ESTIMATES DAY DEBATE ; FOREIGN AND COMMONWEALTH OFFICE: THE FCO AND THE SPENDING REVIEW 2015.

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Minister for Europe King Charles Street London SW1A 2AH 13 April 2016 Crispin Blunt MP, Chair of the Foreign Affairs Committee, House of Commons, London, SW1A 0AA Dear Crispin, ESTIMATES DAY DEBATE

1 Minister for Europe King Charles Street London SW1A 2AH 13 April 2016 Crispin Blunt MP, Chair of the Foreign Affairs Committee, House of Commons, London, SW1A 0AA Dear Crispin, ESTIMATES DAY DEBATE ; FOREIGN AND COMMONWEALTH OFFICE: THE FCO AND THE SPENDING REVIEW Thank you for your contribution to the debate on 1 March. You and other colleagues in the House asked questions which, in the limited time available, I was unable to address during the debate and to which I would now like to respond. You asked for a copy of the FCO s Settlement letter from the Treasury. As I explained during the debate, the Treasury does not publish Settlement letters. I have appended a summary of the key points from the Spending Review, which I hope you and fellow members of the Committee will find of use. Both you and Catherine West invited me to comment further on the Future FCO review. As I stated during the debate, the purpose of the review is to advise Ministers and senior officials on how the FCO can be more expert, more agile and more focused. Our aim is to be the most respected diplomatic service in the world; that we use our network to protect British people, promote Britain s prosperity and project British values. The review has a broad remit to examine how the Department functions. It is expected to present recommendations about how the FCO is structured and how its staff are deployed. It will report to the FCO s Permanent Under Secretary by the end of the Financial Year. He will then submit the report to the Foreign Secretary. You and Patrick Brady asked about specific items in the Supplementary Estimates. This included an item relating to the FCO s vacation of the Old Admiralty Building in October 2015, which was then transferred to the Department for Education. Government budgeting guidance requires that the full market value of the asset transferred is reflected in Supply Estimates and Accounts. The estimated value of Old Admiralty Buildings is 73.8m. This is given to the Department for Education as a Grant-in-Kind but is offset by a notional receipt of a corresponding amount from the Department for Education. No cash changes hands as the point of showing the transaction is to make transparent to Parliament the value of the asset being transferred, rather than to adjust departmental budgets.

2 The increase of 30m administration and 220m programme expenditure and offsetting receipts in the Supplementary Estimates reflects changes in our financial arrangements with other Government departments, particularly UKTI and UK Visa and Immigration. We are moving towards an overseas platform provider charging regime. We are therefore increasing the transparency of the cost of providing services to these other government departments. FOXHOUND is the name of a Cabinet Office-led, cross-government IT programme to develop a new secure capability for managing sensitive national security information. The programme's objective is to address the growing information and cyber risk, while improving scope for collaboration across the National Security Council departments and other relevant organisations. It makes sense for HMG to invest in a single approach, and the FCO and other departments have contributed to its early development at a pro rata rate, based on projected usage. In the future, the programme will be funded centrally. Finally on the Estimates, Patrick Grady asked about funding for a memorial commemorating the Battle of New Orleans. I stated that the FCO had contributed $215,000. However, I must correct this, since the FCO has not yet made the donation to the memorial. The FCO has been allocated $215,000 to support the project, but will disburse the funds only once the project is more advanced and sufficient funds to cover the full cost of the memorial have been secured, beyond those of the existing donors. In addition, I said that the State of Louisiana had made a donation, but in fact it has not done so. I will lay a Written Ministerial Statement in the House of Commons to correct the Parliamentary record. Tasmina Ahmed-Sheikh asked what impact proposed changes to the Department s budget will have on the work of the FCO to address the challenge of increasing the diversity of our staff. The targets the FCO Board set in October 2014 still stand - for our senior leadership to be at least 39% female, 7% black and minority ethnicity, 6% LGBT and 7% disabled staff. As of 31 December 2015 our senior management is 29.8% female and 3.6% black and minority ethnicity. Disclosure rates for LGBT and disabled staff are 65% and 54% respectively. On this partial data, LGBT staff form 6.9% and staff with disabilities form 10.9% of the senior management. Progress continues to be good on female, LGBT and disability targets, but we need to increase black and minority ethnic representation. Tasmina Ahmed-Sheikh also asked what schemes and initiatives within the Department will be funded in the next year specifically to address these issues. The FCO will continue to fund a number of schemes to meet its diversity priorities. These include Civil Service initiatives such as the Senior Leaders and Future Leaders Schemes, and the CS Positive Action Pathway (PAP), which provides career development support for officers from underrepresented groups. We also fund external initiatives such as the BME into Leadership programme, the Disability Rights UK Leadership Academy Programme and the Stonewall into Leadership programme. In September 2015 we launched Alchemy, a home-grown development programme for Band B and C BME staff. Our Staff Associations are also allocated funds to help achieve their priorities in line with the FCO Board objectives. On Syria, Tom Brake asked whether we had budgeted for providing stabilisation assistance to Syria once a ceasefire is in place. The Prime Minister has already announced that we will commit at least 1 billion to Syria's stabilisation and reconstruction. Government

3 departments continue to plan for the needs which will arise once a ceasefire is in place and political transition under way. John Baron suggested that funding for the British Council had been cut. The British Council is the UK s main national asset for cultural diplomacy and we will continue to fund it appropriately. The British Council s budget will be protected in real terms and will rise with inflation over the course of the Parliament. However, the British Council has also been asked to move to zero non-oda by the end of the Parliament, and their Grant-in-Aid profile will reflect this phased reduction. In addition to their continued Grant-in-Aid, the British Council will be able to bid competitively for up to 711 million from a cross-government fund to improve links with emerging economies, help tackle extremism globally and support good governance. Tom Brake and others raised human rights issues in a variety of countries. For more specific information, they are welcome to write to the Foreign Secretary in the usual manner. On the general point, I would like to reassure you that the FCO takes work on human rights seriously. Baroness Anelay, FCO Minister for Human Rights, was clear in her evidence session on 24 February that there has been no reducing of the priority that we give to human rights, which are embedded across the whole spectrum of the work we do. She has also written to you to give further details of the Official Development Assistance issue which you raised both at the evidence session and during this debate. Finally, Patrick Grady and Tom Brake asked about the conflict in Yemen. President Hadi, the legitimate President of Yemen, requested support by, all means and measures to protect Yemen and deter Houthi aggression. This was endorsed by UN Security Council Resolution The UK was and is not a member of the Saudi Arabian-led Coalition military intervention, and British personnel were and are not involved in carrying out strikes, directing or conducting operations in Yemen or selecting targets, nor in the Saudi targeting decision-making process. As you know, a ceasefire came into effect on 10 April which the Government welcomes. The UK has deployed a small number of military personnel serving as liaison officers in Saudi headquarters. Their role has been to build our relationship and provide insight into Saudi operations. They remain under UK command and control. Munitions are supplied to the Saudi Air Force under pre-existing contractual arrangements. The Government is satisfied that extant licences for Saudi Arabia are compliant with the UK s export licensing criteria, which the UK Government takes seriously. All export licence applications are assessed on a case-by-case basis against the Consolidated EU and National Arms Export Licensing Criteria, taking account of all relevant factors at the time of the application. Risks in relation to human rights violations are a key part of our assessment against the Consolidated Criteria. We are aware of reports of the alleged use of Cluster Munitions by the Coalition in Yemen. We have raised this issue with the Saudi authorities and, in line with our obligations under the Convention on Cluster Munitions, continue to encourage Saudi Arabia, as a non-party to the Convention, to accede to it. With regard to potential breaches of International Humanitarian Law (IHL) in Yemen, looking at the available information, we have not assessed that there has been a breach of IHL by the Coalition. We continue to monitor the situation closely, seeking further information where appropriate, and take allegations of IHL breaches seriously. We have provided

4 training and advice to the Coalition to ensure continued compliance with International Humanitarian Law. I am copying this letter to Catherine West, Patrick Brady, Tasmina Ahmed-Sheikh, Tom Brake and John Baron, and placing a copy in the library of the House of Commons. RT HON DAVID LIDINGTON MP

5 SUMMARY OF SPENDING REVIEW 2015 FOREIGN AND COMMONWEALTH OFFICE The table below sets out the FCO s allocation under the Spending Review Settlement: 2016/17( m) 2017/18 ( m) 2018/19 ( m) 2019/20 ( m) RDEL ,008 1,029 Of which Overseas Development Aid (ODA) Additional ODA from DFID CDEL Resource Departmental Expenditure Limits (RDEL) The FCO s overall RDEL will be protected in real terms through uplift in baseline ODA funds. The FCO s non-oda allocation will remain flat in cash terms; assuming 7% inflation over the Spending Review period. Within the FCO s overall settlement, it will be required to fund: the UK s Presidency of the EU in the second half of 2017; meet the objectives on full spectrum diplomacy outlined in the Strategic Defence and Security Review; our Chairmanship of the Commonwealth (and associated Heads of Government meeting in 2018); enhanced support for the Overseas Territories; enhanced activity in the Gulf; and enhanced activity in Russia and the former Soviet Union, in line with the National Security Strategy and Strategic Defence and Security Review. Official Development Assistance (ODA) The FCO s direct ODA funding will increase significantly and it will have access to a greater pool of cross-whitehall ODA funds, with the new Prosperity Fund (worth 1.3bn over the five years to ) and an expanded CSSF (rising from 1.033m in to 1.3bn in ). As shown in the table above, the FCO will also receive additional ODA transfers from DFID for specific programmes, including additional provision for the British Council and continued maintenance of the Chevening Scholarships programme. We will also pass through funds for the BBC World Service for enhanced language services and strategic communications activity. ODA will increase as a proportion of our overall spend.

6 Capital Delegated Expenditure Limit (CDEL) The FCO s Capital Delegated Expenditure Limit is fixed at 98 million per annum. The FCO will have to fund: Technology Overhaul; UN and NATO capital grants; completion of Abuja and Budapest builds; Consular IT improvement; and business as usual capital spend, including essential health & safety and security work. Capital smoothing will allow the FCO to carry over capital receipts from one year to another, as well as supporting a strategic approach to the timing of disposals to a timetable that derives best value. Foreign Currency Protection HMT has exceptionally agreed to extend the budgeting arrangements from the last parliament around differential inflation over this Spending Review period. Any adjustments to the FCO s budget for differential inflation will be made annually through the Supplementary Estimates process, and will be equivalent to the currencies and weightings used under the Foreign Currency Mechanism.

UNCLASSIFIED. Foreign & Commonwealth Office Main Estimate Memorandum for the Foreign Affairs Committee

UNCLASSIFIED. Foreign & Commonwealth Office Main Estimate Memorandum for the Foreign Affairs Committee Foreign & Commonwealth Office Main Estimate 2017-18 Memorandum for the Foreign Affairs Committee Introduction 1. The Foreign and Commonwealth Office Estimate has the following sections: Section A: Expenditure