV on the BBCM Review outcome last week. This completesthe final stage of the review’s terms of reference following sign oV by the BBC Board of Governors at thebeginning of July.

I am going to announce the outcome to all BBC Monitoring staV tomorrow, Monday 1 August. Thisannouncement will coordinate briefings for our staV in Caversham, Nairobi, Moscow, Kiev, Baku,Tashkent and Cairo.

Coincident with my announcement to BBC Monitoring staV (timed for 12:00 BST Monday 1 August) Iwanted to share the outcome with you and your committee.

I believe the Review outcome is a very positive one for BBCM. The outcome provides us with an increasein our funding and a new, more strategic, framework within which to work with our stakeholders and users.

I’ve summarised the outcome and some next steps on a 1 pager that all BBCM staV will get tomorrowthat I’ve attached to this email. In summary the outcome establishes:

— A good funding outcome for FY 06/07—10/11 given the circumstances:

— While the Review recommended an average of £24.6 million pa from 06/07 to 10/11, the actualoutcome equates to an average of £23.8 million pa over the same period. As a result we willregrettably need to close 50–80 posts by March 2007. We feel that this is manageable given positiveengagement in strategic change by BBCM staV, including the Trades Unions.

— Achieving this level of funding took a considerable amount of time and eVort by the Reviewer, SirQuentin Thomas, and Sir David Omand, both of whom had extensive discussions with ourstakeholders and HM Treasury. These discussions, and those of the Review group, were mademore diYcult by the FCO stating to the Review at its inception that they wished to remove £4.5millon pa from our funding, not £2 million pa, a position that was described by the FCO as “non-negotiable”.

— A new funding regime: single “ring fenced” funding (similar to that pertaining to BBC WorldService) replacing the current “dis-aggregated” subscription model.

— The Cabinet OYce is our new “sponsor department” replacing the FCO.

— A new Governance Panel chaired by the Cabinet OYce to replace the current FCO chairedStakeholder group.

Furthermore the Review concludes:

— that BBCM services—in partnership with the US FBIS—match UK requirements;

— the review says the partnership works well, is crucial and provides excellent VFM; that the UKrequires global open source (“a rich resource”); that open source is low cost relative to the benefit,and its value is greater when dealt with systematically and speedily; and

— that it should be a UK objective to give BBCM stability and confidence allowing us to focus onmaintaining the operation and developing products/services that match customer needs.

As you can see from this brief summary the outcome is a very considerable advance on where we havebeen under the current stakeholder regime and where we could been if the FCO’s position had led to otherstakeholders also removing funding.

That the Review outcome is such a positive one for BBC Monitoring is due to the strong support shownat the highest levels by our MoD, Cabinet OYce, BBC World Service and Intelligence Agency stakeholders.It is also due to the professionalism and dedication of two fine public servants: the Reviewer Sir QuentinThomas and for the former Intelligence and Security Co-ordinator Sir David Omand.



Finally, on behalf of myself and all my staV at BBCM, I’d like to thank you for your committee’s role.From your very public support to your extensive and eVective work behind the scenes, your position onBBCM was instrumental in getting us to where we are today. In all the staV briefings on the outcome I andmy Direction team will be making this point and expressing their thanks as well.

I would be more than happy to provide you and the members of the FAC with a fuller briefing at anytime. Please feel free to contact my oYce and if there is anything I or BBCM can do for you just call.

31 July 2005

CABINET OFFICE—REVIEW OUTCOME

— A good funding outcome for FY 06/07—10/11 given the circumstances:

— initial five year agreement: stable funding to the end of the decade;

— tight public sector funding a fact of life, so:

— cost reductions ! eYciency savings ! reprioritisation continue; and

— £2 million pa cost reduction by March 2007: 50–80 net jobs lost.

Financial Year 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11

Current Stakeholder funding £m 22.1 22.1 21.1Review recommendation £m* 24.6 24.6 24.6 24.6 24.6Review outcome £m 24.6 24.6 23.4 23.4 23.4

* the Review recommended an average of £24.6 million pa from 06/07 to 10/11 the actual outcome equates to an average of£23.78 million pa from 06/07 to 10/11

— New funding regime: single “ring fenced” fund a.k.a. BBC World Service

— replaces separate subscriptions and core/product split

— The Cabinet OYce is our new “sponsor department”

— FCO relinquishes role of lead stakeholder

— New Governance Panel chaired by Cabinet OYce

— members: existing stakeholders ! three agencies.

— BBCM ! FBIS normally attend, HM Treasury can be invited

— BBCM services—in partnership with FBIS—match UK requirements

— partnership works well, is crucial and provides excellent VFM

— UK requires global open source—a rich resource

— open source: low cost relative to the benefit & value greater when dealt with systematically& speedily

— UK objective: to give BBCM stability & confidence:

— allowing us to focus on maintaining the operation

— develop products/services that match customer needs

Next Steps

— Ensure all BBCM staV fully understand the review outcome

— The Direction team and Project Group:

— will work with all BBCM staV to identify the best ideas for the future

— iterative process involving stakeholders, FBIS and Trades Unions

— Direction team, BBCM Supervisory Board & ExBo:

— decide on detailed, costed proposals for the future

— complete formal I.R. processes in line with Agreed Statements

— Whole of BBCM:

— execute to time and budget

Strategic Themes to 2010

— Digital—source of competitive advantage

— impacts of the digital media landscape and our use of the technology



— Processes—greatest opportunity for change

— simplify & reduce cost; add value & avoid repetition, key to flexibility, resilience and VFM

— People—at the heart of what we do— culture, values, trust, openness; types: staV, IC, UK, overseas, etc.

— Products—stakeholder needs now & in the future

— quality, reach, reputation, impact, volume ! insight & analysis

CONSULAR SERVICES

Letter to the Clerk of the Committee from Paul Sizeland, Director, Consular Services, Foreign andCommonwealth OYce

Updating of Consular Directorate’s List of Notifiable Serious Arrestable Offences

I wrote to you last year suggesting that you might like to share with the Foreign AVairs Committee thelist of serious arrestable crimes which our consular oYcials overseas use to ensure that the National CriminalIntelligence Service is informed if a British national is arrested for one of these crimes. As I said then, I tryto ensure that consular staV working overseas have the best reference tools and information available tothem and to ensure a consistent, world-wide approach.

It has recently been brought to our attention by the law enforcement agencies that this list had someomissions. We have therefore updated it. In addition to the Police and Criminal Evidence Act, we have alsoused definitions in the Criminal Justice Act (Schedule 15) 2003 and the Regulation of Investigatory PowersAct (RIPA) 2000. We have also taken the opportunity to clarify our obligations under the Sex OVendersRegister and the Sexual OVences Prevention Orders.

I thought that you might again like to share the enclosed updated list with members of the Foreign AVairsCommittee.

Paul SizelandDirector, Consular Services

14 September 2005

APPENDIX 1

Serious Crimes—Notifiable to NCIS on Arrest(Amendments to previous list in italics)

General

— Treason

— Murder and manslaughter

— Kidnapping and Hostage taking

— Hi-jacking and Endangering trains, ships, planes, etc

— Terrorism

— Torture

— Human traYcking (for exploitation) and People Smuggling (illegal immigration), to includepreparatory and ancillary oVences of forgery and possession of forged documents

— Causing explosions likely to endanger life or property

— Possession or use of firearms or imitation firearms with criminal intent

— Assault causing serious injury—the injury can be physical or mental

— Child cruelty and Neglect

— Female Genital Mutilation

— Riot and Violent Disorder, such as football hooliganism, etc

— Theft and related oVences, such as robbery, fraud, burglary, etc, involving substantial sums orsignificant loss or injury

— Arson and other cases of serious criminal damage, such as threat to life and serious damage toproperty

— Money laundering



— Causing death by dangerous driving

— Causing death by careless driving, when under the influence of drink or drugs.

Drugs

— Production, supply and possession with intent to supply controlled drugs

— Manufacture and supply of substances mainly used in the manufacture of controlled drugs

— Illegal importation and exportation of controlled drugs

— Excise oVences, such as large-scale smuggling of alcohol and tobacco.

Sexual Offences

— Rape

— Assault by penetration, by a part of another person’s body or with an instrument

— Causing or inciting a person to engage in activity involving such penetration without consent

— Indecent assault which constitutes an act of gross indecency

— Publication of obscene material

— Publication, possession and distribution of indecent images of children

— Attempts and conspiracies to commit any of the above oVences.

Notification of all the above oVences to the National Criminal Intelligence Service (NCIS), via the DeskOYcer in Consular Directorate, is triggered by a person’s arrest, charge, conviction, other finding of guilt,or deportation.

If the person is convicted of the crime overseas, then that conviction will appear on their record ofprevious criminal convictions on the Police National Computer (PNC), if the conviction is supported byfingerprint evidence. Otherwise, the information will be recorded on intelligence databases.

Sex Offenders Register and Sexual Offences Prevention Orders

In addition, and in order to include relevant oVenders on the Sex OVenders Register or to apply for SexualOVences Prevention Orders in the UK, NCIS should also be informed of:

— Any sexual oVence, from rape to indecent exposure, committed against a person under the age of 18

Notification in these cases is triggered by a person’s conviction. However, if Posts inform their DeskOYcer of a person’s arrest for any of these oVences, then the Desk OYcer will inform NCIS at theappropriate time.

Letter to the Chairman of the Committee from the Secretary of State for Foreignand Commonwealth AVairs

CONSULAR GUIDE CONSULTATION

British people now make some 65 million overseas trips a year, and some 13 million British nationals liveoverseas. Thankfully, the vast majority of those British nationals who travel and live abroad do so withoutserious diYculty. But the Foreign and Commonwealth OYce’s consular staV in the UK and worldwide nowdeal with some 3.5 million enquiries and some 85,000 new cases requiring more acute support every year.

A number of factors have led to a steady increase in demand for consular assistance, including the growthin travel; more trips by vulnerable groups such as the elderly; the rise of international terrorism; and naturalcatastrophes such as the tsunami or the recent hurricanes in the United States. The Foreign andCommonwealth OYce has worked hard over the past years to respond to these challenges, includingthrough better arrangements for responding to crises, building stronger partnerships with otherorganisations in delivering consular assistance, and implementing changes to our travel advice to helppeople make informed decisions about their safety overseas.

In its manifesto for the last General Election, the Government committed itself, if elected, to consultingwidely before drawing up a comprehensive statement of the consular assistance which the FCO can provideto British travellers and residents in diYculty overseas. Such a comprehensive guide to this support has notpreviously been available in a single document.

By publishing this document and through the consultation preceding its formal launch, the Governmenthopes to achieve two main objectives:

— to raise public awareness of what support our consular staV can oVer and of the constraints on thathelp imposed for example by the very diVerent conditions in which we operate around the world



— to foster a wider debate on the questions underlying our services: for example, how much shouldpublic money be used to help those who have got into diYculty abroad, including those who havenot taken out appropriate insurance? How can we help British travellers and residents overseasbetter to protect themselves against things going wrong.

I enclose a draft text1 of the comprehensive statement foreseen in the Government’s manifesto. LordTriesman is hosting a consultative event with external stakeholders on 27 October to discuss the key issues.He would very much welcome an opportunity to discuss these with you, as Chair of the Foreign AVairsCommittee, beforehand. I am very keen to engage Members on these important issues and am making awritten statement to the House this week inviting Members to give their views.

Jack Straw MPForeign Secretary

18 October 2005

Letter to the Chairman from the Secretary of State for Foreign and Commonwealth AVairs

As you are no doubt aware, the last two months have been exceptionally busy ones for the Foreign OYce’sconsular crisis teams. Hurricane Katrina at the beginning of September was followed in quick successionby Hurricane Rita from 23 September 2005 onwards, the bombings in Bali on 1 October 2005, the Pakistaniearthquake on 8 October 2005 and, most recently, Hurricane Wilma in Mexico.

This memorandum sets out in detail the action which the Foreign OYce took in response to the twohurricanes which hit the United States—concentrating in particular on our handling of Hurricane Katrina.I believe it shows that, on the whole, Foreign OYce staV did an exceptional job in extremely diYcultcircumstances.

Hurricane Katrina caused major destruction to the coastal areas of Louisiana, Mississippi andAlabama—and in particular to the city of New Orleans. In total the federal authorities designated over233,000 square km as a disaster zone—an area about the same size as the United Kingdom. The hurricanedisplaced over one million people and caused damage estimated at between US$ 70 billion and US$ 130billion. The oYcial death toll stands at around 1,300 people. Although we do not know the exact numberof British nationals aVected, we estimate that in Hurricane Katrina it was probably fewer than 1,000. Ofthese only a small number were tourists. Most were businessmen and long term residents, many of the latterbeing British/US dual nationals. They were spread across the aVected area. One Briton (a long term residentof New Orleans) is confirmed dead, and nine remain on the list of those originally reported missing. Thereare no reported British casualties from Hurricane Rita.

In response to both hurricanes, we used well-rehearsed standing arrangements to make sure that we gottrained staV on the ground quickly. This included sending rapid deployment teams from London to providesupport to our consular staV deployed from across our posts in the United States. The first such team arrivedin Houston on 1 September, the day after the levees broke in New Orleans. Our Consulate General therehad already set up a reception centre for British nationals being evacuated out of New Orleans and had beenasked by the local authorities to co-ordinate international relief eVorts. The British consular presence wasthe largest of any country. Our staV continued to work around the clock providing a rapid and co-ordinatedresponse in extreme conditions.

Attached to this memorandum are examples of the praise which British nationals gave for the helpprovided by our consular staV, and for the eVorts which were made to search for and locate those reportedto us as missing. We have also been thanked by EU partners for our co-ordinating role with them. Inaddition to the purely consular response, our Embassy in Washington, and staV from the Cabinet OYce andDfID, helped to co-ordinate UK and EU assistance to the US authorities.

I am sure that you will remember that there was criticism at the time of Hurricane Katrina that we wereslow in getting to those British nationals who were in the New Orleans Superdrome. As the attached recordshows we repeatedly requested access to New Orleans but were denied it by the State authorities. Once thoseauthorities sanctioned access on 4 September 2005, our consular staV were among the first into the city.

I would also like to make a point of noting that some of the criticism in the press—most notably from theMail on Sunday—had no basis in fact. An article written by that newspaper, and subsequent correspondencebetween the Managing Editor and David Triesman, are attached at section G. I am sure that you will fullyunderstand that it would be quite wrong for ministers to allow such a false accusation to stand against staVwho have volunteered to work extraordinarily long hours in very harsh—and sometimes traumatic—conditions.

This is not to say that our response was faultless; it wasn’t and it never will be in such a situation. Wherethere were complaints we have investigated them. And just as we have learned from previous incidents,including the tsunami in the Indian Ocean, we shall use the experience gained from Hurricanes Katrina andRita to improve our response further in future.

1 Not printed.



But overall, I believe that the Foreign OYce’s response to these huge natural disasters was professionaland well-run. In the vast majority of cases our staV did a good job and in many they went well beyond thecall of duty.

I would be happy to provide any further detail or clarification which the Committee may need.


10 November 2005

Memorandum to the Foreign AVairs Committee: FCO Response to Hurricanes Katrina and Rita

This memorandum sets out the FCO response to Hurricane Katrina which hit the Gulf Coast ofLouisiana, Mississippi and Alabama on 29 August 2005, and to Hurricane Rita, which hit the Texas Coaston 24 September 2005.

A. Timeline of Events

26 August: Tropical Storm Katrina hits Southern Florida

26 August: Travel Advice amended as follows: Tropical Storm Katrina hit Florida during the night of25 August, causing damage to trees and buildings. It is currently moving southwest across southern Florida.You should check news reports and keep in touch with your local travel agent about how this might aVectyour travel plans.

26 August: Travel Advice amended as follows: Hurricane Katrina hit Florida during the night of25 August causing flooding and damage to trees and buildings. It is now gaining intensity in the Gulfof Mexico and is expected to re-enter Florida or Alabama sometime on 26–27 August. You should checknews reports and keep in touch with your local travel agent about how this might aVect your travel plans.

27 August: Katrina becomes Category 2 Hurricane.

28 August: New Orleans Mayor orders mandatory evacuation of the city.

29 August: Authorities move those not evacuated from New Orleans to the Superdome andConvention Centre.

29 August: Travel Advice amended as follows: Hurricane Katrina hit Florida during the night of25 August causing flooding and damage to trees and buildings. It has since gained intensity and hasremained in the Gulf of Mexico region. The situation is liable to change quickly. You should check newsreports regularly and keep in touch with your local travel agent about how this might aVect your travel plans.

29 August: Katrina strikes New Orleans at 6.10 am local time, 12:10 pm London time. Wind speeds upto 155 mph are recorded.

29 August: Travel Advice amended as follows: Hurricane Katrina reached landfall on the coast ofLouisiana during the morning of 29 August. It has been classified as a Category 4 hurricane (wind speedsof 131 to 155 mph). The storm will proceed northwards on a projected path through the states of Louisianaand Mississippi. Please visit http://www.noaa.gov/ for more information on the hurricane and http://www.fema.gov/ for advice on how to deal with hurricanes. The situation is liable to change quickly. Youshould check news reports regularly and keep in touch with your local travel agent about how this mightaVect your travel plans.

30 August: Louisiana State Authorities advise residents to wait for area to be declared safe beforereturning home.

30 August: Mississippi Emergency Management Agency report that they have no knowledge of anyBritish citizens being injured in the recent hurricane.

30 August: Consulate General in Atlanta report all known missing British citizens to the Red Crossnational helpline. Red Cross advise that families are going to have to wait until communications are up-and-running to contact family members. Their priority is reaching those people who are disabled or in needof special assistance.

30 August: FCO Emergency Response Team (ERT) take over call handling in London but are stooddown after only four calls received. Responsibility passes back to FCO Response Centre out of hours andConsular Directorate during oYce hours. Consulate General in Houston is the principal call centre and isstaVed for 24-hour operation.

30 August: Travel Advice amended as follows: Katrina has been downgraded from a hurricane to atropical storm and, although still aVecting the southern US, it is expected to further diminish in strength.There have been an unconfirmed number of casualties, as well as widespread damage and disruption to partsof Louisiana, Mississippi, Alabama and Florida. Please visit http://www.noaa.gov/ for more information



on the hurricane and http://www.fema.gov/ for advice on how to deal with hurricanes. The situation is liableto change quickly. You should check news reports regularly and keep in touch with your local travel agentabout how this might aVect your travel plans.

30 August: Houston Deputy Consul General contacts Louisiana authorities seeking information aboutBritish nationals, state of the city and consular access. Was told that Federal Emergency ManagementAgency (FEMA) were denying access to New Orleans because the city was unsafe.

30/31 August: New Orleans levees break.

31 August: Travel Advice amended as follows: Hurricane Katrina has caused widespread damage in thestates of Louisiana, Mississippi and Alabama. Communications and the transport infrastructure have beenbadly aVected. All airports in the region are closed. There have been a number of casualties. Please visithttp://www.fema.gov/ for advice on how to deal with hurricanes. You should check news reports regularlyand keep in touch with your local travel agent about how this might aVect your travel plans.

31 August: US declares State of Emergency. Governor of Texas calls Harris County oYcials(at 3:00 am) asking them to help with New Orleans evacuation.

31 August: State of Georgia relays the following message to all Consulates in Atlanta—“GovernorBarbour of Mississippi and Governor Blanco of Louisiana have essentially ordered that only essentialemergency, rescue, and recovery personnel may be in the area.”

31 August: UK response being co-ordinated from British Embassy Washington. Deputy Head ofMission is the crisis manager, with an Embassy team allotted specific roles. Regular teleconferences chairedby Washington between Embassy, FCO in London, Houston, Atlanta and (later) teams in the field.

31 August: Consulate General in Houston informed that Britons in New Orleans Superdome were to beevacuated to Houston Astrodome from that night.

31 August: Consular oYcials set up 24-hour reception centre at the Houston Astrodome to meet Britishand other eligible nationals (EU and Commonwealth) arriving from New Orleans Superdome.

31 August: Deputy Head of Mission Washington travels to Houston to co-ordinate UK operation.

31 August: Director Consular AVairs for the US travels to Houston to lead consular relief eVort.

31 August: Consular oYcials obtain credentials from Harris County and set up 24-hour reception centreat the Houston Astrodome to meet British and other eligible nationals arriving from the New OrleansSuperdome. Within 24 hours, British Consul General Houston is asked by Harris County OYce for ForeignMissions to co-ordinate international response to evacuation. Began operating two sites: one at the pointwhere buses oV-loaded evacuees, to extract them from the flow of people; the other in nearby Reliant Centerwhich served as Consulate Headquarters, with phone, fax and internet capability. Both sites were staVedby consulate volunteers 24 hours/day for seven days and 18 hours/day subsequently. Fifty-one consulatesregistered with the headquarters. For two weeks, the British Consul General Houston met daily with theIncident Command Team and provided briefings to the Houston Consular Corps.

31 August: Our team in the US sends list of all British citizens reported missing to State DepartmentCrisis Management OYce.

1 September: ERT reactivated and new public enquiry numbers released in London and in the US.

1 September: Travel Advice amended as follows: Hurricane Katrina has caused widespread damage inthe states of Louisiana, Mississippi and Alabama. Communications and the transport infrastructure havebeen badly aVected. All airports in the region are closed. There have been a number of casualties. If you arehaving trouble getting in touch with family and friends in the area aVected by the hurricane, please call theBritish Consulate in Houston on Tel No: 713-659 6270—this line is open 24/7. Please visit http://www.fema.gov/ for advice on how to deal with the aftermath of hurricanes. You should check news reportsregularly and keep in touch with your local travel agent about how this might aVect your travel plans.

1 September: First 5-man FCO Rapid Deployment Team (RDT) arrives in Houston.

1 September: Travel Advice amended as follows: Hurricane Katrina has caused widespread damage inthe states of Louisiana, Mississippi and Alabama. Communications and the transport infrastructure havebeen badly aVected. All airports in the region are closed. There have been a number of casualties. The USauthorities are not allowing anyone other than the emergency services into the aVected areas, and thissituation is likely to prevail for some time. You should listen for announcements by US Government andState oYcials and follow any instructions about when to return.

2 September: Team deployed to Baton Rouge to liaise more closely with the Louisiana authorities.

2 September: Deputy Head of Mission Washington speaks to Louisiana Secretary of State Olivierrequesting access to New Orleans and is denied.

2 September: News media continue to report that there is a lack of security in New Orleans and that theUS authorities are going over the weekend to “take back the streets”.

2 September: Consular Teams sent to other emerging evacuation reception centres in Dallas, BatonRouge and San Antonio.



2 September: Cheryl Plumridge (Director Capabilities, Cabinet OYce Civil Contingencies Secretariat,COCCS) arrives to pursue detailed discussion with the Administration and US military over UK assistance.

3 September: Four-person team from Atlanta, supported by other US posts, travels to Alabama andMississippi checking Red Cross shelters in Georgia, Alabama and Mississippi.

3 September: Consular team from Los Angeles deploys to Arkansas.

3 September: StaV outside New Orleans try to gain access to the city and are refused by US authoritieson the ground.

4 September: Second RDT deployed to aVected area (four people).

4 September: Director Consular AVairs and RDT gain access to New Orleans.

4/5 September: British Ambassador visits Houston.

5 September: Hurricane Unit set up in FCO with team of four staV.

7 September: OYcer deploys from Washington to set up an FCO oYce in Baton Rouge to liase with StateDepartment oYce, Louisiana authorities and Consular teams.

9/10 September: British Ambassador visits Atlanta.

10 September: Second oYcer deploys to Baton Rouge to take charge of FCO oYce.

10/11 September: British Ambassador visits Baton Rouge and New Orleans.

14/15 September: Greater Manchester Police (GMP) visit FCO Hurricane Unit to discuss arrangementsfor GMP assistance with missing person enquiries.

15 September: Lord Triesman, Minister of State for Consular AVairs, visits Baton Rouge. Meetsconsular team and speaks by telephone to those aVected.

17 September: Consular teams withdraw from Mississippi/Alabama.

19 September: Greater Manchester Police (GMP) take over enquiries to trace remaining 68 missingBritons following Katrina. Police operation named Operation Dimension. A FCO Liaison OYcer isassigned to work alongside GMP.

23 September: Hurricane Unit takes on handling of calls following Hurricane Rita.

26 September: Head of FCO Hurricane Unit and Police Liaison OYcer in Consular Directorate visit theGMP operation in Manchester.

27 September: Progress being made in tracing Katrina-related missing persons. GMP start to reduce thenumber of oYcers deployed on Operation Dimension.

30 September: FCO Liaison OYcer withdrawn from Manchester. Continues to act as police liaisonoYcer from London.

B. Activity in London

1. Over the bank holiday weekend of 27–29 August, the FCO Response Centre remained in touch withour posts in the United States and with Britons concerned about relatives and friends who might have beenin the vicinity of the Hurricane. There were very few such calls. Consular Directorate’s emergency callhandlers in the Emergency Response Team (ERT) were on standby to man the Emergency Response Unitas they are each weekend. The duty Rapid Deployment Team was also on standby.

2. Following the Bank Holiday, our Consular Assistance Group took over contact with posts and thefielding of calls from relatives. During 30 August they received only 35 calls relating to Katrina. As aprecaution, Consular Crisis Group brought the ERT call handlers on duty for the night of 30 August butthey were stood down during the evening after receiving only 4 calls. Responsibility for handling Katrinacalls overnight reverted to the FCO Response Centre until the next day.

3. On Wednesday 31 August, news reached London that the New Orleans levees had broken. TheEmergency Response Team of call handlers were again deployed to handle calls which began to increasesteadily throughout the day. New contact numbers for relatives—an emergency information line—werereleased in both London and Houston. These numbers were kept open on a 24 hour basis.

4. The Head of Consular Crisis Group liaised with his opposite numbers in EU capitals by teleconference.They agreed that the UK as Presidency would co-ordinate information on local consular assistance onthe ground.

5. Following discussion with Washington on 31 August, 11 Rapid Deployment Team volunteers weredeployed from the UK to the aVected areas to support staV from our US network: five on 1 September, fouron 4 September, one (a Press OYcer) on 9 September, and one on 11 September. In addition three membersof staV were deployed to Baton Rouge on temporary duty to continue local enquiries about missing Britons.

6. Consular Directorate kept FCO Ministers up to date on the consular response to the hurricane throughdaily briefing sit-reps. The FCO web-site and Travel Advice was also continuously updated.



7. The Cabinet OYce Civil Contingencies Secretariat (COCCS) mechanism for inter Whitehalldepartmental co-ordination was also activated at FCO request on 1 September, to discuss consular andother issues including assistance to the US and requirements for support from other Whitehall departments(eg the return to the UK of any British nationals; contingencies for the return of bodies for burial).

8. A separate Hurricane Unit was set up with four additional staV, as part of Consular Crisis Group, on5 September. This unit also handled calls concerning Hurricane Rita from 23 September.

C. Reports from the British Embassy, Washington During the Crisis

The following reports2 were received from Washington in the aftermath of the hurricane. Also attachedis a special feature article3 on the work and experiences of our teams on the ground, produced by theEmbassy for their Focus magazine.

D. Financial Implications

1. It is too early to put a figure on the total cost to the FCO of our response to Hurricane Katrina. Thebill from Greater Manchester Police is awaited.

2. In addition to staV deployed from the UK and from around the US, we put together a package ofmeasures from which assistance could be drawn for British nationals as follows (a similar, though slightlyrefined package was oVered to British national aVected by Hurricane Rita):

— Continuing support for tourists who need help before they return to the UK (accommodation,food and clothing and help with tickets back to the UK).

— Five nights’ accommodation for any residents in desperate need of help. Posts have discretion toadd a further two nights’ food and accommodation.

— Flights for US residents who want to return to the UK.

— Flights for family of those most likely to have been involved and still missing, who want to travelout to the US as soon as it is appropriate.

— If British deaths are confirmed, repatriation of remains and assistance as above to families whowish to travel out to the areas.

3. So far there has been little take-up of this assistance package. Only seven people have had tickets paidfor, or reimbursed after the event.

4. Lord Triesman spoke to the son of the deceased Briton and oVered to pay for the funeral expenses inthe US and the repatriation of her ashes to the UK. This was in recognition of the help the son gave to ourteams operating in New Orleans, work for which he refused payment.

E. International and Bilateral Assistance

1. As EU Presidency, the Embassy co-ordinated the EU response alongside our own bilateral assistanceand consular activity.

2. The Embassy collated lists of missing EU citizens and put out information to EU Embassies wheneverit had been obtained from the US authorities. Our consular teams on the ground helped EU (and other)nationals when requested. The Embassy acted to facilitate EU assistance as and when needed. We havereceived a number of plaudits from EU Ambassadors for both our consular and assistance work (attached).

3. Cheryl Plumridge (Director Capabilities, Cabinet OYce Civil Contingencies Secretariat, COCCS)arrived on 2 September to pursue detailed discussion with the Administration and US military over UKassistance. She was joined by three colleagues, from the COCCS and DFID. The team were co-located withthe OYce for Disaster Assistance (OFDA) Response Management Team (RMT) which was set up inArlington, Virginia. It included staV from US Agency for International Development (USAID),Department of Defense, US Customs, State Department, and international personnel from the EU, UN,NATO and the International Red Cross.

4. The DFID expert (David Horobin) with the COCCS was designated the EU Expert Co-ordinator bythe Commission—the US point of contact for the EU co-ordination mechanism (known as the MIC).

2 Not reproduced.3 Not reproduced.



5. The COCCS team was charged with supporting USAID eVorts following Hurricane Katrina. Inparticular it helped to provide structured arrangements for co-ordination between the RMT and both theEU member states and the European Commission. It assisted with incoming enquiries from participatingUS entities regarding EU activities in support of the US government and assisted in providing clarificationon any technical issues arising from planned activities.

6. The team handled specific enquiries on operational assistance from EU members. The UK Embassy,in its capacity as Presidency of the EU, helped the US Government with broader questions.

F. Latest Figures on UK Nationals Affected

1. We estimate that the total number of British nationals aVected by Hurricane Katrina to be less than1,000. Most of these were long term residents (including British-US dual nationals), businessmen andtourists.

2. As of 13 October, one British national has been confirmed dead (a long term resident of New Orleansand a UK/US dual national). Nine people remain on the list of those originally reported to us as missing.

G. Public Criticism, and Bouquets

1. There were some critical comments made in the early days of the crisis. We received one MP’s letterregarding a constituent’s complaint that their son had not received consular assistance while he was in theNew Orleans Superdome.

2. The FCO is aware of the following criticisms:

We did not respond to requests for help from distressed British Nationals

— In many cases, our consular teams were the first people to reach British nationals trapped in theirhouses. We provided whatever help we could. This took many forms, including giving food,money, use of a cell phone to call family/friends, helping evacuate etc (see attachment D for moredetails). 420 missing persons were reported to the Emergency Response Team (ERT) in Londonand to our 24-hour response line set up in the US. We were able to resolve 250 of these cases fairlyquickly, leaving 170 people unaccounted for. Our consular teams on the ground conducted ahouse-by-house search, as areas became accessible using addresses provided by those reportingmissing persons. We also immediately notified their family when a missing person was found.

The Embassy refused to help callers

— On Friday 2 September press reports of trapped Britons in the New Orleans Superdome startedto appear. Britons in the aVected areas called relatives and complained that they were not beinghelped. The British Embassy, Washington received a call on 30 August from a UK National in theSuperdome who asked if we could send a team by helicopter to evacuate her and a group of otherswhich had congregated together in the stadium. A member of the Embassy’s consular sectionexplained this was not possible and advised that the group should stay close to the police in thestadium. She also gave them the contact details for our Consulate General in Houston and ourHonorary Consul in New Orleans. She recommended that they keep in touch but understood thatcommunications were likely to be diYcult.

The FCO should have entered New Orleans earlier to help those trapped in the Superdome and local hotels.

— At least 13 complaints were received from people who had been in the New Orleans Superdome.The time line (attachment A) shows that we sought access to New Orleans from the very beginning.We were refused access to the city on three grounds: (a) that it was unsafe to enter; (b) that the USauthorities did not want such a presence on the ground at a time when they were gearing up theirrelief eVort and seeking to restore order in the city; and (c) that those in the Superdome were beingevacuated immediately to the Astrodome in Houston and we would be better placed to deploy ateam to meet them on arrival.

— The UK had the only consular team (four people) on the ground to meet and help British andeligible nationals when they first arrived in Dallas after being evacuated from the New OrleansSuperdome. (An Irish Consular OYcer was the only other diplomat present.) We ferried 30 Britishnationals and several others to hotels, organised meals, the purchase of new clothes, professionalcounselling and medical advice and sorted out (and in some cases paid for) their onward flights.We did the same for other British nationals who had not been in the Superdome, but rather inhotels, shopping malls and other places of refuge, and who made it out of New Orleans by othermeans. We were also one of the first to gain access to New Orleans, once the ban on entry to thecity was lifted on 4 September (along with two Australian consular colleagues).



— Over the weekend of 3–4 September press stories circulated that our consular response was“inept”, “cowardly” and “unhelpful”. The Mail on Sunday published a factually incorrect article.The article, Lord Triesman’s response (sent after he had visited the area on 15 September), andsubsequent correspondence, are attached. The article was demoralising to our staV who had beenworking around the clock to help UK nationals, often in diYcult conditions. Many of our staVwent for days with little sleep and no change of clothes.

3. The following is a report4 of 6 September from the Embassy in Washington on good news stories andbouquets.

H. Role of the Greater Manchester Police Force

1. Although FCO eVorts had reduced the number of missing persons significantly, it became apparentthat there was a need to draw on police expertise so that formal missing person investigations could becarried out to trace the 68 Britons still unaccounted for (these included a number of people who we assessedas unlikely to have been in the aVected area). The Greater Manchester (GMP) took over the investigationsat noon on 16 September. GMP named their operation “Operation Dimension”, on which they deployed13 police oYcers.

2. By the week beginning 19 September, the number of outstanding cases had been reduced to fewer thanforty as a result of GMP’s enquiries and reports from the US and to the FCO. GMP assessed a substantialnumber of the cases as unlikely to have been directly involved in the hurricane. As at 30 September, thenumber of outstanding cases stood at 30. We do not anticipate having many, if any, long term missingpersons as a result of the hurricane.

3. A FCO Liaison OYcer was attached to the Greater Manchester Police for two weeks. On 26 Septemberthe head of the FCO Hurricane Unit and Consular Directorate’s Police Special Adviser visited the policeoperation in Manchester. On 30 September the FCO Liaison OYcer was withdrawn from Manchester, butcontinued to act as a police liaison oYcer from London.

4. Our assessment is that the work done by the Greater Manchester Police, the first time that we haveworked with them on a consular emergency, has been a success. Co-operation between the FCO and thePolice was excellent throughout.

I. Hurricane Rita

1. Hurricane Rita, at various times, was a tropical storm and a Hurricane varying between Category 1and 5. It crossed the Texan Coast at Port Arthur on 24 September at 03.31 am as a category 3 hurricane.Our travel advice was updated daily. It impacted on our Katrina work in the following way. The USauthorities ordered the re-evacuation of New Orleans on 22 and 23 September. As a result, the search formissing British nationals in New Orleans had to stop. On Friday 23 September, rain from the edges ofHurricane Rita resulted in a number of repaired levees being breached once more, causing parts of NewOrleans to be flooded once again.

2. Hurricane Rita aVected an area of Texas and Louisiana in which some 60,000 British nationals liveand work, a sharp contrast to the much smaller numbers directly aVected by Katrina. Parts of Houston andcoastal areas were placed under mandatory evacuation. The tower block housing our Consulate-GeneraloYce in Houston was closed on the morning of 22 September and was not open again until 26 September.Our Consul General and her staV then worked from home. Because of this, a Rapid Deployment Team offive was sent to Dallas as a precaution on 23 September, ready to deploy to aVected areas once the hurricanehad passed. The Consul in Washington also deployed to Dallas on 23 September.

3. The Consular Directorate’s Emergency Response Team was activated at noon on Friday 23 Septemberto take calls from friends and relatives of those that might be aVected in the path of Rita. Because of theswift response of the US authorities, casualties as a result of Hurricane Rita were low: 107 deaths (including23 elderly people who died when the coach in which they were being evacuated was engulfed in flames).

4 Not reproduced.



4. We are not aware of any British casualties. Nor have there been any complaints about assistance beingprovided by our oYcials on the ground.

Foreign and Commonwealth OYce

October 2005

Letter to the Head of the Parliamentary Relations and Devolution Team, Foreign and CommonwealthOYce from the Clerk of the Committee

The Committee yesterday received copies of the NAO Report on FCO consular services.

It has also obtained from the NAO copies of a joint NAO-FCO document, entitled Joint findings onlessons to be learned from the handling of the response to the Indian Ocean tsunami. As you know, theCommittee has taken a close interest in the response to the tsunami, and the FCO has previously suppliedus with helpful material on this.

A number of points arise from initial study of the NAO/FCO joint report and the Chairman of theCommittee has asked me to write requesting further information, for the Committee to take into accountwhen it comes to make its report on the FCO Annual Report 2004–05.

1. Does the FCO intend to implement all the recommendations made in the joint report on the responseto the tsunami? If not, why not?

2. The box following para 3.20 of the joint report sets out the assistance package for victims of thetsunami, which covered repatriation of remains, travel by family members, emergency medical assistanceand other expenses. Para 3.22 eVectively recommends that such a package be made a permanent feature ofthe FCO’s crisis response strategy. When will this recommendation be implemented?

3. Para 3.23 suggests that the costs of the tsunami response “might partly be met by the Treasury.” Whatis the latest information on the extent to which the Treasury has met or will meet these costs? How will theremaining costs be met?

4. What discussions has the FCO had with the Treasury about whether the Treasury would in principlefund all or part of the response to a comparable future crisis?

If possible, I would appreciate a reply on each of the above points not later than 12 December.

The Committee notes that a further report by the Zito Trust, presented from the perspective of victimsand their families, will be published by the NAO next year. The Committee may have further questionsarising from that Report.


25 November 2005

Letter to the Clerk of the Committee from the Head of the Parliamentary Relations and Devolution Team,at the Foreign and Commonwealth OYce

Thank you for your letter of 25 November in which you asked several questions about the FCO responseto the NAO report on the Tsunami. Our answers are as follows:

Q. Does the FCO intend to implement all the recommendations made in the joint report on the response to thetsunami? If not, why not?

A. Yes. Many have already been implemented, and the remainder will be implemented as soon as possible.The attached matrix details each recommendation and the action we have taken or plan to take.

Q. The box following para 3.20 of the joint report sets out the assistance package for victims of the tsunami,which covered repatriation of remains, travel by family members, emergency medical assistance and otherexpenses. Para 3.22 eVectively recommends that such a package be made a permanent feature of the FCO’scrisis response strategy. When will this recommendation be implemented?

A. Following any major catastrophes in the future, the Foreign Secretary will make a decision as soon aspossible on whether there is a need to oVer exceptional assistance and what the components of thatassistance should be, bearing in mind the circumstances of the catastrophe and the resources available. Thefactors that the Foreign Secretary can consider in making that decision may include whether there is a



breakdown of basic infrastructure, local services etc preventing British nationals from accessing supportdirectly; or whether as the result of a natural disaster such as flood or earthquake, large numbers of Britishnationals have lost all forms of ID, travel documents, insurance policies, belongings etc.

This will be covered in the Guide “Supporting British Nationals Abroad” (see the Foreign Secretary’swritten statement to the House of 20 October), which will be launched in final form in the New Year.

Q. Para 3.23 suggests that the costs of the tsunami response “might partly be met by the Treasury”. What isthe latest information on the extent to which the Treasury has met or will meet these costs? How will theremaining costs be met?

A. The Treasury agreed on 2 December that tsunami costs may be met from a combination of Emergencyand Disaster Reserve funds, a claim on the Treasury’s Central Reserve, and a contribution from the FCO’s2005–06 end year flexibility. FCO and Treasury oYcials will agree exact proportions in time for the SpringSupplementary Estimates.

Q. What discussions has the FCO had with the Treasury about whether the Treasury would in principle fundall or part of the response to a comparable future crisis?

A. This will be considered as part of the ongoing discussion with the Treasury about the future managementof the Emergency and Disaster Reserve, between Treasury’s Defence, Diplomacy and Intelligence Team andthe FCO’s Finance Directorate.

We also thought the Committee would find it helpful to have matrices listing each of the recommendationsin the NAO’s main review of consular services, along with those of the joint NAO/FCO review of lessonslearned from the tsunami, and the action taken or planned by the FCO on each one. We have thereforeprepared these matrices, which are attached here. I hope the Committee find them useful.


THE FOREIGN AND COMMONWEALTH OFFICE: CONSULAR SERVICES TOBRITISH NATIONALS

DETAILED NAO RECOMMENDATIONS AND FCO RESPONSES

NAO summary recommendation NAO detailed recommendation FCO response

Influencing and changing behaviours of travellers

1. There is scope to better (a) Undertake structured analyses of previous The new version of our consular casework software,understand the root causes of assistance cases, building on other on-going Compass—which isnowbeingrolledout—allowsusassistance cases, and to target research, to better identify key risk traveller better to identify the groups of travellers most likelyhard hitting messages at groups which are less likely to access and to get into diYculty, and the types of casestraveller groups which do not digest the full text of existing, extensive concerned. Analysing and using this information toprepare adequately, or those travel advice; target our communications activity is a high prioritywhich have historically for the consular communications team. We haverequired more consular alsoconductedbench-markingresearchtoestablish,assistance. for example, which groups are least likely to read

Travel Advice or obtain travel insurance, and aretargeting our communications work accordingly.

(b) Increase the use of trend analysis, We are building a capacity for this within our smallinternational passenger surveys and future consular policy team. We have also increased ourmodelling techniques to forecast the likely engagement with outside stakeholders, for examplefuture demand for assistance; through the Travel Advice Review Group and

Consular Strategy Board, enabling us better to drawon and be aware of their own analysis of futuretrends.

(c) Ensure that all country travel advice pages We have begun to collate the necessary informationinclude in their summaries advice on the most (where it exists), and will implement thiscommon causes of assistance cases in that recommendation soon for those countries wherecountry; and information is already available.




(d) Increase the range of media sources used to We have appointed new “student ambassadors” indisseminate messages, targeting identified 15 of the UK’s biggest universities, to promote ourrisk sectors—for example using features on safe travel messages to this vulnerable group oftelevision travel programmes, student travellers using student media and networks. Ourmagazines and tabloid newspaper travel Rough Guide to Safer Travel is also targeted at thissections—and make wider use of illustrative audience. Our TV “fillers” on safety abroad are thepersonal case histories to convey most-played of any Government information films,consequences of being under-prepared. with the equivalent of £324,000 of free air-time in the

last quarter alone. Through a PR company, we havegenerated extensive press, radio and TV coveragethrough research-based stories on key travel themessuch as winter holidays or Hen and Stag partiesabroad. Clearly we need to handle case studiessensitively and respect confidentiality. But we areusing our customer satisfaction survey for the firsttime to ask people if they would be prepared for thedetails of their cases to beused as appropriate in casestudies, and hope that the results of this will providematerial.

2. In developing a consular (a) The consular guide should make clear:customer guide for assistance — The boundaries of consular of consular The Guide will make this clear. It will be launched inwork, the FCOshould consider activity and the services FCO will the New Year.the key criteria it should use to never oVer;establish levels of assistance — The minimum service FCO will try to The Guide will make this clear.which are appropriate for provide in all countries;the country and individual — The minimum level of support which The Guide will make this clear.circumstance. the public can expect to receive in all

cases,whether for terroristatrocities,orother murders overseas or othercircumstances. This may result in theneed for flexible resourcing to provideshort-term assistance to Posts duringmore exacting cases;

— The principles, such as the vulnerability The Guide will set out the principles that Ministersof individuals, which will be considered will consider when deciding if a particular event orwhen assessing whether to provide an set of events is a major catastrophe, which meritsenhanced level of assistance for provision of an enhanced level of support. It alsoparticular cases. takes a criteria-based approach for example in

describing when we will make exceptions to ourpolicy on support for dual nationals. We are doingfurther work on criteria such as individualvulnerability—see under 2(b) below.

(b) The guide should be underpinned by:— A central set of criteria on risks and We have set work in hand to consider what criteria

appropriate assistance levels, to assist staV should use in deciding on the resources toposts in setting—and justifying if devote to individual cases. One example is thechallenged—an appropriate level of vulnerability of individuals (2(a) 4th bullet pointassistance; above).StaVare likely toneedtodevotemore timeto

delivering service to, say, a vulnerable and frailindividual far from home, than to a long-termresident abroad with family support, knowledge ofthe local language and procedures, etc. We areconsidering whether we can codify such criteria inour internal guidance to staV.

— Increased emphasis on sharing the We are co-located with EU partners in Almaty,burden of consular services by working Ashgabat, Dar es Salaam, Pyongyang, Quito,closely with other nations, services, Reykjavik, Minsk and Chisinau. We are alert toincluding pooling of staV resources and further opportunities to expand this list. We haveaccommodation, and driving forward made work on the “EU consular space” a priority ofideas such as European Union our EU Presidency. However, this is still at an earlyconsular space. stage:mostBritishNationals indiYcultyabroadstill

expect to see a representative from the Britishmission rather than having to rely on an EU oYce orthe local authorities.




Moving towards more consistent frontline service to individuals

3. Both increasing the breadth (a) Post reviews should be extended to cover theand depth of coverage of the following areas in more depth:Post review system, and — The appropriateness andconsistency of This has been implemented.collecting fuller management the level of assistance provided;information, would assist the — The accuracy of performance and This has been implemented.FCO in ensuring that posts management information andprovide a consistent level of performance against targets;service, appropriate for the — Customer care, including enquiry This has been implemented.country circumstance. handling, complaints, and facilities;

— The use made of the Compass This has been implemented.assistance software tool;

— Opportunities to work with other This has been implemented.embassies to routinely provide jointinformation or consular assistance inremote locations, as well as co-operation in crisis situations; and

— The quality of decisions being taken on In July 2005, a Nationality and Passports Bestthe handling of applications of Practice Unit (BPU) was set up, with a remit topassports. undertake a rolling programme of visits to the main

passport issuing posts, and to other posts as the needarose.The BPUreviewsall aspectsofpassportwork,eg management of the operation, staYng levels,quality of decisions. The BPUworks closely with theReviewers, and has so far visited Amsterdam, Beirutand Damascus.

(b) Following reviews, the team should Where possible, and following discussion with Postmaximise impact by encouraging Posts to management, recommendations will be reasonablyagree action plans linked to specific and precise on timings. However, for any which aremeasurableachievements, andbydeveloping dependent on staV moves (in and out), or budgetmore formal mechanisms to disseminate availability, timings are less certain. Reviews will belessons learned. followed up, six to 12 months after the report has

been issued, to check onprogress with implementingrecommendations, and to determine what benefitshave been realised.As part of the review process, Posts are also beingencouraged to share best practice with colleagues atother Posts. We will monitor this to see if we need todo more. One mechanism for best practice sharing isvia articles in the Real World (consular network)newsletter. Others are being considered.

(c) Post reviews and subsequent management Infinancialyear2005–06wehave for thefirst timesetaction could be better informed by: a PSA target for customer satisfaction which we are

measuring through a survey conducted at overseas— More rigorous collection and analysisposts and in the UK (for clients who have returnedof customer satisfaction measures,here). Posts which devote more than two staV yearsincluding more comprehensive analysisto consular work are also required to conductof complaints and otherregular customer satisfaction surveys of their own,correspondence.and we are looking to strengthen central collectionand analysis of the information which these provide.We have set work in hand to review and strengthenour procedures for dealing with complaints.

— Better methods of reviewing and We are about to issue the first detailed guidance oncomparing workload, including the using Compass (the Consular database withreassessment of the potential for using e-mail facility). We are also rolling out an advanceda basic method of time recording, version of Compass (Compass Next Generation)particularly for assistance cases, using worldwide. Consistent use of Compass needs to bethe capabilities of Compass. embedded across all posts. Once that has been

achieved, we will consider how we can use theprogramme to compare workloads. Roll-out isplanned to be complete by the end of 2006.

4. The FCO should continue to (a) Continue to refinea risk-basedassessment to:work on ensuring that crisis — Prioritise feedback to Posts on the We maintain a rolling programme of suchmanagement and emergency qualityof theircrisismanagementplans assessments and feedback results to posts on aplanning at Posts is robust, and according to key factors such as the regular basis.should complete its action plan number of British visitors andarising from lessons learned expatriates, the likelihood of civilfrom the Indian Ocean unrest, natural disasters and terroristtsunami. activity;

— Agree with Posts the frequency with This exercise is now complete. Posts are asked towhich they should test crisis plans. carry out regular reviews on a quarterly or annual

basis.




(b) Experience shows that understandably, the We are maintaining the momentum of checking allneed to respond to successive crises has Posts’plans,despitethenumberof crises towhichwedetracted from progress in reviewing have respondedsince the tsunami(8).But thedatebyemergencyplans. TheFCOshould review the which we cancomplete this exercise has slipped fromlevel of its staYng commitment to these areas October to December 2005.to ensure that crisis planning is givensuYcient attention, and maintains themomentum towards completion by the datethe FCO has set itself of October 2005.

(c) United Kingdom-based and overseas senior This exercise will be complete by the end of the year.management should regularly reviewachievement against agreed dates forsubmitting and testing emergency plans, andrespond to any failures to comply.

(d) The FCO should ensure that the crisis This involves, forexample, consultationwithTradesplanning and training is included in the Unions; our target for implementing thisobjectives of senior oYcials at Post, against recommendation is June 2006.which their performance is assessed.

(e) The FCO should establish a system for In principle we agree. Best practice guidelines areongoing review and enhancement of currently beingdisseminatedvia theFCO’s intranet.emergency planning and testing, including We are recruiting more staV to take this forward.establishing baselines from which to monitorimprovements in quality.

(f) Expanding and extending the role of Rapid Expansion is ongoing. The Hong Kong RDT is nowDeployment Teams to promote faster operational and work is well under way to establishresponses. Giving regional rapid deployment a second RDT for the US Network by the middle ofteams such as that being developed in Hong 2006. For the time being, responsibility for testingKong for South East Asia the responsibility plans will remain at thecentre, but regional expertisefor providing a regional source of crisis will be useful for relevant Posts. Regional RDTmanagement expertise to assist Posts in members have limited time to devote to extratesting their plans. RDT activities for which they volunteer.

5. The FCO should seek to (a) Establish formal liaison points, guidance and Tessa Jowell is the Cabinet Minister withmaximise the benefits from practical arrangements with other United responsibility for the co-ordination of theimprovingexisting,andforging Kingdom government departments to Government’s support to British nationalsnew, working partnerships provideaco-ordinatedgovernment service to returning from major incidents overseas. We arewith others to provide a more United Kingdom citizens seeking initial finalising a formal agreement with the DCMS oneVective end-to-end service to assistance from consular staV. This should exactly how a transfer of responsibility will takeBritish nationals, in crisis and include ensuring that responsibility for place: this will be ready by the end of 2005. It willnon-crisis situations. British citizens returning to the United include a DCMS colleague being embedded in the

Kingdom passes smoothly to relevant Home FCO Crisis Unit.departments.

(b) Implement more flexible arrangements for Onlyaround50%of loansare repaid; theothershaveallowing Posts to use some discretion in to be written oV from public funds. We believe thisissuing loans to individuals as Undertakings rate would increase if Posts were given moreto Repay once all other sources of funding discretion (they can currently issue UTRs up tohave been explored, to reduce costs and to £100 excluding costs without reference to London).avoid unnecessary deterioration in the We are considering how we might implement thisindividual’s circumstances. recommendation but we need to take account of the

fact that allowing Posts more discretion would leadto inconsistent practice, which could, in turn, leadconsular customers to complain about perceivedunfairness. To ensure consistency in advancingloans, the policy and decision making on theissuance of most UTRs should remain in London.

(c) Develop arrangements with United We oVer routine consular assistance throughKingdom based non-governmental partners working with NGOs. The best example is Prisonerswho can provide additional services and Abroad, with whom we have a three-year rollingsupport to those seeking routine consular funding Agreement (based on Home OYce bestassistance and in times of major crisis. practice guidelines—”Compact”) and who deliver

routine welfare support to British prisonersoverseas.Otherpartners includeFairTrialsAbroad,SAMM Abroad [support for victims of murder andmanslaughter], REDRESS [victims of torture],REPRIEVE [death penalty cases], REUNITE[international child abduction], VeteransAssociation, Travelcare [support for people atHeathrow and Gatwick], Missing Persons Helpline.WealsoworkwitharangeofNGOstodeliverhelp incrisis situations, eg British Red Cross Society,Samaritans, Salvation Army, Victim Support,CRUSE International [bereavement], DisasterAction, WRVS. Many of them play formal roles inour crisis handling arrangements.




We are looking for scope for more partnerships withsuch organisations. An example could be to contractout the transmission of some funds from families totheir overseas prisoner relatives (in most countries).Another couldbe regularcontactwithrelativespost-event (death, injury, detention), or prison visiting insome countries.

(d) For significant emergency situations, a clear See 5(a) above. Negotiations with the DCMS aretriggerpointshouldbeestablished toensurea close to completion, including on exactly when theco-ordinated cross-governmental response, trigger point should occur. Contact is also made atincluding clear understanding of respective the initial stage of an incident with Cabinet OYcemanagerial and budgetary responsibilities by Civil Contingency Secretariat, to set in hand crossall stakeholders. Whitehall co-ordination arrangements.

(e) Ensure that Post crises plans include Posts’ crisis plans take account of all existingconsideration of the scope for and benefits of resources, including Locally Engaged staV. Weco-operation with others such as local staV recognise the latter are essential in making theand volunteers in emergency situations. regionalRDT conceptwork. Wehave alsostarted to

engage with the Diplomatic Service FamiliesAssociation, and provide crisis training for ourPosts’ Community Liaison OYcers, to ensure thatspouses and partners are better equipped to help outinacrisis.Postsareencouraged todiscoveranddrawon whatever expertise exists amongst the localcommunity (eg the resident British community),while ensuring that any such volunteer response in acrisis would not conflict with the main one. TheBritish Red Cross Society would, if necessary, sendout managers with the appropriate skills to ensuremaximum eVectiveness of volunteer groups.

6. The FCO has made good (a) Consider scope for extending the range of The majority of 100% consular jobs are at Bands B3progress in enhancing the career opportunities in consular work to and C4, which are relatively junior grades.professionalism of its consular encourage high quality staV to embed Thereafter, the jobs tend to have a smallerstaV but still needs to use consular skills into their portfolios, and to percentage of consular work. Within the FCO’straining and innovative engage in consular work at diVerent points current structure, there is opportunity to return toapproaches to further improve throughout their careers; consular work, in a supervisory capacity, as staVthe quality of its service. progress through the grades.

(b) Developing a better mix of experience We are encouraging those with consular experienceof consular staV, including widening toapply forkeyconsular jobsas theybecomevacant.opportunities for less experienced London- The Professional Skills in Government agenda isbased casework oYcers to do consular work leading to changes in the way that HR Directorateoverseas in addition to familiarisation visits; will expect oYcers to gain experience across the

diVerent work groups in the FCO. When these takeeVect, oYcers from all entry streams will be requiredto have experience of service delivery work(including consular) to be able to progress throughthe grades. This should increase the pool of talentavailable for consularwork,andhelp toensure moreoYcers have experience of it as they advance intheir careers.The majority of casework oYcers in London do nothave overseas experience and many are new entrantsto the FCO. We encourage caseworkers to payfamiliarisation visits overseas. However, theconstraint on resources—financial and personnel—does not allow us, at present, to release caseworkersfor an additional period to gain valuable experienceworking in a consulate overseas.

(c) Pilot a scheme to evaluate the costs and We will consider by the end of March 2006 whetherbenefits of introducing a United Kingdom the Canadian system of handling consular work outbased system for “out of normal hours” of hours would bring benefits to the FCO and ourassistance, similar to that used by the consular clients. We need to take account of the farCanadian foreign ministry; greater number of British people travelling and

living abroad, and consequently of the greaterchallenge which maintaining such a system wouldpose. We would still need to maintain the samesystem ofoutofhours cover atourPostsoverseas, sothat cost savings might be less significant.

(d) Make attendance at core consular training We have made training mandatory for all thesecourses mandatory for all locally engaged groups.We haveset upa newdatabase toensure thatconsular staV (includingHonorary Consuls), all staV overseas who have not had the requiredand duty oYcers; training quickly receive it, and to monitor ongoing

training for all staV. We will also be able to monitorthis throughthenewCOMPASSsoftwarenowbeingrolled out. We are producing a distance-learningvideo for duty oYcer training to allow posts quicklyto train any oYcers that need this.




(e) Increase the number of regional training We are doing this. Our internal reviewers areevents and make specific provision in these to conducting a review of our consular training team toshare lessons between Posts. see if its resources need to be increased to cope with

the growing demand for training in the UK andoverseas.

7. Passport applicants overseas (a) Agree with the United Kingdom Passport We have agreed this with the United Kingdomshould be given greater choice Service that overseas citizens should be able Passport Service (UKPS).to obtain their passports from to obtain their passports directly from thethe United Kingdom or from United Kingdom Passport Service if theythe FCO, subject to meeting desire,with immediateeVect;wheretheyhavebasic security requirements. travelled back to the United Kingdom, can

attend any necessary interviews there and canprovide a verifiable address. The UnitedKingdom Passport Service believes that thiscan be made to work, particularly forrenewals, given adequate arrangements toensure applicants’ eligibility and identity.

(b) Align Consular and United Kingdom We are working hard towards closer alignment withPassport Service security checking and UKPS standards. Wherever possible we will alsoquality assurance processes for the issue of standardise procedures; where local circumstancespassports. overseasmayrenderexactduplicationofprocedures

impractical, we are coordinating closely with UKPStoensure thatwemeet thesamestandards,even if themeans may diVer. This has been agreed with UKPS.RecentUKPSattachments toourmissionshavealsoresulted in increased awareness by UKPS of therigorous nature of the checks (eg on foreigndocumentation) which we carry out. Thoseconcerned have commented that they will be morecareful when checking foreign documents presentedto them in the UK.

(c) Regularly review the impact of the new We will closely monitor how the new latitude forarrangements on speed and security of applicants overseas to obtain a passport in the UKpassport issuing, and particularly on the level aVects the numbers of issuesPosts make.This will beofdemandforpassports tobe issuedoverseas. recorded in Posts’ annual returns.The impactofsuchcaseswill providevaluableinput into a more fundamental decisionsregarding the future of issuing passportsoverseas (see recommendation 8).

Equipping consular services meet emerging change

8. Given the radical changes (a) In response to our findings the FCO has The Cap Gemini review confirmed therequired for the passport already commenced the process of the recommendation that passport production overseasoperation, the FCO should fundamental review through a report from should be concentrated in regional hubs. This oVerschange its current business consultants CapGemini. We consider that an eVective way forward.The recommendations willmodel for issuing passports the future direction of the Passport operation be presented to ministers for their approval inoverseas. should include: December/January. In the meantime, we are

engaging Cap Gemini for a detailed follow-up— Production of passports should beworkshop, which will result in a transformationbased in far fewer locations than atmap. The process of hiring workstream managerspresent. Specifically, a passportfor the various strands of recommendations is nownetwork based on productionunderway.capability mainly in the United

Kingdom, but with the option tomaintain several regional “hubs”where therearemajor concentrationsofBritish passport holders (such as Spainand North America).

— A clear definition and service standardfor those residual functions that need tobe retained in the country of residenceof the applicant. This should focus ofmaintaining the capability at Poststo issue non-biometric emergencytravel documents or temporarypassports to assist emergencytravel, and to undertake local checkson passport entitlement, such asinterviews, biometric enrolment andthe inspection of local records. Since arelatively small number of emergencypassports will be issued, unit costs willincreasebutfees shouldbe set torecoverfull cost.




— To build up capability in passportproductions hubs to take on tasks suchas the authorisation of passportdecisions made by Posts, and to advisePosts on their decisions on nationality.Once the nature of the next stage ofbiometric passports is clear the FCOshouldreconsiderwhether furtherworkshould be consolidated to “hubs”, toobtain lower costs and more consistentstandards.

9. The FCO should ensure that (a) Re-invigorating Compass, the consular PilotingofCompassNG(NewGeneration)began inexisting consular information assistance software programme, with more October, with rollout to Posts expected to begin attechnology systems are fully detailed training and a staged rollout of its theendofFebruary2006.Therewillbemore face-to-utilised and new systems are functions; including its planned improved face training at Posts, and trainers will also take partdeveloped to enable it to functionality. in regional conferences. New modules to comeallocate its resources where onstream later in the year include Crisisthey are most needed. Management and On-line registrations.

(b) Monitoring whether posts are using the We actively encourage Posts to use Compass and weCompass system, including enforcing monitor its use. The Directorate’s senior staV raisecompliance through linking any staYng bids Compass use on overseas visits. We are currentlyto case workloads shown on the systems; considering the benefits of enforcing compliance by

linking future staYng bids to Compass statistics.

(c) Regular and proactive investigations of This function is now covered by the Head ofcommon infrastructure problems and Consular Directorate’s ICT Operations Team,frustrationswith thesystemreportedbyPosts created in February 2005. Co-ordination with ITto the centre; and Helpdesk, FCO Services and UKPS has tightened

considerably, ensuring that we obtain regularreportsofproblemswithconsularITsystemsandareable to investigate and resolve them. The currentfocus is on resolving problems Posts experience withOmniBase—a joint UKPS/FCO database of all UKpassports issued.

(d) Better generation of management and A new tool has been developed to produceperformance information from the key management information from GenIE (our currentinformation technology systems. digital passport issuing system). BRIT, the new

biometric passport system, to be introduced atPosts from February 2006, has been developed toproduce extensive management and performanceinformation, including for example data onperformance against PSA targets.

10. The FCO should, in (a) Regular reviews to assess the adequacy of When assessing passport fee increases, assumptionsconjunction with HM funding levels should consider: are made based on available statistical information,Treasury, regularly review the of the likely demand for consular services. This— Changing patterns of travel and thebasis of funding for consular information will include:observed level of demand;assistance work and should — Projected trends in the issue of Numbers of journeys;reconsider the range of passports; and Travel trends (for example the growth in travel toconsular activities covered by — The case for linking the consular more exotic locations, the increase in adventureits internal and external premium to the number and type of holidays, the increase in independent travellers);targets. overseas visits as well as the number of The numbers of passports predicted to be issued;

passports issued. The increase/decrease in popularity of somelocations (and staYng implications for those Posts);The likely benefits of improved travel advice andKnow-Before-You-Go campaigns.We will continue to seek to improve the forecastingof demand for services. The introduction of ID cardswill pose important challenges, as they will allowBritish Nationals to travel within the EU without apassport.The introduction of the ID card could well mean areduction in the number of passports issued byUKPS. We will keep in close contact with UKPSregarding their predictions of the impact of the IDcard on passports issued.

(b) A hierarchy of targets should be established The number of hits on the travel website is upunder the existing Public Service Agreement 25% year on year. To take account of growingand underlying targets, to develop more interest in the subject in the travel and insurancedetailed working level targets in areas where industries and the public, the frequency of Travelnone currently exist. For example, targets for Advice Review Group meetings has been increasedtravel information and crisis management from two to three per year.could include: We will introduce targets to measure website hits.— The level of public awareness of, All Posts should have current, reviewed and tested

or a number of visits to, traveller emergency plans. The review and test programme isinformation; a rolling one.




— The number of Posts who have current, It would be diYcult to set a target for deploymentreviewed and tested emergency plans; speed, because so much depends on the nature, and

— The speed of deployment in response to location,of thecrisis.Thefirst jobwouldbe todecidecrises, and level of continuing support upon the requirements and only then could anduring crises. appropriate response be planned. It should be

possible to devise targets for speed of both analysisand advice to Ministers (within X hours of event).We will give this matter further thought.

Foreign and Commonwealth OYce

6 December 2005

Letter to the Head of the Parliamentary Relations and Devolution Team, Foreign and CommonwealthOYce, from the Clerk of the Committee

Mike Gapes has asked me to write to you, requesting a detailed note on the FCO’s handling of the caseof Mr Craig Alden, a British care worker who is imprisoned in Brazil.

Mr Gapes understands that some two years after Mr Alden’s conviction, the FCO appointed a QC to givean opinion on this case; that the QC found that Mr Alden had been denied a fair trial and that his convictionwas unlawful; but that subsequent correspondence between the Secretary of State and his Brazilian oppositenumber has been unproductive.

As you know, the Committee has taken an interest in the provision of consular services to British citizensoverseas. I would therefore be grateful to receive a note setting out in detail how Mr Alden’s case has beenhandled by the FCO, including the dates of each development in the case and of each action taken, and anindication of what further steps are envisaged. I would hope to receive this note not later than 10 January


12 December 2006


Consular Case—Craig Alden

In the first two reports Mr Richardson found that there were serious concerns about the fairness ofMr Alden’s trial proceedings. He further found that the appeal process oVered little hope of addressing theseconcerns and suggested three options to take the case forward. His third report focussed on Mr Alden’swelfare. All three reports were submitted to the Foreign Secretary.

In early 2005, Mr Alden indicated he would prefer to pursue non-legal avenues, if his latest appeal failed,as they might oVer a better prospect of resolving his situation. Under Brazilian law, clemency was not anoption because Mr Alden had been convicted of a “heinous” crime which was outside the scope of clemency.The Pro Bono lawyer advised that an alternative was to apply for Presidential Expulsion.

Presidential Expulsion is limited to foreign nationals and is enacted by Presidential prerogative. Onceexpelled, an individual may not return to the country unless the decree establishing his or her expulsion isrevoked. In order to seek expulsion, an individual must have exhausted, or abandoned, the judicial process.This option obviously denied Mr Alden the chance to clear his name. He and his family had explicit concernsabout going down this route. We also considered that this was a high risk strategy given domestic politicalpressures in Brazil about the nature of the alleged crime.

Nevertheless, Mr Alden and his family decided to apply for Presidential Expulsion, and the ForeignSecretary agreed to write in support of Mr Alden’s application. The Foreign Secretary wrote to the BrazilianForeign Minister, Mr Celso Amorim, on 30 March 2005 setting out our reasons for supporting PresidentialExpulsion and expressing concern about the trial as outlined in the independent pro-bono lawyers’ reports.In parallel, our Ambassador in Brazil presented a copy of the Foreign Secretary’s letter and copies ofMr Richardson’s reports to the Minister of Justice and was assured of a swift response. On 15 July, theForeign Secretary sent a second letter to Mr Amorim expressing the family’s frustration that a decision onPresidential Expulsion had not yet been made. Mr Amorim replied on 11 November saying that it wasimpossible to expel someone before his sentence had been served or who has a Brazilian child, as Mr Aldendoes. He suggested that the Prisoner Transfer Agreement be engaged.



The Foreign Secretary wrote again on 18 November asking the Brazilian Government to look again atthe human rights issues at stake. In between these ministerial exchanges, our Ambassador and his staV keptin regular touch with Brazilian Ministers and their oYcials pressing for a response to the Foreign Secretary’sletters on behalf of Mr Alden.

On 16 December, Mr Amorim replied to the Foreign Secretary’s letter of 18 November saying that hisMinistry and the Ministry of Justice had carefully considered the human rights concerns raised by theForeign Secretary. The letter referred to a power of attorney signed by Mr Alden about the engagement ofcriminal lawyers on his behalf, added that Mr Alden was convicted only after all possible measures withinthe Brazilian judicial system had been taken and provided a resume of subsequent habeus corpas appeals byMr Alden. The letter also repeated the Brazilian Government’s willingness to look at applying the PrisonerTransfer Agreement in this case and to the possibility of regime progression (parole). Embassy oYcialscalled on the Ministry of Justice on 23 December seeking a meeting to clarify its contents and we will discusspossible next steps with Mr Alden and his family in coming weeks.

Since his arrest, Mr Alden and his family have expressed concerns over his safety while in prison. In Brazil,prisoners convicted of heinous crimes are usually imprisoned within the general prison population. We havetaken his fears about his safety seriously and Embassy oYcials have made numerous successfulrepresentations to the Brazilian authorities, requesting that he remain apart from other prisoners. Forexample, in September 2005 the Embassy received information that Mr Alden was to be moved into thegeneral prison population. The Consul and Pro Consul visited the prison (some 45 miles away) immediatelyto dissuade the new prison director from moving Mr Alden and to remind him of the Brazilian authorities’obligation and responsibility for Mr Alden’s welfare. After some discussion the director agreed to keep MrAlden isolated from the general prison population. Two days later, the Embassy followed up this discussionin a meeting with the Brazilian Ministry of Foreign AVairs.

The Embassy also had meetings with the Ministry of Justice. As a result, the Consul wrote to Mr Aldenoutlining a number of options that were open to him, including transferring to another prison. But Mr Aldenpreferred to remain where he was at Planaltina prison. In his letter of 11 November 2005 to the ForeignSecretary, Mr Amorim referred to a report he had received from the Ministry of Justice about the Planaltinaprison, and confirmed that Mr Alden would remain there, separated from other prisoners.

Since his conviction, Mr Alden has talked a number of times about going on hunger strike. He did so on1 November 2005. We urged him to reconsider his decision, while, at the same time, recognising that it wasultimately his decision to take. Consular staV and the Embassy nurse paid a number of visits to Mr Aldento check on his welfare. On the days that they did not visit in person, they telephoned to check on his health.They ascertained that Mr Alden was accepting liquids and that food was available to him. Mr Alden endedhis hunger strike during a visit by the Consul and the Embassy nurse on 13 December. But we understandthat he may resume his hunger strike.

Ultimately, decisions on the next steps can only be taken by Mr Alden and we will do everything wereasonably can to support his decision. In addition to Presidential Expulsion Mr Alden has applied forCriminal Revision. If this is granted he will have the opportunity to produce new evidence to clear his name.Alternatively he could apply under the Prisoner Transfer Agreement to serve his remaining sentence in theUK. Another option would be to apply for parole when he is qualified to do so under the Brazilian penalsystem. Mr Alden currently has a case before the Supreme Court challenging the constitutionality of notallowing regime progression for heinous crimes.

We will continue to oVer Mr Alden consular support and remain engaged with the Brazilian authorities,within the boundaries of our consular policy and respect for the sovereignty of Brazil, including theindependence of its judiciary.

Chris Stanton

10 January 2006

CRAIG ALDEN—CHRONOLOGY

01/07/02 Craig Alden arrested by Brazilian authorities, accused of sexual abuse of a minor. Taken toDelegado de Policia, Barrolandia, Planaltina de Goias. Charged by police with four accounts ofchild abuse and corruption of minors.

Embassy Consular OYcer attends police station to provide consular assistance.

02/07/02 First Court Hearing. Mr Alden visited by lawyers, Dr Mauricio.Mr Alden attends a preliminary hearing with lawyer. Exact charges are Articles 214 and 224 (a)of the penal code and Articles 232 and 243 under the statute of the Child and Adolescent relatingto child and corruption of minors.

03/07/02 Mr Alden’s mother, Mrs Maureen Alden, informed of his arrest.

15/07/02 Mr Alden summoned to local courts by judge. Served with new charges. Visited by Consular staV.



18/07/02 Consular staV visit Mr Alden.The then Ambassador speaks to Mr Alden on telephone.

19/07/02 The then Ambassador calls on Ambassador Marcelo Jardim, Director for Europe at Ministry ofForeign AVairs (MFA). Hands over Note Verbale expressing concerns relating to Mr Alden’ssafety and welfare since his arrest.

22/07/02 Embassy oYcial meets Mr Alden’s lawyer and Embassy nurse.

25/07/02 The High Court in Goiania provided Mr Alden’s lawyer a statement of release. Charges notdropped. District Prosecutor insists Mr Alden should not be released. Mr Alden is taken tohospital for a pre-release medical.Police OYcer provides lawyers with new paperwork signed by local Judge. Mr Alden served withnew charges and re-arrested.

26/07/02 Consular staV visit Mr Alden.

29/07/02 Embassy oYcial calls Ambassador Marcelo Jardim, Director for Europe, MFA.

30/07/02 Embassy oYcials meet Mr Alden’s new lawyer, Cristina Dos Santos.

02/08/02 Consular staV visit Mr Alden.Consul and VC meet member of the Superior Tribunal of Justice.

14/08/02 Final hearing postponed until 26 August.

24/08/02 Letter from Mr Alden to then Ambassador.

26/08/02 Hearing takes place. Appointed lawyer fails to appeal. Court appoints Dr Ana Maria to representMr Alden. He declines but accepts public lawyer Dr Jarmisson Goncalves de Lima.

27/08/02 Pro Consul visits Mr Alden before court hearings.

02/09/02 Report sent by Mr Alden’s lawyer, Maria Cristina Santos, to British Embassy Brasilia.

17/09/02 Report from Maria Cristina Santos to BE Brasilia.

23/09/02 Mr Alden’s lawyer calls on the then Ambassador and oYcials.

01/10/02 Embassy oYcial called by Celso Franca, International Adviser to the State Secretary for HumanRights of the Ministry of Justice.

04/10/02 Mr Alden visited by Embassy oYcial.

08/10/02 Embassy oYcial calls Celso Franca, Adviser, Ministry of Justice.

17/10/02 Embassy oYcial visits Mr Alden.Celso Franca, Adviser, Ministry of Justice contacts Embassy oYcial.

25/10/02 Celso Franca, Adviser, Ministry of Justice calls on Embassy oYcial.

29/10/02 Mr Alden appoints new lawyers, Carvalho, Ribeiro, Melo and Tognolo.

31/10/02 Embassy oYcial visits Mr Alden.

08/10/02 Celso Franca, Adviser, Ministry of Justice, contacts Embassy oYcial.Report sent to British Embassy Brasilia by new lawyers.

14/11/02 Embassy oYcial visits Mr Alden.Second report sent to British Embassy Brasilia by new lawyers.

19/11/02 Mr Alden formally convicted. Sentenced to 48 years. Mrs Alden informed by friends. Lawyersconfirm appeal process has already started.

20/11/02 Habeas Corpus denied by Judge Fernando Goncalves.Mr Alden’s lawyer, Gustavo de Carvalho, attends Embassy to brief on case.


27/11/02 Mr Alden moved to a state prison.

28/11/02 Consular oYcial visits Mr Alden.The then Ambassador calls on Ambassador Marcello Jardim.

03/12/02 Embassy oYcial speaks to Celso Franca, Adviser, Ministry of Justice, Ronaldo Dunlop, Ministryof Justice, Pedro Saldanha, Ministry of Foreign AVairs and Mr Alden’s lawyer.

04/12/02 Mrs Alden and Pastor Simon Trundle5 arrive in Brasilia.The then Ambassador calls on Minister of JusticeMrs Alden meets the then AmbassadorMrs Alden meets Secretary of Justice (Deputy Minister).

5 Pastor Trundle, friend of the family, heads Mr Alden’s supporters’ group.



06/12/02 Mrs Alden and Pastor Trundle meet Embassy oYcial.Embassy oYcial escorts Mrs Alden and Pastor Trundle to visit Ambassador Jardim, Director forEurope, Ministry of Foreign AVairs.

17/12/02 Habeas Corpus application to Supreme Court of Justice (STJ) is denied.


31/01/03 Embassy oYcial speaks to Celso Franca, Adviser, Ministry of Justice.

03/02/03 Embassy oYcial visits Mr Alden.Embassy oYcial speaks to National Secretariat for Human Rights.

04/03/03 Baroness Amos, the then Foreign OYce Minister, meets Sir Brian Mawhinney MP, Mrs Aldenand Pastor Trundle in the House of Lords.

07/03/03 The then Ambassador and a consular oYcial meet Mr Alden’s defence lawyer, GustavoCarvalho.

13/03/03 The then Ambassador meets Minister of Justice.

18/03/03 The then Ambassador meets the Brazilian Foreign Minister.


26/03/03 Mrs Alden and Pastor Trundle arrive in Brasilia. Embassy oYcial accompanies Mrs Alden andPastor Trundle on a call on her lawyer.

27/03/03 Embassy oYcial takes Mrs Alden to call on National Secretary of Justice, Claudia Chagas.Embassy oYcial calls on Ambassador Jardim, Director for Europe, MFA

04/05/03 Bill Rammell, Minister for Latin America, raises case during trip to Brasilia with SpecialSecretary for Human Rights.


10/07/03 The then Ambassador meets Celso Franca, International Adviser, Special Secretariat for HumanRights, Ministry of Justice.

11/07/03 Foreign Secretary raises case during meeting with Brazilian Minister of External Relations, CelsoAmorim.

31/07/03 Pro Consul visits Mr Alden.

12/08/03 Embassy oYcial accompanies Mrs Alden to call on Ambassador Jardin at the Ministry ofExternal AVairs.

03/09/03 State Court in Goiania hears Mr Alden’s appeal. Sentence is reduced from 48 years to 11.

14/10/03 The Supreme Court rejects Mr Alden’s application for Habeas Corpus.

19/11/03 Embassy oYcial calls on the Federal Director for Prisons at the Ministry of Justice.

12/12/03 An appeal sent to the Prime Minister from Pastor Trundle about Mr Alden.

28/01/04 Consular oYcials visit Mr Alden.

02/03/04 Embassy oYcial speaks to Celso Franca, Adviser, Ministry of Justice.

04/03/04 Consular oYcials visit Mr Alden.

08/03/04 Mrs Alden and Pastor Trundle call on the then Ambassador in Brasilia.

09/03/04 Mrs Alden, Pastor Trundle and an Embassy oYcial, call on Claudia Chagas, Secretary forJustice.

10/03/04 FCO contacted by Brazilian Embassy, London. Mr Alden’s case raised.

10/03/04 Mrs Alden and Pastor Trundle visit Mr Alden. Also meet lawyer, Gustavo, and Dr Agostinho,of the Human Rights Commission of the Federal Chamber of Deputies.

27/04/04 Mrs Alden, Sir Brian Mawhinney and Pastor Simon Trundle meet the Foreign Secretary.Consular oYcials (including London Consular Case oYcer) visit Mr Alden.

24/06/04 Consular oYcial visits Mr Alden.

13/08/04 Jeremy Richardson QC, first report submitted to Alden family.

22/09/04 Consul and Pro Consul visit Mr Alden.

27/09/04 Jeremy Richardson QC visits Brazil (until 01/10/04).

11/10/04 Jeremy Richardson QC, second report submitted to Alden family.



09/11/04 At family’s request, Consul writes to Mr Alden asking for his views on the options presented afterJeremy Richardson’s report. Options provided as follows (options 1–3 from Jeremy Richardson’sreport, and option 4 from Mrs Alden and the Supporters’ Group):1. Maintain the status quo and continue with legal avenues.2. Take a “twin track” approach of legal avenues (including “criminal revision”) and

simultaneously seek “Presidential Expulsion”.3. Drop the legal avenues and seek “Presidential Expulsion”.4. Continue with the application for Habeas Corpus based on a lack of defence; the Ambassador

to call on the President of the STJ (the Supreme Court for Judicial Matters) to seek reassurancethat the Habeas Corpus application will be given due and proper consideration.

Mr Alden asks for “Option 4” to be pursued.

07/12/04 The then Ambassador calls on Mr Edson Vidigal, President of the Supreme Court of Justice(STJ).


01/02/05 Director of Consular Services meets Mrs Alden, Sir Brian Mawhinney MP, Jeremy RichardsonQC, and Pastor Simon Trundle.

03/02/05 Email from Director of Consular Services to Mrs Alden.

11/02/05 The Foreign Secretary agrees to support Mr Alden’s application for Presidential Expulsion.

14/02/05 Letter from Mr Alden to Consular oYcial.


02/03/05 Mr Alden formally requests to apply for Presidential Expulsion, with HMG support.

11/03/05 Consul speaks with both Mr Alden and his lawyer.

17/03/05 Mrs Alden meets Director of Consular Services and Ambassador Brasilia.

21/03/05 Jeremy Richardson QC provides a three-page summary of his two reports into Mr Alden’s case.

22/03/05 Letter from the Foreign Secretary informing the Home Secretary that Sir Brian Mawhinneywishes to meet to discuss implications of Mr Alden’s possible transfer.

30/03/05 The Foreign Secretary writes to Brazilian Foreign Minister.

01/04/05 The Ambassador visits Mr Alden.Mr Alden’s lawyer delivers his signed letter, applying for Presidential Expulsion, to the BrazilianMinistry of Justice.The Ambassador sends the Foreign Secretary’s letter to the Brazilian Minister of Foreign AVairs,Celso Amorim, with covering letter.

04/04/05 Ambassador meets Claudia Chagas, National Secretary of Justice.

05/04/05 Ambassador calls on Brazilian Minister of Justice, to discuss Mr Alden’s case. Hands over copiesof Mr Alden’s request for Presidential Expulsion, the Foreign Secretary’s letter, and JeremyRichardson QC’s summary.

07/04/05 David Lammy, Minister at the Department for Constitutional AVairs, raises Mr Alden’s casewith Brazilian Minister of Justice during his visit to the UK.

26/04/05 Supreme Court of Justice (STJ) panel of judges meets to consider Mr Alden’s Habeas Corpusapplication. Panel judges ask to see further papers. Once papers have been read, panel judges willmeet again to consider application.Minister Bastos (Ministry of Justice) contacts the Ambassador. Explains that they are lookingcarefully at the case but have not yet made a decision. Minister tells the Ambassador that whena decision is made he would like them to meet so he can personally discuss and advise him ofthe decision.

05/05/05 Embassy oYcial raises case with Claudio de Alencar, Bastos’ Chefe de Gabinete, andAmbassador Portella, International Adviser.Mr Alden informed that Habeus Corpus application was denied.Consul speaks to Mr Alden.

13/05/05 Consul speaks to Mr Alden. Mr Alden states that he has given permission to Mrs Alden andPastor Trundle to take his story to UK media. Both Mr Alden and Mrs Alden advised that it istheir decision, but would not be in his best interests.

19/05/05 Embassy oYcial raises case with Ambassador Oswaldo Portella, Minister Bastos’ Senior Adviser(Ministry of Justice).



01/06/05 Email from Mrs Alden to Director of Consular Services stating her concerns about the lack ofresponse from the Brazilian authorities regarding Mr Alden’s Presidential Expulsion application.Letter from the Ambassador to Minister Bastos. Asks when Minister might be in a position todiscuss the case with HMG.

16/06/05 Ambassador meets Claudia Chagas, National Secretary of Justice.

20/06/05 Ambassador meets Mrs Alden and Rev Bartlett (Supporter’s Group).Mrs Alden and the Ambassador meet Claudia Chagas, National Secretary of Justice.

04/07/05 Letter from Mrs Alden to Director of Consular Services. Attached copy of a letter from CraigAlden to the Prime Minister.Director of Consular Services telephones Mrs Alden.

12/07/05 Ambassador meets Lord Mawhinney and Mrs Alden’s MP, Shailesh Vara.

13/07/05 Baroness Scotland, Home OYce Minister meets Claudia Chagas, National Secretary of Justice.

14/07/05 Director of Consular Services and the Ambassador telephone Mrs Alden.

15/07/05 Second letter from the Foreign Secretary to Minister Amorim.

22/07/05 Letter from Director of Consular Services to Lord Mawhinney re UK/Brazil Prisoner TransferAgreement (PTA), and the Sex OVenders Register

26/07/05 Foreign OYce Minister, Lord Triesman meets Mrs Alden and Shailesh Vara MP.


28/07/05 Letter from Director of Consular Services to Shailesh Vara MP re Prisoner Transfer Agreement.

29/07/05 Mr Alden visited by Consul.

02/08/05 The Ambassador calls on Claudia Chagas, National Secretary of Justice. The Ambassadordelivers letter from Mrs Alden to Ms Chagas.

10/08/05 Embassy oYcials receive letter from Brazilian National Secretariat of Justice acceptingMr Alden’s original request to remain in Brazil for two years after his sentence finishes.

11/08/05 Letter from Director of Consular Services to Mrs Alden about the UK-Brazil Prisoner TransferAgreement.

25/08/05 Embassy oYcials and London based case oYcer attend meeting at the Ministry of Justice withthe Secretary of Justice’ Chefe de Gabinete. Brazilians inform that they will reject Mr Alden’sapplication for Presidential Expulsion. An oYcial letter from the Foreign Minister to the ForeignSecretary will be forthcoming soon.

26/08/05 Embassy oYcials visit Mr Alden at Planaltina prison. Inform him of Ministry of Justice’sdecision. Mr Alden threatens to go on hunger strike if family do not go to press.

31/08/05 Pastor Trundle arrives at FCO unannounced. Meets consular oYcials.

13/09/05 Embassy oYcial meets Dr Andre Macedo, Private Secretary to Claudia Chagas.

14/09/05 Director of Consular Services meets Mrs Alden, Shailesh Vara MP, and Pastor Trundle.

16/09/05 Director of Consular Services speaks to Minister Mitzi Costa, Deputy Head of Mission theBrazilian Embassy in London.

20/09/05 Consul talks to the new prison director, Dr Dercio Sebastiao de Oliveira, regarding new threatsto move Mr Alden in with general prison population.

21/09/05 Consul and Pro Consul attend prison to discuss threats of moving Craig in to general prisonpopulation.

22/09/05 Dr Andre Macedo contacts Embassy oYcial.

23/09/05 Embassy oYcial calls on Counsellor Lineu de Paula, acting Chef de Cabinet.

30/09/05 The Ambassador raises Mr Alden’s case with Foreign Minister Amorim’s Chefe de Gabinete.

03/10/05 British Embassy, Brasilia, receives written reply from Brazilian Ministry of Foreign AVairs to theForeign Secretary’s letters to Foreign Minister Amorim. Letter briefly explains that Ministry ofJustice is now dealing with the case.

11/10/05 Embassy oYcial calls on General Athos, Secretary of Security for the federal district.

18/10/05 Consular oYcial writes to Mr Alden about his safety in prison, and options available to him.Letter from Mr Alden to Director of Consular Services.

21/10/05 Mr Alden informs Embassy oYcial that he intends to go on hunger strike on 1 November.

24/10/05 Mrs Alden, Shailesh Vara MP, and Pastor Trundle meet the Ambassador to Brasilia in London.Consular oYcial visits Mr Alden.



27/10/05 Consular oYcial visits Mr Alden in prison.

28/10/05 Director of Consular Services replies to Craig Alden’s letter of 18 October.

31/10/05 The Ambassador meets the Foreign Minister, Amorim’s acting Chef de Gabinete.Consular oYcials meet Mrs Alden in Brasilia.

01/11/05 Embassy oYcial speaks to Dr Andre Macedo, Chefe de Gabinete to Claudia Chagas.Craig Alden starts hunger strike.

03/11/05 The Ambassador speaks with Ambassador Portello, Ministry of Justice’s international adviser.Consular oYcial and Mrs Alden visit Mr Alden.Letter from Craig Alden to FCO, London.

04/11/05 Third report by Jeremy Richardson QC on Craig Alden on welfare.Reply from Director of Consular Services to Craig Alden’s letter of 3 November, deliveredimmediately by Embassy driver.

08/11/05 Letter from Dr Andre Macedo, to Embassy oYcial about Mrs Alden’s letter to Claudia Chagas.

10/11/05 Embassy oYcial speaks to Foreign Minister Amorim’s Chefe de Gabinete.

11/11/05 Foreign Secretary receives oYcial written response from Ministry of Foreign AVairs.Vice Consul and Embassy nurse visit Mr Alden.

15/11/05 Letter from Lord Triesman to Mrs Alden.

16/11/05 Lord Triesman raises Mr Alden’s case with the Brazilian Ambassador to London.

18/11/05 Letter from Foreign Secretary to Foreign Minister, Celso Amorim.

22/11/05 Consul and Embassy nurse visit Mr Alden.

23/11/05 Pastor Simon Trundle informs that Mr Alden has agreed to end his hunger strike, for a holdingperiod, which is soon retracted by Mr Alden who continues his action.

01/12/05 Consul and Embassy nurse visit Mr Alden.

05/12/05 Lord Triesman meets Mrs Alden, Shailesh Vara MP, Pastor Trundle, and Sarah de Mas fromFair Trials Abroad.

07/12/05 Pro Consul and Embassy nurse visit Mr Alden.

08/12/05 Letter from Mrs Alden to Lord Triesman.Sarah de Mas, Fair Trials Abroad, sends report on Craig Alden.

12/12/05 Report from Pastor Trundle of his meeting with Minister Mitzi Costa at the BrazilianEmbassy, London.

13/12/05 Receive FAC request for report on Craig Alden case.Ambassador receives email from Ambassador Bustani re Pastor Trundle’s meeting at theBrazilian Embassy.Consul and Embassy nurse visits Mr Alden. Mr Alden confirms that he will end his hunger strikeand eats sandwich. Recovery diet and food supplies list provided by Embassy nurse. Provisionsbought. Mr Alden states that if there are no positive developments by 1 March 2006 he willresume his hunger strike.

16/12/05 Reply to the Foreign Secretary’s letter to Minister Amorim, of 18 November, is received by BEBrasilia, translated immediately and forwarded to Consular Directorate.

23/12/05 Embassy oYcials meet at the Ministry of Justice with Dr Andre[acute] Macedo and Dr DouglasVasconcellos (Counsellor, Legal AVairs Division, Ministry of Foreign AVairs) to seekclarification of some points in Mr Amorim’s letter of 18 November.

05/01/06 Pro Consul visits Mr Alden.



CONTINGENCY PLANNING


Flu Pandemic: FCO Business Continuity and Contingency Planning

When I appeared before you recently to give evidence on the FCO Departmental Report, you made clearthat the Committee would welcome more information on the key management issues facing us. Given itstopicality, I thought you would be interested in our preparations for a possible human flu pandemic.

The FCO, along with other government departments, is revising its business continuity and contingencyplans to respond to the threat of a pandemic. In developing our plans we are working closely with theDepartment of Health, Defra, DFID and other government departments within the framework set by theCivil Contingencies Secretariat of the Cabinet OYce. We are also keeping in close touch with other Britishorganisations with large overseas networks, including British companies.

We have established contacts with key partners, for example EU Member States, the US, Australia,Canada, New Zealand and Japan, to encourage closer international cooperation on prevention andpreparedness and also to ensure we are in step with others, for example, on providing consular assistancefor our nationals.

Central to our contingency planning is a programme of action to help us to continue delivering servicesto the public, particularly the estimated 15 million British nationals resident and travelling overseas, at atime when our staV are as likely to succumb to a pandemic virus as others. This will be a considerablechallenge.

We are planning to enhance significantly our remote working capacity to help us to continue to operate,at home and overseas. This should also be of longer-term benefit in terms of business continuity. Howeverconsular work presents a particular challenge as it generally involves face-to-face contact. In a pandemicour ability to work in this way would inevitably be constrained. To maximise our capability to maintainbusiness critical services, and to provide our staV and families overseas with healthcare equivalent to thatavailable to the UK population under the National Health Service, we are putting in place additionalsupport for our staV. We have already procured stocks of Tamiflu anti-virals for our posts in the Asia-Pacificregion. We now want to extend the supply of anti-virals to posts in the rest of the world.

Even with additional health measures in place some staV and families, for example those in high-riskmedical categories, and those with young, elderly or frail dependants in the UK, may wish to return to thiscountry in the event of a pandemic. FCO ministers have therefore accepted the principle of oVeringvoluntary evacuation to staV and families overseas, if the situation deteriorates, with the clear caveat thatreducing staV numbers to a level below that needed to fulfil business critical tasks, would be very much alast resort. We have asked Regional Directors and Heads of Mission to draw up contingency plans, by theend of November, which strike a balance between public service commitment and duty of care to staV, andtaking account of local circumstances.

In close liaison with DH and the Government Communications Network, we will be working to ensurerealistic expectations on the part of the British public and British nationals overseas of what consularassistance and other activity we could in practice deliver during a flu pandemic, not least given the likelyconstraints on international travel, and advising them how best to look after their own health and safety.We already have an Avian Influenza fact sheet on our website (I enclose the current version). This will beupdated regularly as the situation changes, as will our travel advice.

While the Department of Health clearly has the Whitehall lead on planning for a flu pandemic, the FCO isinvolved in a wide range of avian influenza and pandemic related activity, in particular in our EU Presidencycapacity. We decided that the most eYcient way to bring together the diVerent areas of activity would beto set up a programme with a virtual team of staV or project managers from relevant departments acrossthe organisation. This has made best use of existing resources rather than creating new positions andstructures. I see it as a good example of the sort of cross-cutting teamwork, coordinated by one additionalmember of staV, which we increasingly need to use to maximise the impact of our work within tightlyconstrained resources.

I would be happy to provide further information, as our planning develops, if Members of the Committeewould find this useful.


16 November 2005



DIPLOMATIC REPRESENTATION

Letter to the Chairman of the Committee from Permanent Under Secretary of State,Foreign and Commonwealth OYce

During my recent appearance in front of the Foreign AVairs Committee, there was interest from theCommittee on our Embassy to the Holy See. I thought I would therefore write to let you know that we intendto announce on Tuesday 15 November the appointment of Francis Campbell as our new Ambassador tothe Holy See. I enclose a copy of the announcement and Mr Campbell’s CV.

This is the first time that we have appointed an Ambassador by open competition. It is, however, in linewith the Government’s policy of recruiting people with appropriate skills and experience from all areas ofpublic life. I believe that this is a positive step that demonstrates how the FCO is becoming more modern,open and diverse. By opening the competition up, we have ensured that we have someone with the rightskills and experience for what is an interesting and challenging job.

Francis Campbell’s knowledge and understanding of the mechanics of government and work with faithorganisations and civil society in the UK and internationally mean that he is ideally placed to promote anddevelop the UK’s overseas strategic priorities with regard to the Holy See. His background in diplomacy,coupled with his experience outside the Foreign and Commonwealth OYce, will enable him to interact atthe highest levels within UK and Vatican circles. I am confident that his appointment will be warmly andwidely welcomed in the UK and at the Holy See.

Francis Campbell will have full diplomatic status and will carry out the full range of diplomatic duties.


11 November 2005

CHANGE OF AMBASSADOR TO THE HOLY SEE

Mr Francis Campbell has been appointed Her Majesty’s Ambassador to the Holy See in succession toMrs Kathryn Colvin CVO who has retired from the Diplomatic Service. Mr Campbell will take up hisappointment in December 2005.

CURRICULUM VITAEFull Name: Mr Francis Martin-Xavier Campbell

Date of Birth: 20 April 1970

2005– Senior Policy Director, Amnesty International

2003–05 1st Secretary, British Embassy to Italy

2001–03 On secondment to No 10 Downing Street as Private Secretary to thePrime Minister

1999–2001 On secondment to No 10 Downing Street as Policy Adviser to thePrime Minister

1998–99 European Enlargement Unit, FCO

1997–98 On secondment to the European Commission⁄appointed to the ECDelegation at the UN in New York for the UK Presidency of the EU

1997 European Enlargement Unit, FCO

1996–97 University of Pennsylvania, Philadelphia (MA)

1994–95 Katholieke University of Leuven, Belgium (MA)

1989–92 Queen’s University Belfast, (BA)



Letter to the Permanent Under Secretary of State, Foreign and Commonwealth OYce, from the Chairmanof the Committee

Further to your letter to me of 11 November 2005, informing me that a new Ambassador had beenappointed to the Holy See, I am writing to seek your observations on the accuracy of the enclosed reportfrom yesterday’s The Times newspaper, in which it is suggested that the staYng of the Vatican Post is beingreduced, and that the oYces and residence are being relocated outside the Holy See. I am sure the Committeewould also wish to know at what stage plans for the changes in representation to the Vatican were whenyou wrote to me in November.

I would appreciate a response to this letter by Friday 27 January.

Mike Gapes MPChairman of the Committee

10 January 2006


Thank you for your letter of 10 January and the invitation to comment on the article which appeared inThe Times on 9 January.

The article is accurate on one point only regarding our representation to the Holy See. It correctly statesthat we have re-located our Embassy to the Holy See from its rented oYces in Via Condotti, at the foot ofthe Spanish Steps in Rome, to the compound where our Embassy to the Republic of Italy is located. Thatdecision was taken as a result of security concerns about the exposed Via Condotti site. The move took placein July 2005, with the prior consent of the Holy See. The Embassy to the Holy See remains separate fromthe Embassy to Italy, with a separate building, flag and plaque. So the headline of The Times’s article, whichrefers to a proposal to close the Embassy, is entirely incorrect. There is of course no question of closing theEmbassy, as the Foreign Secretary made clear in his Written Statement to Parliament in December 2004. Itremains an important part of our overseas network.

The Times article also raises the issue of the Ambassador’s Residence. It is true that we were consideringmoving the Ambassador’s Residence from the current rented property at the Villa Drusiana to a propertyon the same compound as the Residence to the Ambassador to Italy (the Villa Wolkonsky). Unfortunately,it appears that there was a genuine misunderstanding between ourselves and the Holy See regarding theacceptability of this move to the Holy See. Their concerns about such a plan only became clear late last yearwhen the new Ambassador took up his appointment. We therefore agreed that the Ambassador to the HolySee should not take up residence on the Villa Wolkonsky compound and communicated this decision to theHoly See last December. However, it remains our plan to move the Residence from the Villa Drusiana, fora mixture of financial, practical, and security reasons, and we expect this move to take place during 2006.

On the question of staV, some changes have been made to staYng levels following an internal review ofthe Embassy last year. This resulted in a small reduction (the equivalent of one part-time member of staV)in the overall level of staYng. Before the review, the Embassy was staVed by the Ambassador, a part-timeDeputy Head of Mission, a full-time assistant to the Ambassador and two part-time support staV. Followingthe review, the Ambassador now has a full-time political oYcer and a full time assistant/support oYcer. Thefinal requirements for domestic staV to support the Ambassador will depend on the nature of the Residencebut we expect that fewer staV will be required. As such, four Residence staV have already been maderedundant. This decision was taken before the arrival of the new Ambassador.

You mention my letter of 11 November. That was of course exclusively focused on the announcement ofthe new Ambassador and followed on from the interest your Committee had expressed in the appointmentwhen we met in October. The move of the Embassy had already taken place by then.

I believe that the changes we have made to our Embassy to the Holy See are leading up to a more modernand eVective Embassy. We constantly seek eYciencies in the way we run our posts in order to get the bestvalue for money from every Embassy. I am confident that, in this case, the appointment through opencompetition of an Ambassador with a deep understanding of the workings of Whitehall and the Vatican willresult in an Embassy which focuses at least as much on policy and serious relationship-building as on therepresentational and ceremonial (as indeed the new Ambassador has made clear in the press), and istherefore better suited to contribute to the delivery of the Government’s overseas priorities.


25 January 2006



Letter to the Chairman of the Committee from the Secretary of State forForeign and Commonwealth AVairs

I am writing to inform the Committee of a change to our diplomatic representation in Abidjan, Coted’Ivoire.

On 1 April 2005 we suspended operations in our Embassy in Abidjan, and withdrew all UK diplomaticstaV from the country, due to the uncertain security situation.

Following a review of our representation in Cote d’Ivoire, I have decided to appoint a First Secretary inAbidjan to provide political reporting and analysis. This oYcer will operate from within the United StatesEmbassy. We intend to accredit Gordon Wetherell, High Commissioner in Accra, as Ambassador to Coted’Ivoire, and are currently seeking agreement to this from the authorities. I also plan to appoint a Britishnational resident in Abidjan to act as Honorary Consul, to assist British nationals in diYculty.

Though we will be vacating our current premises, this does not constitute a permanent decision to closeour Embassy in Abidjan. I judge that the new arrangement will provide the right level of representationwithout placing our staV at undue risk, given the real and continuing security threat to foreign nationals inAbidjan. But I intend to review the position on a regular basis.


19 January 2006


In view of the Committee’s ongoing interest in our overseas network, I am writing to inform you that wehave taken the decision to transfer coverage of Equatorial Guinea from our High Commission in Yaounde,Cameroon.

We intend that the High Commissioner in Abuja will be appointed as the UK’s non-resident Ambassadorto Equatorial Guinea, and are seeking the necessary agrement. Day-to-day responsibility and managementwill rest with the Deputy High Commission in Lagos. They will provide consular services for Britishnationals in Equatorial Guinea and oVer a visa service to Equato-Guineans. We expect this will take placein January 2006, but the exact date will be dependent on agrement being granted.

We are making this change because the Deputy High Commission in Abuja is a larger mission thanYaounde with greater resources and flexibility to devote to covering Equatorial Guinea. It will also allowour mission in Yaounde to engage more eVectively in the other countries in the region where we do not havea resident mission, such as Chad


6 December 2005

FINANCE AND ESTIMATES

Written evidence submitted by the Foreign and Commonwealth OYce

FCO Supply Estimate 2005–06 Memorandum for the FAC

I attach an Estimates memorandum to be read alongside the 2005–06 Main Supply Estimate, which willbe published by HM Treasury on Wednesday 25 May.

In accordance with Treasury guidance Michael Jay, as Accounting OYcer, has authorised Ric Todd, asFinance Director, to sign future Estimates memoranda on his behalf. The memoranda will continue to becleared by Michael Jay in near final draft.

Chris StantonParliamentary Relations and Devolution TeamForeign and Commonwealth OYce

24 May 2005



Annex 1

Foreign & Commonwealth OYce Main Estimate 2005–06

Reconciliation of 2005–06 Main Estimates to SR2004 Outcome

1. The 2004 Spending Review settlement showed the FCO Resource Budget for 2005–06 as £1,581.311million and the capital budget as £84.074 million. Since July 2004 there have been a number of changes tothe FCO’s Departmental Expenditure Limits (DELs) which bring the current Resource DEL figure for2005–06 to £1,813.483 million and the Capital DEL to £122.978 million. The tables below show the mainchanges and reconcile the DELs with the Main Estimates figures.

Table 1 Resource 2005–06

Resource DEL Baseline from SR 2004 (£m) 1,581.311

Changes to Resource DEL

Conflict Prevention Pool Main Estimate Changes (net) 171.886Near Term Pressures Reserve Claim 50.700Impairments Departmental Unallocated Provision 20.000EYciency Challenge Fund 9.600Iraq: increased expenditure on behalf of OGDs 47.347Iraq: OGD receipts to match increased expenditure "47.347Iraq OGD transfer from resource to capital "10.875OPM adjustment 2003–04 FCO "7.600Net eVect of reclassifying British Council as Public "2.340CorporationOther changes less than £1 million 0.801

New Resource DEL 1,813.483

DiVerence Between Resource DEL and Main Estimate

Remove Common Foreign and Security Policy (non-voted "6.713expenditure in DEL)Add Reimbursement of Taxes (voted expenditure outside 18.000of DEL)Exclude Departmental Unallocated Provision—including "46.000£20 million impairments DUP (not voted)

2005–06 Main Estimate Resource Total 1,778.770

Table 2 Capital 2005–06

Capital DEL Baseline from SR 2004 (£m) 84.074

Changes to Capital DEL

Near Term Pressures Reserve Claim for security 35.900Iraq OGD transfer from resource 10.875Net eVect of reclassifying British Council as Public "7.800CorporationOPM "0.071New Capital DEL 122.978

DiVerence Between Capital DEL and Main Estimate

Departmental Unallocated Provision for Capital (not "1.000voted)

2005–06 Main Estimate Capital Net Total 121.978



Explanation of most significant changes

Conflict Prevention Pool Main Estimates Changes

2. Activity and expenditure under the Conflict Prevention Pools are undertaken jointly by the FCO,MOD and DFID. The FCO manages the Peacekeeping and Global programme expenditure elements of thepool and has £74 million for the Global Conflict Prevention Pool in its Resource DEL baseline which isadded to by other pool partners through transfers between Departments in Main and SupplementaryEstimates. The eVect of the transfers between pool partners to the 2005–06 FCO Main Estimates is a netincrease of £171.886 million, which includes an increase of £200 million for peacekeeping.

3. The Chief Secretary to the Treasury has so far agreed that Parliamentary approval should be soughtfor up to £373 million of peacekeeping expenditure for 2005–06. Since there is uncertainty over these costsdue to changes in demand for military involvement, the Treasury has agreed that an initial amount of£200 million should be applied for in the Main Estimate. The Treasury expects that further provision willbe sought in the Supplementary Estimates, by which time more accurate information will be available.

Near Term Pressures Reserve Claim

4. The FCO made a claim on the Reserve in July 2004 for funds to implement changes recommended inthe review of FCO security that followed the November 2003 attack on the British Consulate General inIstanbul and also for funds for network modernisation and exceptional pressures. The overall amountgranted was £50.7 million resource and £35.9 million capital.

5. The security related claim for £20.7 million FCO resource, £35.9 million FCO capital and £6 millionfor British Council (resource) was met in full. In addition, £10 million was made available from the Reservefor network modernisation and £14 million for exceptional pressures. The network modernisation funds willbe used towards the Future Firecrest Project, which will replace the FCO’s current ICT systems, as well astowards the up-front costs of our eYciency programme. The funds for exceptional pressures will mainly beused for the cost of the UK presence in Iraq.

Departmental Unallocated Provision for Impairments

6. The non-cash Departmental Unallocated Provision for impairments does not form part of the FCO’sbaseline and so was not included in the Spending Review figures. Treasury has allowed the FCO continuedaccess to this unallocated provision of £20 million for 2005–06. Impairments arise where the cost of abuilding exceeds its current value and an accounting adjustment is made to write oV the diVerence as a non-cash cost. The diVerence arises because the FCO has to provide buildings that, as far as possible, conformto UK health and safety standards and incorporate additional safety and security features. It is rare for suchadditions to be fully reflected in the local market value.

Efficiency Challenge Fund

7. The FCO is drawing down the £9.6 million that HM Treasury made available for 2005–06 from theEYciency Challenge Fund as part of the 2004 Spending Review settlement. This will be used to continue tofund FCO EYciency Plan proposals for early retirement in the UK and to restructure the overseas networkof locally-engaged staV. The aim is to bring the FCO staYng structure into line with current operationalrequirements.

Iraq

8. Income and expenditure have been increased by £47.347 million to account for the contribution ofother government departments to their share of the cost of the UK presence in Iraq. Of this, £10.875 millionhas been transferred to the capital DEL to cover higher capital costs.

Overseas Price Movements

9. OPM is an agreement between the FCO and the Treasury that safeguards the Department’s overseasspending power against exchange rate movements and increases in overseas inflation rates, when the latterexceed UK inflation. Where spending power is eroded by exchange rate variations or inflation, the Treasurymakes good the shortfall in the Department’s budget. Where sterling exchange rate gains or relative overseasdeflation produce windfall gains, as here, the Department returns funds to the Treasury.



Net Effect of Reclassifying British Council as a Public Corporation

10. The reclassification of the British Council from a Non-Departmental Public Body (NDPB) to a PublicCorporation has been reflected in the FCO’s Resource and Capital Departmental Expenditure Limits sincethe 2004 Spending Review. As an NDPB the resource and capital expenditure of the British Council wasincluded in the FCO’s Resource and Capital DELs and the Resource DEL included an element for BritishCouncil non-cash costs such as depreciation. As a Public Corporation only the grant-in-aid payable to theBritish Council needs to be recorded in the FCO’s Resource DEL and the British Council’s capitalexpenditure is no longer included in the FCO’s Capital DEL. The amount of grant-in-aid payable to theBritish Council is unaVected by its change in status.

Impact on PSA Targets

11. The additional £14 million for Iraq outlined in paragraph 5 will contribute to the FCO’s pursuit ofPSA targets one, two and three, relating to Weapons of Mass Destruction, terrorism and conflict prevention.The additional expenditure on security and network modernisation will contribute to the achievement of allthe FCO’s PSA targets.

Departmental Expenditure Limit (DEL) and Administration Budgets

12. The tables below shows a comparison of the 2005–06 DEL (Table 3) and Administration (Table 4)budgets with the 2003–04 outturn, 2004–05 forecast outturn and plans for 2006–07 and 2007–08.

Table 3 (£m) 2003–04 2004–05 2005–06 2006–07 2007–08Actual Forecast Budget Plan Plan

Resource DEL1 1,585.188 1,786.890 1,813.483 1,683.660 1,720.660Capital DEL 49.821 77.533 122.978 111.203 109.203

Less: Depreciation2 "103.538 "111.218 "133.624 "168.624 "184.624

Total 1,531.471 1,753.205 1,802.837 1,626.239 1,645.239

1 Resource DEL figures for 2006–07 and 2007–08 are understated because they do not include conflictprevention expenditure, which will be transferred at the time of the 2006–07 and 2007–08 Main andSupplementary Estimates.

2 Depreciation, which forms part of Resource DEL is excluded from the total DEL, since Capital DELincludes the purchase cost of capital assets. To add on the depreciation of those assets would double counttheir cost.

Table 4 (£m) 2003–04 2004–05 2005–06 2006–07 2007–08Actual Forecast Budget Plan Plan

Administration Budget 745.715 741.855 797.638 827.068 833.068

Departmental Unallocated Provision

13. In accordance with Treasury guidance, the FCO have put aside a Departmental UnallocatedProvision (DUP) on RfR1 of £16 million resource and £1 million capital for 2005–06. This would be usedto meet unforeseen requirements arising in-year. There is also a non-cash DUP of £20 million (see paragraph6 above) to meet costs relating to the impairment of fixed assets.

14. In addition, in 2004–05, the FCO did not draw down its RfR1 DUP of £11 million resource, £1 millioncapital or its £20 million non-cash impairments DUP and anticipates rolling these forward under the endyear flexibility scheme.

15. For RfR2 there is £10 million of DUP remaining for the Global Conflict Prevention Pool globalprogramme expenditure.

Sir Michael Jay KCMGAccounting OYcer

May 2005



Letter to the Clerk of Committee from the Head of the Parliamentary Relations and Devolution Team,Foreign and Commonwealth OYce

FCO DEPARTMENTAL INVESTMENT STRATEGY 2004–07

As part of its scrutiny of the expenditure and administration of the FCO, the FAC has in the pastexpressed particular interest in the FCO’s capital investment plans. I enclose a copy of the FCO’s latestDepartmental Investment Strategy, which documents our investment plans for the Spending Review period2004–07. You may wish to show this to the new Committee, once appointed.

This document has been published on the FCO’s website at www.fco.gov.uk.


5 July 2005


FCO WINTER SUPPLEMENTARY ESTIMATE 2005–06 MEMORANDUM FOR THE FAC

I attach an Estimates memorandum to be read alongside the 2005–06 Winter Supplementary Estimate,which will be published by HM Treasury on Thursday 17 November.

In accordance with Treasury guidance Michael Jay, as Accounting OYcer, has authorised Ric Todd, asFinance Director, to sign Estimates memoranda on his behalf. Michael Jay has cleared this memorandumin final draft.

Chris StantonHead, Parliamentary Relations and Devolution Team

16 November 2005

Memorandum for the Foreign AVairs Committee:Foreign and Commonwealth OYce Winter Supplementary Estimate 2005–06

Summary of Changes

1. The 2005–06 Winter Supplementary Estimate for the Foreign & Commonwealth OYce (FCO)provides for changes arising from a number of transfers to and from other government departments. Theseare reflected in changes to the Departmental Expenditure Limit and the Administration Budget. There areno changes to the FCO’s Capital budget.

Detailed Explanation of Changes

2. Table 1 lists the individual changes included in the Winter Supplementary Estimate. The changes areshown in descending value within each category. All changes aVect the Departmental Expenditure Limit(DEL).

Table 1

DETAILED EXPLANATION OF CHANGES

Amount Description(£m)

Transfers from Other Government Departments

RfR17.985 Transfer to Section A3 (grants) from the Department for International Development (DfID) for

transfer of responsibility for the Small Grants Scheme. This is a baseline change that carriesthrough to 2006–07 and 2007–08. From 2006–07 onwards these funds will form part of the FCO’sbilateral programme budget.



Amount Description(£m)

1.000 Transfer to Section A2 (other current) from the Home OYce for funding of the Afghan DeliveryPlan.

RfR212.000 Transfer to Section C3 (grants) from DfID from the Conflict Prevention Pool for Africa

Peacekeeping activity.

0.150 Transfer to Section B3 (grants) from DfID for funding of the Caucasus Conflict PreventionProjects.

21.135 Change to Resource DEL

Transfers to Other Government Departments

RfR1–3.588 Transfer from Section A2 (other current) to the SIA for planned programme activity.

–1.400 Transfer from Section A1 (administration) to the SIA for language training.

RfR2–0.100 Transfer from Section A3 (grants) to the SIA for funding revisions in conflict prevention activity.

–5.088 Change to Resource DEL

Increase in gross spending oVset by Appropriations in Aid

RfR11.400 Increase in administration provision for language provision (Section A1 administration).

–1.400 OVset by increased income from SIA for language training (Section 5 A in A)—see transfer toother government departments above.

0.000 Change to Resource DEL

16.047 Net total change to Resource DEL

Departmental Expenditure Limit (DEL) and Administration Budgets

3. The tables below shows the eVect of changes to the FCO’s DEL (Table 2); and a comparison of the2005–06 DEL (Table 3) and Administration (Table 4) budgets with the 2003–04 outturn, 2004–05 forecastoutturn and plans for 2006–07 and 2007–08.

Table 2

CHANGES TO DEPARTMENTAL EXPENDITURE LIMIT IN 2005–06

2005–06 2006–07 2007–08Voted Non-Voted Total DEL Total DEL Total DEL

Resource1

Main Estimate Figure 1,760.770 52.713 1,813.483 1,683.660 1,720.660Winter Supplementary Change 16.047 0.000 16.047 7.985 7.985Current Resource DEL1 1,776.817 52.713 1,829.530 1,691.645 1,728.645

CapitalMain Estimate Figure 121.978 1.000 122.978 111.203 109.203Winter Supplementary Change – – – – –Current Capital DEL 121.978 1.000 122.978 111.203 109.203

Less depreciation at start of year 113.624 20.000 133.624 168.624 184.624Winter Supplementary Change – – – – –Current depreciation 2 113.624 20.000 133.624 168.624 184.624

Total DepartmentalExpenditure Limit 1,785.171 33.713 1,818.884 1,634.224 1,653.224



Table 3

DEL COMPARISON (£m)

2003–04 2004–05 2005–06 2006–07 2007–08Actual Forecast Budget Plan Plan

Resource DEL1 1,585.188 1,786.890 1,829.530 1,691.645 1,728.645

Capital DEL 49.821 77.533 122.978 111.203 109.203Less:Depreciation 2 "103.538 "111.218 "133.624 –168.624 "184.624

Total 1,531.471 1,753.205 1,818.884 1,634.224 1,653.2241 Resource DEL figures for 2006–07 and 2007–08 are understated because they do not include conflictprevention expenditure, which will be transferred at the time of the 2006–07 and 2007–08 Main andSupplementary Estimates.2 Depreciation, which forms part of Resource DEL, is excluded from the total DEL, since Capital DELincludes the purchase cost of capital assets. To add on the depreciation of those assets would double counttheir cost.

Table 4

ADMINISTRATION BUDGET COMPARISON (£m)

2003–04 2004–05 2005–06 2006–07 2007–08Actual Forecast Budget Plan Plan

Administration Budget 745.715 741.855 796.238 827.068 833.068

Departmental Unallocated Provision (DUP) 2005–06

4. There is no change to the Departmental Unallocated Provision set out in the memorandum thataccompanied the 2005–06 Main Estimate. For RfR1 there is a £16 million resource DUP and £1 millioncapital DUP to meet unforeseen requirements arising in-year. There is also a ringfenced non-cash DUP of£20 million to meet costs relating to the impairment of fixed assets. For RfR2 there is £10 million of DUPremaining for the Global Conflict Prevention Pool global programme expenditure.

5. The FCO is currently reviewing whether to draw down these unallocated provisions in the SpringSupplementary.

End Year Flexibility (EYF)

6. The Public Expenditure Outturn White Paper published in July 2005 showed a total figure of £111.991million for carry forward of 2004–05 DEL underspending into 2005–06 under the DEL EYF scheme. Table5 below shows how this figure was made up from a mixture of adjustment for 2003–04 final outturn, forecast2004–05 underspend and unused Departmental Unallocated Provision.

7. The FCO is currently reviewing whether to request take up of any of this end year flexibilityrequirement in the Spring Supplementary.

Table 5

ACCUMULATION OF EYF in 2004–05 (£m)

Administration Programme Capital Total

RfR1Adjustment for 2003–04 final outturn (6.306) – 5.297 (1.009)Forecast voted underspend 2004–056 30.000 – 25.000 55.000Ringfenced Impairments DUP 2004–05

not used 20.000 – – 20.000FCO Core DUP 2004–05 not used 8.000 3.000 1.000 12.000

RfR2 – 26.000 – 26.000

Total FCO EYF in PEOWP 51.694 29.000 31.297 111.9916 An adjustment to reflect final outturn will be made in the 2005–06 EYF exercise.



Impact on PSA Targets

8. Changes to the FCO’s budget provision relate to planned activity and so will not impact our publicservice agreements.

D R ToddDirector Finance

November 2005

Letter from the Head of the Parliamentary Relations and Devolution Team, Foreign and CommonwealthOYce to the Clerk of the Committee

FCO Spring Supplementary Estimate 2005–06 Memorandum for the FAC

I attach an Estimates memorandum and the FCO extract from the 2005–06 Spring SupplementaryEstimate,7 which will be published by HM Treasury today.

In accordance with Treasury guidance Michael Jay, as Accounting OYcer, has authorised Ric Todd, asFinance Director, to sign Estimates memoranda on his behalf. Michael Jay has cleared this memorandumin final draft.

Chris Stanton

14 February 2006

Letter to the Head of the Parliamentary Relations and Devolution Team, Foreign and CommonwealthOYce, from the Clerk of the Committee

The Committee has noted with interest the NAO Report on Fraud at the British Embassy in Tel Aviv.As you know, this Report will be the subject of a hearing of the Public Accounts Committee next week.

The Committee has asked me to request, before its meeting on 15 February, answers to the following twoquestions.

— What steps have been taken to prevent any repetition of a fraud such as that perpetrated at theEmbassy in Tel Aviv?

— Why was this Committee not informed of the fraud, either before or during its visit to Israel inNovember 2005?

I apologise for the very tight deadline for a response, but as you know, the House will be in recess from16 February and the Committee is then away on oYcial business until 6 March.


9 January 2006


Fraud in Tel Aviv

Thank you for your letter of 9 January.

In answer to your first question, we have taken a number of steps to ensure that there is no repetition ofthe fraud in Tel Aviv. On the question of Rest Home Payments, we have checked with all of our overseasposts and confirmed that all additional payments or allowances that are paid as part of salary are correctand based on the proper scale. We found no evidence of a similar fraud at any other post. We have amendedour internal audit package so that additional payments made with salary are automatically scrutinised aspart of the audit. We have also issued a “Lessons Learned” paper that focuses on the weaknesses whichallowed the Tel Aviv Fraud to go undetected. This paper has been sent out to all Heads of Posts andDepartments in London—a copy is attached for the Committee’s information.

The key weaknesses that allowed the bag clearance element of the fraud to happen were cash payments,hand written receipts and lack of rotation of duties. We have a world wide initiative to reduce cash payments:this is an area that is closely looked at in our self-audit package as well as by visiting Audit and Financial

7 Not printed.



Compliance teams. We are also making further improvements to our guidance and anti-fraud trainingpresentations to highlight the importance of questioning hand written receipts and invoices and benefits ofrotation of duties of staV working overseas.

Prism, our new financial management computer package, will enable us to gather more informed anddetailed budgetary and financial information. This has enabled us to develop more analytical end of monthchecks of Posts accounts and the introduction of a monthly management account report to the Head of Post.The embedded controls within Prism, for example the need to match an invoice to a Purchase Order beforeit is paid, have also strengthened our payments procedures.

We have also increased the number of staV in Internal Audit Department and Financial Compliance Unitthus enabling a increased frequency of internal audits of medium risk posts from every five to four years (highrisk posts are audited every three years) and an increase in FCU proactive visits from 10 a year to 15 a year.

On your second point, this incident was not raised in briefing for the Committee’s visit to Israel becausethe present system for commissioning briefing does not cover fraud. We will, however, check with ourFinancial Compliance Unit when preparing future briefing. It was not raised by Post while the Committeewas in Israel as it was not thought to be relevant to the purpose of the Committee’s visit.

I attach a full copy of the report for your information.

Chris Stanton

14 February 2006

Annex

Tel Aviv and other Frauds: Lessons Learned

1. Payments should only be made on receipt of formal invoices

Too many Posts continue to pay for too many transactions by way of an advance that is only supportedby a receipt, which in many cases is hand written. We all need to work harder to reduce the incidence ofpayments made in this manner so that only the most minor of payments (ie those made through imprests)are made this way. In countries with a cash based economy this may be diYcult but even in this environmentpayment for material purchases should only be made against a formal invoice.

The best way to ensure that payments are only made on receipt of an invoice is to have formalrelationships with your suppliers, perhaps even contracts, such that Post receives a periodic invoice forgoods supplied. Such an arrangement has many advantages:

— payments are only made on presentation of original invoices;

— management at Post are able to exercise much more control over suppliers used thereforeconfirming that suppliers are indeed bonafide;

— it is more evident how much is being spent with suppliers making it easier to negotiate on pricewhen contracts are tendered resulting in better value for money from procurement; and

— cash payments are reduced (see below).

Post should approach those suppliers who don’t currently provide invoices and request them to do so.Consideration should also be given to whether it is appropriate to continue to do business with supplierswhich cannot provide invoices for all but small one-oV items ie those items being purchased from imprest.

The prescribed use of Purchase to Pay on Prism will give management at Post some assurance that goodprocedures are being followed as Prism, when correctly used, requires a properly authorised requisition andpurchase order to be raised on the system before a payment can be made. Management at Posts with Prismshould therefore ensure that purchases are being made in accordance with prescribed procedure.Management OYcers must however ensure that all claims and advance payments are brought to accounton-line and released by the SMO before cash is issued. Otherwise the potential scam will be that theAccountant could raise fraudulent STD invoices.

2. All payments where there is no formal invoice should be questioned

If it is not possible to obtain an invoice the oYcer certifying the payment or releasing the payment onPrism:

— must question why this is the case and satisfy themselves that it is acceptable to pay on a receiptonly;

— must not pay on the evidence of a hand written receipt unless absolutely necessary; and

— must confirm that the price paid represents value for money and is genuinely what was paid if itis necessary to pay on a hand written receipt.



3. Cash payments should be minimised

Cash payments are inherently risky. Not only is there an increased risk of fraud and impropriety but theyare also ineYcient. All Posts should review the number of cash payments made with a view to reducing them.The latest guidance for end of month accounts checks for Prism posts sets a limit of £100 over whichpayments should be made by non cash means.

You should also be aware that we encourage the use of corporate credit cards where possible to reducethe level of cash payments. All posts should actively consider whether a corporate credit card can be used.

4. Only pay on original documentation

An easy control overlooked on too many occasions. All Post’s need to make every eVort to ensure thatboth invoices/demands for payment and supporting documentation is original and genuine. If an invoice/supporting documentation is not an original, this needs to be questioned and extra attention given to thepayment to ensure that it is valid and has not been paid before.

5. Be aware for duplicate payments

We all need to be aware of the potential of duplicate payments. Whilst vigilance from the Accountant,the accounts supervisor and checking oYcers remains of vital importance there is some good news to helpyou in this area. Prism, if used properly, can help give you an assurance that duplicate payments are notbeing made on your account. If a transaction is processed through purchase to pay the payments cannot bemade without matching it to a Purchase Order. A duplicate payment should not therefore be able to be madeas it has no matching Purchase Order. As with point 1 above it is important that you ensure that PrismPurchase to Pay is being properly applied at your Post.

SMOs should be aware that although it is not possible to pay the same invoice twice or even enter it twiceagainst the same supplier, it is possible within the system to pay for the same goods/services by altering theinvoice number with a space, dot or dash 1. If this coincides with an open purchase order then it wouldautomatically be paid. But if it was a single purchase order then it would go on hold and could only bereleased by the SMO. SMOs should therefore be careful to check invoice numbers when authorisingpayments against open purchase orders.

6. StaV should take their annual leave entitlement

Locally engaged staV should be required to use their annual leave allowance, including at least one blocka year that means another oYcer must take over their responsibilities for at least a whole week. Persistentfailure to take leave may be an attempt to hide malpractice, ie someone else will have to do my work whileI am away and will discover what I have been doing.

There should be a rotation of duties to enable diVerent staV to undertake the same activities duringdiVerent periods. This is not just to prevent fraud, but also gives posts maximum flexibility during periodsof staV absence or leave.

7. General Awareness of staV lifestyles

Take notice of any staV who accumulate significant debt or whose lifestyle appears incommensurate withtheir income. There may be a perfectly acceptable explanation but an extravagant lifestyle can be indicativethat a person has a second, perhaps fraudulent, income.

Tied in with this all staV should be asked to declare outside business interests annually.

8. Confirm that suppliers are genuine

Prism can be used as a database of regular suppliers that can be used as a tool when inviting companiesto bid for tenders. New suppliers should only be added to the database when it has been confirmed that thecompany actually exists. This may involve a member of staV actually visiting the premises or checking thatthe company is registered or simply checking the details against other publications such as the localtelephone directory.

9. Ongoing awareness of Posts main suppliers

Posts should monitor those companies that are winning larger contracts to ensure that a variety ofsuppliers are being used. In the case where one supplier is regularly winning contracts, Post should ensurethat there is a valid reason for this.



10. If the worst should happen ensure that Post can protect FCO interests

Terms and Conditions of Service for locally employed staV should include a provision for immediatedismissal for gross misconduct (eg fraud) and, where possible the withholding of terminal gratuities.

Financial Compliance Unit

November 2005

Annex

Fraud: Lessons Learned from Tel Aviv and other Frauds

1. I think you are all aware of the fraud that was discovered in Tel Aviv a little over a year ago. TheNational Audit OYce have completed their report, which will be attached to the FCO 2004/05 Accounts.We expect Public Accounts Committee interest. The PUS may be called to give evidence.

2. Against this background, I attach a note written by Financial Compliance Unit on the lessons learnedfrom the Tel Aviv and other frauds. I commend this to you. You should ensure both that those involved inmanagement work in your post read it carefully and that the relevant checks are in place as far as possible.

3. The paper is a statement of good practice, not a catch-all document. It highlights some of the keyindicators of fraud and the key steps which, in our experience, help you prevent it. It is neither a set of ironrules which must be followed nor a guarantee that fraud will be avoided by following them. Rather the paperis designed to help you discharge your responsibilities as SAO in support of Michael Jay as Accounting OYcer.

4. You should be guided by your own judgement and common sense in the light of local circumstances.So, for example, if the circumstances of your post compel you to make cash payments or make it diYcultto obtain invoices in every case, then you need to think about what flanking and/or other arrangements willhelp mitigate the risks (”compensating controls” in auditor speak). What I would say is that it would bemuch more diYcult for an SAO to explain a fraud to the Accounting OYcer if it has occurred by failure toimplement the good practice set out in this paper.

5. I am aware that DSP and FCO guidance need to be updated, not least in the light of Prism, and weare working to this end.

6. Finally, may I repeat that if you would like specific advice on tackling fraud or you suspect malpracticein your post, please contact me or FCU immediately. I would encourage you to make use of their expertise.

D R ToddFinance Director

3 November 2005

GLOBAL OPPORTUNITIES FUND

Letter to the Chairman of the Committee from the Secretary of State for Foreign andCommonwealth AVairs

It gives me great pleasure to enclose the Global Opportunities Fund’s second Annual Report which willbe laid before the House as a Command Paper on 12 October 2005.

I launched the GOF in May 2003 to focus the FCO’s programme spending more closely on our priorities;and to bring greater professionalism to our programme and project management work.

The GOF’s second year has built upon the foundations laid in 2003–04. Its programmes are now directlyaligned to the Strategic Priorities which continue to support an impressive portfolio of projects, many ofwhich are beginning to bear fruit. The Fund has also played a key role in the evolution of the wider FCOprogramme budget.

From 2006–07, it will expand to include all strategic programmes (Drugs and Crime Fund, Migration andOverseas Territories programme) so that the FCO can provide well-structured and coherent support to itsoverarching strategy.

I am aware of the Committee’s continuing interest in the GOF and trust you will find this second AnnualReport an interesting and informative read. I would be happy, as always, to arrange a separate informalbriefing on the progress of GOF in year three and the wider changes taking place to the programme budgetif required.


10 October 2005



OVERSEAS POSTS AND FCO ESTATE

Written evidence submitted by Thomas Rambaut

Government Shuts Embassy and Cuts Aid to Madagascar

I am writing to you in the hope that you can influence a situation which needs to be urgently put right. Iknow that for the moment there is no Committee but that one is expected shortly. However could you pleaseassist with your influence in putting right a wrong that seems totally unnecessary.

I recently returned from a visit to Madagascar—a country of enormous potential, but one of the pooreston earth—due mainly to a succession of bad and corrupt governments over the past 30 years. I can confirmfrom my own observations that the level of poverty, malnutrition and misery are every bit as bad asindicated.

Since 2002 Madagascar has been governed by a new breed of leaders; who have the interests of the peopleat heart, and who are determined to beat corruption and bring prosperity to the people of Madagascar.There is now a mood of hope which has not been felt for two generations, and to which aid donors and theinternational community have responded with generous financial and technical assistance to help rebuildthe country’s shattered infrastructure. The British Embassy has become the most visible diplomaticpresence. The Americans are bunkered down and the French have a long and awkward history to forget.The British presence is noted and spoken about very well, in even the remotest parts of Madagascar wheretelevision reaches. This was all noted and praised in a report by an FCO man called James Bevan.

Against this background I was astonished to discover that the government has decided to close the BritishEmbassy in Antananarivo later this year—to save pounds sterling 300,000 a year. Furthermore, when theEmbassy closes a fund used to finance the construction of schools, equip medical centres and projects whichprovide regular incomes to poor communities will also come to an end. This cannot be right. The Britishgovernment claims to be determined to reduce poverty and suVering in Africa. But closing the BritishEmbassy and ending British aid will have precisely the opposite eVect.

After only three years the government of Madagascar has achieved a great deal. It is one of Africa’s fewsuccess stories, and it is already showing the way to other developing countries. To withdraw British supportat this time makes no sense at all. It is damaging to the interests of Britain and Madagascar and couldundermine the government’s eVorts. Furthermore it contradicts everything that Mr Blair and Mr Brownhave said, particularly in the context of the recent Commission for Africa report.

I understand that several large British investments in Madagascar have recently been announced or areexpected to be announced. The British Embassy has been in the forefront of facilitating these. I know thatit is common amongst a very few staV of the FCO to say that they are not interested in British investmentoverseas, only in generating British exports or investment into Britain. I am sure that you are aware thatmost of the largest investments overseas also arrange huge procurement in the UK. When Companies suchas Rio Tinto and BAT wish to invest in Madagascar you must expect substantial exports from Britain tosustain these companies’ operations. It is also my understanding that these same companies want to helppay for the operation of the Embassy because they find it so helpful and useful in their endeavours. So thesavings can be made by other means. The FCO ignores this oVer.

I also understand that there are dozens of local staV in the Embassy and residences, most of whom,because of the extreme poverty, will never work again. There are opportunities not to break up this staV andto pass the buildings and staV to another country. Your staV in London have vetoed this. This would seema vile way to treat loyal staV and, those who propose it, deserve to rot in the same kind of poverty. It is alsototally against the policies and declared intentions of the FCO.

It is fairly clear what has happened. In spite of the glowing report by Mr Bevan,the FCO has decided tomake an economy by shutting this embassy, without thinking, analysing or listening. Once someone hadmade the decision and his error became apparent to him, all he could do was to bring forward the closureto stop the protests. Jack Straw does not know the truth about this and Gordon Brown and Tony Blairwould surely be surprised by the cavalier way in which this person has done his best to bring misery to dozensof British employees, a disservice to British industry, incomprehension to a very friendly government anda stab in the back to those who are trying to bring aid to this, one of the poorest countries in the World.

You know two f***s from Bob Geldorf and the culpable manager would be well in the S***. Could theFCO not quietly put this right before the Gleneagles Conference and save themselves from looking asinine?The FCO have made a serious mistake in deciding to close the British Embassy in Antananarivo. It shouldbe big enough to admit it and reverse this decision before it is too late. I hope you will use your influence toensure that British support for Madagascar continues, for the benefit of the people of Madagascar to endthe poverty and suVering they have endured for so long.

Thomas Rambaut

22 June 2005



Letter to the Second Clerk from the Parliamentary Relations and Devolution Team at theForeign and Commonwealth OYce

Quarterly Estates Sales Return

Chris Stanton wrote to Steve Priestley in April 2005 enclosing a list of properties that the FCO had soldin the third quarter of the Financial Year 2004–05, in fulfilment of a commitment made by Sir Michael Jayto the Committee on 20 July 2004 to submit regular reports. Enclosed with this letter is a table listing theproperties sold in the fourth quarter of the Financial Year 2004–05.

As with previous tables, the figures shown are the gross sales proceeds. Transaction costs will vary, butcan be expected to average 6–8%. Only one of the properties involved, that sold in St Georges, Grenada,was the Residence of a Head of Mission, which has been replaced.

Mark TurnerParliamentary Relations & Devolution Team

26 July 2005

FCO PROPERTY SALES FOR THE PERIOD 1 JANUARY to 31 MARCH 2005

Post Type of property Gross salesreceipts

4 January 2005 Copenhagen Residential £661,0006 January 2005 Wellington Residential £128,00023 March 2005 St Georges Residence £254,000

Gross Sale Proceeds £1,043,000

Letter to the Chairman from the Secretary of State for Foreign and Commonwealth AVairs

I am writing to you as Chair of the Foreign AVairs Committee to alert you to a written Statement I willbe publishing tomorrow setting out my plans for changes to the network of overseas post. I attach a copy.

I am also copying this to The Speaker.


10 October 2005

Written Statement, OYcial Report, 11 October 20058

Overseas Network

The Secretary of State for Foreign and Commonwealth AVairs (Jack Straw): In December 2003, I set outthe Government’s international priorities for the next five to 10 years and the Foreign and CommonwealthOYce’s strategy for delivering them in a world of new challenges, opportunities and threats.

On the basis of that strategy and the outcome of the 2004 spending round I announced on 15 December2004, OYcial Report, columns 137–140WS, changes to the overseas network, aimed at enhancing oureVectiveness in representing British interests abroad, and helping to deliver an eYcient service on behalf ofthe British taxpayer.

However, in the light of further reviews I have agreed to make the following small adjustments to ourplans:

One subordinate post, Hamburg, scheduled to remain open with locally based staV, will now close andour interests will be covered from Berlin. Two subordinate posts, Munich and Miami, will now continue tobe headed by a UK based member of staV rather than covered entirely by locally engaged staV as originallyproposed. Other changes will go ahead before end 2006, as previously announced.

8 Column 22WS.



The overall picture on implementation of the changes announced in December is as follows:

Post Planned change State of Play

ASIA PACIFICPort Vila (Vanuatu) Close To be closed by end 2006Nuku’alofa (Tonga) Close To be closed by end 2006Dili (East Timor) Close To be closed by end 2006Tarawa (Kiribati) (currently a locally Close ClosedstaVed post)

AMERICASAsuncion (Paraguay) Close ClosedNassau (Bahamas) Close Closed

AFRICAMaseru (Lesotho) Close ClosedMbabane (Swaziland) Close ClosedAntananarivo (Madagascar) Close Closed

AUSTRALIABrisbane Localise To be localised by end 2006Perth Localise To be localised by end 2006

NEW ZEALANDAuckland Localise Localised

JAPANFukuoka Close Closed

LAOSVientiane (Laos) (Trade OYce) Close Closed

UNITED STATESSeattle Localise LocalisedMiami Localise To remain UK basedPhoenix Close ClosedDallas Close ClosedSan Juan (Puerto Rico) Close Closed

FRANCEBordeaux Localise To be localised by end 2006Lyon Localise To be localised by end 2006

GERMANYMunich Localise To remain UK basedHamburg Localise To close by end 2006Frankfurt Close To close by end 2006Leipzig Close ClosedStuttgart Close To close by end 2006

SPAINPalma Localise To be localised by end 2006Bilbao Localise Localised

PORTUGALOporto Close Closed

CAMEROONDouala Close Closed

In addition, I have agreed the following further changes to the network:

In Brazil, following a review of our commercial eVort there, I have agreed that our Trade OYces in BeloHorizonte and Curitiba should be closed, but the existing Honorary Consuls will remain. Commercialservices currently provided in Belo Horizonte and Curitiba will in future be delivered through our otherposts in Brazil. In India we plan to upgrade our Business Information Centres in Pune and Chandigarh toBritish Trade OYces and cease to operate a Business Information Centre in Bhopal.



The full details of these additional changes are as follows:

Post Planned change

Trade OYce, Curitiba, Brazil Close. Honorary Consul to remain. Trade interests coveredfrom other Posts in Brazil (Brasilia, Sao Paulo or Rio deJaneiro).

Trade OYce, Belo Horizonte, Brazil Close. Honorary Consul to remain. Trade interests coveredfrom other Posts in Brazil (Brasilia, Sao Paulo or Rio deJaneiro).

Business Information Centre, Bhopal, India Close. British Council Library to remain. Trade interestscovered from Mumbai.

Business Information Centre, Pune Upgrade to full Trade OYce.

Business Information Centre, Chandigarh Upgrade to full Trade OYce.

We have no other plans to close or open any further sovereign posts but like any well-run organisationwe will continue to move resources flexibly as priorities require in line with UK interests. I will inform theHouse of any further planned changes.

Letter to the Clerk of the Committee from the Head of the Parliamentary Relations and Devolution Teamat the Foreign and Commonwealth OYce

Quarterly Report of Estate Sales

My colleague wrote to Sarah Ioannou in July 2005 enclosing a list of properties that the FCO had soldin the fourth quarter of the Financial Year 2004–05, in fulfilment of a commitment made by Sir Michael Jayto the Committee on 20 July 2004 to submit regular reports. Enclosed with this letter is a table listing theproperties sold in the first quarter of the Financial Year 2005–06.

As with previous tables, the figures shown are the gross sales proceeds. Transaction costs will vary, butcan be expected to average 6–8%. None of the properties involved was the residence of a Head of Mission.


11 October 2005

FCO PROPERTY SALES FOR THE PERIOD 1 APRIL to 30 JUNE 2005

Gross SalesPost Type of Property Receipts

30 May 2005 Brisbane Residential £160,0008 June 2005 Helsinki Residential £185,00020 June 2005 Bratislava Residential £383,000

Gross sale proceeds £728,000

Letter to the Clerk of the Committee from the Parliamentary Relations and Devolution Team,Foreign and Commonwealth OYce

Quarterly Report of Estate Sales

My letter of 11 October 2005 enclosed a list of properties that the FCO had sold in the first quarter of theFinancial Year 2005–06. In accordance with Sir Michael Jay’s commitment in July 2004 to send theCommittee regular reports, I am enclosing a further report which shows that only one property was sold inthe second quarter of the Financial Year 2005–06.



As with previous tables, the figure shown is the gross sales proceeds. Transaction costs will vary, but canbe expected to average 6–8%. The property involved was not the residence of a Head of Mission.

Chris StantonParliament Relations and Devolution Team

19 January 2006

FCO PROPERTY SALES FOR THE PERIOD 1 JULY TO 30 SEPTEMBER 2005

Post Type of Property Gross Sales Receipts£

29 September 2005 Lisbon Residential 800,000

Gross Sale Proceeds £800,000

MISCELLANEOUS


I am writing to share with you the good news that the FCO’s network of overseas Posts achieved Investorsin People (IiP) recognition in December 2005. As the FCO’s UK-based operations (an IiP organisation since2001) were judged to be successfully maintaining the IiP Standard back in November 2004, we are nowrecognised together under FCO corporate accreditation. This is a real achievement and a testament to thehard work that Posts overseas and Directorates in London have put in to improving the management anddevelopment of staV.

The Assessor highlighted revised induction programmes and the development of Locally Engaged (LE)staV as two major improvements since his last visit in 2004, noting that these had been facilitated with theassistance of internal team members and the 10 Regional Training Centres around the world, which weintroduced in April 2004. He commended the latter as being a very innovative step to improving theopportunities for LE staV to access training and noted the significant commitment by senior managers atPost in encouraging and supporting staV development.

The Assessor acknowledged that a considerable eVort has been made at all levels of the FCO to developthe skills, knowledge and behaviour of line managers. The greater rigour in our appraisal system coupledwith a clearer competence framework and increased (and improved) management training has contributedto the raising of management standards. In particular, “LE managers now have a far better appreciation oftheir responsibilities for supporting and managing the successful performance of their teams”.

While we are pleased that the progress we have made, we are conscious that a great deal more remains tobe done if we are to maintain recognition against the revised (more challenging) IiP Standard in futurereviews. Looking ahead to 2006–07, the impact of our new leadership training for Heads of Mission as wellas mandatory performance management training for all senior managers should start to be felt. At the sametime we intend to expand our network of Regional Training Centres to include more Posts and more staV.And we will also be addressing the development points highlighted in the Assessor’s report by continuingto enhance our ability to plan and evaluate training eVectively—continuous improvement being a key IiPtheme.


6 January 2006

Letter to Chairman of the Committee from the Permanent Under Secretary of State,Foreign and Commonwealth OYce

In December 2003 the FCO published a White Paper entitled “UK International Priorities: A Strategyfor the FCO” (which you can find at www.fco.gov.uk/strategy).

In publishing the Strategy, we committed to reviewing it every two years in order to ensure that itcontinued to reflect the Government’s international priorities. We do not expect this review to lead to radicalchanges. But in light of developments since 2003, and a complex and rapidly changing world, we areupdating our analysis of the key issues, institutions and relationships; and the international priorities for



the UK identified in the Strategy. In doing so we are likely in particular to underline the importance ofmigration, public service delivery, in particular consular services, and the growing importance of Chinaand India.

We intend to publish a new paper at the end of March and will of course ensure that the Committeereceives copies. If in the meantime you and FAC colleagues have views on the Strategy and the areas thereview should cover, these would of course be welcome, if possible before the end of January.


12 January 2006

Letter to the Clerk of the Committee from the Director of the BBC World Service

I enclose BBC World Service’s written evidence for the Committee’s Inquiry into the FCO AnnualReport. It is in two parts: the first part is a summary of BBC World Service activity over the year, and thesecond part is a summary of BBC World Service’s strategy and vision to 2010, which focuses on majorchanges to be formally announced on 25 October 2005 following full approval by the BBC Board ofGovernors last week.

In preparation for the Committee’s hearing on the FCO Annual Report 2003–04, the World Service sentmembers a briefing on its SR04 submission, which included a separate bid for funding to establish an Arabictelevision service.

The Committee will be aware that the bid for extra funds for Arabic television was unsuccessful and theWorld Service was asked to look at ways of funding it through re-prioritisation.

This work has been ongoing throughout the year; during this period, there have been two other majorpublic exercises which have contributed to our strategic thinking:

— In March 2005, the DCMS published its Green Paper on BBC Charter renewal, A Strong BBCIndependent of Government. This included the recommendations that the World Service shouldexplore how it could face up to the arrival of satellite TV in many markets; and that it shouldconsider reducing its portfolio of languages, particularly in Central and Eastern Europe.

— And, as you know, at the beginning of 2005, a Review of Public Diplomacy, led by Lord Carterof Coles, was established. BBC World Service welcomed the opportunity to provide informationto the review. The review team is shortly to report, and is expected to echo the Green Paper inproposing that the language portfolio should be carefully scrutinised. It is also expected torecommend that the World Service should continue to exploit new technologies, services andplatforms, and should respond more quickly to changing geopolitical circumstances.

Both of these developments have reinforced the BBC’s own conviction that a far-reaching, radicalstrategy is needed to ensure that the World Service can retain its pre-eminence in a multimedia world.

The second attached paper sets out the main elements of the BBC World Service’s strategy to 2010, withspecific financial plans through 2007–08. It lays out the strategic principles and priorities that will guide thechanges in activities, and details the areas of new investment. It also describes the reprioritisation of activitiesthat will be necessary to deliver this exciting vision.

The paper was endorsed by the BBC Board of Governors on 20 October. Consultations have also beenheld with the FCO about the proposed changes. The Foreign Secretary has given written approval, as he isobliged to do under the Broadcasting Agreement, for the proposed investment in Arabic TV and theproposed service reductions.

Nigel ChapmanDirector

24 October 2005

1. BBC WORLD SERVICE: 2004–05 A YEAR IN REVIEW

In 2004–05 BBC World Service consolidated its position as the best known and most respected voice ininternational broadcasting

Independent research indicated that its reputation for trust and objectivity was higher than for any otherinternational broadcasters in virtually all markets surveyed—including in Egypt, Indonesia, Nigeria,Pakistan, Russia, and USA. Its reputation also improved in markets in the Islamic world where it suVereda reverse during and immediately after the Iraq war.

Throughout the year, the range, intensity and geographical spread of major news stories wasunprecedented. As well as developments in Iraq and the Middle East, there was extensive news coverage ofthe Indian Ocean tsunami, the Darfur crisis, the Beslan school siege, the US and Ukrainian elections and



the enlargement of the European Union. BBC World Service produced some of its strongest-ever newsprogrammes, pioneered the use of new interactive media and provided enhanced services where mostneeded.

Audiences

— BBC World Service’s overall audience figure rose to 149 million weekly listeners, a rise of threemillion listeners compared to 2004’s estimate of 146 million. This is the sixth year in successionthat BBC World Service has attracted an audience over 145 million. This equates to over 50% morelisteners than any comparable international broadcaster.

— Listening in the USA increased to 5 million, the highest ever level, up from 4.7 million last year.One in five opinion formers in New York and Washington listen each week while the figure inBoston is even higher at over one in four.

— In India, weekly audiences rose 4.8 million to a total of 16.4 million weekly listeners. The increasehas been due to improvements in Hindi language programming and to a high-profile series of BBCHindi road-shows in rural areas of the country. This is the first increase in a number of yearsfollowing a dramatic drop in overall radio listening in India, as well as a ban by Indian regulatorson local FM stations carrying news from foreign broadcasters. This had resulted in a drop of over12 million listeners between 1995 and 2002.

— The weekly audience for the BBC Bengali Service has risen by 2.6 million to 13 million in the pastyear. The growth of the audience to BBC World Service is mostly driven by the increase in rurallistening, and represents a strong recovery from the audience drop in 2003, particularly inBangladesh, following the Iraq war. This latest survey reveals that the vast majority of those whohave ever listened to the BBC—more than 80%—consider it to be trustworthy.

— Audiences in Indonesia rose by 1.2 million to 4.4 million.

— World Service audiences in the UK were measured at 1.3 million regular listeners. Programmesare now more easily available following the growth of digital and cable services.

— In Nigeria, a Government ban on the rebroadcasting of foreign broadcasters’ news programmesby local FM stations, imposed in April 2004, has resulted in an overall drop of 1.5 million listenersin the country. However 20.2 million Nigerian listeners still tune in every week—17.6 million inthe Hausa language, mostly on shortwave.

Growth of competition had a negative impact on World Service audiences in some regions:

— Listeners to the BBC Urdu service in Pakistan fell by 3.2 million to 9.4 million

— Kenyan audiences to BBC programmes fell by 2.1 million to an overall total of 4.5 million.

— Listeners to the BBC Swahili service in Tanzania fell by 1.3 million to an overall total of 10.2million.

FMs

BBC World Service programmes are now available in high quality audibility on FM in 146 capital cities(77% of the world’s capitals), up from 139 last year.

Iraq

Research showed that BBC World Service is the biggest speech radio station in Iraq. Weekly audiencesin the country increased to 3.3 million (22%) from 1.8 million weekly listeners (13% of the radio audience)last year—an increase of 1.5 million. The independent surveys also showed that 43% of opinion formers inIraq listen every week.

The BBC’s new FM transmitter network in the country has made a crucial diVerence in ensuring theWorld Service remains competitive—we now have FMs in Baghdad, Mosul & Irbil, Kirkuk, Al-Nasirya,Basra, Al-Kut, Salahuddin and Al-Amara.

The news bureau in Baghdad gave the organisation an important edge in reporting from a country thatremains diYcult and dangerous to cover. For World Service news teams it complements the new bureau inCairo, where a significant amount of programmes are now made for the Arabic Service.

Afghanistan

Despite limited survey work due to safety considerations, the BBC attracted 2.8 million listeners in fiveprovinces of Afghanistan—an increase of 2 million on last year’s Kabul only survey. That survey showedthat BBC World Service programmes in Pashto and Persian had a 60% reach in the Afghan capital.



New Media

Monthly page impressions to the BBC’s international news site, including bbcnews.com, increased to 351million in August 2005 from 284 million a year previously, an increase of 67 million (for the period of thisreview, figures were 324 million in March 2005 from 279 million exactly a year previously—a rise of 45million).

In Brazil, online services now attract larger audiences than radio. BBC World Service is pioneering theintroduction of video content and working closely with key media partners in that country. In January 2005the BBC’s Brazilian website, bbcbrasil.com, registered 14.3 million page impressions, up more than 120%in a year.

Since the period covered by this review, a BBC Persian Service programme became the first BBC languageprogramme to be available to audiences via a podcast in August 2005. The podcast provided listeners withthe flexibility to listen to a 15-minute highlight how and when they want to at bbcpersian.com.

Finance

In the SR04 settlement, the Government announced an increase in funding for the World Service of£27 million over the period 2005–08. The separate bid for an Arabic television service was supported by theGovernment, but it said that funding would need to come from reprioritisation.

BBC World Service will channel all the additional funds into expanding FM in major cities, strengtheningits impact in the Islamic world, improving interactivity and partnership development.

In order to maximise the value of new investments, World Service strives to cover all rising costs fromeYciency gains. In this financial year, BBC World Service achieved eYciency savings of £4.4 million. Theorganisation also commenced a far-reaching reprioritisation exercise, the results of which are given in thesecond part of this paper.

General Editorial Overview

BBC World Service continued to report on and from the Islamic world, including powerful coverage onIraq—especially the elections and handover of power—enabled by a strong presence on the ground,complemented by insightful analysis and interviews.

The network carried strong coverage of the Afghan and Iraqi elections, the Israeli-Palestinian crisis andother key stories including developments in Saudi Arabia, the death of Yasser Arafat—the World Servicebegan broadcasting on FM in Bethlehem on the day of his death, and the assassination of the Lebaneseprime minister.

Elsewhere, reporting was unparalleled, including in-depth coverage of the Beslan crisis (for which theWorld Service won the News Output Award at the Sony Radio Academy Awards), leveraging editorialcoordination and newsgathering strength under diYcult circumstances. There was extra programmingacross several languages for the Tsunami disaster and comprehensive coverage of: events in Darfur;elections in Ukraine, and the USA; the death of Pope John Paul II; EU enlargement; the Davos summit.

Landmark Programming

Landmark programmes included The Jigsaw in Pieces, on diplomacy after the Iraq war; The New Europe,broadcast across all European languages; and Profit and Loss: The Story of African Oil.

The World Service played an important role in the BBC-wide China Week, a week of original andgroundbreaking programmes. The organisation was given unprecedented access inside the country. Therewas a high degree of editorial collaboration across the BBC’s Global News Division. Talking Point fromTsinghua University was carried across all three media—radio, television and online. Both BBC World andBBC World Service carried the Shanghai edition of Question Time.

Global Conversations

The World Service continued to expand its interactive debates on radio and online. Opportunities forusers to question key decision-makers and to exchange views across nations and continents included agroundbreaking initiative to connect families separated by the Line of Control dividing Kashmir. For thefirst time in years Kashmiris were able to communicate through a video conference organised and webcastby bbcurdu.com. In May 2004, the Foreign Secretary took part in Talking Point, an interactive debatecovering Iraq, the wider Middle East and the future of Europe. BBC World Service interactive websites inSpanish, Russian, Arabic, Persian and Urdu won awards for excellence.



The Indian Ocean tsunami prompted one of the largest news eVorts ever undertaken by the BBC, withcorrespondents deployed on an unprecedented scale. Within hours of the waves striking, the World Servicelaunched notice boards for missing people. In five aVected regions—India, Maldives, Sri Lanka, Thailandand Indonesia—more than two million people looked at these pages. BBC World Service received over25,000 emails, and several families were reunited with the help of the BBC.

BBC Monitoring

BBC Monitoring continued to provide highly valued material for stakeholders from areas such as theMiddle East, Darfur, Russia and Ukraine. Pan Arab TV coverage was enhanced, including a supply of TVfeeds to BBC World.

During the Beslan siege, Monitoring helped to unravel a confused media picture of events. Our Russianteams in the UK and overseas were able to reveal the widely diVering accounts being given in newspapersand on television, and the diVerences between regional and Moscow-based media.

The benefit of following events over a long period was demonstrated by the tremendous expertise andanalysis applied to explaining Ukraine’s “Orange Revolution”.

This year also saw the conclusion of the Cabinet OYce-led Review of BBC Monitoring. The BBCwelcomed the outcome of the review, and its endorsement of the role and value of BBC Monitoring as anational and international resource of information on the media.

The BBC believes that the new Funding and Governance regime is a positive development, providing aframework within which Stakeholders can join with BBC Monitoring to concentrate on strategicdevelopments, rather than on short-term funding issues.

The stability aVorded by the Review outcome will enable BBC Monitoring to focus on meeting thechallenges of operating in a rapidly evolving global media environment. In addition, the Review providesa firm foundation for the future of BBC Monitoring’s long term partnership with the US-based FBIS.

BBC Monitoring is now working with the Cabinet OYce and others to establish the new Funding andGovernance Regime. It is also examining how to remove £2 million pa from its annual costs by March2007—a consequence of the funding settlement agreed between the Stakeholders being lower than thatrecommended by the Review.

BBC Monitoring believes that 50-80 net job cuts (10–16%) will arise as a consequence of the fundingprofile in the later years of the 5 year settlement. There will be some changes, but BBC Monitoring estimatesthat coverage and services will be broadly maintained.

BBC World Service Trust

The World Service Trust had a good year, with income of over £13 million in 2004–05.

The Trust continues its work on various projects around the globe: Southern Iraq’s first regionalbroadcaster, Al Mirbad, developed from scratch by the Trust, began broadcasting in June; the Trust’s FCO-funded Media Dialogues programme in the Middle East and North Africa is addressing training needs ofjournalists. A major new TV drama—Taste of Life—is spearheading the Trust’s mass media healthcampaign in Cambodia. The first Burmese-language soap opera Thabyegone Ywa (Eugenia Tree Village),addressing health issues, celebrated its 100th episode.

2. BBC WORLD SERVICE THREE YEAR PLAN 2005–08 AND VISION TO 2010

1. Introduction

This paper sets out a series of significant changes in the strategic direction of the BBC World Service(BBCWS) to 2010. It includes specific developments funded by agreed Grant in Aid levels to and including2007–08, and outlines:

— The context of the changes.

— The proposed strategic vision to 2010.

— The proposed specific investments to the end of 2007–08, including proposed service reductions.

— Aspirations beyond 2007–08.

— Impact on jobs.

— Success measures to 2010.



2. Context

2.1 This revised strategy for the BBC World Service proposes the biggest single set of changes in its recenthistory. It is designed to take advantage of geopolitical change, specifically in Central and Eastern Europe,the development of independent media there, and support from the FCO for reprioritisation which willenable the BBC to shift resources to where audience need is greater and where competition is intensifying.

2.2 In the context of limited funds, and a more restrictive public spending climate by the Government,the strategy is predicated on selective and increased investment in key areas: television and video news in themost important vernacular languages complementing the global role of BBC World, increased interactivityacross all three media (TV, radio and online), modernised distribution for radio and stronger marketing.

2.3 While there is a strong case a priori for the closure of some language services, funds released from this,plus a refocusing of the English network, and the benefits of a simpler management structure and savings inadministration and support areas will enable us to make the new investments. In addition, over the 2005–08period, other eYciency savings and changes in the distribution portfolio will fund rising costs. All this addsup to a demanding set of financial targets in a part of the BBC that has already made significant eYciencysavings over many Spending Review periods.

2.4 The proposals have been thoroughly discussed with the Foreign and Commonwealth OYce and wehave secured the written approval of the Foreign Secretary for the intended closures as well as the launchof Arabic television.

3. Proposed Strategic Framework to 2010 and Financial Plan to 2008

3.1 Strategic framework to 2010

3.1.1 Vision

To be the world’s best known, most creative, and most respected voice in international news, therebybringing benefit to the UK, the BBC and to audiences around the world:

— To provide the most trusted, relevant, and highest-quality international news in the world, and anindispensable service of independent analysis and explanation, with an international perspectivewhich promotes greater understanding of complex issues;

— To connect and engage audiences by facilitating an informed and intelligent dialogue—a GlobalConversation—which transcends international borders and cultural divides; and to give audiencesopportunities to create, publish and share their own views and stories;

— And by so doing, to enable people to make sense of their increasingly complex world and, thusempowered, lead more fulfilling lives.

3.1.2 Target audiences

— We will target influencers—opinion formers and decision makers—in every market;

— In less developed markets, we will also target news followers—audiences with a wider need forbasic news and information;

— We will oVer lifeline services to audiences in areas of conflict or failed states.

3.1.3 Priority markets

We have assessed our existing services against criteria of geopolitical importance and information need,as well as prospects for continued impact. As a result we have redefined our priority markets and services:

— English will continue to be our core global oVer. Alongside BBC World, the BBC World ServiceEnglish radio network and the international news online site will serve audiences around the worldas part of a multimedia oVer from the BBC;

— We will seek to provide a vernacular multimedia service in priority markets—the Arab and widerIslamic world including Pakistan, Iran and Indonesia; and China, Russia, India, and Spanish-speaking Latin America.

— China is a critical market but there is as yet no likelihood of better access to the TV market in thetime frame in question. We will work with BBC Worldwide to maximise the value of our currentoVer; and we will continue to lobby Chinese authorities.

— We will continue to serve less developed markets in Africa and Asia, such as Nigeria andBangladesh, as well as a number of information poor markets with clear need for independentinformation.

— We will also continue to serve a number of other markets such as parts of Eastern Europe, theBalkans and Turkey, but review our oVers there regularly based on political, market developmentsand audience impact.



— We will close our services in 10 languages that no longer fulfil these agreed strategic criteria: Czech,Greek, Hungarian, Polish, Slovak, Slovene, Bulgarian, Croatian, Thai and Kazakh. Thesecurrently attract under four million weekly listeners for a spend of ca. £12 million. Portuguese forBrazil will become an Internet-only oVer, and we will reduce spend on Hindi online.

3.2 Specific investment proposals through 2007–08

3.2.1 Arabic Television

Developing an Arabic television news service is our highest priority. We would launch a 12-hour oVer inearly 2007, supported by a text and audio service for the remaining part of the day, with a view to going tofull 24-hour provision as funds become available.

— TV is the dominant news medium in the Arab world.

— Audience research commissioned in 2003, and repeated in 2005, has indicated a very strongdemand for a BBC Arabic television service. Between 80–90% of those surveyed said they wouldbe “very” or “fairly likely” to use the service—with about half in the “very likely” group. Thetrusted nature of the brand—its independence and strong record in news—is cited by mostpotential users as the reason for their strong interest.

— The oVer would build on the trusted legacy of the BBC’s Arabic radio services. In surveys fromthe region over recent years, and in bespoke focus group research, the BBC emerges as the mosttrusted international news provider on radio.

— Even though there are strong competitors in the region—mainly Al Jazeera and Al Arabiya—theMiddle East is still relatively immature as a TV news market. There is a clear opportunity to occupya genuine “high ground” in the market, away from the perceived pro-US oVer of Al Hurra andwith a diVerent and wider perspective to the Arabic regional channels such as Al Jazeera and AlArabiya.

— The establishment of an Arabic television service would mean the BBC was the only media playerwith a genuine tri-media oVer and all the opportunities which flow from this in terms of cross-promotion and awareness raising.

— We would maximise synergies between a linear TV oVer and emerging on-demand opportunitieson broadband, mobile and other platforms, especially video news reports.

— The channel proposition would consist of world class news and current aVairs about internationaland major regional issues. This would be complemented by discussion programmes and debatesmounted in conjunction with our radio and online services.

— We believe the commercial impact on BBC World will be minimal as the channel propositions willbe complementary rather than competitive.

— In five years’ time, we would expect at least 25 million weekly viewers, as part of an overall BBCtri-media portfolio, and to be the largest international Arabic-language TV news channel in termsof reach after Al Jazeera.

3.2.2 Digital interactive services

— BBC World Service will aim to deliver broadband video news reports in vernacular languages andmake them available on broadband (inc. as downloads), mobile, and other platforms.

— High priorities for video investment will be Arabic, Spanish, Portuguese for Brazil, Persian andRussian.

— We will invest in a wide range of opportunities for audiences to engage with our content and topublish and share their views and stories—the Global Conversation.

3.2.3 Strengthened distribution on FM and other platforms

We will invest in the acquisition and management of distribution partners on FM and other emergingaudio platforms and in ensuring our product portfolio remains competitive.

3.2.4 Marketing activities

We will invest further in marketing our services in the context of increasing competitionThese investments will total over £33 million over three years:



3.2.5 Other television aspirations

We will also move quickly to explore the viability of priority TV services outside Arabic—focusing onRussia, Latin America, and India, by leveraging partnerships with local and regional players, given thediYcult financial climate.

3.3 Funding change: 2005–06—2007–08

We are proposing to achieve a balance of eYciency savings and reprioritisation representing up to 20%of our total operating budget in order to enable new high-priority activities and absorb rising costs.

3.3.1 Language service reductions

The strategic analysis shows that there are 10 language services that no longer fulfil the key criteria forinvestment. Eight of these (Czech, Greek, Hungarian, Polish, Slovak, Slovene, Bulgarian, and Croatian) arein Central and Eastern Europe, where the huge changes in the political and media environment of the lastfifteen years now means that the need for BBC language services is far lower, and in many cases the trendis of audience decline. We also propose to close the Thai service and Kazakh for reasons of lower impact.Furthermore, we propose to reduce our investment in Portuguese for Brazil, retaining the online service.

In addition, with the roll out of an Arabic tri media service, savings will be sought by 2007–08 onproduction and distribution synergies. Once Arabic TV is proven, we will also examine Arabic radio witha view to reducing investment in non-peak areas.

3.3.2 English output

— The English schedule is also changing to reflect increased focus on news and information. Anumber of non-News programmes will be decommissioned in the area of factual and music andthere will be a merging of programme titles in other areas. These changes have already beenannounced to the relevant staV.

— There will be significant savings in the way BBC News currently produces its output for the WorldService. This will involve a re-organisation in the way the teams are set up and their senior producersupervision.

— Initial estimates indicate a number of job losses in BBC News which supplies the World Servicewith its English news and current aVairs programmes. This is in addition to 16 post closures innon-News programmes.

3.3.3 Regional structures and support areas

We will reduce the number of managerial regions from five to three. This rationalisation will lead the wayto further savings when we complete our review of support staV and business development which has beenon hold pending the outcome of our review.

3.4 Rising costs and eYciencies

— Before funds can be refocused for new investments in 2005–08, we must also meet our obligationsunder Spending Review 2004 in relation to rising costs. We will continue to achieve furthereYciency savings of at least 2.5% on baselines throughout the 2004 Spending Review period, inorder to fully fund all rising costs.

3.5 Overall financial picture

The overall financial picture over the 3 year plan shows that:

— We will absorb most of our rising costs, via eYciency savings and changes in distribution methods.

— We will invest new funds granted under SR02 and SR04 in the vital developments outlined earlier,and towards the savings generated by language service closures and other programme/managerial changes.

— Funds have been set aside to cover expenses such as increased employer pension contributions,from 2007–08.

3.6 Impact on jobs

— It is currently forecast that there will be 236 overall job reductions from these restructuringproposals. However more job reductions will be announced after the impact of the restructuringon BBC News has been discussed with unions and staV.



— The current forecast total is made up of 218 posts due to the closure of 10 language services (around127 jobs in the UK and 91 overseas); and a further 18 posts lost in other reprioritisation, such asthe Portuguese for Brazil service concentrating on news bulletins and online.

— In all around 201 new jobs have been or will be created by the new investment. It is expected that148 new jobs will be created by the new Arabic channel; 41 new posts for New Media andinteractive initiatives; and 12 in international oYces.

3.7 Aspirations beyond 2007–08

To deliver the 2010 vision we also aspire to further initiatives beyond 2007–08. Where possible, we planto bid for additional funding in Spending Review 2007 to fund these.

— We will seek to upgrade our 12-hour Arabic television oVer to a full 24 hour service.

— We will seek to launch a limited Persian television oVer funded through Grant in Aid.

— Depending on the evolution of television markets elsewhere, we will continue to exploreopportunities in other languages, emphasising partnerships as a cost-eVective route to market.

— We will invest in further digital interactive services.— Video production in further languages: Urdu, Mandarin and Hindi.— Continuing expansion of interactive and user-generated content.

— We will continue to invest in strengthening radio distribution where relevant.

— We will continue to invest in strengthening marketing initiatives.

3.8 Strategic success measures by 2010

— BBC World Service aims to achieve the highest reputational ratings of any international newsprovider in all priority markets, overall and among target audiences.

— By 2010, we aim to have increased the global reach of the BBC’s international news services—including through the World Service—around the world from over 190 million to over 250 millionweekly users. While we expect radio audiences to decline somewhat, despite a migration from shortwave to FM and other platforms, growth in digital media and vernacular television will more thancompensate, alongside growth in BBC World.

— The services operated by the BBC World Service will make a key contribution:— We are aiming to vigorously defend radio audiences, though by 2010 we expect a slight decline

in radio listening.— We are aiming to reach significant new audiences through vernacular television by 2010, with

about half through Arabic. The balance would come through a presence in a further range ofvernacular TV markets—depending on partnerships and additional funding.

— We are aiming to multiply our reach in new digital media like online, broadband, and mobile.

— We aim to secure the highest reach of any international news provider in all priority markets—both overall and among target audiences.

— We also aim to be recognised as providing the most innovative interactive services of anyinternational news provider.

Printed in the United Kingdom by The Stationery OYce Limited3/2006 325570 19585

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