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Strategic Framework (FCO)

Volume 476: debated on Tuesday 20 May 2008

I am delighted to have secured this debate and to serve under your chairmanship for what I believe is the first time, Mr. Martlew.

I do not intend to do the Minister’s job, but I thought it would be helpful to outline exactly what we are talking about, because I imagine that various documents are called “Strategic Framework for the Foreign and Commonwealth Office”. I wish to talk about the framework launched by the Foreign Secretary in a written ministerial statement on 23 January. It has since been published on the Foreign and Commonwealth Office website and informs its departmental report. I believe that it took effect on 1 April.

The written statement is of great interest—it is right that the Foreign Office reviews its overall strategic direction, priorities and so on from time to time. I strongly applaud various aspects of the framework, including counter-terrorism, counter-proliferation, climate change and conflict zones such as Afghanistan. To digress slightly, the Foreign Office has done particularly well on counter-terrorism in the past six years—in many ways, it sets global standards. I saw for myself in Kano, Nigeria, some of the helpful work that it does to match British Muslims with Muslims in other countries to exchange best practice on community cohesion and the softer counter-terrorism work.

On the set of goals in the strategic framework, I regret that the promotion of democracy has been transferred to the Department for International Development. I think that it more properly belongs with the FCO, but adding goals and objectives to the strategic framework is not the main purpose of my remarks; rather, they are less about what is in the document than what is not, and the resources that the Foreign Office has or does not have to meet the objectives of the framework—the issue is more the Foreign Office’s capacity and infrastructure to deliver the framework.

The FCO’s overall budget is projected to be £1.7 billion by 2010-11, which is not an awful lot. It is significant, but compared with the £2.7 billion of extra borrowing announced last week, it is not that great an amount. We can also compare it with the newly-nationalised Northern Rock bank, which has more than £100 billion in assets. Overall, we get good value for money from the £1.7 billion given to the FCO, but it represents a reduction in the budget. The Foreign Affairs Committee calls it

“an average real annual reduction of 0.2 per cent.”

It also says in its annual report published on 19 November 2007 that the amount

“compares poorly to the settlements of other departments”,

that it

“risks jeopardising the FCO’s important work”

and that

“if the FCO’s settlement is compared against its expenditure plans for 2007-08 as set out in Public Expenditure Statistical Analyses, we calculate the change in budget as an average real reduction to be…5.1 per cent. per annum”.

I have some doubts about whether the strategic framework document is deliverable on such a budget. Doubtless the FCO will manage—it always has—but overall Government expenditure is riddled with waste and there is not much on the FCO’s bones to take off, as it were, if we wish to achieve the overall goals.

I want shortly to compare our budget with the budgets of some of our European allies, but the contrast with what the United States is doing with its State Department budget is particularly striking. Having perhaps learned from the period 2001-04, the US is beefing up its soft diplomatic power quite considerably. On 26 November 2007, the US Defence Secretary, Robert Gates said:

“What is clear to me is that there is a need for a dramatic increase in spending on the civilian instruments of national security—diplomacy, strategic communications, foreign assistance, civic action, and economic reconstruction and development”.

In 2006, when launching the transformational diplomacy initiative, the Secretary of State, Condoleezza Rice, talked about the need for more diplomats to be sent to trouble hotspots, creating regional public diplomacy centres and small, localised posts outside foreign capitals, and training diplomats in new skills.

In the State Department’s budget for the financial year that has just finished, $124.8 million was allocated to transformational diplomacy. That included $40 million for the geographical repositioning of jobs and about $36 million for language training, public diplomacy, technological training and so on. That $125 million was up from $103 million the previous year. Between 2007 and 2008, the United States increased its overall foreign affairs spending by $6 billion. In terms of sheer numbers, therefore, our budget is not only contracting in real terms, but, unfortunately, going in the opposite direction to that of our leading ally and those of some of our European allies.

The change in the number of our embassies and consulates over the past 10 years has been particularly stark. Since May 1997, the Government have closed eight embassies, six high commissions and 18 consulates—that is 32 closures in the past 11 years, and two more high commissions will close this year. To be fair, some new outposts have opened in that time, but only 13, most of which have been in new countries, such as Montenegro, where an embassy had obviously become a necessity. Overall, however, there has been a significant decline in the number of Foreign and Commonwealth Office outposts abroad.

I find it particularly striking that we have less presence across the world than other European countries of comparable size. In Latin America, for example, we have four fewer outposts than France and two fewer than Germany. Strikingly, we are directly represented in fewer UN countries than France, Germany or Italy. In Africa, Lord Malloch-Brown was challenged over why we had no representation in 23 of the 53 African states. He conceded the point, but rather incongruously said that the Government were

“trying to grow our diplomatic footprint in Africa”.

I question how we can do that when the number of outposts is rapidly contracting.

On 8 November 2006, Lord Hannay told the Foreign Affairs Committee:

“When I was doing the job…as ambassador to the UN, the world had an inconvenient habit of finding itself in the middle of crises in places where Britain did not have embassies: Kigali in Rwanda, Haiti, Somalia and Afghanistan. Your capacity to operate effectively was cut by a large amount by not having an independent, objective flow of information coming in.”

Today, we have no representation on the ground in 50 to 60 states. That includes obvious places such as San Marino and Liechtenstein, where nobody would argue that Britain should be represented. However, it also includes serious trouble spots, such as Chad, Equatorial Guinea, Kyrgyzstan and Somalia. Our diplomatic footprint has therefore been dangerously shrinking, contrary to assurances given in Parliament.

The number of diplomats has also been declining, and that decline is projected to increase. As many people know, at various times the Foreign Office has too many people in a particular coterie to fill certain positions, because of its pyramid structure. I believe that currently it has a lot of people in their early, mid and later forties. Given the number of diplomats that the Foreign Office projects it will shed over the coming years, however, the situation will become very dangerous, particularly in the lower ranks. The Foreign Office recently announced that it would cut the number of diplomats from 6,000 to 5,400 in the next five years, but such people are vital to our efforts. On 8 November 2006, Sir Jeremy Greenstock, also a former ambassador to the United Nations, told the Foreign Affairs Committee:

“We are finding that the size of post, the spread of the Foreign Office’s work, the capacity to construct relationships and to negotiate, the experience gained by a slimmer number each year of men and women in important but more junior roles in embassies abroad because numbers have been cut is leading to a progressive decline in the capacity of the Foreign Office to cover every aspect of diplomacy.”

We are, therefore, looking at not only a reduction in the number of postings, but a significant reduction in the number of those who are posted. Again, that leads me to doubt whether the strategic framework will be realised.

I want to discuss the specific issue of the Foreign and Commonwealth Office’s language school, which is earmarked for closure. I am not sure whether the closure has already taken place or is about to take place, but it seems that it will go ahead. The closure will save only £1.5 million a year as part of what is described as the “new business model”. The number of diplomats in the FCO who receive language training has been in decline for some time—that is not a new phenomenon. Figures from the Foreign Affairs Committee show that 405 people received language training in 2005-06 and that that fell to 252 in the 2007 financial year. The language school is, however, a crown jewel, which it might be difficult, if not impossible, to recreate in future years.

Of course, languages can be learned elsewhere, and no one would deny that there is no point the Foreign Office setting up a whole infrastructure for small and minority languages where that expertise exists, such as in the School of Oriental and African Studies or the School of Slavonic and East European Studies. While I was at university, I attended Czech language classes that were part-funded by the Foreign Office, and I want to use my experience to illustrate the importance and utility of learning minority languages, which have turned out to be rather useful in ways that one could not have predicted 20 years ago.

I want to use a practical example and to name one of our diplomats. I have not spoken to him about the debate and I have not had any contact with him since I met him in November. However, he is a good example of somebody who has used language training to augment and improve our diplomatic efforts on the ground.

I have in mind our excellent ambassador in Skopje, in Macedonia, Mr. Andrew Key. As part of its work, the European Scrutiny Committee visited Macedonia in November 2007, and the FCO website says that Mr. Key presented his credentials only at the beginning of September 2007. None the less, he was pretty much the only ambassador from one of the major European countries to have put significant effort into learning Macedonian. He was already fluent in Chinese and had taken out two months to learn Macedonian.

We had a meeting with the Prime Minister of Macedonia, Mr. Nikola Gruevski, and my knowledge of Czech allowed me to understand enough Macedonian to get the gist of what was going on. It was quite clear from the exchanges with the Prime Minister that Mr. Key could speak Macedonian to an extremely good level. The Prime Minister said to me how important that was, and what a message it sent: although the Prime Minister could speak very good English, and most other people whom our ambassador would come across could speak it in their official capacity, it still conveyed a positive impression and gave our ambassador an edge over some of the other people on the ground.

Macedonian is a small language, but Macedonia is an extremely important country at the moment, not least for being next door to Kosovo and being an EU applicant country. It is also a potential trouble spot in its own right. It is important for us that our ambassador can engage fully in his role there. I do not know whether he learned his Macedonian at the Foreign Office language school, and do not want to give that impression if it is not so. I merely use the example to show how important the knowledge of languages—even obscure minority languages—can be for our efforts on the ground. The language school decision will obviously save a little money, but over a longer period it will prove a false economy. Greater savings could be made elsewhere in Government.

I want to deal briefly with two or three other matters, starting with the BBC World Service and the economies being driven through in the Russian language service. The eastern European services were closed a year or two ago, which probably made sense. It did not seem to make much sense still to broadcast in Polish and Czech when those countries were pretty much fully integrated members of the EU. However, many of the cuts in the Russian language service are disturbing. The reliance placed on local providers—especially on shortwave networks that have since been closed down by the Russian Government—is a disturbing phenomenon.

The second topic I want to mention is Commonwealth scholarships, which are featured in the annual departmental report. I understand that they have been greatly reduced or eliminated. I mentioned earlier that in Nigeria I met two or three people who had such scholarships and that it struck me that the value for money was extremely good.

The third issue, which is very important and which I am surprised has led to budget problems, is increased security in several of our consulates and embassies. The Istanbul consulate bombing was in 2002 and I know for a fact that in a number of our embassies and consulates, such as in north Africa and the middle east, it led to a serious and understandable review of security. The embassy in Algiers, for example, is undergoing, or is about to undergo, an expensive reconstruction project. That seems inevitable and right, but I am disturbed to hear that, in a general sense, some of the budget for security improvements and changes that was already agreed has been cut out by the Treasury.

An Opposition politician may say that spending should not be cut on this, that or the other, but where could savings be made? The Foreign Office could make significant savings by looking at one of its biggest projects: the FCO website. Everyone recognises the importance of a good, capable website for the FCO, but I doubt whether it will replace highly trained staff on the ground and fixed facilities. The FCO is not like other Departments in the matter of trying to find economies. It strikes me that the money being poured into the development of what must be one of the world’s most expensive websites could be better deployed.

In a parliamentary answer to my hon. Friend the Member for Eddisbury (Mr. O’Brien) on 25 April, the Minister for Europe called the website change an “upgrade”, with an

“initial cost of £9.7 million”.

That is just for one website. Admittedly, it is a portal serving the whole FCO globally, with all our embassies, consulates, high commissions and so on being run out of the same website, but as well as that initial cost of £9.7 million, we were told that

“the project is on target to cost £19.2 million over five years”.

We were also told:

“The web is vital for the delivery of the FCO’s Departmental Strategic Objectives.” —[Official Report, 25 April 2008; Vol. 474, c. 2321W.]

I agree with that, but the amount being poured into the website—almost £20 million, which is far more than has been spent on the language school—is questionable. I am interested to hear the Minister’s defence of spending that enormous sum on one website.

I disagree not so much about the Foreign Office’s strategic framework as about how it can be achieved, and about some of the directions being taken by the FCO. I believe strongly that the FCO will need a growing number of experienced and highly trained diplomats on the ground—skilled in languages, technology, commercial and other important skills—in as many key places as resources allow. Ironically, the United States and some of our European allies are showing the way forward in that respect, and we seem to be going in the wrong direction.

I look forward to the Minister’s response to the points that I have made. It seems to me that we are asking more and more of the FCO and giving it in return fewer and fewer resources to achieve it.

I congratulate the hon. Member for Hammersmith and Fulham (Mr. Hands) on securing this debate, which gives us an opportunity to highlight the important topic of how the Foreign and Commonwealth Office can best promote UK interests internationally. Although the hon. Gentleman’s title for the debate should perhaps have referred to the budget, rather than the strategic framework, I shall try my best to answer the points he made.

As globalisation proceeds and speeds up, the barriers between domestic and international affairs are breaking down. Almost every area of domestic policy now has important international dimensions. The role of the FCO has to change in response to those changing circumstances, to ensure that it continues to deliver for the UK. We keep the role and objectives of the FCO under regular review and, as the hon. Gentleman knows, the latest such review was announced by my right hon. Friend the Foreign Secretary on 23 January. I stress that it was not an efficiency exercise, but was carried out to provide greater clarity about the purpose of the Department, and to focus our resources where they can achieve the greatest positive impact for the UK.

The new strategy identifies the three main roles for the Foreign Office: providing a flexible global network serving the Government as a whole; delivering essential services to the British public and business; and shaping and delivering the Government’s foreign policy. The new strategic framework will replace the 10 strategic priorities set out in the Foreign Office’s 2006 White Paper. That is in line with the view expressed by the Foreign Affairs Committee, among others, that

“ten strategic priorities is too many”

and that they should be

“simplified and reduced in number”.

The conclusions of the latest review were the result of a dialogue which took place externally with key stakeholders and on the FCO’s website; across Government, through discussions with other Departments; and internally, through contributions from staff across the world. The new strategic framework has been welcomed for its clarity by stakeholders and staff. The new strategy explicitly recognises for the first time the importance of the Foreign Office’s global network. We provide that network for the whole of the British Government, giving a platform for achieving the UK’s international objectives and for serving British people and businesses.

The global network remains vital and we continue to review it to ensure that resources are deployed in line with priorities and that they provide the best possible value for money. That is where the hon. Gentleman is plain wrong. Since 1997, the overall number of Foreign Office posts around the world has increased, from 242 to a total of 261 today. That includes three more embassies than there were in 1997.

The hon. Gentleman has misunderstood the strategic framework. In no way have we hived off the promotion of democracy to the Department for International Development or anybody else. It continues to be mainstream Foreign Office work, just like a range of other issues, including human rights. The Foreign Office regularly discusses such matters with Governments overseas, as do Foreign Office Ministers with their counterparts.

The new strategy recognises the importance of the essential services that we provide to the British people and British business. Our consular services will be sustained and our dedicated staff will continue to provide invaluable assistance around the world to Britons living, working and travelling abroad. Incidentally, the FCO website is a key platform for that work. Not only can people access information about the FCO there, but our new service, Locate, which I have launched in the past few days, enables people to register where in the world they will be. It has already had benefits in identifying where people are in crisis situations, such as the China earthquake.

The United States has had that function for US citizens abroad for at least the past five years. My main point about the website was not whether one is needed, but its extreme cost. How does the Minister justify a cost of almost £20 million for a website?

I am talking about the whole range of our work. I merely point out to the hon. Gentleman that the website is an important part of everything else that we do.

We will continue to help British business and the UK economy through UK Trade and Investment. In addition, the Foreign Office will continue to support Britain’s migration objectives through our own work and in co-operation with the UK Border Agency.

To help to focus the Department’s policy efforts, the new strategic framework identified four policy goals where we can make the most difference: countering terrorism and proliferation, preventing and resolving conflict, promoting a low-carbon, high-growth global economy and developing effective international institutions, especially the UN and EU. As the new strategic framework is implemented, resources are being reallocated to the new priorities. We must ensure that our limited resources are deployed where they can have the greatest impact, including the new resources provided under the comprehensive spending review.

Contrary to what the hon. Gentleman suggested, the Foreign Office’s budget will increase from £1.6 billion in 2007-08 to £1.7 billion in 2010-11. That will provide substantial increases in resources, particularly for counter-terrorism—I thank him for his kind comments on that—climate change and our work in Afghanistan.

May I make a bit more progress? I am conscious of the time. I shall come back to the budget issues.

Funding for counter-proliferation, conflict prevention and international institutions is also set to increase, but by more modest amounts. We are increasing substantially the number of front-line officers in priority countries. About 60 extra policy staff will work on or in south Asia, Afghanistan and Asia Pacific. The number working on or in the middle east will also increase significantly, and more modest increases will occur in Africa, Russia, central Asia and multilateral organisations.

In our work force planning, staff numbers are predicted to decline slightly during that period. We are saving on back office and administrative functions to put resources more precisely into front-line work. At the same time, we have agreed a decrease of diplomatic staff in Europe. It is not that we consider Europe to be less important now; Europe will remain vital for the UK, not least because we live in it. However, we can do the essential work with fewer staff by delivering in a more flexible and targeted manner. Whitehall Departments can now operate more efficiently with fewer staff by taking advantage of modern technology and quicker and easier travel.

Similarly, we are reducing funding for certain policy areas, including three areas for which other Departments will take on more responsibility: sustainable development, science and innovation, and crime and drugs. We will not withdraw from those areas. Our ambassadors will remain heavily engaged where they are of particular importance to the UK, such as in the fights against drugs in Colombia and crime in Jamaica. Our posts overseas will continue to operate as bases where all Departments can locate their own staff and resources to deliver their own priorities. Our ambassadors will continue to offer Departments advice and act locally on their behalf on all the major issues affecting the UK.

Can I take the Minister back to the budget for a moment? She lauded what she called a substantial increase in funding for the FCO; I think that she said that its budget would increase from £1.6 billion to £1.7 billion over five years. That is only a 6 per cent. increase over five years, which is way below current and projected rates of inflation. Surely that means that the Select Committee on Foreign Affairs was right to point out the real-terms budget decreases? Does she agree with the Committee? From the evidence that she has just given, she must agree that they are real-terms cuts.

I said that there was an increase, and I set out the amount. The hon. Gentleman has obviously been sitting there using his calculator, or indeed mental arithmetic, to work that out. We make no apologies for becoming a more efficient and streamlined organisation. I am not sure whether we will get more information from him today about Conservative commitments to spend more money. I am not sure that his Front Bench Members would thank him for that. We are looking at how to work more effectively. I have said that we will reduce administrative posts to put more into the front line. I must correct his figures: the increase will take place over three years, not five. I assure him, as he raised so many points about the financial aspects, that I have not finished with the budget.

Our new priorities are also reflected in the work of our partner agencies. The BBC World Service will launch a new Persian television channel and extend its Arabic language TV broadcasting to 24 hours a day, seven days a week. In addition, the British Council will extend its efforts to build mutual understanding with Muslim societies—the hon. Gentleman praised that work, for which I thank him—particularly among alienated younger populations. With the BBC World Service and the British Council, we are pursuing ambitious efficiency programmes, and I make no apology for that. We are jointly committed to delivering £144 million in efficiency savings over the next three years through a wide range of projects.

The process is carefully managed. We have defined our strategy goals and we are aligning our resources with them over time, so that the sorts of problem that the hon. Gentleman wrongly suggested would occur will not occur. The decision on the language centre predates the strategic framework. It was undertaken under the previous Foreign Secretary. Having considered it, FCO Services concluded in 2006 that its language training services cost between 15 and 40 per cent. more than those offered by comparable providers. It is important that we look at the matter sensibly and put our resources where they are needed, ensuring that we are using the money in the best way. I should have thought that the hon. Gentleman would welcome that.

On scholarships and fellowships, we have consolidated our scholarship programmes and are focusing on the Chevening and Marshall schemes, the purpose of which is to build strong relations with the international leaders of the future. Again, I make no apologies for considering carefully where we want to have the most impact and putting our resources there.

As my right hon. Friend the Foreign Secretary explained in his statement to the House:

“every organisation, including every Government Department, should regularly reassess its own aims and priorities. Successful organisations stay focused on the biggest issues on which they can make the biggest difference, and they regularly readjust that focus as circumstances and priorities change.”—[Official Report, 23 January 2008; Vol. 470, c. 54WS.]

The Foreign Office’s new strategic framework will do that. It will refocus our efforts, reprioritise our resources and refresh our strategic approach. The four new policy goals that emerged from the review present a clear and concise picture of what we are trying to achieve, and associated changes to the resourcing of our network overseas indicate how we are going to achieve it.

Although we have a new strategic focus, we are determined to preserve the strengths of the Foreign Office and its staff: world-class diplomatic skills, understanding of other countries, and a sense of public service. I assure the hon. Gentleman that the combination of those talents with a sharper set of priorities will ensure that the FCO can better serve the UK’s interests internationally.