© National Audit Office 2025

Managing FCDO’s overseas estate

Foreign, Commonwealth & Development Office

Session 2024-25
23 May 2025
HC 878

The National Audit Office (NAO) scrutinises public spending for Parliament and is independent of government and the civil service. We help Parliament hold government to account and we use our insights to help people who manage and govern public bodies improve public services.

The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. We audit the financial accounts of departments and other public bodies. We also examine and report on the value for money of how public money has been spent.

In 2023, the NAO’s work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £1.59 billion. This represents around £17 for every pound of our net expenditure.

We are the UK’s independent public spending watchdog.

We support Parliament in holding government to account and we help improve public services through our high-quality audits.

Report by the Comptroller and Auditor General

Ordered by the House of Commons
to be printed on 21 May 2025

This report has been prepared under Section 6 of the National Audit Act 1983 for presentation to the House of Commons in accordance with Section 9 of the Act

Gareth Davies
Comptroller and Auditor General
National Audit Office

14 May 2025

Value for money reports

Our value for money reports examine government expenditure in order to form a judgement on whether value for money has been achieved. We also make recommendations to public bodies on how to improve public services.

The material featured in this document is subject to National Audit Office (NAO) copyright. The material may be copied or reproduced for non-commercial purposes only, namely reproduction for research, private study or for limited internal circulation within an organisation for the purpose of review.

Copying for non-commercial purposes is subject to the material being accompanied by a sufficient acknowledgement, reproduced accurately, and not being used in a misleading context. To reproduce NAO copyright material for any other use, you must contact copyright@nao.org.uk. Please tell us who you are, the organisation you represent (if any) and how and why you wish to use our material. Please include your full contact details: name, address, telephone number and email.

Please note that the material featured in this document may not be reproduced for commercial gain without the NAO’s express and direct permission and that the NAO reserves its right to pursue copyright infringement proceedings against individuals or companies who reproduce material for commercial gain without our permission.

Links to external websites were valid at the time of publication of this report. The National Audit Office is not responsible for the future validity of the links.

015399 05/25 NAO

This report can be found on the National Audit Office website at www.nao.org.uk

If you need a version of this report in an alternative format for accessibility reasons, or any of the figures in a different format, contact the NAO at enquiries@nao.org.uk

The National Audit Office study team consisted of:

Andrew Ellis, Eloise Peck, Robert Sabbarton, Adam Taylor, Karen Tostee, Matthew Wilkins and Stephanie Woodrow, with assistance from Hamzah Al-Kadir, Tom Culshaw, Jonathon Kitto, Sohila Sawhney, Preena Shah, Luis Thorpe, and Hetal Vaghela, under the direction of Leena Mathew.

For further information about the National Audit Office please contact:

National Audit Office
Press Office
157–197 Buckingham Palace Road
Victoria
London
SW1W 9SP

020 7798 7400

www.nao.org.uk

@NAOorguk

Key facts

Summary

Introduction

1 The Foreign, Commonwealth & Development Office (FCDO) leads the UK’s diplomatic, development and consular work around the world. To support this, it manages an overseas estate of approximately 6,500 properties, mostly located in 282 locations (known as posts) in 180 countries and territories. Posts can vary in size, from 86 acres to a single office. The number of posts has increased from 270 in 2018-19 to 282 in April 2024. In March 2024, FCDO’s overseas estate, including owned and long-term leased properties, was valued at £2.5 billion. As at December 2024, FCDO had more than 2,200 UK staff based overseas (27% of FCDO’s 8,273 UK staff), and employed 9,143 country-based staff.

2 FCDO regards its overseas estate as central to supporting the achievement of UK government objectives, by facilitating diplomatic engagements and providing a platform for promoting UK industry and services. The overseas estate also hosts over 35 other UK government departments, the devolved administrations and other bodies requiring a presence overseas.1 This comprises 5,200 staff. For example, UK Visas and Immigration staff based at FCDO property overseas assist with visa applications, and the Department for Business and Trade has an overseas network in support of UK trade, exports and investment. FCDO aims for its estate to be smaller and more efficient, with lower running costs and reduced carbon emissions.

3 As part of the 2010 Spending Review settlement, FCDO did not receive a budget for estate maintenance and projects. Between 2010-11 and 2023-24, FCDO has funded the management of its estate by selling overseas assets for £1.47 billion, primarily through sales in Bangkok (sold for £426 million in 2018) and Tokyo (sold for £685 million in 2022).

4 Strategically, FCDO manages its overseas estate through its corporate Estates, Security and Network Directorate (ESND). Daily management of the estate at posts is carried out through a range of approaches, including both in-house and contracted-out maintenance arrangements.

5 The NAO has published several reports on property, most recently our January 2025 report, Maintaining public service facilities, which examines how the government plans and manages property maintenance for UK public buildings.2 We last reported on the former Foreign and Commonwealth Office’s (FCO’s) overseas estate in 2010 and found that it lacked the clear strategy and comprehensive data necessary for managing its overseas estate effectively, although it was taking positive steps to adapt its properties to new global challenges.3

Scope of the report

6 This report examines whether FCDO has a robust approach to managing its overseas estate. It considers whether FCDO:

has a clear overarching strategy for meeting its current and future overseas estate requirements;

is set up to manage its overseas estate effectively; and

is managing its maintenance programme and capital projects effectively.

7 We do not examine the maintenance of security systems in secure areas or the effectiveness of individual posts’ approaches to managing their estates. We do not typically identify individual overseas posts, to mitigate any potential security risks. We also do not examine arrangements for managing the FCDO’s UK estate, other than where decisions regarding the UK estate may affect the overseas estate.

Key findings

Estates strategy, governance and funding

8 FCDO oversees a large and complex global portfolio of land and buildings, facing additional challenges not experienced in the government’s UK estate. FCDO’s overseas estate consists of approximately 6,500 properties mostly located in 282 locations (known as posts) globally. This includes Embassies, High Commissions, Consulates, offices, official Residences and staff accommodation, and a diverse array of amenities. Properties outside the UK can face risks not commonly experienced by the government’s UK estate. These include exposure to extreme climates, earthquakes, and risks arising from operating in conflict zones. FCDO also simultaneously operates in different labour markets and local jurisdictions, which have a range of local standards and laws. Additionally, FCDO is constrained in how it can use many of these properties; for example, some have been given to the UK for diplomatic purposes and cannot be sold (paragraphs 1.2, 1.7 to 1.9, 2.9 and Figure 2).

9 FCDO and other government departments consider the overseas estate key to achieving the government’s global ambitions. The UK government uses FCDO’s overseas estate as a ‘soft power’ asset in support of its strategic goals. As well as the estate’s functional use as office or residential space, it also has broader value. The estate signals the importance of the UK’s relationship with the host country, facilitates engagements with key stakeholders and helps promote UK industry and services. The estate also brings together the UK government presence overseas (paragraphs 1.3 and 1.10).

10 FCDO has not set out the estate it requires to deliver UK government objectives or a plan for achieving this. It has strategic goals for its overseas estate to be smaller and more efficient, with lower running costs and reduced carbon emissions. However, FCDO does not currently outline the overseas estate that it requires to deliver UK government objectives, rank its posts by importance or set out how it may need to adapt the current estate to meet these objectives. Without this information, it is challenging for FCDO to identify where it could change its estate to reduce costs. In April 2023, FCDO’s internal audit reported it was not clear how investment decisions were linked to achieving government ambitions. FCDO reports it is making progress in these areas; for example, including some metrics of posts’ importance in its new project prioritisation methodology and starting work to define and rank the importance of posts and review the future size and shape of its overseas estate. FCDO has also not set out in a coherent and useable manner how its various delivery plans and policies support its goals for its overseas estate, and it does not have key performance indicators (KPIs) to measure performance against all elements of its overarching strategy (paragraphs 1.11 to 1.13, 3.3 and Figure 3).

11 FCDO lacks good-quality data on all aspects of its estate but has started taking steps to improve this. In November 2023, FCDO reported that 85% of posts either did not have an asset register containing a record of building components and physical assets at that post, or that the register was incomplete, and commissioned surveys to try and fill this gap. Staff at posts do not always have the capacity or skills needed to collect data. FCDO’s centrally held estates data, such as on building condition and utilisation, are also incomplete and of variable quality, and cannot be joined up effectively. FCDO uses a number of IT systems to collect estate data, as well as local IT and paper-based systems. FCDO has acknowledged the poor state of its estate data and is taking some steps to improve its data and data systems, including using its forward maintenance register 2024 (FMR24) exercise to gather information on its overseas estate maintenance backlog. It is expanding its portfolio management office to collect data on all estates activity such as maintenance, not just projects. It is also installing new IT systems and has a plan to integrate its systems, but these are not complete (paragraphs 1.22 to 1.26).

12 FCDO has recently restructured its estates directorate to manage headcount pressures and enable more effective governance of its estates spending, but has not yet set out how its changes will support this aim. Within FCDO, ESND is responsible for managing the global estate. In 2024, FCDO merged its maintenance and estate project delivery functions to help reduce headcount and improve its estate oversight and decision-making. However, it did not set out the changes to its estates departments and what these changes are intended to achieve. Without such an articulation, FCDO will be unable to track the impact of these changes or whether they are achieving their intended benefits (paragraph 1.16).

13 Although FCDO’s current approach to funding its overseas estate is not sustainable, it is working with HM Treasury (HMT) to determine future funding options. Since 2010, FCDO has funded its overseas estate capital and maintenance projects through property sales. It has generated £1.47 billion from these, largely from two significant sales in Bangkok in 2018 and a partial sale of its Tokyo site in 2022. FCDO has been able to access funds flexibly (subject to standard HMT spending controls) and complete, or approve for construction, around 200 capital projects since 2018, including refurbishing the Washington D.C. Embassy and building a new High Commission in Ottawa. FCDO commissioned a review by Knight Frank in 2020, which confirmed that it had no assets remaining of similar value to Tokyo and Bangkok that it could sell. FCDO will need to work within annual funding limits set by HMT from 2025-26, compared to previously flexible funding across years. This will require FCDO to produce a robust plan for the size and shape of its future estate (paragraphs 1.17 to 1.21, 3.5 and Figure 4).

Estate condition and maintenance

14 Long-term under-investment in maintenance has contributed to the declining condition of FCDO’s overseas estate. In November 2024, FCDO increased the risk rating of its overseas estate from major to severe, based on the risk of irreversible estate deterioration and FCDO being unable to meet minimum health and safety standards. FCDO has assessed 933 buildings as not meeting its internal target condition score of 70% or higher (where buildings are sound, operationally safe and exhibit only minor deterioration), while a further 3,616 have not had their condition assessed recently. In 2023-24, individual posts spent £56 million directly maintaining their estates and FCDO also spent £36 million on facilities management contracts. HMT is currently discussing with FCDO the level of annual budget necessary for estates purposes. The poor condition of the estate reduces FCDO’s resilience and capability to respond to events, and has the potential to affect the productivity and health of its staff: 26% of respondents to our survey of overseas posts reported major concerns with health and safety, and 50% reported minor concerns. Nineteen percent of respondents reported major concerns with building condition or functionality having a negative impact on staff productivity and 36% reported minor concerns (paragraphs 1.14, 2.3 to 2.6, Figures 5 and 6, and Appendix Two).

15 FCDO has prioritised its maintenance spending to address immediate risks, at the expense of more long-term spending. FCDO has prioritised its funding for maintenance projects on addressing health and safety and compliance risks, over longer-term prevention works that reduce overall costs. Planned preventative maintenance is the responsibility of posts, but the majority of respondents to our survey said that it was challenging to undertake preventative maintenance, resulting in the need for more reactive maintenance. In one post, a building has been declared unsafe due to cracking and tilting. In another post, three quarters of British Embassy staff had to move into temporary accommodation early, ahead of refurbishment of the main Embassy building due to the failure of mechanical and electrical equipment. FCDO acknowledges that failure to conduct maintenance is poor value for money, as it often results in more extensive and costly subsequent work. FCDO is now implementing a new prioritisation system, but this will remain heavily focused on managing health and safety risks (paragraphs 2.4 and 3.5).

16 FCDO conducted an important exercise to provide a more accurate picture of the condition of its estate and identified a £450 million maintenance backlog, much greater than its previous estimate. In 2023, recognising that its estates data was both incomplete and inaccurate, FCDO decided to commission professional surveys of 97 posts identified as ‘most at risk’ to check that their asset registers were accurate and identify necessary extra maintenance work. This snapshot exercise, called FMR24, reported in November 2024 that FCDO’s total overseas estate maintenance backlog liability was £450 million, much greater than FCDO’s previous estimate of £150 million. At FCDO’s pace of reactive maintenance spending at the time, it will take at least a decade to clear this (paragraph 2.7).

17 FCDO overseas posts use different delivery models for property maintenance, which makes it challenging to identify efficiencies across the global network. Different FCDO posts operate in very distinct local contexts, with differing laws, supply chains and labour markets. Accordingly, different maintenance models operate across FCDO’s estate. For 16% of FCDO overseas posts where supplier capacity exists, primarily in Asia Pacific and Europe, estate maintenance is outsourced and provided through regional facilities management contracts, where private companies provide both estate maintenance services and other facilities services, like waste disposal. The other 84% of posts are responsible for maintaining their own estates, through in-house teams or local contractors, or a hybrid model. This flexibility allows posts to adapt their estate maintenance to local conditions. However, it also makes it more difficult to assess and benchmark performance across posts and identify best practice (paragraph 2.9 and Figure 2).

18 FCDO’s outsourcing of facilities management services has had mixed results. FCDO contracted out facilities management for 24 locations in Asia Pacific in 2021, and for 22 locations in Europe in 2023. The contractor, Jones Lang LaSalle (JLL), is now performing strongly overall against its KPIs in most posts in Asia Pacific. In Europe, however, its performance varies considerably: in January 2025 one post achieved 91% of its KPIs, but another just 33%. Challenges and reasons for inconsistent performance include insufficient staff and difficulties in switching sub-contractors. FCDO acknowledges the transition to have been more challenging than anticipated and aims for performance to improve in the second year of the contract. FCDO is considering expanding this outsourcing model to other European posts, but JLL’s performance means that it does not yet consider this feasible. FCDO considers the outsourcing model can deliver benefits such as increased professionalism, and is considering outsourcing facilities management in other regions where sufficient supplier capacity exists (paragraphs 2.10 to 2.13).

19 FCDO’s ability to support effective estate management is limited by significant staffing and skills shortages, both centrally and at overseas posts, which it has found challenging to address. Estate management responsibilities are devolved to overseas posts, supported by FCDO’s central estates department. FCDO overseas posts do not all operate a model with estates professionals on site and, where they do, have found it difficult to recruit and retain people locally with the necessary skills. To support posts with their estate maintenance, FCDO provides a network of regional specialists, although their capacity is limited. It also contracts FCDO Services for technical support for government facilities. However, in November 2024, FCDO’s principal risk register rated the risk of inadequate capacity and capability at posts affecting progress in clearing any maintenance backlogs as severe. It also highlighted insufficient capacity and capability within FCDO’s central estates directorate as a risk. Sixty-five percent of respondents to our survey of overseas posts agreed that lack of capacity and staffing was a challenge in managing their estates. FCDO has acknowledged that limited capacity means posts are often unable to adequately monitor the condition of their estates and maintain them. However, it has not yet produced a workforce plan to clarify and address capacity and capability issues at the centre and at posts (Figure 4 and paragraphs 1.6 and 2.13 to 2.20).

Estates capital projects

20 FCDO has not previously taken a strategic approach to the allocation of its estate capital funding, but is now implementing a new approach to prioritising projects. Since 2018, to ensure that receipts from the sale of the Bangkok and Tokyo estates are fully committed, FCDO has approved funding for its capital projects when they reach full business case stage, rather than planning delivery across the portfolio based on the priority allocated to each project. While this ‘first past the post’ approach has enabled funds to be spent, FCDO identified that it could reduce its flexibility to respond to urgent and unexpected estates needs, or fund higher-priority projects that had a longer planning and development process. FCDO has been operating in a context of global volatility and changing political priorities, which it considers has had an impact on its strategic direction. It is now ranking potential projects using health and safety, staff security and strategic importance criteria. FCDO plans to use this ranking to create a multi-year delivery plan. As at April 2025, FCDO’s estimate of the cost of its capital investment pipeline of projects is £2.1 billion, covering more substantial refurbishments, replacements of assets at end of life, acquisitions and new constructions. FCDO will need to work within annual funding limits set by HMT from 2025-26, compared to previously flexible funding across years, and as such the prioritisation system will be of even greater importance (paragraphs 3.2 to 3.7).

21 FCDO has completed or approved for construction around 200 estates capital projects since April 2018, with some large high-profile projects running significantly over time and budget. FCDO reports that it completed, or approved for construction, around 200 capital projects between 2018 and 2024. FCDO does not hold the management information necessary to evidence its track record or to enable fully informed decision-making across the portfolio. Some notable projects have been delivered late and considerably over budget. The refurbishment of the Washington D.C. Embassy, for example, was completed 12 months behind schedule. FCDO’s estimate of final outturn project costs increased from £112 million in 2019 to £160 million in 2023 (inclusive of contingency costs). FCDO identified a range of contributing factors, including the COVID-19 pandemic, scope and design changes, foreign exchange loss, and the worse-than-expected condition of the 90-year-old Residence. In October 2024, FCDO assessed that delivery to time was a significant risk for 12% of its live projects, and a further 19% of its live projects had some risk of running over schedule (paragraphs 3.8 to 3.13).

Conclusion

22 FCDO’s overseas estate is essential for delivery of the UK government’s global objectives, helping to facilitate diplomacy and promote UK industry abroad. Yet much of the FCDO’s overseas estate is in a poor and deteriorating condition, and a maintenance backlog of nearly half a billion pounds has built up over time. FCDO has rightly focused on making repairs to ensure its buildings are safe and legally compliant. However, this has come at the expense of longer-term investment to improve the estate or reduce its cost, and inevitably this compromises the long-term value for money of this spending.

23 FCDO has in recent years taken positive actions, including improving its understanding of the true condition of its overseas estate. However, it still needs to do more to achieve value for money from its estate. The significant challenges it needs to address include poor and incomplete data at post and portfolio level, capacity and capability issues and the need to develop a coherent strategy and delivery plan setting out how it will achieve its future estate needs. FCDO has invested in its estate using proceeds from selling land and buildings, but there are now no more significant assets to sell. FCDO now needs to work with HMT to take decisions about what it can realistically afford. It must find ways to identify efficiencies, reduce costs, adapt its estates portfolio, or accept the decline in condition of its overseas estate.

Recommendations

24 Our recommendations focus on measures FCDO needs to take to improve the robustness of its management of its overseas estate.

a FCDO should develop its estates strategy further, setting out the overseas estate needed to fulfil UK government objectives. FCDO should build on the strategic work it has already conducted to ensure it can demonstrate that its plans for its estate fully support UK diplomatic, foreign policy and wider government objectives. FCDO’s estates strategy should rank posts by strategic importance and identify opportunities for improving long-term value for money. Where appropriate, it should consider options such as co-locating posts with other diplomatic missions, reducing the number of posts and leasing properties.

b FCDO should support its overseas estates strategy with a fully costed delivery plan, clarifying its priorities and identifying any necessary trade-offs. FCDO should ensure its estates strategy reflects a full and informed assessment of the funding it is likely to have available in future. This should also consider the feasibility and scale of asset sales and efficiencies.

c FCDO should review its estates governance structure to ensure that it is working effectively. FCDO should review whether its new ESND structure is achieving the intended benefits and identify whether any further improvements are necessary to ensure effective oversight of its overseas estate.

d FCDO should produce a plan for its estates workforce. FCDO should evaluate the skills it requires in its estates staff, identify skills gaps in the organisation and create a plan to set out how it intends to close these gaps. This includes central staff, staff at posts, contractors and the balance between specialist and generalist roles.

e FCDO should ensure that the collection and use of good-quality and complete data is embedded into the day-to-day running of its overseas estate. FCDO should develop a plan to ensure its data on the estate is kept up to date after its one-off FMR24 exercise. FCDO should proceed with its plan to integrate and consolidate estates data centrally as a matter of urgency, to ensure it can use this data.

f FCDO should identify suitable performance benchmarks for its maintenance delivery models and use this to assess the performance of different models. Once benchmarks and performance measures have been identified, FCDO should establish a monitoring regime to support data collection.

g FCDO should review its management of its estate capital projects, to ensure it has appropriate oversight of delivery risks at a portfolio level. This includes reviewing portfolio governance, reporting and management information.

1 FCDO manages and provides the One HMG Overseas platform, which provides services including HR, transport, accommodation, finance and procurement.

2 Comptroller and Auditor General, Maintaining public service facilities, Session 2024-25, HC 544, National Audit Office, January 2025.

3 The former Foreign & Commonwealth Office (FCO) and the former Department for International Development (DFID) merged to create the Foreign, Commonwealth & Development Office in September 2020.

Part One

Estates strategy, governance and funding

1.1 This part of the report sets out the Foreign, Commonwealth & Development Office’s (FCDO’s):

overseas estate;

estates strategy;

governance and oversight of the overseas estate;

funding for the overseas estate;

collection and use of estate data; and

additional uses of the estate.

FCDO’s overseas estate

1.2 FCDO leads the UK’s diplomatic, development and consular work around the world. FCDO’s overseas estate consists of approximately 6,500 properties, mostly located in 282 locations, known as posts, in 180 countries and territories (Figure 1). This includes Embassies, High Commissions, Consulates, offices, official Residences and accommodation for staff and their families, and amenities such as swimming pools and sports facilities.4 The size of FCDO’s estate has increased in recent years, from 270 posts in April 2019 to 282 as at April 2024.

1.3 FCDO provides the One HMG Overseas platform, which provides services including HR, transport, accommodation, finance and procurement, hosting and supporting more than 35 other UK government departments, devolved administrations and other bodies requiring a presence overseas. This includes the Department for Business and Trade (DBT), which has an overseas network in support of UK trade, exports and investment, and the Home Office – including UK Visas and Immigration – which has staff overseas, for example, providing visas.

1.4 As at December 2024, FCDO had more than 2,200 UK staff based overseas (27% of FCDO’s 8,273 UK staff), and it employed 9,143 country-based staff.5 FCDO’s overseas estate also hosts 5,200 staff from other UK government departments and bodies. FCDO organises its estate operations into seven main regions: Africa, Americas, Asia Pacific, Eastern Europe and Central Asia, Europe, the Middle East and North Africa and South Asia and Afghanistan. This is in addition to two groupings for overseas territories and multilateral posts which cover international organisation delegations.

1.5 FCDO was created in September 2020 by merging the Foreign and Commonwealth Office (FCO) and the Department for International Development (DFID). Prior to that, the overseas estates of both former departments were consolidated in 2015, and FCDO does not consider the merger to have had a significant impact on the management of the overseas estate. However, FCDO did use the merger as an opportunity to consolidate the UK estate of the former departments.

1.6 FCDO’s overseas posts are responsible for managing their own operations, led by the Heads of Mission at that post.6 This includes responsibility for managing the estate. Within FCDO, the Estates, Security and Network Directorate (ESND) is responsible for providing a suitable estate to enable staff to implement its strategic aims. The Overseas Estates Department within ESND has around 80 staff roles, some of which are vacant, and around 75 contracted regional technical leads and technical works supervisors. They support posts to manage the estate by setting corporate standards, providing guidance and providing technical assistance, but it does not deliver maintenance directly. Maintenance is delivered either by posts or through regional facilities management contracts (see paragraph 2.9). Posts vary considerably in size and composition; for example, one post is a site of 86 acres, while another is a single building. Larger posts have Deputy Heads of Mission and corporate estates managers with estates teams, while smaller posts will have only generalist corporate teams or only a few staff present.

1.7 Many of the challenges in managing government property that we identified in our report Maintaining public service facilities apply to FCDO’s overseas estate.7 These include difficulties capturing estate data, its declining condition and being unable to fund preventative maintenance. However, FCDO also experiences challenges managing its overseas estate that are not present for much of the wider government’s UK estate (Figure 2). FCDO staff work in some of the most vulnerable locations worldwide, where UK diplomatic premises are prime targets for terrorism or demonstrations. Additional infrastructure, such as blast-resistant walls and windows, may be needed to provide security, while still maintaining accessibility and functionality. FCDO’s equivalent departments in the USA and Australia have faced similar challenges.8

1.8 FCDO requires its overseas estate to be responsive to changing policies and events. Our case studies highlighted how posts can react to changing priorities to deliver UK government objectives. In Europe, a post increased its secure space to accommodate extra staff. There is now an opportunity to streamline the estate to reflect current needs and reduce overhead costs; however, short-term cash constraints have prevented FCDO from developing these plans. Another post had to respond quickly to accommodate staff from a nearby post that had closed due to conflict. However, posts report difficulties in responding to changing requirements: 22% of respondents to our survey said the estate not being flexible or resilient enough to deal with changing circumstances was a major concern for them, and 34% said it was a minor concern.9

1.9 As at March 2025, FCDO owns 27% of the properties in its portfolio and leases the remainder. FCDO’s total overseas estate portfolio, including both owned and long-term leased properties, was valued at £2.5 billion in March 2024. Many FCDO properties operate under constraints: for example, some have been given as a gift by host governments for diplomatic use only, and FCDO is not permitted to sell these. Other parts of the estate have title restrictions, limiting FCDO’s options for their use and disposal.

1.10 Aside from the estate’s functional use as office or residential space, FCDO and other government departments consider that the overseas estate provides broader value that is important for delivering diplomatic and wider government objectives. The estate signals the importance of the UK’s relationship with the host country, and FCDO uses the overseas estate to represent the UK abroad by hosting events which build ‘soft power’ and influence with governments, diplomats, businesses and others. It is difficult to quantify the value of such activities. Some posts collect metrics such as the number of visitors, the number and size of businesses attending trade events and number of events held. For example:

the Ducale Residence in Brussels received around 18,000 visitors in 2024-25, up from around 7,000 in 2019-20. Three missions use the Ducale Residence, and it is seen as a key asset supporting UK diplomacy post EU exit; and

the UK Residence in Paris hosts more than 400 events annually, such as receptions, dinners, conferences, and trade showcases. FCDO considers this property to have been central to efforts to improve diplomatic and business relationships in France after EU exit.

This ‘soft power’ can translate to tangible benefits for the UK, such as increased investment in the UK, trade agreements and economic growth.

FCDO’s estates strategy

1.11 FCDO’s overarching strategic goal for its overseas estate is for it to be smaller and more efficient, with lower running costs and reduced carbon emissions. Additionally, ESND aims for its buildings to be flexible, safe and secure, and value for money. FCDO’s core strategy document for the overseas estate is the Global Asset Management Plan (GLAMP), which identifies priority capital investment projects and their phases of delivery (see paragraph 3.2). It also provides a high-level set of guiding principles ESND considers when managing the overseas estate (Figure 3).

1.12 We last reported on the former Foreign and Commonwealth Office’s (FCO’s) overseas estate in 2010, and found that it lacked the clear strategy and comprehensive data necessary for managing its overseas estate effectively, although it was taking positive steps to adapt its properties to new global challenges.10 We have now identified some key gaps in FCDO’s strategic estates management.

FCDO is required to provide the estate necessary to deliver UK government objectives overseas. While the GLAMP identifies FCDO’s priority capital projects, FCDO does not set out the intended estate necessary to deliver UK government objectives, how it may need to change its current estate to meet these objectives, or a plan for achieving this.

The United States State Department rates its estate by operational importance, identifying which buildings are essential and which can be released to reduce costs. FCDO does not currently rank posts’ importance for delivering its objectives. However, ESND has included some metrics of posts’ importance in its new project prioritisation methodology, and it has started to work with FCDO’s strategy directorate to define and rank the importance of posts and review the future size and shape of its overseas estate.

FCDO does not set out in a coherent and usable manner how its various estates delivery plans, policies and programmes collectively support its goals for its overseas estate. FCDO reports it is undertaking work to refresh its strategic documentation and bring it together coherently.

1.13 FCDO does have some indicators that are relevant to its estate goals. These include, for example, monitoring reductions in average occupancy rates. FCDO also works with the Office of Government Property, and provides some high-level data on the overseas estate for the government’s ‘State of the Estate’ report.11 FCDO routinely reports on whether its estate is safe and secure. However, FCDO does not have key performance indicators (KPIs) to measure performance against all parts of its overarching strategy.

Governance and oversight of the overseas estate

1.14 Overall governance of FCDO’s overseas estate is through FCDO-wide supervisory and management boards, which are attended by many of the same senior officials (Figure 4). The supervisory board is chaired by the Foreign Secretary and provides strategic direction for FCDO as a whole. FCDO’s management board brings together senior FCDO officials and non-executives to make decisions about how the organisation is run. This includes ratifying estates project decisions, endorsing the GLAMP and risk management. FCDO’s principal risk register includes its key estate risks. In November 2024, FCDO’s overall estate risk assessment was rated severe, up from a rating of major in June 2024 (Figure 5).

1.15 FCDO has multiple approval stages for investment in its overseas estate. Posts can spend up to £3,000 on maintenance without needing wider approval. Maintenance above this cost is included on the forward maintenance register. Anything above £250,000 is designated as a capital project and is included on the GLAMP.

1.16 Until August 2024, FCDO had separate internal estates departments for delivering estate maintenance and large estate projects, each with their own operational head. FCDO regarded this structure as ineffective, and in 2024 merged its maintenance and project delivery functions under a single operational head within ESND. As part of this restructure, FCDO is bringing estate programmes such as the worldwide inspection programme and the global maintenance programme under the GLAMP.12 FCDO expects this restructure will reduce headcount pressures, improve handovers between maintenance and projects and improve oversight and decision-making. However, FCDO did not set out the changes and their implications, their rationale or the benefits that the restructure would achieve.

Funding for the overseas estate

1.17 FCDO divides its overseas estate funding between estates funding (which covers activities including the purchase of properties, new builds and major refurbishments) and maintenance funding. Both categories require revenue and capital funding. FCDO’s 2023-24 accounts state that it spent £290 million on estate, security and capital-related costs, but this includes non-estate costs and covers the whole organisation.13 ESND monitors its capital and resource spending but does not have visibility of estate spending at post level, because these budgets are devolved to geographical directorates. Therefore, FCDO does not have a complete picture of how much it spends as an organisation on its estate each year. Adding up the main relevant budget lines shows that in 2023-24 FCDO spent £263 million on estate projects, maintenance and support (Figure 6). Additionally, in 2023-24 FCDO spent £166 million on property leases.

1.18 Since the 2010 Spending Review, FCDO has been required to fund all estate requirements and some maintenance requirements though selling existing assets. Between 2010-11 and 2023-24 this has raised £1.47 billion, mainly through sales of its Bangkok site in 2018, generating £426 million, and the partial sale of its Tokyo site in 2022, generating £685 million.14 FCDO has been able to access funds flexibly (subject to standard HM Treasury spending controls) and complete, or approve for construction, around 200 capital projects since 2018. The proceeds from the Tokyo sale, for example, enabled FCDO to avoid halting most of its ongoing capital projects at that point. FCDO has also sold other smaller assets, such as surplus staff accommodation, generating on average £15 million to £20 million annually.

1.19 FCDO considers there are no remaining assets of similar value to Tokyo and Bangkok that could be sold to generate funds. FCDO commissioned a Knight Frank review in 2020, which found that opportunities to attain significant revenue from selling properties, after allowing for replacement costs, were limited.

1.20 During phase 1 of Spending Review 2025, FCDO did not request any funding other than continued use of funds from the Tokyo sale. FCDO is currently working with HM Treasury to confirm annual funding for the overseas estate.

1.21 FCDO recognises it needs to prioritise projects more rigorously, and that further work is necessary to identify and achieve long-term efficiencies. However, FCDO has not produced a plan for how it can adjust its estate to match current and likely future funding while continuing to deliver its objectives. In April 2023, FCDO’s internal audit identified long-term sustainable funding and the potential impact of this on FCDO’s flexibility to respond to unexpected needs as a key risk for FCDO in managing its overseas estate. FCDO also maintains an estate in the UK, including two headquarters buildings: King Charles Street in London and Abercrombie House in East Kilbride.15 Any decisions regarding spending on the UK estate will affect what FCDO can spend on its overseas estate. In March 2025, plans to open a new office in Glasgow were cancelled on the grounds that it would not be affordable.

Collection and use of estate data

1.22 The main IT systems FCDO uses to manage its estate are:

Pyramid: a legacy system that FCDO has used for 25 years to store property and maintenance data. It is now being replaced by another commercial property management system. Some data has already been moved to the new system, but some Pyramid modules have not been transitioned and are still in use, such as those supporting FCDO’s worldwide inspection programme;16

a new commercial property management system, replacing Pyramid. It currently contains data on properties, staff at posts, asset value, leases and rents;

Phoenix: a project management system containing details on estate projects;

Evotix: a database for recording health and safety incidents at posts; and

Hera: an integrated finance and HR data system.

1.23 FCDO’s IT systems do not permit effective monitoring and management of its estate. Central IT systems have been developed separately and are not integrated with each other, or with systems at posts. There is also a lack of time series data to support benchmarking or tracking of progress. For example, the only way project data in Phoenix can be used to track progress on time and cost against initial estimates is by manual comparison with previous versions. Consequently, it is challenging for FCDO to collate information from across its estate. In 2023-24, our financial audit highlighted risks around FCDO’s valuation and size data for its estate. We observed that FCDO routinely needed weeks to produce basic information on its estate.

1.24 There are also limitations to FCDO overseas posts’ estates data. In November 2023, FCDO reported that 85% of posts did not have an asset register containing a record of building components and physical assets at that post, or one that was complete. This was the reason for the forward maintenance register 2024 (FMR24) exercise, which updated asset registers at overseas posts to help identify the true extent of the maintenance backlog. This was a one-off exercise though, and our analysis found gaps in data on properties such as utilisation, date of opening and size; for example, 9% of estate assets did not have a size estimate. FCDO told us posts are responsible for keeping systems up to date, but have not always had the resources or skills to do so. In addition, many posts use paper systems or IT systems developed locally, and these are inconsistent in use, standards and accuracy, and produce limited management information. Our survey found that 41% of respondents considered that using IT systems to collect and report data was a challenge.

1.25 FCDO has acknowledged the significant gaps in its estate data and has plans to improve this. Poor data has featured as a major risk on FCDO’s principal risk register, but was downgraded to moderate following the decision in November 2023 to proceed with the FMR24 exercise to gather information on the maintenance backlog (see paragraph 2.7). Aside from the FMR24 exercise, other activity includes:

FCDO intends that its new commercial property management system will eventually contain all its data on its estate and maintenance needs. Migration from Phoenix started in 2022 and was expected to finish in 2025, but is now not expected to complete until 2028-29;

FCDO’s portfolio management office originally focused only on major project reporting and did not provide a whole view of the estate portfolio or progress with tasks such as maintenance. FCDO has expanded it recently to five staff, to produce management information to support strategic planning; and

FCDO has developed a plan to produce an integrated data set that would bring together data from its central IT systems. This plan was recently paused.

1.26 FCDO is not the only UK government department experiencing challenges collecting the data it needs. In our report Maintaining public service facilities, we found that government does not have complete data on property condition, and in places the data it does hold are out of date. The condition of many properties is not being surveyed every five years as required, and for other properties, government departments are carrying out surveys but not reporting the information.17

Additional uses of the estate

1.27 There are examples where FCDO posts are using their estate more efficiently and to generate income. These include posts renting out facilities, staff and catering for events at Residences where they have capacity to do so alongside official use. For example, the Residence in Paris is in high demand for events due to its historic nature, and in 2024, events generated €87,500 net income, with the team hosting 13,655 official and non-official guests. Posts also generate income through hosting other allied governments and organisations. As at April 2025, FCDO hosted 11 other friendly governments and organisations at 17 posts.18 A further nine FCDO posts are hosted on the estate of other nations’ or organisations’ missions. FCDO aims to use Residences as much as possible for income generation, as well as representational use, and will seek to sub-let space at particular posts. However, these opportunities are generally limited, and may require up-front investment; for example, to adapt facilities or ensure they are in sufficiently good condition for co-locating tenants. FCDO is also restricted in using the estate for commercial activities due to the Vienna Convention on Diplomatic Relations.

4 An Embassy is an official office in another country’s capital city as part of a permanent diplomatic mission, a Consulate is a smaller official office that provides a presence in cities outside a country’s capital, and a High Commission or Deputy High Commission are the terms for an Embassy or Consulate located in a Commonwealth country.

5 UK staff are UK employees who work in the UK or at overseas posts. Country-based staff are employed locally in different countries.

6 Head of Mission (HoM) refers to the Head of the UK’s diplomatic representation in various posts across the world. A HoM represents the UK government as a whole and leads and coordinates HM Government’s activity in-country. HoMs are usually referred to as ‘Ambassadors’, except in member countries of the Commonwealth of Nations, whereby the term ‘High Commissioner’ is used instead.

7 Comptroller and Auditor General, Maintaining public service facilities, Session 2024-25, HC 544, National Audit Office, January 2025.

8 U.S. Government Accountability Office, Overseas Real Property: State Has Not Aligned Natural Hazard Resilience Plans to Staffing Levels, June 2023 (accessed 12 March 2025). Australian National Audit Office, Management of the Overseas Owned Estate, April 2010 (accessed 12 March 2025).

9 We received a total of 153 responses to our survey of posts’ experiences in managing and maintaining their estate.

10 Comptroller and Auditor General, Adapting the Foreign and Commonwealth Office’s global estate to the modern world, HC 295, Session 2009-10, National Audit Office, February 2010.

11 The government’s State of the Estate report is published annually and provides management information and data associated with the management of the public estate.

12 The worldwide inspection programme are mandatory inspections to ensure the safety and compliance of equipment and machinery. The global maintenance programme is the funding of maintenance-related works between £3,000 and £250,000.

13 Foreign, Commonwealth & Development Office, Annual Report and Accounts 2023 to 2024, HC 63, 29 July 2024.

14 The Bangkok Embassy was relocated to new premises.

15 FCDO’s UK estate includes King Charles Street in London, Abercrombie House in East Kilbride, Hanslope Park in Milton Keynes, 1 Carlton Gardens in London, Lancaster House in London and a small touchdown workspace in Elizabeth House, Edinburgh. FCDO also leases two additional premises to fulfil an international bilateral agreement.

16 ESND commissions FCDO Services to run a worldwide inspection programme, which are mandatory inspections to ensure the safety and compliance of equipment and machinery.

17 Comptroller and Auditor General, Maintaining public service facilities, Session 2024-25, HC 544, National Audit Office, January 2025.

18 FCDO aims to increase space efficiency and economies of scale by co-locating its diplomatic missions with those of friendly nations and organisations. FCDO sub-lets space on its estate (either office or residential space) where it becomes available, and in some places FCDO is hosted on the estate of other nations’ diplomatic missions.

Part Two

Estates condition and maintenance

2.1 This part of the report sets out:

the condition of the Foreign, Commonwealth & Development Office’s (FCDO) overseas estate; and

how the overseas estate is maintained.

The condition of the overseas estate

2.2 In our report Maintaining public service facilities we identified maintenance backlogs across the UK public service estate of at least £49 billion.19 We found that conducting regular preventative maintenance helps maintain the condition of properties and is usually less expensive than reactive repairs in the long run, but is not seen as an investment priority. Building failures can significantly affect service delivery and safety. The Civil Service Board, which supports the strategic leadership of the civil service, considers unsafe property a risk to the civil service’s ability to deliver the government’s objectives, and has assessed it as beyond the level of risk that government can accept.

2.3 Much of the FCDO’s overseas estate is in poor condition. Our analysis of FCDO data on 6,327 buildings located in its 282 designated posts found that 3,616 (57%) did not have a property condition score. Of 2,711 buildings with a condition score, 1,778 (66%) met or exceeded FCDO’s internal target of 70%, while 933 (34%) did not.20 We also found that the average condition of posts varies across regions (Figure 7). Fifty percent of respondents to our survey reported the condition of their estate to be very good or good, varying from 68% in the Americas to just 30% in Africa.21

2.4 FCDO has historically prioritised maintenance projects spending on addressing immediate risks, rather than carrying out all required routine planned preventative maintenance (see paragraphs 2.22 to 2.23). FCDO reports that this was due mainly to the lack of available budget and also due to limited qualified resources and capabilities at posts. Our case studies identified examples where not carrying out all routine maintenance required has led to deterioration in the estate:

a building was declared unsafe due to cracking and tilting walls. Staff were moved out and the building fenced off;

a High Commissioner’s Residence has been closed as the heating system is not reliable enough to make it through winter. The presence of asbestos and lead paint means any refurbishment would be a major project, and consequently a new temporary Residence has been leased; and

three quarters of British Embassy staff at one post moved into temporary accommodation early, ahead of refurbishment of the main building, due to the failure of mechanical and electrical equipment.

2.5 Planned preventative maintenance is the responsibility of posts, but the majority of respondents to our survey said that difficulties delivering preventative maintenance – resulting in the need for more reactive maintenance – was a challenge at their post. FCDO acknowledges that failure to conduct routine maintenance can lead to more extensive and costly subsequent work. It can also have a negative impact on staff health and safety, productivity and business operations. Twenty-six percent of respondents to our survey of overseas posts reported major concerns with health and safety and 50% reported minor concerns. Nineteen percent reported major concerns with building condition or functionality having a negative impact on staff productivity and 36% reported minor concerns.

2.6 FCDO has been aware of the poor condition of much of its estate for several years. In July 2021, FCDO reported that property condition scores had declined every year since 2014, so that only 77% of its Residences, 66% of its offices and 68% of its staff accommodation met its minimum standard. As a result, in 2021 FCDO changed its risk rating of the possible impact of poor estate condition from moderate to severe. It instigated a five-point action plan which, although not completed, reduced the risk to major.22 In November 2024, FCDO increased its estate risk rating to severe again, based on the risk of irreversible estate deterioration and FCDO being unable to meet minimum health and safety standards, citing factors such as capability at posts, Estates, Security and Network Directorate (ESND) capacity, matching estates funding to demand, and missing or inaccurate data.

2.7 In November 2023, FCDO recognised that its £150 million estimate of its overseas estate maintenance backlog was likely an under-estimate. In response, it commissioned professional surveys to confirm the true extent of the maintenance backlog. FCDO contracted three companies to survey 97 posts identified as most at risk of having unknown maintenance liabilities, confirm the accuracy and completeness of posts’ asset registers and identify extra maintenance work required.23 This exercise, named forward maintenance register 2024 (FMR24), was a one-off exercise to provide a snapshot of the FCDO estate. It reported in November 2024 that the total maintenance backlog liability was £450 million. At the time FCDO spent around £50 million per year on reactive maintenance work, and FCDO noted that at that pace of spending it would take a decade to clear its backlog, assuming that no further maintenance needs were identified. FCDO has agreed with HM Treasury to convert a further £50 million into resource spending for 2025-26 to cover maintenance projects as well as the administration costs for sustainability and GLAMP projects. However, this would reduce FCDO’s funding for capital projects.

How the overseas estate is maintained

2.8 Estate maintenance requires conducting scheduled maintenance to ensure assets remain in good condition, and responding to issues that arise, such as leaking roofs. FCDO allows maintenance projects to be delivered wholly by posts, or in tandem with FCDO Services or private contractors.24 Projects below £3,000 are funded and carried out by posts. Projects above £3,000 are funded by FCDO centrally and are examined in paragraphs 2.22 to 2.24 and Part Three.

2.9 FCDO’s estates maintenance approach varies between posts. One reason is that, while the FCDO aims to adhere to UK standards, this is not always possible. For example, UK standards require solid gas pipes, but FCDO follows local rules for flexible gas pipes to reduce the risk from earthquakes. FCDO has therefore mapped out which posts should follow UK rules for certain critical systems such as gas and electrics, and which should diverge. Local conditions also vary, including the presence of skilled labour, the breadth and depth of contractor markets, material supplies and local supply chains. Consequently, FCDO delivery models for day-to-day management of its estate vary across posts:

Eighty-four percent of posts are responsible for understanding, operating and maintaining their assets, either through:

an in-house estates maintenance team; or

a combination of in-house estates staff and local contractors.

Sixteen percent of posts are maintained through two regional facilities management contracts in Europe and the Asia Pacific, covering both ‘hard’ estate maintenance services and ‘soft’ services like waste disposal. Both contracts are currently let to Jones Lang LaSalle (JLL). FCDO determines which regions and posts can be outsourced primarily by supplier availability, although the views of posts are also a factor.

Having different delivery models across posts helps FCDO maintain its estate in a wide variety of conditions. However, this also makes it challenging for FCDO to assess and benchmark performance of posts and identify best practice.

Regional facilities management contracts

2.10 FCDO has outsourced facilities management for 24 locations in Asia Pacific and 22 locations in Europe to JLL, until 2028 and 2030 respectively (see Figure 8).25 The Asia Pacific contract has a value of £104 million and the Europe contract is £110 million.

2.11 FCDO has regional contract managers in both Asia Pacific and Europe to manage JLL, and they meet regularly with JLL to discuss performance. FCDO monitors JLL’s performance against a suite of key performance indicators (KPIs) and can choose to invoke penalties in the case of under-performance, including withholding fees (Figure 9).

The Asia Pacific contract started in 2021 and JLL is now meeting its KPI targets in most posts. Overall KPI scores increased from 73% in January 2023 to 96% in January 2025. While overall performance is strong, it has been poor in certain locations. For example, in one post in Asia Pacific, FCDO put JLL on an improvement plan in December 2023.

The Europe contract started in December 2023. JLL initially found establishing the contract challenging, due to poor staff retention and the need to develop its own supply chain with sub-contractors. The Europe contract’s KPI performance continues to vary greatly, from 91% in one post to 33% in another post in January 2025. FCDO acknowledges the transition to have been more challenging than anticipated and aims for performance to improve in the second year of the contract.

2.12 FCDO’s March 2024 risk register rated the risks of mobilising and resourcing the JLL contract in Europe as severe. We found that a common challenge faced by both FCDO and JLL is attracting and retaining skilled maintenance professionals, due to factors including relatively low wages and the need for security clearances. In one post in Europe, for example, JLL has been unable to fill posts, and as a result many jobs have not been completed, with one lift out of action for ten months. This was compounded by the lift being 30 years old and installed to UK standards, which local suppliers found challenging to maintain.

2.13 FCDO regards outsourcing as having the potential to consolidate the contracts it manages, increase professionalism and reduce overheads. However, many regions do not have the developed supply markets necessary to contract out facilities management. FCDO has considered expanding the Europe contract to cover other posts in the region, but has so far decided against proceeding while the current supplier is experiencing issues.

Support provided by FCDO to posts

2.14 Overseas posts vary greatly in their size and type of estate. Some posts have hundreds of buildings and staff, while others can be a few staff in a single building. Some posts do not have dedicated estates professionals present. FCDO’s ESND helps posts maintain their estate, including:

ESND commissions FCDO Services to run a worldwide inspection programme. This consists of mandatory inspections to ensure that FCDO complies with all necessary statutory obligations in relation to mandatory testing and to check on the safety and compliance of equipment and machinery. Aside from legal compliance, these inspections also act as a check to identify any deterioration in equipment that could pose health and safety risks (predominantly those leased by posts between inspections), ensuring that it can be operated, adjusted and maintained safely;

ESND commissions FCDO Services to provide a network of 22 regional technical leads (RTLs) who help and advise posts on compliance and maintenance needs. RTLs make physical visits to posts to inspect equipment and documentation and create compliance plans for posts; and

ESND contracts a private recruitment agency to provide 42 technical works supervisors to carry out maintenance in secure areas.

2.15 We found that many posts value the expertise and assistance RTLs provide. However, FCDO Services has found it difficult to recruit RTLs, because of the lack of competitiveness of civil service pay and rewards with the external market, and the time and process for obtaining security clearances. An individual RTL will have to support multiple posts, and gaps in the network reduce the number of times they can visit posts.

2.16 In June 2022, ESND estimated it needed extra staff to provide it with the necessary delivery capability. In April 2023, FCDO’s internal audit identified recruiting and retaining staff with the appropriate technical skills to fulfil key roles as a major challenge across ESND. This included surveyors, planners and other project delivery roles, data specialists and engineers. This risk remains, as ESND’s November 2024 risk register highlighted a severe risk around inadequate ESND capability and capacity.

Maintenance carried out by posts

2.17 Around 84% of posts are responsible for carrying out planned preventative maintenance and reactive repairs (paragraph 2.9). This is funded by budgets allocated to FCDO’s geographic directorates. Posts may also oversee and deliver small maintenance projects funded centrally by ESND, where the post team are able to do so (paragraph 2.22). ESND supports posts undertaking maintenance work, including through the RTL network and an estates helpdesk. The overall maintenance delivery model is complex and varies by post. Reflecting this, the FMR24 exercise reported that there can be confusion over who is responsible for maintenance, projects or reactive works, where budget liability lies and who is responsible for specific elements of the estate.

2.18 In November 2024, FCDO’s principal risk register rated the risk of inadequate capacity and capability at posts as severe, and stated this could affect progress clearing maintenance backlogs. The FMR24 exercise reported that, as a result of local expertise being limited, posts routinely fail to monitor and maintain their property. It also found there was an inconsistent approach to maintenance delivery across posts, and that there were:

missing building records and maintenance certifications;

inadequate project handover documents to establish maintenance regimes for new buildings, and a general lack of technical systems for planning and organising maintenance;

deficiencies in staff training and competency; and

high volumes of mechanical, electrical and building assets beyond economic repair, posing an operational risk from sudden failure.

2.19 A lack of capacity and staffing resources at post was reported as a challenge by 65% of respondents to our survey, and 44% reported that staff at post not having the necessary training, skills and experience was a challenge. Our case studies highlighted that:

local resourcing is not always flexible in response to changing circumstances. For example, in one post there was no increase in local maintenance staff to support the relocation of staff from another post following a conflict there;

training local staff to implement UK standards can be expensive. The alternative, getting professionals from the UK to perform work, can also be expensive; and

the need for security clearances to perform some work can limit the potential hiring pool and the scope for contractors to perform work.

2.20 FCDO has acknowledged that limited capacity means posts are often unable to adequately monitor the condition of their estates and maintain them, and gaps in key roles in ESND also present a risk. However, it has not yet produced a workforce plan to clarify and address capacity and capability issues within ESND and at posts.

2.21 Other nations are affected by challenges ensuring posts have sufficient estates expertise. The U.S. Government Accountability Office, for example, found that the U.S. Department of State experiences workforce problems and these have affected its ability to maintain its overseas estates.26 It has faced hiring delays and difficulty in hiring qualified facilities staff to maintain US Embassies.

Maintenance projects

2.22 FCDO also spends money on projects for one-off works to repair, improve or replace estate assets. Lower-cost projects costing between £3,000 and £250,000 are treated as resource expenditure and funded through the Global Maintenance Plan (GMP). Projects above this cost are treated as capital expenditure and funded through the Global Asset Management Plan, as explained in paragraph 1.15, and these are covered in Part Three.27

2.23 FCDO’s spending on maintenance projects through the GMP has historically prioritised addressing immediate risks over longer-term prevention work. FCDO initially identified the need to change its prioritisation system in 2020. In 2023, it stated the system did not reflect FCDO’s changing priorities, account for the whole life costs of different approaches to maintaining the estate or align with other strategic FCDO agendas, such as sustainability. FCDO also acknowledges that its prioritisation system had discouraged the registering of lower-priority works, due to the perception that they will not receive funding. We also heard that the system encourages assigning higher priority to works, to increase the chance they get funded.

2.24 FCDO launched a new prioritisation system in 2023. This separates categories for planned and reactive maintenance, to help ensure both types of works go ahead. It also includes a category focused on the long-term maintenance liability of a building component or system, which FCDO intends will reduce the risk of sudden failure. The new prioritisation system has been implemented for all FMR24 surveys. However, FCDO acknowledges this policy is still focused on managing health and safety risks, and it is not clear the change will enable FCDO to complete more preventative work, given funding constraints.

19 Comptroller and Auditor General, Maintaining public service facilities, Session 2024-25, HC 544, National Audit Office, January 2025.

20 FCDO’s target condition score of 70% or higher is an internal target that corresponds to achieving Cabinet Office Condition B standard that buildings should be sound, operationally safe and exhibit only minor deterioration. Cabinet Office uses an A to D ranking based on Government Functional Standard for Property. FCDO is working towards a target of 85% of its properties achieving Condition B.

21 17 out of 25 survey responses from FCDO’s Americas region, and 8 out of 27 survey responses from FCDO’s Africa region reported the condition of their estate to be very good or good.

22 The five-point action plan FCDO started in April 2021 included actions to improve its funding business cases, expand its internal management functions, restructure estates teams at posts, improve its data on its assets and expand outsourcing of estate services.

23 The total maintenance liability for the whole FCDO estate was calculated by extrapolating survey data from 97 posts and combining it with existing data. FCDO initially identified 104 sites to survey, comprising 48% of the overseas estate property portfolio, but surveys of seven posts could not be completed due to safety issues.

24 FCDO Services provides a range of integrated services worldwide to support diplomacy, development and defence for the UK government, and operates as a trading fund of FCDO.

25 The contracts do not cover all posts in a region; for example, Madrid is not included in the Europe facilities management contract.

26 U.S. Government Accountability Office, Overseas Real Property: State Should Improve Strategic Workforce Planning for Facilities Maintenance Staff, April 2023 (accessed 12 March 2025).

27 The government budget allocated to and spent by government departments is known as the Departmental Expenditure Limit (DEL). This is split into resource spending (RDEL) for day-to-day resources and administration costs, and capital spending (CDEL) for investment.

Part Three

Estates capital projects

3.1 This part of the report sets out the Foreign, Commonwealth & Development Office’s (FCDO’s):

high-value capital investment projects; and

sustainability and energy reduction.

High-value capital investment projects

Approach to selecting, funding and prioritising projects

3.2 As set out earlier, FCDO takes forward its estate capital projects (those estimated as costing more than £250,000) through its Global Asset Management Plan (GLAMP). As of June 2022, the highest-value project on the GLAMP was the Washington D.C. Embassy and Residence refurbishment, which had a budget of £128 million. The GLAMP projects include major refurbishments and repairs, office reconfigurations, upgrades to important infrastructure like electrics and heating systems, or completely new buildings. For example, in Ottawa FCDO decided to spend over £30 million constructing a new High Commission building with a much-improved sustainability profile.

Project prioritisation and portfolio planning

3.3 To date, FCDO has not taken a strategic approach to selecting and progressing GLAMP projects. Between 2018-19 and 2022-23, FCDO selected projects for the GLAMP through a process that involved partners across government, directorates and posts, with the list of projects refreshed annually. In April 2023, FCDO’s internal audit team highlighted that the GLAMP selection process focused on ‘traditional’ estates concerns, such as health and safety and security risks, and did not have a clear mechanism for factoring in FCDO’s global strategic priorities. It concluded there was a lack of clarity about how FCDO should be prioritising and allocating estate investment to meet future UK government objectives. FCDO has been operating in a context of global volatility and changing political priorities, which it considers has had an impact on its strategic direction.

3.4 Once on the GLAMP, FCDO has progressed projects towards full business case as they become ready, rather than planning delivery across the portfolio based on the priority allocated to each project. FCDO identified that this ‘first past the post’ approach allowed it to spend funds but that it could reduce its flexibility to meet urgent and unexpected estates needs. It also creates a risk that high-priority projects further back in the pipeline will not be able to access future funding because it is allocated to other projects that are ‘ready’ sooner. FCDO acknowledges it is difficult to understand the impact of approving an individual project on the overall portfolio within this system.

3.5 FCDO is taking steps to manage its overseas estate projects more effectively as a portfolio. It intends to change both how it prioritises projects and how it plans its portfolio. FCDO’s new approach will rank GLAMP projects using a combination of factors, with most importance placed on health and safety and security factors as part of its duty of care to people working and living on its estate. FCDO plans to use this ranking to create a multi-year delivery plan that accounts for annual funding and other delivery constraints. As at April 2025, FCDO’s estimate of the cost of its capital investment pipeline of projects is £2.1 billion, covering more substantial refurbishments, replacements of assets at end of life, acquisitions and new constructions.28

3.6 FCDO is changing its approach because its capital projects funds from asset sales are now fully committed. As a result, it will need to work within annual funding limits set by HM Treasury (HMT) from 2025-26, compared to previously flexible funding across years. It also expects to receive a smaller budget than requested from HMT, and as such the prioritisation system will be of even greater importance.

Over-programming

3.7 FCDO has historically chosen to approve more projects in the GLAMP to work on than it has funding for. Since 2018 it has ‘over-programmed’ by around 30% to 50%, to allow for projects that cannot complete as planned and ensure the capital funds were fully committed. However, this approach meant money was spent developing projects that had not been funded or completed. As of October 2024, there were 526 GLAMP projects, of which 63 (12%) were on hold and 190 (36%) stopped, compared to 143 (27%) completed and closed. Of the 190 stopped projects, one was stopped after construction had started, on account of an issue with the contractor, but the others were stopped earlier in the project development and contracting process. Reasons given for projects being put on hold included funding issues and re-prioritisation, changes in Heads of Mission (who might have different views on a project) and cost escalation.

Delivering capital projects

Delivery track record

3.8 By November 2024, around 200 capital projects had been completed or approved for construction since April 2018, totalling circa £850 million and funded by the Tokyo and Bangkok sales. We found that FCDO does not hold the management information necessary to evidence its track record or facilitate decision-making across the portfolio of projects.

3.9 As of June 2022, seven projects had breached their full business case budgets, with a few high-profile projects significantly over time and budget:

The Washington Embassy programme completed 12 months behind schedule. FCDO’s estimate of final outturn project costs increased from £112 million in 2019 to £128 million in 2021, and then to £160 million in 2023 (inclusive of contingency costs). As at April 2025, FCDO is yet to finalise total programme outturn costs. FCDO identified a range of contributing factors to the cost increase, including the COVID-19 pandemic, scope and design changes, foreign exchange loss and the worse-than-expected condition of the 90-year-old Residence.

In January 2024, FCDO moved into its new High Commission in Ottawa, which was completed to high sustainability standards. This replaced its existing over-sized High Commission building. The project completed 18 months behind schedule and around £10 million over its £30 million budget, although FCDO is yet to finalise total programme outturn costs. FCDO identified COVID-19, strikes and design changes as key contributing factors to the overruns.

FCDO identified key cost pressures for the remainder of its portfolio as global inflation, supply chain constraints and labour shortages.

Status of current projects

3.10 As of October 2024, there were 130 ‘live’ overseas projects in the GLAMP database. FCDO assesses its projects on time, cost and quality. Time is the biggest risk area for live projects. In October 2024, FCDO assessed that delivery to time was a significant risk for 12% of its live projects, and a further 19% of its live projects had some risk of running over schedule. This compared to 7% and 13% respectively with regards to budget, and 1% and 5% with regards to quality. Our survey, which was open between October and December 2024, identified a similar trend. Respondents to our survey with capital projects underway were least confident in the projects being delivered on time (51% said the project was on time), compared to budget (68%) and quality (85%).29

3.11 Recent uncertainty over the Spending Review and funding has slowed down delivery. Between September 2024 and January 2025, FCDO only put one project out to tender. As of February 2025, FCDO had paused further progress on 118 projects pending decisions on future funding and the prioritisation system. Project delays have knock-on impacts on staff working conditions and overall costs. GLAMP projects awaiting re-prioritisation and funding decisions include examples of people working in buildings that do not meet health and safety requirements or are in increasing disrepair, in anticipation of projects for which funding is no longer secure (Figure 10).

Lessons learned

3.12 FCDO identifies lessons learned on projects through a range of methods, including workshops on the completion of some projects, reflections in project delivery team meetings, and a ‘live’ exercise to collate lessons identified through project design reviews. FCDO has generated useful lessons through these processes (Figure 11) and taken action to address some deficiencies identified. For example:

FCDO found that its initial project delivery team for one project had insufficient skills and resources, and accordingly it expanded the team. This improved communications, issue resolution and timeliness of decisions;

FCDO is undertaking work to improve its template contract documents and upskilling its staff on contracting;

in response to lessons identified for one project, the project team at another post involved the facilities management team at an earlier stage, involving them in design work and planning for the building’s transition into operation; and

a High Commission project encountered design problems during construction and identified that a second peer review of the project design would have helped avoid these. This additional review has been implemented in a project at another post.

3.13 However, in early 2024, the portfolio management office stopped supporting a process to centrally log lessons, identify recommendations and actions and track their implementation, due to resourcing constraints. Consequently, FCDO was unable to demonstrate the extent to which it systematically learns, shares and implements lessons.

Sustainability and energy reduction

3.14 FCDO has committed to a 20% reduction in energy use in its global estate by 2025, compared to 2019-20 levels. It has some carbon reduction measures in place, including a sustainable procurement policy that requires bidders for contracts valued at £5 million or above to provide a carbon reduction plan. However, its delivery plans and capabilities are limited, and it does not have a reliable measure to track its progress.

3.15 FCDO has a £30 million fund for supporting energy efficiency and carbon reduction projects across the estate between 2022-23 and 2024-25. In addition to reducing costs and carbon emissions, low carbon measures can play an important role in boosting post resilience where local energy supplies are unreliable. Prior to establishing the fund, FCDO piloted two solar power projects. FCDO has primarily used the fund to make enhancements to existing Global Maintenance Plan and GLAMP projects. However, FCDO expects to spend only £11.1 million from the fund by the end of 2024-25. In November 2023, FCDO identified lack of staff capacity as the most significant risk for its sustainability objectives.

3.16 In 2021, FCDO determined that all new build projects should be designed to a BREEAM (Building Research Establishment Environmental Assessment Method) ‘Outstanding’ rating, and all major refurbishments should achieve a minimum ‘Excellent’ rating, or equivalent standards.30 New capital projects should therefore have sustainability and energy reduction considerations factored into design from project inception. The new High Commission in Ottawa, completed to BREEAM ‘Excellent’ equivalent, is the most environmentally sustainable building FCDO has built.31 However, in other parts of the world, it has not been feasible to design to these standards within the funding available. For example, FCDO agreed that one post’s refurbishment could instead build to a target of Good or Very Good.

28 FCDO’s capital programme requirement is a point in time estimate that it updates regularly.

29 As projects were at different stages, there were 51 responses to whether the project was on time, 47 responses to whether the project was on budget, and 46 to whether the project was expected to meet quality standards.

30 BREEAM is a certification system for building sustainability performance. The BREEAM ratings are Pass, Good, Very Good, Excellent, Outstanding.

31 The new High Commission was certified as LEED (Leadership in Energy and Environmental Design) ‘Gold’. LEED certification is a US-based green building rating system, based on a range of quality criteria including carbon, energy, water and materials. The LEED ratings are: Certified, Silver, Gold, Platinum. LEED ‘Gold’ is equivalent to BREEAM ‘Excellent’.

Appendix One

Our audit approach

Our scope

1 This report examines whether the Foreign, Commonwealth & Development Office (FCDO) has a robust approach to managing its overseas estate. The overseas estate includes Embassies, High Commissions, Consulates, offices, official Residences and accommodation and amenities for UK staff overseas. We consider whether FCDO:

has a clear overarching strategy for meeting its current and future overseas estate requirements;

is set up to manage its estate effectively; and

manages its maintenance programme and capital projects effectively.

2 We do not examine the maintenance of security systems in secure areas or the effectiveness of individual overseas facilities maintenance contracts. We do not typically identify individual overseas posts, to mitigate any potential security risks. We also do not examine arrangements for managing the FCDO’s UK estate (primarily the King Charles Street and Abercrombie House headquarters), other than where decisions relating to the UK estate may affect the overseas estate.

3 We reached our conclusions based on our analysis of evidence collected during fieldwork between August 2024 and April 2025.

Our evidence base

Interviews

4 We conducted around 20 interviews with FCDO officials selected because of their job role and experience in managing the overseas estate, which meant interviewees were primarily from FCDO’s Estates, Security and Network Directorate (ESND). Interviews were mostly conducted online, and we tailored interviews to the role of the person being interviewed.

5 We interviewed colleagues in other departments and bodies:

FCDO Services, which provides a range of secure services worldwide and operates as a trading fund of FCDO;

Ministry of Defence;

British Council;

HM Treasury; and

Infrastructure & Projects Authority.

Document review

6 We carried out detailed analysis of around 250 relevant FCDO documents in response to our evidence request. These were reviewed against our study questions on how the estate is set up and its programmes for maintenance and capital projects. Documents included proposal and planning documentation, guidance documentation, board papers, business cases and risk registers.

Data analysis

7 We analysed data provided to us by FCDO on its overseas estate, such as on the number of posts across the world, financial data, data on estate assets such as condition score and size, and facilities management contract performance.

Survey

8 We surveyed corporate estates managers/estates managers at FCDO posts across the world to capture feedback on the experience in managing the overseas estate, to identify potential pain points and areas for improvement (see Appendix Two).

9 FCDO sent an online survey link on our behalf to all posts and a subsequent reminder email. We received responses between 25 October and 9 December 2024. We received 153 responses, excluding duplicates (which were removed) and including some responses we received via email. These responses covered 168 posts, as some were for multiple posts or networks.

International comparisons

10 To identify common themes and challenges, we circulated eight high-level questions to the Supreme Audit Institutions (SAIs) of Australia, Canada, New Zealand and the USA. We received three full responses, previous audits from one SAI, and we met with officials from the U.S. Government Accountability Office and the Office of the Auditor General of Canada.

Case studies

11 To illustrate findings from our document review and our interviews, we conducted case studies with eight posts across FCDO to understand specific capital and maintenance challenges, and their impact ‘on the ground’ within local posts. We physically visited two sites and conducted the remaining case studies online. We interviewed staff at posts such as corporate service managers, heads of local maintenance teams and people responsible for overseeing major project delivery. We also conducted document review, data analysis and observational analysis to understand the state of individual posts, how they were being managed, objectives, performance of maintenance staff, management of risks and status of ongoing projects. These case studies were conducted between October 2024 and February 2025.

12 These case studies were selected after considering several variables, such as the value of the site, type of maintenance arrangements, the presence of major estate projects, FCDO geographic region, and climate or security risks. This meant that the eight case studies were conducted across different regions, and the posts we looked at faced different challenges in maintaining their estates. We considered evidence against a consistent framework, to enable systematic assessment for each case study against a set of questions.

Appendix Two

Survey of Foreign, Commonwealth & Development Office (FCDO) overseas posts

Survey methodology

1 Between October and December 2024, we surveyed corporate service managers/estates managers at FCDO overseas posts to gain insights into their experiences of managing and maintaining their estates. Some responses were from other staff at the overseas post with a key role in managing the estate, such as Deputy Heads of Missions.32

2 The survey consisted of 20 questions, covering the following areas:

current condition of the post;

clarity of FCDO objectives for the estate;

concerns and challenges that posts face; and

delivery of maintenance and capital projects.

3 Most survey questions were mandatory. The survey included a mix of closed and open questions. Respondents provided some detailed comments as free text. We consulted with internal NAO survey experts to quality assure our survey approach and our presentation of survey analysis and results.

4 FCDO sent an online survey link on our behalf to all posts on 6 November and a subsequent reminder email. We received responses until 9 December 2024. We received a total of 153 responses across FCDO’s regions (Figure 12). This excludes duplicate responses (which were removed) and includes some responses we received via email. These 153 responses covered 168 posts, as some were completed on behalf of multiple posts or networks, since respondents could have responsibility for more than one post.

5 The following sections set out some of our analysis of survey responses, covering views from respondents on maintaining the estate, managing the estate and delivering projects.

Maintaining the estate

6 Half of respondents stated that the condition of their estate was either very good or good, while 17% said it was either very poor or poor (Figure 13). Thirty-eight percent of respondents said their estate had been getting worse over the last five years, and 36% of respondents said they expect their estate to get worse in the future.

7 Posts have different arrangements for delivering maintenance. Overall, 62% of respondents were either very or somewhat satisfied with their arrangements for delivering maintenance, while 27% were either very or somewhat dissatisfied (Figure 14).

8 Health and safety was rated either a major or minor concern by 76% of respondents. Building condition/functionality was a concern for 55% of respondents, and buildings not being fit for purpose was a concern for 52% (Figure 15).

9 Sixty-five percent of respondents said that lack of capacity and staffing resources at post was a challenge, and 61% said that difficulties accessing funding for maintenance work was a challenge. Difficulties delivering preventative maintenance, meaning more reactive maintenance needs to be done, was reported as a challenge by 57% of respondents (Figure 16).

Managing the estate

10 Thirty-five percent of respondents didn’t have a delivery plan for managing their estate, and 22% of respondents were unclear how FCDO and UK government property objectives apply to the management of the post’s estate. Of respondents with a delivery plan, 93% were clear how property objectives applied to the management of their estate, while for respondents without a delivery plan, it was half.

11 Twenty percent of respondents said that not meeting environmental or sustainability objectives and targets was a major concern, and 43% said it was a minor concern. Twenty-two percent said that the estate not being flexible or resilient to deal with changing circumstances or conditions was a major concern, and 34% said it was a minor concern (Figure 17).

12 Forty-two percent of respondents said that not having the autonomy to make changes or improvements to the estate at their post was a challenge, 41% said they faced challenges with using IT systems and 37% said they faced challenges with assessing asset condition (Figure 18).

13 Seventy-eight percent of respondents said that their post and FCDO’s central estates team engaged well or adequately on best practice and guidance on estates management and maintenance procedures, and 69% said they engaged well or adequately on estate strategy and policies. Only between 5% and 16% of respondents said they and the FCDO central estates team engaged well on all the topics, with skills and training opportunities being the lowest at 5% (Figure 19).

Capital project delivery

14 Fifty-one percent of respondents said they have not had a capital project completed in the last five years. Thirty-two percent had a capital project completed and measured whether it achieved the outcomes and benefits intended (Figure 20). For those respondents who did measure the outcomes and benefits intended, 65% said the project achieved them to a great extent.

15 Sixty-four percent of respondents said that difficulties accessing funding for large capital projects was a challenge, and 46% said that balancing sustainability and other estate objectives was a challenge (Figure 21).

32 The Deputy Head of Mission is responsible for the daily management of an overseas Embassy or High Commission.

Design and Production by NAO Communications Team
DP Ref: 015399-001