Spending Reduction In The Foreign And Commonwealth Office
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Spending reduction in the Foreign and Commonwealth Office
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
language: en
Publisher: The Stationery Office
Release Date: 2011-09-30
Around half of the Foreign and Commonwealth Office's budget is spent in foreign currencies. In 2008, the Treasury removed the protection it had previously provided to the Department against exchange rate fluctuations. The FCO did not have the expertise or experience to effectively manage the risk of a fall in exchange rates, and that the Treasury imposed poor value for money conditions on forward purchasing foreign currency. As a result of a decline in the value of sterling, in September 2009 the FCO faced an overspend of £91 million on its 2009-10 budget (£72 million centrally and £18.8 million overseas), out of its total budget of £1.6 billion. It made drastic cuts to reduce this overspend. The FCO did well to reduce spending so quickly, which enabled it to live within its budget. However, many of the spending cuts made were short term in nature, and involved simply delaying or stopping some activities, rather than making lasting efficiency improvements. Not enough was done to monitor and measure the impact of the cuts and there is a risk that such short term cuts can lead to increased spending in the future. The FCO needs to achieve sustainable reductions in running costs of £100 million over the next four years, and sees the overseas estate as a potential source of these efficiencies and income. But in the past, high charges have had the unintended consequence of discouraging other government departments from sharing premises.
The implications of cuts to the BBC World Service
Author: Great Britain: Parliament: House of Commons: Foreign Affairs Committee
language: en
Publisher: The Stationery Office
Release Date: 2011-04-13
The Foreign Affairs Committee believes the BBC World Service is of such value to the nation that its income should be ring-fenced against spending cuts. The Service has suffered a disproportionate reduction in its future Grant-in-Aid under the spending review settlement, by comparison with that of the 'core FCO': allowing for inflation, 16% as against 10% across the four years 2010-11 to 2014-15. High-level discussions between the Government and the BBC about a transfer of funding responsibility started only nine days before the formal announcement of the change. The report says that the decision to reduce World Service spending by 16% during the 2010 spending review period should be reversed, and resources made available for it to continue its operations at roughly the 2010-11 level of staffing and output. If the Service's funding is reduced in spite of this recommendation, the committee urges for damage limitation with an unreduced BBC Hindi and BBC China Mandarin shortwave service, and enhanced resources to BBC Arabic as required by the recent and continuing political developments in the region. Some of the activity of the World Service contributes to the wider aims of the Department for International Development, and a transfer of just 0.35% of DFID's resource budget over the next three years would compensate for the proposed 16% reduction in World Service funding. There is no reason why such a transfer should not be made if the political will to carry it out is present.
The role of the FCO in UK government
Author: Great Britain: Parliament: House of Commons: Foreign Affairs Committee
language: en
Publisher: The Stationery Office
Release Date: 2011-05-12
The Foreign Affairs Committee believes the Foreign and Commonwealth Office (FCO) will not be back at the centre of Government and able to lead UK foreign policy, in line with the Foreign Secretary's ambitions, unless it can provide deep foreign policy expertise and judgement to underpin and implement Government decision-making. The FCO must have the resources and skills required to fulfil this role, especially specialist geographical expertise and knowledge of foreign languages. The FCO has a vital role to play for the Government, namely the timely provision of world-class foreign policy information, analysis, judgement and execution. Finances, people and buildings must be well-managed, but managerial requirements must not divert time and focus disproportionately from the FCO's core foreign policy functions. Given the resource constraints facing the FCO, however, there is doubt whether the department can achieve the Government's ambitions for enhanced commercial work while maintaining its core foreign policy functions at the required standard. The committee regards the FCO's network of overseas posts as integral to the department's ability to discharge its functions, and recommends that the FCO should seek to maintain a global UK presence. The committee also called "confusing" the fact that under the current Government the FCO has three sets of priorities: the Foreign Secretary's, the Cabinet Office's Business Plan for the department, and the 2010 Strategic Defence and Security Review.