With all government departments having to look at huge cuts, I thought I would write about what I know. These are the steps I would take to cut back radically on the FCO budget.
1) Make all Directors-General and Heads of Department Redundant
Diplomats alternate in their careers between Whitehall and postings to Embassies, High Commissions and Consulates abroad. In the FCO in Whitehall, the chain of command goes like this.
Heads of Department
Assistant Heads of Department
Heads of Section
Assistant Desk Officers
The nomenclature changed several times when I was in the FCO, and may well have changed since from the above, but the structure remains the same.
That is many more layers of bureaucracy than is necessary. “Submissions” going to ministers work their way up every link of the chain, leading to duplication and second guessing. The official view is that more and more senior officials bring increased wieght and experience. The counter view is that, as you go up the chain, you are moving further and further away from expertise on the particular subject.
On top of which, at every leve,l you have varying degrees of budget management responsibility and the whole accompanying New Labour paraphernalia of target management, measurement, internal market and performance indication. The layers spend much of their time in internal administration of the interfaces grinding between each other. Savings from losing layers would be much greater than the considerable employment costs of the individuals involved.
There are two too many layers here. I can see varying arguments for which levels you cut and there is a sense in which it does not make too much difference. But on close consideration I would cut Heads of Department (assistants then becoming Heads at a lower grade, with some big departments with more than one assistant split up) and Directors General.
Remember it isn’t a saving unless you actually make the individuals redundant.
Full cost saving £25 miilion pa
2 Slash Embassies in EU States
The world has changed. In particular, the way that the UK interrelates with other EU members has changed dramatically. Huge areas of foreign and security policy are “coordinated” with the EU, while most trade and economic questions are under direct EU control or “competence”. The coordination of all this between states takes place to a small extent in capitals, but to a massive extent in Brussels.
The FCO has become marginal to the process to the point of irrelevance. This is an absolutely key point.
Thirty years ago a British official dealing with fisheries conservation or with environmental policy would almost never, in the course of their entire career, meet their French or Spanish counterpart. If a question on environmental policy arose, the British official would send a memo to the Foreign Office. If the FCO agreed, it would send an instruction to the diplomat whose portfolio included environmental policy in the Embassy in Paris or Madrid. He would make an appointment and go and see the officer in the French or Spanish foreign ministry who dealt with the question. He would leave him a copy of a memorandum. In due course, he would relay back to the FCO the answer from the French or Spanish ministry, who would send it on to the British environmental official we started with.
This world has changed completely. Now our British environmental of fisheries conservation official will meet his French and Spanish counterparts six times a year in Brussels at EU meetings on his subject, and now and then at international conferences. He will be on first name terms with them, have their mobile and telephone numbers. The chances that anyone in the FCO has a clue what he is doing are slim indeed. If he needs to cabal with the French, Pole and German to influence an EU decision, he will do it himself in the corridors of a meeting, not ask the FCO.
Yet our Embassies in EU countries remain among the biggest and grandest we possess, reflecting the days when our shifting bilateral relationships with European nations were literally matters of life and death, war and peace. They are magnificent and madly over-staffed by crazily over senior people. They are a great relic of a bygone age, institutions so grand that their overwhelming presence masks their lack of purpose.
Be radical. Large Embassies in EU member states should be cut to eight diplomats (Paris, Bonn) small Embassies to four diplomats (Copenhagen, Dublin). Let’s move into the 21st century.
This would bring not only a great regular saving, but a very large one off lump sum indeed. We have an owned estate of massive value in houses and offices in Europe’s capitals. Selling off most of it would net at least 300 million
Cash Gain From Property Sales 300 million
Annual Full Cost Saving £200 million
3 Close Consulates in First World Countries
We have a network of consulates (posts subsidiary to embassies) in places like Nice and Vancouver. They are there primarily to offer market advice to British businessmen and passport and consular services to British nationals. This is outmoded in this globalised age. France or Canada are no longer part of some scarey “abroad” in which British businessmen cannot operate without their hand being held by some bureaucrat who has never sold anything in their life. These are countries where tourists in trouble should not need their hand held by the government. Close all first world consulates, and deploy half the savings into opening new consulates and embassies outside the first world where they are actually needed. Again this would bring an annual saving and a big capital benefit from property sales.
Net Cash Gain From Property Sales 50 million
Net Full Cost Saving £60 million pa
4 Reduce the Dipomatic Housing Estate
Diplomats, especially senior ones, live in housing which is much grander than civil servants of their grade could possibly aff0rd in London. There used to be a reason for this. Official entertaining at home had to impress your foreign visitor.
But the real truth is that our diplomats nowadays very seldom use their grand houses for entertainng at home. There has been a measured and major trend towards entertaining in restaurants. Actually I think this is an awful shame. I had literally thousands of visitors a year through my home throughout my entire diplomatic career. But my breed is now extinct. Diplomats see their grand home as their private space, and many senior diplomats do not entertain at home.
Why should diplomats therefore live in houses and apartments often worth £2 million up?
I do not propose we get rid of our Ambassadorial residences, which are an important diplomatic tool and often woth £10 million up. But these assets need to be sweated much more. Every Ambassadorial residence has its de facto public and private rooms – who wants to eat their breakfast alone at a table for 36? The public/private areas should be formalised, and the public areas be available to any diplomat in the post to use for entertaining purposes, and possibly available to rent for British companies. Official use of the public areas is probably below 20% at the moment, if you take lunch, dinner and weekend afternoons as the possible entertaining opportunities. Let’s get that up over 90%.
Our diplomats can then be asked to live in the kind of accommodation that their salary would afford in London – ie very much smaller than they get now. Many very expensive properties could be sold off.
Cash Gain From Property Sales 150 miilion
Annual Full Cost Saving (Rent) 20 million
The savings figures are estimates and designed to give no more than a rough feel for the sums involved. The beauty of this scheme is that the capital gains from property sales would more than cover the cost of compulsory redundancies.
The FCO bureaucrats will take the opposite view of any cuts. They will not want to give up their expensive houses or any London jobs with access to ministers and political power. They will certainly not want to cut any postings to easy countries with access to Aspen or St Moritz. They will propose a series of closures of posts in third world countries – pretty well the only place the FCO actually is any use. They will propose cuts to the BBC World Service.
My key piece of advice to William Hague: do not get captured by your senior officials.