TNAG-1851-FCO40-2626-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1989 — Page 16

MINUTES OF EVIDENCE TAKEN BEFORE THE FOREIGN AFFAIRS COMMITTEE

WEDNESDAY 3 MAY 1989

Members present:

Mr David Howell, in the Chair

Mr Michael Jopling

Mr Ivan Lawrence

Mr Jim Lester

Mr Ian Taylor

Mr Peter Temple-Morris Mr Bowen Wells

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PUBLIC EXPENDITURE WHITE PAPER AND THE SPRING SUPPLEMENTARY ESTIMATES

Questions to the FCO on the Government's Expenditure Plans 1989-90-1991-92 (EST/39)

Memorandum submitted by the Foreign & Commonwealth Office

DEPARTMENTAL FIGURES

1. What are the reasons for any differences between the 1988-89 plans published in Cm 288 and the 1988-89 estimated outturn?

(a) Overseas Representation increased from £435 million to £439 million. This increase of £4 million consists of (i) an additional £7 million under the end of year flexibility scheme in which, under certain circumstances, unspent capital project funds may be carried forward from one financial year to the next; (ii) a decrease of £3 million which was transferred (less an element for efficiency savings) to external broadcasting and monitoring as part of a rationalisation to produce efficiency savings in the operation of FCO relay stations.

(b) External Broadcasting and Monitoring increased from £1 14 million to £120 million. This increase of £6 million consists of (i) an additional £1 million authorised after publication of Cm 288; (ii) an additional £2 million transferred from overseas representation; (iii) an additional £3 million under the end of year flexibility scheme for capital expenditure.

2. (i) What are the reasons for the differences between the planned figures for 1989–90 and 1990–91 in

Cm 288 and those for the same years in Cm 602?

(ii) What is the reason for the £50 million increase in the overseas representation budget between 1990– 91 and 1991-92 in Cm 602?

(i) The differences between the plans in the two White Papers reflect:

(a) a reduction of £21 million in each year because of overseas price movements favourable to the

FCO and

(b) increases of £47 million in 1989-90 and £70 million in 1990–91 to expand programmes such as British Council and FCO scholarships, to reinstate a capital project in the BBC audibility pro- gramme and to provide extra resources needed to meet existing commitments after maximum offsets from efficiency gains.

(ii) The exact increase in provision is £40.9 million. The published figures of £470 million and £520 million have been rounded from the agreed figures of £474.7 million and £515.6 million. There are two main elements in the increase: £22.4 million to cover forecast inflation while maintaining the existing level of commitments, and £17.6 million to meet increased capital requirements.

3. Why are running costs as a proportion of total expenditure on overseas representation planned to rise from 90 per cent in 1988-89 to 97 per cent in 1990-91?

Table 2.16 took account of the forecast overseas price movements in 1988-89: table 2.1 did not. This difference affects the comparison.

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