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Adapting the Foreign and Commonwealth Office’s global estate to the modern world

The Foreign and Commonwealth Office lacks a clear strategy and comprehensive data to manage its overseas estate effectively, according to a report published today by the National Audit Office.  The FCO is taking positive steps to adapt its properties to new global challenges but has not achieved value for money in the management of its estate as a whole.

The FCO’s strategy for managing its estate is high-level and the underpinning detail is scant. It does not lay out the requirements for the estate, whether the estate meets the requirements and how it will address the gaps.  Without a clear framework to assess the estate’s performance, it is difficult to evaluate the Department’s progress.  The Department has recognised this and has recently appointed an estates specialist as Director of Estates and Security who is developing a new strategy.  These steps have the potential to help secure improved value for money in the future.

The FCO does not have adequate financial and management information about the estate.  The lack of robust information on the cost and use of the estate hampers good decision making on efficient use of space and the identification of surplus assets for potential sale.  The management of projects to improve the estate could be better: a third of the projects that the NAO analysed exceeded their initial approved budget by over 10 per cent and two-thirds were delivered late.  The total cost overrun since 2002 is approximately £57 million, against a total spent on capital projects of £250 million.

There are several factors, such as changing political issues, security restrictions and exchange rate pressures, which add to the complexity of managing the global estate.  The NAO found examples of good practice and innovation across the estate, and noted that the FCO had done well to respond to changing security threats, including a three-fold increase in the number of countries operating with a critical or severe terrorist threat rating.

The FCO does not always use space in its posts efficiently.  Over half of the posts that responded to the NAO’s survey have unused office space or staff accommodation.  Posts could make better use of accommodation by sharing with other UK government organisations, but there are several barriers to this including the FCO’s lack of authority to drive co-ordinated cross-government action and a mismatch of estate needs.  However, the FCO could do more to promote actively the use of its overseas estate by others where feasible.

"The FCO can do more to get value for money from its overseas estate.  Although the Department has begun to remedy some of the shortcomings we identified and has started work on its strategy for managing the estate, it still needs to get the basics right.  It needs to lay out the priorities for its overseas estate and work out how to get more robust information.  Whilst there are examples of good practice at individual posts, the Department needs to spread this across the whole estate if it is to make real efficiencies."

Amyas Morse, head of the National Audit Office

Notes for Editors

  • The Foreign and Commonwealth Office’s overseas estate currently comprises 4,062 properties in 279 cities and other locations across the world. The estate is valued at £1.6 billion. Annual expenditure on the estate increased from £180 million in 2004-05 to £285 million in 2008-09.
  • Locations where the FCO has a presence are known as ‘posts’ and may consist of an embassy, high commission or consular offices, an official ambassadorial residence and staff accommodation.
  • Press notices and reports are available from the date of publication on the NAO website, which is at https://www.nao.org.uk/. Hard copies can be obtained from The Stationery Office on 0845 702 3474.
  • The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff.  He and the NAO are totally independent of Government.  He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.

PN: 11/10