TNAG-1851-FCO40-2626-House-of-Commons-Select-Committee-on-Foreign-Affairs-enquiry-1989 — Page 20

THE FOREIGN AFFAIRS COMMITTEE

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3 May 1989]

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by the need to respond, more quickly than hitherto, to changing operational requirements, especially in the security field.

(ii) In parallel, we have taken steps to improve the managerial control of the estate, by inter alia; devolving responsibilities for day-to-day estate decisions and budgets to Posts overseas, installing a computerised Management Information System to strengthen financial management and audit control, and developing a Procurement, Freight and Warehousing Unit, partially staffed by experienced managers brought in from the private sector.

(iii) Many of the benefits from these managerial initiatives will appear in the longer term and cannot be immediately quantified. However, we have so far made running cost savings of over £2.5m (in 1985/86 cost terms), which is ahead of the 10 year target agreed with the Treasury in 1985. In 1989/90, we expect to save up to £200,000 on our revised arrangements for warehousing and freight.

11. A programme for energy efficiency is described in paragraph 37. What order of financial savings is expected from this programme?

There has been a reduction of £152,000 in the amount spent on utilities (gas, electricity, heating) this financial year (to 31 December) when compared with the same period last year. Identifying exact efficiency savings is not possible because the FCO is not yet billed direct on heating (we pay 17 per cent of the Whitehall District heating bill) and other utilities. However, the PSA hope to introduce soon direct billing where practicable and where Departments want it. The FCO would welcome this greater control of its own energy use.

A programme of draught-proofing windows and of installing pull-cord lighting continues. Many rooms on the estate have already been improved. In the refurbished parts of the office, energy savings systems are being built in by the PSA. The FCO continues to give priority to training accommodation managers in energy efficiency matters.

RELOCATION

12. What progress has been made in the FCO in reviewing the potential for relocations of staff from central London?

More than a quarter of FCO staff serving at home are already housed outside central London. We are currently reviewing the scope for relocating up to 350 further jobs.

QUESTIONS TO THE FCO ON THE SPRING SUPPLEMENTARY ESTIMAtes 1989-90

13. The revised cash limit for Class II, Vote 1 is £429,826,000, and the Departmental running cost limit has been reduced to £401,951,000. The provisions in the voted estimate, however, remain at £432,023,000 and £402,589,000 respectively. Can you provide a table reconciling the subheads, including appropriations-in-aid with the new cash limits?

The running cost Estimates provision has been reduced from £406,298,000 to £403,499,000, not the figure of £402,589,000 quoted in the question. This figure relates solely to Subhead Al which has been reduced from £405,388,000 to £402,589,000. FCO running costs also include Subhead A2 which has remained unchanged at £910,000. (£402,589,000+ £910,000 - £403,499,000). Because the Supply procedures do not permit a reduction in Estimates provision, the provision is higher than the cash limit. The first table annexed to the answer to your Question 2 shows how the subheads are affected firstly by the Spring Supplementary Estimate and secondly by the cash limit reduction.

14. Could you provide a breakdown of the subheads in Vote I to show separately the effects of local inflation, overseas price movements etc, and the distribution of the Unallocated Section?

Table 1 below reconciles the original provision with the Spring Supplementary Estimates and the reduced cash limits. There were four factors reflected in the Spring Supplementary Estimate:

(i) distributing the unallocated provision;

(ii) allocating the £7 million capital underspend carried forward from 1987-88;

(iii) taking provision for agreed increases in certain overseas allowances for UK-based staff; and (iv) taking account of overseas price movement gains.

Table 2 below explains in detail how the unallocated provision was re-distributed.