George Osborne’s decision to protect the budget for the Foreign and Commonwealth Office at this week’s Spending Review has been given a cautious welcome by MPs.
The chancellor announced on Wednesday that the FCO – which was asked to reduce its real terms resource budget by 10% at the 2010 Spending Review, with a further 6.3% cut imposed in 2013 – would be spared the axe in the latest round of cuts.
The Spending Review also committed to opening two new embassy buildings in Abuja and Budapest – although the FCO is in line to dispose of £75m-worth of land and property as part of a wider drive to make government estate savings.
Crispin Blunt, the Conservative chair of the Foreign Affairs Select Committee – which called for the FCO to be protected in a report published ahead of the Spending Review – welcomed a “better outcome than had been feared”.
He said: “We warned in our first report about the severe consequences of applying cuts of 25% or even 40%, which had been widely anticipated.
“Any cuts in the current circumstances we described as being ‘beyond irresponsible’. We therefore welcome the apparent outcome of the Spending Review, but the committee will look more closely at the FCO settlement once the formal response has been received from the department to ensure that yesterday’s presentation and reality align.”
Under the plans announced by Osborne yesterday, the Foreign Office will see its resource budget held at £1bn until at least 2019-20.
As part of its Spending Review settlement, the FCO has promised to deliver administrative savings of £53m over the period, with the Treasury document saying the reductions will come through “more effective administration of the department’s travel budget and better management of the overseas network”.
The FCO currently has 267 overseas posts in 168 countries and territories. According to the department’s latest annual report, it employs approximately 4,400 UK-based staff, down from around 4,800 in 2010. It also employs approximately 9,200 local staff around the world.