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FCO N.T.C.D. LONDON

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071 370 1064

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It would appear

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Ms Barnes Jones

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hiving off passport work

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option, whereas RFD would

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Hong-Kong-, New Consulate General

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review

on 40613

1. I have just received Mr Wootton's minute to you of today's

date.

2. While I must defer to RFD's expertise in these matters, my understanding is that, although the FCO may not receive fee income directly from passport fees, the FCO's PES allocation includes the amount the FCO would have received from passport fees. If passport work is to be done in Hong-Kong the FCO's PES bid should be adjusted accordingly to reflect the extra costs, which will be covered by the extra income from fees. As I said in my earlier minute, fees from passports issued in the UK and overseas cover the full costs, of passport work at home and overseas plus the non-fee bearing consular services. Passport work is therefore resource neutral to the FCO. It may not look like it from the accounts, but that is surely a presentational and book-keeping problem which it should be possible to overcome.

3.

In any case, the whole question of passport fee income is likely to feature in the UKPA review. It is quite possible there will be changes in the FCO's relationship with the UKPA and of our joint accounting arrangements as a result of the review. I think we should focus now on what are really the most cost effective options, rather than what seems to present the FCO in a favourable light simply because of our current book-keeping arrangements, which it should be possible to change.

4.

I

This argues in favour of keeping options open. I prefer the timescale you envisage in your draft submission to Mr Wooton's. suspect the UKPA's new status will not become clear until well into next year at the earliest, and we may find ourselves embroiled in a lengthy dispute with them thereafter on accounting matters.

5. I think Mr Wooton may have overstated one aspect of your draft submission. You mentioned as an option the possiblility of the UKPA taking some of the extra passport issuing in peak years. Unless I have missed something, you do not favour removing the whole operation to the UKPA, although it remains an option set out in the MRS draft.

5.

I am copying this minute to recipients of Mr Wooton's minute under reference.

M.

Bullwas

M F Sullivan

Nationality Treaty and Claims Department

1 7 1993

HKD 406/2

R!

05 JU 1993

Page 75Page 76

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