House of Commons Foreign Affairs Committee Foreign and Commonwealth Office Annual Report 2003– 2004 Eighth Report of Session 2003–04 Report, together with formal minutes, oral and written evidence Ordered by The House of Commons to be printed 14 September 2004 HC 745 Published on 23 September 2004 by authority of the House of Commons London: The Stationery Office Limited £22.00 The Foreign Affairs Committee The Foreign Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Foreign and Commonwealth Office and its associated public bodies. Current membership Rt Hon Donald Anderson MP (Labour, Swansea East) (Chairman) David Chidgey MP (Liberal Democrat, Eastleigh) Fabian Hamilton MP (Labour, Leeds North East) Eric Illsley MP (Labour, Barnsley Central) Rt Hon Andrew Mackay (Conservative, Bracknell) Andrew Mackinlay MP (Labour, Thurrock) John Maples MP (Conservative, Stratford-on-Avon) Bill Olner MP (Labour, Nuneaton) Greg Pope MP (Labour, Hyndburn) Rt Hon Sir John Stanley MP (Conservative, Tonbridge and Malling) Gisela Stuart MP (Labour, Birmingham Edgbaston) The following Members were also members of the Committee during the Parliament. Sir Patrick Cormack MP (Conservative, Staffordshire South) Richard Ottaway (Conservative, Croydon South) 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. Publications 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 www.parliament.uk/parliamentary_committees/foreign_affairs_committee.cfm. A list of Reports of the Committee in the present Parliament is in the inside front cover of this volume. Committee staff The current staff of the Committee are Steve Priestley (Clerk), Geoffrey Farrar (Second Clerk), Ann Snow (Committee Specialist), Kit Dawnay (Committee Specialist), Kevin Candy (Committee Assistant), Julia Kalogerides (Secretary), and Chintan Makwana (Senior Office Clerk). Contacts All correspondence should be addressed to the Clerks of the Foreign Affairs Committee, Committee Office, House of Commons, London SW1A 0AA. The telephone numbers for general enquiries are 020 7219 6106/6105/6394; the Committee’s email address is [email protected]. 1 Contents Report Page Conclusions and recommendations 3 Introduction 11 FCO Annual Report 2003–04 12 Financial management 15 Spending Review 2004 15 Efficiency savings 18 The impact of Iraq 20 Costs of EU and G8 Presidencies 21 UK International Priorities 22 Strategy for the FCO 22 Implementation of the strategy 23 Impact on how the FCO operates 23 Impact on network of overseas posts 24 Security 29 The Istanbul Consulate-General 29 Security Review 30 Security of the British Council and BBC World Service 32 Foreign Office Travel Advice 33 Management of the overseas estate 35 The end of the asset recycling programme? 35 Access to information 37 Impact of the asset recycling programme 40 The cases of the Dublin and New York Residences 42 The Prague Embassy and the Cape Town Residence 45 Entry clearance 46 Coping with increasing demand 46 NAO Report 48 Targets 48 Lack of feedback 50 Biometric data 51 Co-operation with other departments 52 Visa applicants in Romania and Bulgaria, and Mr James Cameron 53 Personnel 55 Workforce reductions 55 Diversity targets 55 Locally-engaged staff 57 Specialists versus generalists 59 2 BBC World Service 60 Work in 2003–04 60 Listening figures and audibility 61 Spending Review 63 Efficiency savings 64 Work in the Middle East 65 Radio 65 New television channel 66 Online services 66 BBC Monitoring 67 Striking the balance 68 British Council 71 Work in 2003–04 71 Public Diplomacy Strategy Board 71 UK International Priorities and By 2010 73 Spending Review 74 Chevening Scholarships 76 British Council in Russia 78 Role in accreditation of EFL schools 78 Flying the flag? 80 Ring-fencing 81 Conclusion 83 Annex A 85 List of abbreviations 85 Annex B 86 Visit itineraries: 86 a) Visit to India and Turkey 86 b) Visit to BBC World Service headquarters Bush House, London 87 Formal minutes 88 Witnesses 90 List of written evidence 91 3 Conclusions and recommendations FCO Annual Report 2003–4 1. We conclude that the FCO Departmental Report 1 April 2003–31 March 2004 is a generally well-presented and comprehensive document, reflecting the breadth of the Foreign Office’s work and the challenging global situation in which it operates. We particularly welcome the new ‘lessons learned’ sections and recommend that they be developed and made more specific in future reports in order to present a more realistic picture of the FCO’s activities to the lay reader. (Paragraph 12) Financial Management 2. We recommend that the FCO, in its response to this Report, state how many bids it has received from its Senior Management Staff for early retirement, whether compulsory early retirements will be made if the figure of 60–80 voluntary early retirements is not achieved, and the operational implications for the Department— including possible losses of embassies and high commissions overseas—of reducing its Senior Management Staff by 60–80 (Paragraph 20) 3. We conclude that HM Treasury’s recognition of the importance of the Foreign Office’s work and the commitment of resources to specific areas, such as security, is welcome. We further conclude, however, that overall the latest spending review settlement will only add to the increasing financial pressure under which the Office now operates and which is putting so much of its valuable work in jeopardy. (Paragraph 21) 4. We conclude that, while it is right and proper for all government departments to strive at all times to make the very best use of taxpayers’ money, the efficiency savings agreed as part of the 2004 Spending Review will place a considerable strain upon the Foreign Office’s operations in the coming years. Given the FCO’s significant fixed costs, people-intensive nature and the increasing demands and expectations being placed upon it, we fear that ‘efficiency savings’ will effectively mean cuts in programme budgets. We recommend that, in its response to this Report, the FCO provide specific, detailed evidence that it will achieve genuine efficiency savings in order to meet HM Treasury’s targets and not simply cut its activities. (Paragraph 28) 5. We conclude that the additional work being carried out by the FCO in support of the Government’s policies in Iraq will remain critical for some time to come. We recommend that the additional costs incurred by the FCO in carrying out this work should be met in full by the Government from the contingency reserve. (Paragraph 31) 6. We conclude that the United Kingdom’s Presidencies of the G8 and the EU in 2005 represent an historic opportunity for this country to help set the world’s political agenda in a number of key areas. It would be unthinkable that such an opportunity should be wasted owing to insufficient funds. We recommend that the Government 4 ensure that it allocate adequate resources to meet the running costs of the G8 and EU Presidencies. We further recommend that the FCO’s other activities must not be allowed to suffer as a result of these additional responsibilities. (Paragraph 34) UK International Priorities 7. We conclude that the UK International Priorities White Paper provides a welcome insight into how the Foreign Office operates and what its aims and priorities are for the coming years. (Paragraph 38) 8. We conclude that the FCO is right to seek to make the most efficient use of its valuable personnel resources and to reap the greatest efficiencies from advances in modern information and communications technology. We recommend, however, that the Foreign Office ensure that, as a result of the changes made following the adoption of the new Strategy White Paper, there is no diminution in the level of service provided by the FCO to Parliament and the public. (Paragraph 42) 9. We conclude that the potential closure of significant numbers of overseas posts implicit in the UK International Priorities document is a source of grave concern. We recommend that wherever possible the FCO seek to maintain as effective and as wide-reaching a network of posts as possible, in order to protect and promote British interests around the globe. (Paragraph 50) Security 10. We conclude that the attack on the Istanbul Consulate General was a barbaric act of terrorism, which we condemn utterly and unreservedly. We again offer our sincerest condolences to all those affected by the terrible tragedy and especially to the families of those who were murdered. We offer our highest praise to those who have worked so hard to cope with the aftermath of the attack and worked in such difficult conditions. We trust that the sacrifice and hard work of those involved will be properly recognised by the Foreign Office. (Paragraph 56) 11. We commend the Foreign Office for conducting an immediate review of security at posts following the Istanbul bombing and we broadly welcome its findings. We conclude, in particular, that the review was right to warn the FCO against turning its posts into “fortresses” and “bunkers”. The FCO’s image and operational capability would not benefit if contact with the public were decreased, although the balance it strikes between operational effectiveness and security must be a very careful one. (Paragraph 62) 12. We welcome wholeheartedly the extra money provided in the Spending Review 2004 for security measures. It would have been wholly unacceptable if extra security measures had had to be funded from the existing FCO budget, to the detriment of other activities. We recommend that, in view of the exceptional exposure of FCO staff overseas to terrorist attack, the FCO should make further requests to HM Treasury for additional funding for security measures as are necessary to safeguard its staff during the current three year period, before the next spending review takes place.