UNCLASSIFIED. Foreign & Commonwealth Office Supplementary Estimate Memorandum for the Foreign Affairs Committee

Transcription

1 Foreign & Commonwealth Office Supplementary Estimate Memorandum for the Foreign Affairs Committee Introduction 1. The Foreign and Commonwealth Office Estimate has the following sections: Section A: Expenditure by the Foreign and Commonwealth Office (FCO), including UK Trade and Investment, on its administration, FCO Services, Wilton Park Executive Agency, hospitality and facilities; scholarships, information services and sponsored visits; special payments and assistance programmes to support foreign policy objectives including human rights, good governance, international security and the fight against the illicit drug trade; and on associated non-cash items; Section B: Grants to international organisations and other bodies supporting FCO objectives; Section C: Resource grant to the British Council; Section D: Capital grant to the British Council; Section E: The net expenditure of FCO sponsored Non-Departmental Public Bodies (NDPBs) in particular the Westminster Foundation for Democracy, the Marshall Aid Commemoration Commission and the Great Britain China Centre; Section F: Grant expenditure by the Foreign and Commonwealth Office on conflict prevention, early warning, crisis management, conflict resolution/peacemaking; Section G: Grant expenditure on peacekeeping and peace building activity and on associated strengthening of international and regional systems; Section H: AME non-cash expenditure on impairments, provisions and exchange rate movements; Section I: AME grants to refund certain taxes and duties paid by certain Foreign and Commonwealth governments. Supplementary Estimates Changes Reserve claims 2. There were 7 claims on the Treasury Resource Reserve: 59.0m capital for work on the FCO UK and Overseas Estate, particularly for the UK Estates Reform Project and the Abuja new build. Finance for this claim is linked to income surrendered to the Treasury from sale of the Kuala Lumpur compound and other asset sales (Section A); 50.4m programme expenditure for Consular Premiums collected in the UK by the Home Office that are transferred to the FCO via the Reserve (Section A); 30.2m grants expenditure arising from the FCO/HMT 40/60 International Organisations Subscriptions cost sharing agreement (Section B); Take up of an additional 28.1m from 374m Peacekeeping Spending Review settlement for We took-up only 330m at the start of this financial year on the understanding that we would take up more if required. It has now become apparent that an additional 28.1m from the 44m we could claim is required for additional Peacekeeping activity. This activity includes the need to transfer 9.7m to Peacekeeping

2 capital to pay for contributions to a permanent premises for the International Criminal Court (Section G); 26.0m of programme non-cash in respect of additional depreciation arising from work on the FCO UK and Overseas Estate (Section A); 2.3m resource for the September 2014 NATO conference. The sum includes a 1m bonus for coming in under the original estimate of costs (Section A); and 1.9m programme expenditure from the Emergency Disaster Relief Fund for consular assistance costs incurred as a result of the Ebola crisis response, the loss of Flight MH 17 in the Eastern Ukraine and the Cheeki Rafiki yacht search in the mid Atlantic (Section A). 3. All of the above claims are the result of pre-agreed funding arrangements and so are routine in nature and will not therefore have to be repaid to Treasury in future years. 4. Additionally, at Treasury s initiative, a sum of 0.7m programme (Section A) has been paid from the Reserve to the FCO to facilitate renovation of the Waterloo Monument at Hougoumont in Belgium. 5. There are also benefits to the Resource Reserve of 56.8m in respect of the Operation of the FCO Foreign Currency Mechanism (FCM) owing to appreciation in the value of Sterling overseas since the FCO baseline year of (Section A). Further benefits to the Reserve arise from a 5.0m final repayment of the Reserve claim for Locally Engaged staff (Section A); the FCO and the British Council were fined 0.2m each for technical infringements of the public sector pay reporting system in arising from misunderstandings of Treasury guidance (Sections A and C), and 0.1m clawed back owing to the extension of reclaimable VAT to cover expenditure on contracted out legal services (Section A). All of these benefits are from programme budgets except for reclaimable VAT which is administration. Take up of Departmental Unallocated Provision 6. We have taken up 10m of administration DUP (Section A) to cover emerging pressures such as the FCO contribution to the September 2014 NATO conference and repayment of the Reserve claim for Locally Engaged staff taken in Budget cover transfers 4. The major transfer to the FCO is 27.7m programme for costs incurred on behalf of UKTI (Section A); 12.4 for conflict prevention (Section F) from the Department for International Development (DFID) and 10m from MoD for their contribution to the cost of the September 2014 NATO conference (Section A). 5. Other smaller DEL transfers into FCO include: A transfer of 7.0m capital from DFID as their contribution to the Abuja new build (Section A); A transfer of 6.8m resource programme from DFID in respect of Official Development Assistance (Section A); A transfer of 4.5m programme from DFID for work in the Middle East and North Africa (Section A); Two transfers in, one of 3.3m of programme resource from DFID and one of 2.8m programme resource from the Home Office in respect of the Returns and Reintegration Fund to increase the number of foreign national prisoners and failed asylum seekers who return to their countries of origin and to ensure that those who return voluntarily are effectively re-integrated (Section A); A transfer of 0.7m resource programme from MoD for conflict prevention work (Section F); Two transfers in, both of 0.7m programme resource, from MoD and DFID for demining work in the Falklands (Section A);

3 A programme transfer in of 0.6m resource programme from DFID for reform and transition work in Burma (Section A); A transfer in of 0.5m from the Cabinet Office resource programme to the British Council in respect of the GREAT campaign (Section C); A transfer in of 0.5m resource programme from DFID in respect of the St Helena Child Abuse Inquiry (Section A); A transfer of 0.3m programme from BIS for the Science and Innovation Network which engages with the local science and innovation community in support of UK policy overseas (Section A). 6. There is also a net transfer out of FCO of 9.4m resource programme to the Security and Intelligence Agencies for expansion and capability (Sections A and F); 7. No FCO programmes or other activities are expected to be reduced as a result of the above transfers. Transfers between government departments such as these are a routine occurrence and are therefore incorporated in the normal budgeting process. 8. We have increased cash AME (Section I) by 9.0m in respect of reimbursements of certain duties, taxes and licence fees following an increase in demand from missions to the UK for reimbursement of local taxation. Reconciliation of Supplementary Estimates to the Main Estimate 9. The table below reconciles the budgets voted in the Supplementary Estimate back to those voted in the Main Estimate as discussed above. Table 1 Resource Resource DEL Baseline from Main Estimate ( m) 1,742.4 Reserve credit for Foreign Currency Mechanism Reserve claim for Consular Premiums Reserve claim for International Subscriptions Reserve claim for Peacekeeping Transfer from UKTI for costs incurred by FCO Reserve claim for non-cash depreciation Net transfer from DFID for conflict prevention Transfer from MoD for NATO conference A switch from Peacekeeping Resource to the Peacekeeping Capital budget Net transfers to SIA for expansion and capability Transfer from DFID for Official Development Assistance. 6.8 Reserve credit for repayment of LE tax Reserve claim Reserve claim for NATO conference costs. 2.3 Reserve claim for Emergency Disaster Relief Fund. 1.9 Transfer from DFID for work in the Mid East and North Africa. 4.5 Transfer from DFID for the Returns and Reintegration Fund. 3.3 Transfer from Home Office for the Returns and Reintegration Fund. 2.8 Net transfers from MoD for conflict prevention work. 0.7 A payment from the Resource Reserve for Waterloo monument restoration. 0.7 Transfer from MoD for Falklands demining. 0.7 Transfer from DFID for Falklands demining. 0.7

4 Transfer from DFID for reform and transition work in Burma. 0.6 Transfer to the British Council from Cabinet Office for the GREAT campaign. 0.5 Transfer from DFID for the St Helena Inquiry. 0.5 Transfer from BIS for the Science and Innovation Network. 0.3 Reserve credit in respect of the BC pay remit Reserve credit in respect of the FCO pay remit Reserve credit in respect of reclaimable VAT for contracted out legal services Resource DEL at Supplementary ,872.1 Changes to Resource AME Resource AME Baseline from Main Estimate ( m) 75.0 Increase for reimbursement of taxes. 9.0 Resource AME at Supplementary Supplementary Estimate Resource Total (DEL+AME) 1,956.1 The FCO has no non-budget spending. Table 2 Capital Capital DEL Baseline from Main Estimate ( m) 98.0 Reserve claim for work on the UK and overseas Estate A switch from Peacekeeping Resource to the Peacekeeping Capital budget. 9.7 Transfer from DFID for works in Abuja Supplementary Estimate Capital Net Total The FCO has no capital AME. Table 3 Administration Administration Baseline from Main Estimate ( m) Reserve credit in respect of reclaimable VAT for contracted out legal services Supplementary Estimate Administration 197.9

5 Programmes 10. In a Written Ministerial Statement on 10 July 2014, the Foreign Secretary informed the House of the Foreign and Commonwealth Office s allocations for Programme spending for the FY 2014/2015. Allocations remain in-line with the budgets set out in that Statement. 11. All the FCO s own direct programme spending scores against Section A of the Supply Estimate with Section B covering the corresponding grants to third parties. 12. In addition to the programme spend set out in the Written Ministerial Statement around 500m of spend in support of front-line activities has been re-classified to programme from administration costs in successive Spending Reviews but these are not allocated to specific programmes. Also included in our programme budget is the tripartite 526.8m Conflict Prevention and Peacekeeping pools, changes to which are outlined above. Budget comparisons 13. The definition of departmental budgets changes over time. Table 4 shows the FCO outturn on the definition of budgets used in the relevant financial year in order to be consistent with data published at that time. Data for each year may not therefore be strictly comparable. Table 4 Previous years' expenditure against departmental budgets m Year Voted Non-voted Total DEL Outturn 1 Variance Per cent Resource DEL Outturn 2, , , Outturn 2, , , Outturn 2, , , Outturn 2, , , Outturn 2, , , Outturn 2, , , Plans (1) 1, , Plans (2) 1, ,239.9 Of which Administration Outturn Outturn Outturn Outturn Outturn Outturn Plans Plans Resource AME Outturn Outturn Outturn Outturn Outturn Outturn Plans (1) Plans Capital DEL Outturn

6 Outturn Outturn Outturn Outturn Outturn Plans (1) Plans (1) Figures from exclude BBC World Service and Conflict Prevention expenditure. (2) 1,240 is exclusive of 100m ODA uplift in Departmental Unallocated Provision (DUP) The FCO has taken up its entire 10m of unallocated resource in the Supplementary to meet in-year pressure in Section A as discussed above. Table Departmental Unallocated Provision remaining Resource Capital DUP to met unforeseen requirements arising in-year 0.0m 0.0m Total 0.0m 0.0m Budget Exchange 15. We have made no use of budget exchange. 16. Further background to this Supplementary Estimate is set out in the FCO Mid Year Report which is available at: ort_accessible.pdf 17. This memorandum has been seen and approved by the Accounting Officer. Iain Walker Finance Director 3 February 2015