House of Commons Foreign Affairs Committee FCO performance and finances 2011–12 Fifth Report of Session 2012–13 Report, together with formal minutes, oral and written evidence Ordered by the House of Commons to be printed 19 March 2013 HC 690 Published on 19 April 2013 by authority of the House of Commons London: The Stationery Office Limited £15.50 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 agencies. Current membership Richard Ottaway (Conservative, Croydon South) (Chair) Rt Hon Bob Ainsworth (Labour, Coventry North East) Mr John Baron (Conservative, Basildon and Billericay) Rt Hon Sir Menzies Campbell (Liberal Democrat, North East Fife) Rt Hon Ann Clwyd (Labour, Cynon Valley) Mike Gapes (Labour/Co-op, Ilford South) Mark Hendrick (Labour/Co-op, Preston) Andrew Rosindell (Conservative, Romford) Mr Frank Roy (Labour, Motherwell and Wishaw) Rt Hon Sir John Stanley (Conservative, Tonbridge and Malling) Rory Stewart (Conservative, Penrith and The Border) The following Members were also members of the Committee during the parliament: Emma Reynolds (Labour, Wolverhampton North East) Mr Dave Watts (Labour, St Helens North) 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 news items) are on the internet at www.parliament.uk/facom. A list of Reports of the Committee in the present Parliament is at the front of this volume. Committee staff The current staff of the Committee are Kenneth Fox (Clerk), Peter McGrath (Second Clerk), Adèle Brown (Committee Specialist), Dr Brigid Fowler (Committee Specialist), Zoe Oliver-Watts (Committee Specialist), Louise Glen (Senior Committee Assistant), Vanessa Hallinan (Committee Assistant), and Alex Paterson (Media Officer). 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 6105; the Committee’s email address is [email protected] FCO performance and finances 2011–12 1 Contents Report Page Summary 3 Conclusions and recommendations 5 1 Introduction 10 2 FCO ambition and performance 11 3 FCO network 16 4 FCO estate 19 Use of FCO premises by other Government departments 19 Co-location with other diplomatic services 20 ‘Iconic’ properties 21 The target for property sales 21 5 FCO staff 23 Disposition of staff 23 Staffing at overseas posts 24 Career development and promotion 28 6 Security at overseas posts 32 7 BBC World Service 34 Overall direction 34 Delivery of services 35 Freedom of expression 39 Governance 40 8 The British Council 41 The 2010 Spending Review and the British Council 41 The British Council’s response to the Spending Review 42 The British Council after 2015 42 The British Council’s profile and “brand” 43 The Council’s role in relation to higher and further education 45 Government policy on student visas 46 The British Council’s view 46 Formal Minutes 48 Witnesses 49 List of printed written evidence 49 FCO performance and finances 2011–12 3 Summary The Foreign Secretary’s intention is that the UK’s Diplomatic Service should be the best in the world by 2015. That is a laudable ambition, which we support; but we do not believe that the FCO has yet devised a method for measuring performance which would allow it to make a properly substantiated judgment on whether the Diplomatic Service is the best in the world; indeed, we suspect that no such method exists. The FCO initially aimed to generate £240 million from sales of property assets between April 2011 and March 2015 for reinvestment in the estates capital budget. Eighteen months into that period, only about £36 million had been raised from sales, and the target has now been reduced to £140 million. The original estimate was clearly poorly founded: there were forecasting failures within the FCO, and the Department should summarise the action which it has taken to improve its procedures for assessing future needs across the estate and its forecasting of local property markets. The FCO’s refusal to provide precise information on staffing at each post hinders the Committee in its work. We recommend that the FCO, in confidence and on an annual basis, supply the Committee with exact numbers of staff at each post, broken down between UK-based and locally engaged staff. Rounded figures for each post should be published each year in the Department’s Annual Report and Accounts. The FCO should also be prepared to supply the Committee, on request and in confidence, with a breakdown of staffing at each post in any specified country, by function, currently and for each of the preceding ten years. The FCO is moving inexorably towards the point where 70% of its workforce will be locally engaged. That could place the esprit de corps of UK-based staff at risk; and to exceed the 70% threshold could concentrate certain duties on UK-based staff and place them under unacceptable stress. We recommend that the FCO give an undertaking that the 70% threshold for locally engaged staff will not be breached. While we accept that the Department needs to promote people who have proven managerial and leadership skills, we do not accept that a framework for promotion based upon general competencies should entirely neglect an essential skill in many FCO postings at different grades: facility in a foreign language. The risk is that there may not in future be an adequate supply of staff who have all of the skills and credibility needed to command respect in key diplomatic postings. We endorse the Foreign Secretary’s vision in this field; but we believe that the FCO should make changes to the criteria for promotion in order to achieve it. We do not see how the BBC World Service can plan properly how to reflect its priorities from April 2014 according to the new Operating Licence, or pursue its new objectives or shape its output, given that the Licence is likely to be published only a few months before it comes into force. A draft Operating Licence should be shared with the BBC World Service without delay and the forthcoming consultation on the Licence should take place as early as possible—ideally before the summer. The BBC Trust should announce as soon as possible what the funding for the BBC World Service will be from April 2014 onwards. 4 FCO performance and finances 2011–12 There is logic in withdrawing BBC World Service short-wave radio broadcasts where the audiences which they attract have dwindled and where other forms of broadcast can be widely received. However, we believe that the World Service must continue to take into account significant audiences in certain parts of the world, such as rural India and Africa, who currently rely on short-wave radio. We do not accept that the distinct interests of the BBC World Service will be fully represented at the BBC’s Executive Board by the Director of News. The BBC should allow for some form of direct representation from the BBC World Service at the BBC Executive Board, at least when key strategic and financial decisions are to be taken. The British Council’s cultural and educational aims are ends in themselves, but the Council is also a major instrument of UK public diplomacy and “soft power”. The UK currently performs well in the global contest for soft power, but that contest takes place in an increasingly crowded field and against increasingly well-resourced competitors. The Council has so far responded positively to the challenges of the 2010 Spending Review, but warned this year that if cuts to FCO grant continue at a similar rate after the Review period ends in 2015, it will struggle to marry its role helping deliver the UK’s foreign policy objectives with its increasingly entrepreneurial approach. We urge the Department to pay heed to these concerns. Trading off the competitive advantage the UK currently enjoys in public diplomacy in exchange for savings that are, in the wider scheme of things, relatively minor would be the worst sort of false economy. We believe that the FCO should shield the Council from the effect of any further cuts to the Department’s budget in 2015-16. FCO performance and finances 2011–12 5 Conclusions and recommendations Introduction 1. We commend the Department for its openness in providing the Committee with quarterly bulletins of management information. (Paragraph 1) FCO ambition and performance 2. Performance measurement regimes which are based on large numbers of indicators and quantitative targets might work for some Government departments but are ill- suited to the work of the FCO. (Paragraph 7) 3. We welcome the FCO’s decision to make greater use of peer review. The FCO is correct to value and trust the views of those whose work leads them to engage with the Department on a regular basis and who are well placed to identify weaknesses in performance. Despite the limitations of the FCO’s own process for measuring its performance, the scores which result may over time give a useful indication of trends, and they complement other ‘harder’ forms of assessment. We recommend that, in the interests of transparency, the FCO should publish the methodology which underlies its framework for performance measurement. We do not believe, however, that the FCO has yet devised a method for measuring performance which would allow it to make a properly substantiated judgment on whether the Diplomatic Service is the best in the world; indeed, we suspect that no such method exists.