In my statement to the House of 10 July 2012, Official Report, column 16WS, I set out the funding allocations for the FCO’s strategic programmes for the financial year 2012-13. I now wish to inform the House of the FCO’s spending plans for financial year 2013-14, together with further information on how we will deploy the funds effectively.
As part of the 2010 spending review settlement, and in support of the Government’s commitment to reduce the deficit, the FCO’s budget is being reduced in real terms year on year. Further budget reductions have been made in announcements at the last two autumn statements and the Budget. In total this has reduced the FCO’s budget for 2013-14 by £26 million more than was anticipated in the 2010 spending review.
In order to live within reduced budget allocations, savings are required from all parts of the FCO budget. The FCO is committed to increasing efficiency and is on track to deliver £100 million of administrative savings by 2015.
BBC World Service and the British Council are also funded from the FCO budget and represent around one quarter of the FCO expenditure in 2013-14. At the Budget, the Chancellor announced that all unprotected areas of Government spending would be cut by 1%. Spending on overseas development is protected. In line with this, FCO funding in 2013-14 to BBC World Service will reduce by £2.22 million and to the British Council by £0.6 million.
Specifically on the BBC World Service, we will be working closely to review its proposals for investments in World Service TV in Afghanistan, Burma and Somalia, with an expectation that additional programme funds of £0.5 million will be made available in 2013-14. Looking forward, we will shortly agree with the BBC Trust the BBC World Service operating licence objectives, targets and priorities, which will come into force from April 2014 when the BBC World Service moves to licence fee funding.
The funds allocated to our strategic programmes are also falling over the four-year SRIO period to reflect these financial constraints. Allocations for financial year 2013-14 take into account the changing nature of some of our programmes and the greater operating efficiency with which they need to be delivered.
The FCO’s strategic programmes directly support the delivery of two of our foreign policy priorities: safeguarding the UK’s national security; and building the UK’s prosperity; plus our important work to promote the UK’s values. Our programmes allow for dynamic and targeted interventions, working alongside host Governments and civil society around the world to deliver projects which enhance our bilateral relationships and strengthen the UK’s position internationally.
In the past year, we increased the scope and nature of our programme funding, putting further funding into priority areas such as maritime security, democracy and good governance and enhancing our engagement with the emerging economies.
The total allocation for financial year 2013-14 is £133.55 million, of which £81.8 million will be spent on official development assistance. The allocation for this financial year is a reduction of just over £10 million from last year’s opening figure. I have allocated £44 million in the area of security; £26.9 million for prosperity work; and £62.65 million for programmes in support of our values including our bilateral, regional, and human rights programmes.
In the area of security, we will target our activity on areas such as aviation and maritime security and building counter-terrorism capacity in key countries to strengthen their ability to detect and disrupt threats while protecting human rights. We will also continue to support counter-proliferation work, including through strengthening the international rules-based system that underpins our efforts. We will continue to be engaged in Afghanistan on law enforcement, security, governance, rule of law and democracy; working closely with Afghan partners to ensure UK-funded projects are sustained in the long term.
Our prosperity-related work will focus on promoting the UK’s economic growth, particularly working on opening markets, promoting sustainable global growth and ensuring access to resources. We want to encourage openness to trade and investment, strengthen the multilateral trading system and support the rules-based international economic system. We will continue to focus efforts in the emerging economies in the coming year. This will reinforce our strategy of deploying more staff to the emerging powers and fastest growing regions as the cost of our diplomatic presence in Iraq and Afghanistan reduces and we restructure our subordinate post network in Europe. In the area of climate change, we will aim to create the conditions necessary to raise ambition on emissions mitigation and the shift in investment to low carbon.
The work to promote the UK’s values and build our international influence will focus on promoting human rights, democracy and good governance. As part of this, we will continue to support the Westminster Foundation for Democracy; we will maintain our scholarships programme, offering outstanding scholars with leadership potential from around the world the opportunity to study in the UK; we will work with DFID in support of the Arab Partnership participation programme; and we will maintain our commitment to the overseas territories.
Our policy programme evaluation board, which is chaired by a non-executive member, will monitor and evaluate our strategic programmes throughout the year, to ensure they are providing the greatest possible impact and value for money.