Extra Brexit cash not enough for the Foreign Office, MPs warn

Foreign Affairs Committee warns Treasury to "urgently" consider a rethink of the Foreign Office's budget plans given the vote for Brexit

By Civil Service World

19 Dec 2016

The Foreign Office will need a far greater injection of resources than that already given by the government if it is to cope with the extra demands of Britain's exit from the European Union, MPs have warned.

Chancellor Philip Hammond used last month's Autumn Statement to provide extra funding for both the FCO and the Department for International Trade, which the Treasury said would be given a fresh £26m a year by 2019-20 to help strengthen trade policy capability.

However, most of that extra funding will go to the DIT, with just £5.2m per year allocated the FCO. Before June's EU referendum, MPs on Foreign Affairs Committee said a vote for Brexit would require a doubling or even trebling of the FCO's resources, and the committee's follow-up report in July urged ministers to "give the FCO the resources it needs to fill any gaps in its capacity left by the departure of officials to other departments".

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The committee has now accused the Treasury of failing to do enough to equip the FCO for the years ahead, in spite of what chairman and Tory MP Crispin Blunt said was the "central" role the department is set to play both in the immediate Brexit negotiations and beyond, "as the UK defines its place in the world".

"The additional £10m for trade policy officers is welcome, but is hardly enough to fulfil the ambition of the prime minister and foreign secretary’s global Britain agenda for the UK as an outward-looking trading nation," Blunt said.

He added: “Ministers have failed to heed the committee’s call for a substantial injection of resources to reverse the recent trend of downsizing the UK’s bilateral operations in European capitals for and beyond the EU exit negotiations.

“Given the scale of the task ahead – including what our most senior diplomat has described as the most important negotiation of his career – the FCO must be properly equipped. The government’s response to our recommendations is cold comfort for the diplomatic community, who have seen their budget and capacity reduced dramatically in recent years."

The extra cash promised at the Autumn Statement comes against a wider backdrop of tight resources at the FCO. Although the 2015 Spending Review saw the department's £1bn-a-year annual resource budget spared further reductions, the FCO already implemented a 25% cut and substantial headcount reductions in the last parliament.

Blunt said the Treasury should "urgently" rethink the Foreign Office's budget plans given the vote for Brexit.

"To make a success of Brexit and the opportunities it presents, I believe we need to invest in diplomacy to support our country’s reputation, security, values and prosperity in Europe and globally," he added.

Meanwhile, former head of the civil service Lord O'Donnell has questioned the decision to set up a dedicated Department for Exiting the European Union to coordinate Whitehall's work on leaving the EU.

Speaking to the BBC's Westminster Hour, the ex-cabinet secretary said: "Machinery of government changes are cumbersome and create all sorts of issues about setting up offices and computer systems and new ministers in new departments.

"So frankly I'm in favour of trying to use the machine you've got rather than redesign the machine because that takes time."

O'Donnell – who served as the UK's top official from 2005 to 2011 – said that his own preferred option would be for ministers to make use of the existing arrangements at the centre of government.

He told the BBC: “Normally the Cabinet Office would do [co-ordinating] and if I’d been advising the prime minister I’d probably have said, ‘This is a standard Cabinet Office function, you don’t need an extra department’".

The former cabinet secretary also echoed last week's warning from the Institute for Government think tank that greater political direction is needed from cabinet ministers before the civil service can get on with the job of delivering Brexit.

"It's very difficult round the Cabinet table to get two groups who have been in completely different positions together," he said.

"They've been on different sides of an argument, and one side has clearly won, and now they all need to get together, work as a team, try very hard to stop briefing against each other, and get on and deliver a clear strategic plan and then get the best deal for the country."

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