22
MINUTES OF EVIDENCE TAKEN BEFORE THE EXPENDITURE COMMITTEE
9 December 1975]
[Continued
Mr D F HAWLEY, CMG, MBE, Mr K C THOM, Mr A C GOODISON, CMG, Mr P L O'KEEFFE, CVO, Mr G W HOPCROFT, Mr D F MILTON and Mr D F BURDEN
ponsibility of the PSA and not ourselves. It became impossible to complete fur- nishings in 90 days in 1974 owing to a number of factors, including increased demand world-wide, staff shortages in the supplies division and a deterioration in the supply situation. The situation has improved during the last 12 months, but deliveries are still not good and sup- plies division are not yet able to deliver initial furnishings within 90 days. possibility of doing so is being kept under constant review.
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(Mr
112. You are pressing as hard as you possibly can?--I think we are. Thom.) I think the answer is yes. There is one further point, that although the initial furnishing scheme which was men- tioned, which is a complete set of fur- niture for a new hiring, was requested on the date Mr Hawley gave and pro- duced in about 100 days, there is another dimension of furnishings which is called an "uplift in the trade, and there the PSA looks at the state of furnishings in the estate at the place concerned and draws up a list of what is required to bring it up to scratch. There the delays have been much more serious during the last two or three years for the reasons that Mr Hawley gave. It has meant that limited resources and supplies had to be devoted to the 90 day schemes, where they still existed, on the ground that it was better to give people furniture who had not got any, than to replace furniture for people who already had some. It is these uplift schemes which have bothered the Embassy in Athens. and the supply has been slow. I think the PSA would admit this, but only because there has been an increase in demand in connection with initial fur- nishings.
Mr Roper
113. I do not understand the increased world-wide demand. I did not know there was an increase in diplomatic posts in the last few years?I think the answer is that there has been a large increase in the number of post hirings. The proportion of post hirings where furniture is supplied by the PSA is about 66 per cent.
114. That has gone up significantly? -Yes.
Chairman
115. In Athens we own only one resi- dential property, and that is the nice residence of the Ambassador. Would it have been possible to have bought more probably in the early 1970s before the escalation of prices?(Mr Hawley.) The situation has been examined several times since 1970, and two visits were carried out by PSA surveyors in the first quarter of 1971, and prices were found to average more than 12 times the rent of the properties investigated. Subse- quently, the position vis-a-vis the TDR has deteriorated.
Mr Sandelson
116. There is another aspect to this affair which rather worries me. Bearing in mind the restriction on the outlet of capital for purchase of property abroad, with continuing inflation in these coun- tries it must clearly be worth while to acquire properties rather than pay ever increasing and often extortionate rentals. I would have thought that there should be a Foreign Office policy for house purchase. On the 20 year rent basis we are paying an annual rent bill of some £77,000 in Athens, and on a 20 year purchase the capital involved there is £1 million, and in a 40 year purchase taking into account the inflated position in Athens, it is a total of £3 million. Clearly you cannot lay out £3 million in one fell swoop surely there must be some progressive policy over the years of acquiring properties for the benefit of this country in expensive capitals so that we can house our people in the right way with all that that implies. I recall questions that we put to our staff over there in regard to commercial opportunities for Britain in Greece, and these are considerations which I think weigh very heavily with this Committee, as to what progress commercially we are able to make in these areas. One would have thought that these commercial con- siderations apply equally to the owner- ship of property and the management of our accommodation affairs in these capitals. Would you like to say a word about Foreign Office views on that question of house purchase? Cer- tainly. We agree very much with you, and indeed there is a policy for house purchase, and sums are set aside every