The FCO and the Spending Review 2015

Debate between Crispin Blunt and Andrew Gwynne

Tuesday 1st March 2016 Commons Chamber

[Crispin Blunt (Reigate) (Con)]

It is a pleasure to open the first estimates day debate of the new Parliament, and I thank the Liaison Committee for selecting the first report of the Foreign Affairs Committee for debate.

I pay tribute to the work of the Committee in the last Parliament and to my predecessor, Sir Richard Ottaway. I was lucky to have him as a parliamentary neighbour for 18 years and can well understand why he was so widely regarded across the panoply of the Foreign Office establishment and those interested in foreign and Commonwealth affairs for the way in which he led the Committee in the last Parliament.

One of the Committee’s final reports in the last Parliament, which was published in February 2015 only weeks before Parliament was dissolved, took a detailed look at the impact of cuts on the Foreign Office budget resulting from the 2010 spending review. It accepted that the Foreign Office needed to play its part in the general retrenchment instigated by the review and believed that Foreign Office Ministers and senior managers had, on the whole, played a difficult hand skilfully. However, it concluded:

“The cuts imposed on the FCO since 2010 have been severe and have gone beyond just trimming fat: capacity now appears to be being damaged. The next Government needs to protect future FCO budgets under the next Spending Review…If further cuts are imposed, the UK’s diplomatic imprint and influence would probably reduce, and the Government would need to roll back some of its foreign policy objectives.”

I remind the House that the reduction imposed on the Foreign Office in the four-year period ending in March 2015 amounted to 24% of its resource budget. However, the majority of the savings came from what amounted to a conjuring trick. Funding for the BBC World Service was transferred from the Foreign Office to the licence fee payer from 1 April 2014. At a stroke, the Foreign Office’s apparent budget was reduced by £240 million and the cuts that it had to make to its own budget through savings amounted to just 10%.

Even though the real reduction was just 10% over the four years, it is hard to find anyone who does not believe that the FCO’s capacity was damaged in the process. Our predecessors described the Foreign Office as a machine stretched to the limit, with key posts left unfilled because staff of the necessary calibre were needed for more immediate crises; overseas posts at junior levels lost, reducing the opportunity for staff to accumulate the experience that is essential for service at higher levels within the organisation; and reductions in UK-based staff at many overseas posts, denying those who remained time to leave the diplomatic bubble and gather a sense of the real currents in society around the country in which they served.

Overall, the headcount of UK-based staff has reduced by 10% between 2011 and now, which seems perverse at a time when the Department has been under such policy pressure and suffered such overstretch. To some degree, the reduction in UK-based staff was mitigated by the recruitment of locally engaged staff who, in many cases, have brought a depth of local knowledge that it would be difficult for a London-based employee ever to acquire. However, many of them happen to be British people who are based overseas and then formally become locally engaged staff. Although the average cost of such people is one third of UK-based staff, it is not a straight saving, because such replacements do not come at zero cost. I have already heard troubling reports of unintended consequences arising from such things as locally engaged staff not being cleared to the same security level as UK-based staff.

To use Tunisia as an example in advance of the Committee’s visit to Cairo and Tunis next week, I applaud the FCO’s swift consular response to the terrorist attack in Sousse in June 2015, but I have heard that the subsequent counter-terrorism analysis was complicated by a lack of UK-based staff who were cleared to the necessary level. That analysis was of great significance, because it will have played a role in the FCO’s decision to advise against all but essential travel to the entire country—a country where tourism contributes directly and indirectly to a large proportion of GDP and is a major source of foreign currency. Tunisia is a fragile country that has undergone its fair share of volatility since it sparked the Arab spring, and we all have an interest in nurturing its continued stability.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The hon. Gentleman is making a compelling case for investing in our diplomatic service. Does he share my concern that the cuts are not only leading to a lack of spread across the world and impacting on the standing of the United Kingdom globally, but affecting the expertise and analytical capabilities of the diplomatic service in respect of the information it feeds back to the United Kingdom?

[Crispin Blunt]

The hon. Gentleman is absolutely right. I have made that point before and will make it again in respect of the inquiry we are conducting into the intervention in Libya. Just how deep was the knowledge on the basis of which we decided to intervene? It is the depth of knowledge that has been lost.

Another price that is being paid is that locally engaged staff do not really understand the UK context. It has been put to me that the quality of the reports that are coming through is not quite what it was because they are not addressed to the needs of the Ministers at whom they are aimed. The difficulty is that very overstretched UK-based staff in a post are, in addition, having to oversee the work of the locally engaged employees.

Returning to the issue of Tunisia, I accept that the security of our citizens must be a Government priority and that they cannot commend travel unless they have confidence that our citizens will be reasonably safe, but this decision had serious consequences for Tunisia’s stability and the security of the region. We must therefore be completely confident that we can make informed decisions, rather than simply defensive decisions because of an absence of capability.

Reports are, of course, the standard mechanism by which Select Committees express their views. I believe that Committees can miss opportunities by not getting inside the decision making cycle, or by devoting our energies to conducting retrospective analyses after policy has been formed and executed. The Government should welcome input at an early stage from an informed, cross-party Committee that could make practical, forward-looking suggestions, rather than just telling the Government where they went wrong.

We published our report on the Budget in October last year, almost exactly a month before the spending review, and we made just one recommendation:

“We recommend that the Treasury protect the FCO budget for the period covered by the 2015 Spending Review, with a view to increasing rather than cutting the funds available to support the diplomatic work on which the country’s security and prosperity depend.”

I am delighted that our recommendations were accepted, and that the settlement reflected our central recommendation.

We spent much of our first few evidence sessions looking at how the Foreign Office was preparing for the spending review, and at what scope there was for it to absorb further cuts of the scale already imposed over the previous four years. The Foreign Secretary gave oral evidence twice, and we tried to get a sense of his priorities and what he would seek to preserve. We then took evidence from Sir Simon McDonald, the new permanent under-secretary, and his senior management team, to try to understand the grit and detail of what might be achieved and how if—God forbid—savings of 25% or even 40% were required. That gloomy environment perhaps reflected our rather defensive recommendation, which was obviously designed to hold the current position, but the Committee clearly believes that more resources are needed to support our diplomacy.

Oral Answers to Questions

Debate between Crispin Blunt and Andrew Gwynne

Tuesday 29th March 2011 Commons Chamber

[Andrew Gwynne (Denton and Reddish) (Lab)]

7. What plans his Department has for the future of the probation service.

[The Parliamentary Under-Secretary of State for Justice (Mr Crispin Blunt)]

We will fundamentally reshape probation services to reduce unnecessary bureaucracy, empower front-line professionals and make them more accountable. Probation staff should be able to spend more of their time working directly with offenders; we are lifting the burden of bureaucracy that has hindered them from doing that.

[Andrew Gwynne]

I agree with the Minister that our probation service does a magnificent job in very tough circumstances and, under his self-styled rehabilitation revolution, should have an even greater role in successfully returning offenders to society. Will he therefore explain to the House how he can possibly square the increased work load and responsibility with cutting 3,000 experienced and front-line probation staff as a result of his Government’s spending cuts?