In parallel with the work on the new Foreign and Commonwealth Office (FCO) strategic framework, that I announced to the House on 23 January, I should like to inform the House of our plans for the future of scholarships and fellowships funding.

We have found a transformed situation in higher education, and an FCO scholarship programme that has not always been well aligned to foreign policy goals. So we propose a smaller, better organised programme, focused on the leaders of tomorrow, from a wide range of backgrounds. The savings we make from this reform will support new priority programmes, principally on climate change.

Twelve years ago 30,000 post-graduate students came to the UK from outside the EU. Since then that number has gone up by 160 per cent. British universities actively market themselves, and many offer their own scholarships. So we need to focus on the value-added from the FCO’s scholarship schemes. This value-added is the creation of relationships between the United Kingdom and the international leaders of the future.

We currently support three scholarship schemes (Chevening, Marshall and Commonwealth) in addition to our Chevening fellowship programme. Our scholarship schemes bring young post-graduates to the UK, normally for master degree courses. Our fellowship scheme brings mid-career professionals for 12-week custom designed specialist courses.

As we reviewed our schemes we found a number of weaknesses. The purpose of the scholarship schemes has not always been clear. We have not always sought out students we thought could become international leaders. We have pursued high numbers of scholars, which has sometimes reduced focus on quality. We have not consistently done enough to build the personal relationships with the scholars that we need to get the most out of the schemes, including during selection, which we have sometimes left to others, during their time in the UK and after they have finished their studies. We have not always worked closely enough with our partner Government Departments with an international focus or with British business to ensure the scholarship schemes work for them. And the Chevening scholarship brand has been stronger in some countries than in others.

The schemes have had real strengths. But we need to refocus them to ensure that these strengths are consistent. We will maintain a global scheme, but we will focus scholarships particularly on those countries such as China and India which are going to be most important to our foreign policy success over coming years. We will select more carefully to ensure our scholars really are potential future leaders, with our heads of mission having personal responsibility for ensuring their posts are getting this right. We will work to ensure we are drawing from the widest possible pool of potential scholars.

We will maintain a much closer relationship with those scholars who do come, making sure that right from the start of the selection process we begin to build links with them, increasing our contact with them while they are here, and staying in closer touch with them after they leave, including through the introduction of a new web-based alumni networking system.

We want to increase the engagement British business and Government Departments with an international focus have with the scholars, and we are starting a consultation process to ensure this happens. We will work in the future through two scholarship schemes only, the Marshall scheme in the USA and the Chevening scheme in the rest of the world, and will develop the strength of these brands. This means an end to the FCO contribution to the Commonwealth scholarship and fellowship plan. We will maintain the highly successful Chevening fellowship scheme at its current level.

These changes will free up some £10 million a year for new activity on our new policy goals. The majority of this will be spent on programmes to support the development and implementation of a low-carbon, high-growth economy, in particular:

with other UK Government Departments, developing sound scientific and economic evidence in key countries which demonstrates the benefits of taking strong, early action on climate change;

mobilising support for such action through engagement with key decision-makers, including political, business and civil society leaders in key countries such as the US, China and India; and

with other UK Government Departments, developing and helping to implement regulation in key countries which facilitates investments in low carbon technologies and energy efficiency.

Under the new strategic framework we are also increasing our resources for staff working on these issues in London and overseas.