This sitting is part of our regular scrutiny of the workings of the Foreign Office with the permanent under-secretary and—well, gentlemen, do you want to introduce yourselves?

Thank you, Chair. It is good to be back here. I am Oliver Robbins, the permanent under-secretary of the Foreign, Commonwealth and Development Office.

Good morning. I am Nick Dyer, the second permanent under-secretary.

I am Tim Jones, the finance director.

Thank you very much for coming; it is very nice to have you in front of us. I understand you have a long day, as you will be in front of another Select Committee later. Sir Olly, I wrote to you on 21 November asking for further details of FCDO restructuring, and you said that you would provide the Committee with those details today. Could you begin by telling us about your plans and what progress you have made to date?

Certainly. It is important to start by saying—I know you have heard me say this before, but I must say it—what a brilliant institution the FCDO is. I have been permanent under-secretary for less than a year, and I am blown away every week by what it achieves for Ministers. The work we have done supporting Palestine, the Typhoon deal with Turkey—there is a long list from just the last 10 weeks, which I will spare you.

May I interrupt you and say that that is definitely the view of the Committee as well? We hold the Foreign Office to account; nevertheless, we begin with a belief in the Foreign Office and wanting it to be as good as it possibly can be.

Thank you very much, Chair. I shall take that as read then. Like any important national institution, we have to think about the context we are working in now and over the next few years. The Committee knows that very well, but I am happy to discuss it. Geopolitics, geo-economics, technology—the world is changing very rapidly around us. For the last six months, Nick, I and the leadership of the Department have been thinking about and discussing with Ministers how we make ourselves ready to be as effective in four or five years’ time as we are now. Just saying that we are brilliant today and that is enduring will not be enough. As senior team in London, we have been focusing on making sure that our headquarters function is leaner, but as effective. The only restructuring processes we have run so far were at the top two grades in London, where we shrank the number of directors general who serve with Nick and me on the executive group of the Department. We have just completed an exercise of rationalising the number of directors, SCS2s, at headquarters in London. We thought it was important to start with that because the reality is that we have a lot of senior people in the Foreign Office. That is to some extent a natural corollary of the rotational model that we employ with our overseas heads of mission, but the number has gone up a lot in the last 10 years. If you compare the FCDO today with the FCO and DfID combined 10 years ago, you end up with about 100 more members of the senior civil service in the combined Department today than there were in the two separate Departments 10 years ago.

How many directors did you have and how many directors will you have?

We will talk in terms of directorates because some of those have got shared directors or slightly more complicated arrangements, but we are going down from 43 to 34 at headquarters. Some of those have not been part of the restructuring exercise where there are specialist roles. Without embarrassing Tim, for instance, as finance director, we have not restructured and completed that role. But about 20-odd of the new directorships are ones that we have just filled through the restructuring process. To make that a sensible strategically rationalised headquarters for the next few years, we now need those directors to work with us to look at the lay-down of the headquarters teams as a whole. That is what they are doing at the moment. We will then work with HR to guide a restructuring process for the headquarters function early in the new year. So that is where we are on the workforce.

Just so I understand it and chiming with other things we’ve learnt, you said you were going to reduce the staffing by 25%. Is it be the job each directorate to cut their staff by 25%, for example? How is it going to work? Or is there more of a plan whereby it is felt that this area needs more people than that area?

That is exactly the right question, Chair. First of all, pedantically, when I was before you last, I said 15% to 25%.

That’s not pedantic; it’s very important.

That is the outer edge of our workforce reduction plan, and it is quite a big range. Precisely to your question, Chair, that is to take account of the fact that we are also working through our strategic priorities for the workforce at headquarters and, crucially, overseas. To make the process manageable, it is not completely logical. Honestly, in a completely logical world, you would do everything at once, but if you do everything at once, you risk breaking an institution, so we are looking at headquarters very rigorously first. We have now started, overlapping with that process, a review of the shape and size of our overseas network, which again focuses on whether we have the right people in the right places.

Before we move on to the overseas network, I don’t really understand what you are saying about the domestic one. I get it about the directors, but have the directors been charged with making their teams a certain size, or is there some sort of assessment of needs first? What are we to expect in the next phase for the people working in the Foreign Office?

Sorry, I jumped ahead. Directors have been asked to model various scenarios for the resources ascribed to their new directorates. That is a slightly complicated exercise at the micro level because some of the new directorates have been pieced together. As we shrank the number of directorates, we had to reassemble them in a slightly new formation. They have been given sort of a blanket scenario for reductions in workforce, but then asked to argue from that blanket reduction. It would be a bad outcome if we ended up recommending to Ministers that every directorate in the Foreign Office shrank by the same amount. We are listening carefully to what Ministers say their priorities are for the next years.

Is the blanket figure 25%?

No. If you don’t mind, Chair, I am not sure it is helpful for me to get into that because the one number it will not be for any directorate in the Foreign Office is the assumption that they are currently being asked to model and consider. What we want to come out of that exercise is areas where we think there is strong alignment between the need for future capability and what Ministers are telling us about their priorities, and what we know about the standing tasks of the Foreign Office and areas where we think we can reduce our effort or, more likely, try over the course of the spending review period to digitise some of what we currently do in a sort of manual heavy way.

Okay. Now we can move on to the overseas bit.

Of course. I think I said when I was previously before you that we were keen, if possible, to end the spending review period with a higher proportion of our staff working overseas than is the case today. In a reducing workforce, that means that we will probably end up with a slight reduction overseas, rather than a deeper reduction. Again, as with your last question, Chair, I am keen to avoid a situation in which we just say it is minus x% from everybody. I visited our post in Montenegro a few months ago, and there you would be talking about parts of a person with percentage reductions. We also have to think carefully about where Ministers’ priorities will be for where we need to sustain or even increase our efforts over the next few years. We have started an overseas network review in the Foreign Office, talking to partners and stakeholders and trying to get a sense of how the current lay-down of our workforce and posts maps to what the British public and Ministers need from us, and what future trends we can see in those countries and in the world over the next few years. That exercise will take us a little bit of time, but we thought it important to get it started before we finish the work on headquarters, so that we at least have a sense of how achievable concentrating our resources in intelligent ways overseas is, before we settle the final numbers on workforce restructuring at home.

For people watching who might not know, I have had a look at the NAO report on the Foreign Office, and in March 2025, the FCDO employed 17,000-odd staff. Of those, 47% were UK-based—which presumably means British citizens—

Yes.

And 9,000-odd, or 53%, were country-based staff, employed locally in different countries. Of the 8,000-odd UK staff, only 27% were based abroad. So the majority of UK staff employed by the Foreign Office—75% or so—work in the UK, with about 25% working abroad. Are you saying that you want to increase that, so you have more Brits working abroad, and presumably, therefore, fewer overseas staff?

Those are exactly the right statistics to focus on. Very crudely, yes, we have about 17,000 people, 9,000 of whom are country-based and 8,000 UK-based, of whom 6,000 are in the UK. Over the next three to four years, all of those numbers will go down; what I want is for the 2,000 remaining—between that 8,000 and 6,000—to go down by a lot less than the 6,000 at home.

Okay, so not more Brits abroad, just—

It could be more Brits abroad, but that involves decisions about whether Brits abroad represent more value for money than country-based staff abroad, and I suspect that, in most cases, we will struggle to make that case. I am very focused on the fact that these proportions have changed quite dramatically over the last 10 years. Between FCO and DfID—as Nick will know well—we were collectively a more abroad service 10 years ago, and some of our key partners and peers still are. There is nothing morally right about being more overseas and less at home, but I think we have to look in the mirror and ask ourselves whether our staffing in the UK rising as fast as it has over the last 10 years has been a real response to the world we are in and ministerial priorities or, to be honest, the result of a set of cumulative factors that we have not looked at strategically.

I understand.

To begin with, we have not cut the migration directorate; there is a migration directorate in the new structure. Indeed, if the Foreign Secretary were here, she would say that one of the most important changes that we are currently in the process of making is giving that part of the FCDO, of which Nick has very close oversight, more resource and more priority in the organisation. We have not finally resolved this yet and we will need to talk to Ministers about it, but we have been asking ourselves whether the conflict department, which is an SCS1-led unit within the old migration and conflict directorate, fits best intellectually with a migration-focused directorate, or might fit better in a different part of the organisation. For the moment, as we go into the new year, that team is based with our humanitarian director rather than our migration director, but we are still talking about that. If I may say so, I think that there is—understandably—a misconception here. The Foreign Secretary is extremely keen that we play an active role in conflict avoidance, conflict prevention and conflict mediation. Only a couple of days ago, I was talking to the team about the work that they are doing with the Qataris at the moment, and that is a very high priority for her. However, it is more a question of whether a team that is very focused on the Prime Minister’s and the Government’s priority of reducing illegal migration, which is at the core of what the migration director is focused on, fits neatly with a department that is more interested in how to avoid future conflicts, how to mediate those that are happening, and how to bring to bear the vast experience that the FCDO has in that area.

Given what you have told us about the 34 directorates, will it be possible, maybe by the end of the year, to produce a chart to help us understand how things are now going to work?

Certainly, Chair.

Thank you.

As we are talking about the migration directorate, I will start with the subject of the OBR and its “Economic and fiscal outlook” report. It identified a risk that the Home Office might not achieve its £1.1 billion savings on the asylum budget. How might that affect the Foreign Office? Will the Home Office failure to achieve those savings have an impact on the FCDO’s ODA spending, or on other spending in these directorates?

Those are good questions. It is important to explain properly. In the previous system, there was a total target for overseas development assistance expressed as a proportion of gross national income; then, the cash amount spent on asylum support through the Home Office budget was subtracted from the cash implied by the ODA as a proportion of GNI target. That link has been broken in this spending review outcome, so there is a forecast for asylum spend through the Home Office which still scores, in the international definition, as overseas development assistance. However, the ODA budget granted to the FCDO and indeed to other Departments that spend ODA in the spending review, is now a cash set budget, independent of whatever happens to that asylum budget. From the point of view of the predictability, and therefore strategic planning, of the overall ODA effort, which Nick leads at official level, and the Department’s own budget, that is a more stable situation to be dealing with.

May I add to that answer? We used to be the saver and spender of last resort. If there was a shortfall up to the target level, we would get additional resources, and if the Home Office overspent, we would have to find the savings, which is why we had in-year cuts in previous years. That will no longer happen.

Thank you. I have a broader question about the impact of the autumn Budget on the Department’s restructuring plans. In that recent Budget, the FCDO’s relatively small day-to-day resource and capital budgets for next year were reduced by £400 million each, as I understand it, from the amounts that were outlined in the spending review. I would like to understand what effect you anticipate that having on the work of the Department.

I will give you a short, simple answer, then I will check with Tim that I am right. The FCDO’s budget for this year and the next two years was not reduced in the autumn Budget. There is a very small reduction of about 0.5% to resource DEL in 2028-2029 for us and all other spenders of resource DEL, which for us equates to a £36 million reduction in resource DEL across our entire budget—ODA, operating expenses and non-ODA programming. What you have picked up is correct, but it is a reprofiling. We moved £470 million from—you take over Tim.

We moved 2025-2026 into 2026-2027 as part of the spending review. That was to smooth the glide path from 0.5% ODA to 0.3%. Nick might want to come in on the process that he ran to do that reprofiling.

I understood that this was for capital as well—so £400 million for resource DEL but also capital, and changing from what was in the spending review to what was then given in the autumn Budget?

Across ODA I think we would have moved both RDEL and CDEL.

Yes, we would have. I do not know the precise split. We can check that for the Committee. The original profiling in 2025-26 was that we would spend 0.5% in 2025-26, and then it was going to be something like 0.36% or 0.3%. That reprofiling turned it into 0.48%, 0.37% and 0.3%. The Treasury wanted to smooth that profile.

That there is no overall reduction in resources is the key point.

You have talked about how you are looking to reduce the size of some of the directorates or shift their relative sizes. Could you share how the FCDO monitors and evaluates what it is spending to demonstrate value for money? What process do you use for making those decisions to say, “This directorate is a better use of our money,” or, “We’re going to make sure that we get value for taxpayers’ money from spending it in this way?”

Like most other Government Departments we run to a “three lines of defence” model to assure ourselves of value for money. It may be that your question spans both programme spending and staff spending. For the Department, programme spending is seven times more important than staff spending in taxpayer terms. Specifically on workforce and how we try and judge the impact of teams, since the general election—which predates me—the previous Foreign Secretary set up a delivery unit within the Department, which has been continued by the current Foreign Secretary. That has been about establishing measures for the six priority themes that Foreign Secretary David Lammy established and Yvette Cooper has continued, and making sure that in regular meetings, often chaired by the Foreign Secretary or sometimes by me on the Foreign Secretary’s behalf, we are checking the impact of our work against those themes and holding those teams to account. Often in our work it is quite hard—not impossible, and we have to keep trying—to ascribe a direct outcome to a particular piece of diplomatic or development work, though the development side of the Department tends to be a little bit better at trying to measure in pounds, shillings and pence the impact of what they have done. We try and serve that to Ministers through this delivery process, and the delivery unit pulls it together.

Right now we are working with Ministers to decide how to allocate the ODA budgets that we have across the three-year process. That takes you into higher-level questions around trade-offs. Ministers are asking the question, “If I give this amount of money to country X, what can I not do elsewhere?” That is partly an issue of value for money in terms of what you think you can buy from the different choices. It is also a policy choice in terms of where you want to allocate your resources. Once the resources are allocated, we have a well-defined set of rules and procedures that teams follow called our programme operating framework. It lays out everything that you must do to design and implement a project and then review and evaluate it. That sets out the delegated authorities in terms of who is responsible for approving it, and at what levels, whether ministerial or official. Every project has to be reviewed annually. We do those annual reviews and make them available to the public through our data systems. Each of the projects and programmes are clear about what their activities, outputs and outcomes are. They will all measure and monitor against those outcomes. As Olly says, at an aggregate level we pull that all together to track ministerial priorities. Those procedures are well trodden; we are always asking ourselves whether we need to review them. Most of the procedures were built for a 0.7% world, where we had big multi-year, multimillion-pound programmes. That is changing and we are asking ourselves whether we need a slightly more agile, more nimble process to reflect the realities that we will face in the next few years. We are thinking through that now.

Weren’t there also discussions about trying to find funding from other sources, and about doing more partnership work?

We are certainly asking ourselves how we leverage our money—how do we make our money go further? You can do that in several ways. For instance, if you put money into the multilateral development banks, they leverage that money. For every pound that we put into the World Bank’s low-income arm, it lends out five pounds; it is a 1:5 ratio, so it is leveraging those resources. We are using guarantees more, in which we leverage additional money to be spent at no up-front cost to us—there is a risk to us but we do not lay out any money. That leads to a real-world impact and we have actually not spent any money, so that is quite a good return.

What is it called? The thing that there was all the fuss about in Belém—the Tropical Forest Forever Facility.

The TFFF.

That was one of those, wasn’t it?

We are not funding the TFFF.

I know, but that is one of those.

Yes, that is a model that is trying to leverage more resources from the private sector. We work with the private sector through British International Investment to fund the private sector and try to get more private sector investment into developing countries.

May I ask about the future of that? I am sorry to jump in, but you raise the topic. What is the BII’s future funding? It can get resources by selling off some of the projects once they become profitable, and they can find a market for them, but isn’t there going to be no new money coming in?

We are looking at that right now. Two things are going on.

It is possible, isn’t it?

In the allocations that we have been given by the Treasury, the amount of the type of capital that we would transfer to BII has been cut by a half, so there is less of it available. We are going through a process of looking at BII’s future five-year strategy. One of the key questions in that strategy is about sustainability. In the last two strategies that we had with BII, we heavily invested new money in it; that will not be the case in the future. There will be some money to invest in BII, particularly to cover its investments in Ukraine, because we asked them to scale up in Ukraine. We are talking to BII about developing a new climate mobilisation facility that we might capitalise to put some start-up funding into it. Beyond that, the big sums of money that we have given to BII in the past will not be available. The question for BII is how it sustains its balance sheet and the level of investment that it has had in the past. BII does not want to shrink, and we do not want it to shrink, so one of the questions is: should we be making more money out of those investments? Should we change our return rate? That is a debate that we are having right now with BII.

We will go back to questions on staffing in a minute.

Before we move on, on the point about guarantees, is the FCDO writing cheques on behalf of UK plc? If so, what level of exposure do we have there? Is a decision made on the risk profile of each guarantee, or do you have a total cap on what you are allowed to commit on behalf of UK plc?

We are not providing any direct sovereign lending to countries. What we are doing with our guarantees is fixing a real-world problem where countries want to borrow additional resources from, say, the World Bank but have reached their World Bank lending limit and so the World Bank will not lend them any more money. We come along and basically say, “Well, we will insure the World Bank to lend more money to Country X”—Ukraine is a good example—“and will cover any losses from that lending if it happens in the future.” So there is no up-front cost to us. The default rate for the World Bank over the last 40 years has been 0.7% and they are a preferred creditor, so they get paid first if there is a default. So the risk in guaranteeing additional World Bank funding is really low, and that goes for the other multilateral development banks. On our existing exposure, the total guarantees we have is—I think I am right in saying, Tim?—£8.2 billion. In the accounts we put in what is termed the fair value of each of those guarantees. We monitor our guarantee exposure in two ways. One is the annual average exposure of the guarantee, so we set a limit for that, and there is also the concentration risk. We do not want to be overly concentrated in any one country. We have exceeded both of those limits by our guarantees to Ukraine. As a consequence, we have paused any new guarantees, apart from guarantees that were already in the pipeline, because we feel overexposed.

Out of interest, since the switch to more of a guarantee-based model, what has been the uptick? With that £8.2 billion, is 90% achieved over the last five years?

Yes. We started doing guarantees in earnest in about 2021 or 2022.

In terms of the rainforest fund, was the decision not to provide a guarantee in that case directly linked to the fact we had already topped out the amount we were willing to—

They were not seeking a guarantee. They were seeking additional funding—some paid-in capital, which the Treasury would have had to find. The Treasury decided that at this moment there was not sufficient capital to be able to provide it.

Are there any caveats to that pause? If Ukraine comes requiring additional funding for the 12 months ahead, would that be a Government Minister-level decision?

At the moment, we think other mechanisms are available, like the Russian sovereign assets option, which is currently being discussed internationally. We would rather explore those options first. According to the readout of the conversations I saw in the press this morning, it looked like some progress was being made yesterday on that, or they think there is progress being made. Then in about two years’ time the expectation is that the European Commission, with their new financial framework, will provide most of the budget funding that will be required for Ukraine. I am hoping there will not be a requirement to provide—

You mean the Russian money?

No, using their own money. I am hoping that if we can get through the next two years using the Russian sovereign asset loans or other lending streams, there will not be a need for us to call on additional guarantees.

So I am clear, that is effectively a pause in our support for Ukraine?

No, it isn’t. We have promised $5 billion worth of guarantees. Currently I think there is about $1.5 billion, possibly $2 billion, that we still have not disbursed.

We have also got 8 billion in Russian sovereign assets.

We have 8 billion in Russian sovereign assets and we are providing military funding. The UK has provided £20 billion of support to Ukraine. We are certainly playing our part.

So I am clear, while the pause is in place, over whatever defined period you decide you need to pause it for, would any additional guarantees be a Minister or Prime Minister-level decision, in order to say we are willing to exceed that cap, on a project-by-project basis?

We would certainly have to have conversations with Ministers and the Treasury in terms of who best and how best to fund any losses if they were to occur.

Good morning. I should mention my role as a Government trade envoy, which crosses over into a little bit of this territory. Sir Olly, I wasn’t quite sure from your answer at the start whether you are already reducing numbers of staff overseas at this point. You mentioned that an overseas network review was taking place, but are cuts happening at the moment?

No. A voluntary exit scheme in this financial year was already in train before I started at the Department. Some of the staff who have opted for exit under that scheme will work abroad, but in the grand scheme of our overseas staffing it will be a very small number.

On the ODA side, some of the overseas posts are already asking themselves, “How should we adapt to what is coming?”, which is basically reducing aid budgets. They are starting to work through and think through what their staff laydown should look like. Some of them have made some choices about reducing some development staff in some areas, because they are just doing the right thing, which is thinking ahead about what the funding might be. You will find in some places that there have been isolated examples of staff reductions.

I appreciate that. I know that there is upheaval in some embassies, with staff reductions. I would love to get a picture of whether they are FCDO staff, development staff or Business and Trade staff. Sir Olly, are you across the number of staff overseas from other Government Departments that are being reduced?

Yes, we are. The most important changes so far in my time in this job have been driven by the Department for Business and Trade. Partly as a result of their own spending review settlement, of course, they have been thinking about the effectiveness of their overseas workforce and the balance of that, and their headquarters teams, and are working through some significant reductions to DBT staff overseas.

Where are the significant reductions?

I am afraid that I do not know off the top of my head, Chair.

South America? Africa?

They have looked at concentrating on markets where they think those teams make the biggest difference. I think you are right that Latin America is one of the areas that they have reduced most dramatically in. There are others, too. What we have been trying to work through with them is how we ensure that where British businesses expect to receive a basic level of service from the Crown overseas, we are still able to provide that across ourselves and DBT. The reality is that that means that people who work for us will be called upon in some places to do more commercial and investment work than they have over the last couple of years, and we are making sure that they are trained and supported to do that. However, we also need to make sure that DBT continues to support those teams from London as best it can. DBT has worked quickly to decide reductions in its overseas workforce. We are talking to and thinking with other Departments that are still working through their spending review settlement regarding what it means for their overseas workforces, to make sure that that is factored into our overseas network review. As your question may imply, this is very important to us, obviously in terms of workload and morale, but also financially, because we have spread the costs of our overseas platform across the Departments that work from it. By definition, a smaller headcount from other Departments overseas increases the unit cost of us being there.

Exactly. I appreciate that you do not have the numbers off the top of your head now, but I would be grateful if you were able to write to us with details. As you say, it is not just about trade. Are you able to share with us any information you have on defence? You may not be, but you might be—I can ask. I think we are all concerned. From our visits, it is quite obvious that there is a patchwork of staff from different Departments in some of the places that we have been, and we just need to be reassured that someone, somewhere is taking an overview of this.

Yes. That is a very fair question, and we will do our best to come back to you, with the permission of those Departments. We are trying to make sure that we are as joined up in London as our ambassadors often are at post. The reality of a much bigger system in the Government at headquarters is that sometimes that is actually more of a struggle in London than it is in Addis Ababa, to pick on a post. With the creation and appointment of a DG responsible for our network and the health of that network, and understanding the cross-Government deployments to that network, that situation will be getting better from here.

Practically speaking, you will know that British diplomats tend to head over to a country and spend four to five years there, and they rely heavily on in-country staff for institutional memory, expertise and support. How are you checking and making sure that we are not losing the real expertise of in-country staff? These are the people who British diplomats rely on to execute their plans and to get things done.

Yes. In several ways, Mr Carden. Of course, most importantly, in terms of formal systems but also practical reality, we have to depend upon and appraise our heads of mission on the basis that they are taking sufficient care of, and interest in, the overall expertise available to them to run their mission. Probably the most important development in that respect over the last few months is that we are trying to use the stability of having a spending review settlement for the next three years to create in parallel country and business plans for each of our overseas missions that are three-year plans. Heads of mission have to take an interest not just in what they have to deliver their plan in six months’ time, but in how they are going to sustain and develop that capability to deliver over three years. That is the management-speak way of saying what you are saying, which is that they need to take a strong interest in the experienced country-based colleagues who have been there often much longer than their UK-based colleagues and have fantastic stakeholder relationships and insight that we can draw upon. As you will know from your travels as a Committee, we have a slightly different model from quite a lot of our peer diplomatic and development services. We use country-based colleagues in posts that, for instance, my French opposite numbers would not use country-based staff for, particularly around political insight and what other systems would regard as core diplomacy work. We think that that works extremely well for us, but it does mean that we have to think even harder about how we are investing in training and sustaining that group of people. That is one of the reasons why, when we look at staff engagement and staff morale, we take as much interest, including through surveys and statistics, in how country-based staff are feeling about the Department and their employment with us as we do in their UK-based colleagues.

To be very specific, you are doing that for the FCDO, but right now the DBT is having to cut because of funding restrictions. FCDO and DBT staff work collaboratively in embassies. Where in-country staff are being cut because of DBT cuts, what can you do as the FCDO to keep that expertise in your embassies?

We grant our heads of mission quite a lot of discretion about their staffing plan. They are obviously centrally imposed budgets and, to some extent, personnel rules, though jurisdictions are very different, so for country-based staff we have to grant our heads of mission a bit more licence to work out their staffing plan. From my own interactions with heads of mission over the last few months, I know of many cases in which they have intelligently and creatively taken country-based colleagues who have been released from one area of activity and moved them across to another area precisely because they think there are of value. There is churn in our country-based staffing at post, which allows for a certain amount of repurposing of valued long-term colleagues, but the FCDO is also far and away the biggest employer of country-based staff at post, so our heads of mission normally have a very good overview of that cadre of colleagues.

How can FCDO in-country staff feed into your overseas network review?

They have already been doing so, Mr Carden. The most senior, formal way in which they do so—I met this group not long ago—is through our country-based staff association, which is a representative global group elected by CBS colleagues to bring issues that cut across the interests of CBS at posts all over the world. It is a large group—I think there are about 20 CBS colleagues. Sometimes they meet in person, but more often online. My DG network meets them regularly, and I have seen them. That is a fantastic forum. I have got enormous value—

Maybe we could hear from them sometime, Chair.

As you travel, it is definitely worth seeing the CBS association chairs locally, because there are often extremely mature and experienced members of local staff. The overseas network review team, as they have started their work, have been making sure that, as they talk to posts, they are not just talking to UK-based colleagues; they are getting the perspectives of country-based staff as well.

The budget outlines plans to rationalise the overseas estate. What and where are we losing?

We don’t know yet. As the Committee will probably be aware, we still have a huge estate around the world—6,500 properties strewn over 280 posts. One of the driving objectives of the overseas network review is to ensure that we have the right posts in the right places. We start with the assumption that every post that we have was created for good reason at some point, so the bar for making changes is quite high, but making changes to the size and shape of those posts might be rational, because some of them were created some time ago and the world has moved on a bit. Also, with 6,500 properties across those 280 posts, there is a lot of variation as to how we use the estate. What is freehold, and what is leasehold? What is on compounds, and what is rented in city centres? With the overseas network review, we are trying to make sure that there is a strategic lens on how we are using the estate and that our global asset management portfolio, which is the programme we use to drive the investment in and maintenance of that estate, aligns sensibly with a view of where our overseas footprint needs to be in five years’ time, rather than potentially falling into the trap of fixing bits of property that we may not actually need in three or four years’ time.

The National Audit Office alluded to the FCDO undertaking an exercise of scoring and ranking posts to establish the priorities for maintenance. Is that an ongoing process, or has it been completed?

That is an ongoing process. In order to set the asset management portfolio for the next financial year and beyond, that is the mechanism we are using to try to make sure that the maintenance prioritisation is in line with the value-for-money case for the post but also with important factors like health and safety, which may propel a particular piece of work to be more urgent and more important.

How do you marry the state of an existing asset, or the envisaged ongoing maintenance cost, with either the strategic priorities or the changing priorities of the Government in order to make a decision on where should be retained, where should be divested and what should be invested in?

Our starting point, honestly, is that it is probably not sensible to spend much time on dramatic changes to the number of posts we have around the world. We have 280. That is a lot by comparison with many of our peer and partner services, but it is a thing that Ministers and, I think, Parliament value about the UK that we have that global insight. There may well be changes at the margins, but we are not approaching this exercise by asking, “How do we get from 280 to half that number, let alone twice that number?” What we do need to think about is whether the estate that currently supports each of those posts is reasonable, given what we know about our own priorities and the direction of travel of our relationship with those countries over the next five years. If we know that trade with a country has been shrinking for the last three or four years but we currently have a half-empty office in a downtown location that was built with the intention of having a very large trade section, we should be asking ourselves whether we should release that office, rent a smaller one and put our diplomatic presence in that. It is a bit hard to answer your question in generality, and I worry that I am not answering it properly.

To come back to Dan’s point about the fact that other Departments are stripping out overseas staff, that feeds into this process as well. You can argue that if you have a half-empty trade office, that does not necessarily reflect what might be achievable with that country, but it reflects the fact that DBT have chosen to extract all their staff from that particular place. To what extent is the tail wagging the dog?

Well, we are trying to make sure it doesn’t by using the overseas network review, as I said in answer to the Chair, to compile as much information as we can from Departments about their plans for overseas staffing over the next few years. We are then trying to make sure that we have measures—as you picked up—through the global asset management portfolio to understand where the marginal pound is best spent in restoring and enhancing that estate. Even where an office is, by most commercial standards, underutilised, it may still be important to maintain it. There is sometimes a case in terms of future-proofing. We may feel that we are in a dip at the moment, but it may be an office that we are filling again in three or four years’ time. Sometimes, frankly, releasing a historic property is more hassle than it is worth from a value for money point of view, and of course there are then softer questions that we have to think about, though not over-fetishise, about soft power and the UK’s prestige and character in a place. My personal focus is less on the premium residences and high commissions and embassies. That 6,500 includes many properties that are none of those things. We need to make sure, as far as possible, that where there are very substantial variations in how we house people and the platforms they work on around the world, those variations are for good reason rather than historical initiative that we have never caught up with and rationalised.

Can I add one thing about the use of the estate? There are examples where we share estate with other Governments. We need to look at all the options in all the places that we are located, including whether other Governments could move into our estate or we could share compounds with other European countries or Five Eyes partners. That is something that we will need to look at as well.

I do not disagree. I am trying to understand the scale of rationalisation that is going to be envisaged. I take your point that there is a difference between the front of the shop, which might need to be retained, and the rest of the 6,000 footprint, but the numbers are pretty stark. The Public Accounts Committee says that there is a £2.1 billion pipeline of estate refurbishment projects. There is a £450 million backlog on work. Mr Jones and I have gone around the houses on this, and we have previously settled upon a number—he says cautiously—of £250 million in annual running costs for the overseas estate, but the 2025 spending review only grants you £150 million per annum for the estates budget. The delta between the £150 million that you have, the annual running costs of £250 million, the backlog of £450 million that you need to resolve, and the pipeline of £2.1 billion is quite extensive. Getting to a place where you are living within your means—the £150 million—would require quite a significant reduction in the overseas estate.

It would, but I do not think we will be driven to that, Mr Morello. Do come in, Tim, especially if you think I am getting things wrong, but one of the ways in which we hope to bring down that maintenance backlog is through intelligent rationalisation—where there are properties in that 6,500 where, frankly, the cost of maintaining them, versus disposing of them and doing something more intelligent, is not worth it for the taxpayer. Secondly, excuse me—do correct me if I am wrong about this, Tim—but I do not recognise your £150 million as our overseas estate capital budget. We received from the Treasury an uplift to our baseline for this spending review, so the additional funding we have for our estate in capital terms over this spending review is an extra £100 million a year. That is on top of a capital DEL operating budget that, from memory, was £400 million anyway. Not all of that will be for the estate, but it will be a lot more than £50 million for the estate. We will make our allocations with Ministers over the next couple of months. What I have said internally—I hope it is helpful to say to you—is that what the Treasury gave us in the spending review does not get us out of jail free and will not solve the estate problem overnight, but it has given us the resources whereby it is now our job to come up with sensible answers to how we maintain that global presence that Ministers and Parliament expect from us, but in a rational way.

You agreed at this Committee in June that there is no silverware left to sell to fund maintenance, as was done previously with the sale of Bangkok and so on. I still do not feel like I am homing in on the scale. If only 27% of the overseas estate is owned, you can extricate yourself from leases, but you are still going to retain that 27%. If that is historical and an owned building, that is where all your required commitment to maintenance will be located. I am just trying to understand: are we looking at a future world of 3,000 overseas locations, or even fewer than that?

May I help? Sir Oliver, you helpfully told us that staffing was going to go down by 15% to 25%. Will overseas properties be going down by 50%? Would that be successful? Or will it be 4,000? Just give us a ballpark.

I think the reason I am failing to satisfy Mr Morello is that we are not starting this process with an objective of getting from 6,500 to 4,000. We need, first of all, to work out where we need our people. That is what the overseas network review is about. We are doing that at speed, because we want to set budgets from April that allow for those transitions at post. I have said to you that I suspect that those will be smaller shifts and certainly smaller reductions than we are seeing at home, but there will be some shifts and some reductions. In the Gantt chart of how we are trying to run this process, we then need an estates portfolio activity plan that lags that overseas network review, but not by very much. We will then know how many people we need to accommodate and how many people we need in offices around the world. We will then be driving an estate maintenance and capital investment programme that matches that future vision for the resources.

When are we going to get an answer to this?

We probably will not have a perfect answer, but we will know a lot more about what we think we need in terms of properties overseas by April. We will know, I hope, quite a lot more by the end of February, but we will be setting budgets for that activity by April.

Will that be a published report? Is that something that you will come back and speak to the Committee about?

I would hope and assume that it would be something that we will come back to in these hearings. I do not think it is normally something we publish our forward plans on, not least because in so many parts of the world, unfortunately, there are huge security implications these days to where we house our people and how we look after them when they are in that housing.

When one of your predecessors was in front of the Foreign Affairs Committee speaking to the sale of the Bangkok embassy, they said that that the £400 million would be used to clear the backlog of maintenance. We are now in 2025 and the backlog is £450 million. The refurbishment of the Washington embassy ran 12 months overdue. The National Audit Office said, as a result of its survey, that 31% of FCDO maintenance projects are at risk or likely to miss their delivery deadline. That is at the same time as we are talking about headcount reductions. Again, the National Audit Office survey said that the problem with maintenance is often a lack of dedicated staff for it. How do we have confidence, when we are talking about reduced budgets and managing an exercise of relinquishing some of our overseas estates, that we will end up in a better position than we are in now?

It is a very important focus for Nick, for me and for the management of the Department. We have a good estates function, but it is very thinly stretched around the world. There is an uneven model, I think it is fair to say, of areas of the world where we depend heavily on local expertise to get projects done and areas where the team from London have to or need to play a more interventionist role. One of the things that came out of the work we did with the NAO and the hearing that we did before the PAC was that we need a better explanation for why we do things one way in some parts of the world and why we allow much more local initiative and licence in other parts of the world. Sometimes that works well; sometimes it doesn’t. What the spending review did was break the direct link between our ability to maintain and enhance the estate and our programme of asset sales. In the past, as it sounds like you know well, we could only really afford to put money into the estate for whatever purpose if we had sold something to give us notional funds in the bank to fund that forward activity. The uplift to our capital budget that I explained to you was an explicit acknowledgment from the Treasury that that dependency no longer exists.

Before we go back to the FCDO’s staffing, according to the NAO, your fraud losses before recovery in 2024-25 were £2.2 million, but your counter-fraud action plan had spent £2 million on countering fraud. You spent £2 million on countering it and you lost £2.2 million. How much did you recover as a result of spending £2 million?

We can certainly give you the number for recovery. Gross losses, as you say, before recovery were £2.25 million pounds; after recovery, net losses were £1.3 million. But I would say that the resources that we expend on countering fraud are of course about a lot more than just trying to recover lost funds. They are about trying to make sure that the Department prevents fraud to begin with and also detects and investigates fraud when we see it. One of the things that Nick and I think about and worry about a lot, honestly, is our rates of fraud in the Department. We could say that they are great, across Whitehall, but they worry me, because in a complicated global organisation like the FCDO, it suggests to me that there is still undetected fraud that we need to be investing in finding. That is why we are pleased that we are spending the money that we are spending on counter-fraud activity.

It is quite a lot of money to be spending on counter-fraud activity and not getting a great deal of money back. I just raise that with you as something that should be looked at more carefully, particularly as, as you say, you have a complicated organisation across the world; we have just talked about property and all sorts of potential problems that there might be. It is not like there is no money being spent on it and yet there is very little being found.

The important measure, if only we could find a reliable proxy, is the counter example of how much fraud there would be if we didn’t have a capable counter-fraud team. Unfortunately, I say that knowing that it is impossible to measure that; the best standards in Government or in business cannot give you a precise answer to that. But I am very confident, and I think Nick as second PUS is very confident, that if we did not have that intensity of activity, there would be a risk that the gross losses number would be a lot higher.

Compared with other Government Departments, though, are you not investing more in fraud and getting less back?

I hope we are investing more in fraud and preventing more fraud.

I want to take us back to staffing and restructuring. In our previous meeting in June, you referenced that potentially 500 members of staff would be lost through a voluntary exit scheme. Can you give us an update on where we are with voluntary severance?

Of course. I thought you might ask about that and I wrote the number down. Obviously, the financial year is not quite over yet, but 350 staff have exited under that scheme to date—that is up to now—and further staff may of course exit before the end of the financial year.

Are they at all levels of the organisation?

That is all levels, yes.

Okay. How are we making sure that we do not lose the required skillsets? Have you undertaken a skills audit?

It was a little while ago now, but we ran an exercise of scrutinising those applications for exit, led by senior officials within in the organisation, precisely to check that we are not losing people with enormous talents and skills that we need for the future. That has been to various standards, including a capability framework, but we are also looking at other important pieces of information like appraisal reports and talent assessments of those individuals. We are very keen not to lose people for want of attention. There may be some people who think that they are no longer needed or required by the organisation, who, with a little more investment and a proper conversation, will realise that they still have a strong future with us. We are trying to make sure that we weed those people out of the process, and leave in those who definitely want to pursue something else. It is also very important to all of us that those people feel that they are leaving us well and feel affectionate about the organisation—of course, some of them may return to us one day.

What has been the total cost of the restructuring?

Sorry to be pedantic, but this is a voluntary exit scheme, not a restructuring. The budget we were given for the year was £35 million. We do not yet know the final out-turn on that budget.

Does that include all the expected severance pay?

That is the budget for all the exit payments, so the 300-odd so far and any others that occur before the end of the financial year.

In relation to the other staffing restructure, the PCS have said that they were not informed that staff were at risk. When did you actually consult with the PCS?

We have consulted extensively and intensively with all the trade unions.

Was that from the outset or after staff had received their at-risk notice?

I think I first met the trade union side in the Department about three weeks into my time as PUS, and my head of personnel policy has met with them fortnightly as we have been through this process. It is very important to me that we try to engage the unions as we go along with this, not least as an important way of understanding how our workforce feel about these issues. It has been important to me that we consult and engage with them at every step, and we have tried to do that.

Did you engage with them before staff were notified? The unions are arguing that they were not notified before staff received their at-risk notices.

I would be very surprised. At senior levels, our HR team have been in touch with all the trade unions together—I must keep saying that, to be fair to them all—on a regular basis throughout this exercise. So far, the restructuring exercises have affected very small numbers of senior personnel, and I have talked about that openly in the Department. It is important that people do not think there is a secret plan, and my personnel department have been engaging and informing the unions as we go along.

Has an equality impact assessment been conducted, and what was the outcome?

An equality impact assessment on the senior restructuring exercise?

On the 1,885 potentially at-risk jobs that the union is referencing.

Someone has done the maths—fair enough, I suppose—on what 25% of our UK-based workforce would be. That is not the number of planned redundancies, or anything like it. We still do not know what the overall numbers to leave the UK-based organisation will be over the next year or two—it will depend a lot on the planning work that I was trying to share with the Chair. We are not in a position to be premature and try to do an equality impact assessment of a restructuring that we have not even issued guidance on.

At what stage will that EIA be conducted—after a workforce strategy?

Once we have established the parameters of the restructuring exercise for delegated grades at headquarters, that will be the right time to work out how we comply with all the processes we need to comply with.

The FCDO topped the 2024 civil service people survey for discrimination and bullying. What does that say to you about FCDO culture?

Obviously one case of people feeling discriminated against or bullied is a case too many. Nick and I, and the senior leadership at the Department, spend a lot of time thinking about it and trying to drill down into culture. We operate a necessarily heavily federated organisation. I described the 250 posts to Mr Morello earlier, and each one of those is a micro-culture, as it needs to be. To some extent, that is influenced by the host country, the personality of the head of mission and the kind of work that is expected of that post. There are some very basic standards that we expect our heads of mission to cultivate among their workforce, including not only making sure that people speak up about instances of bullying, harassment and discrimination but setting a culture in which those things are less likely in the first place—

But what concrete measures will you actually take to bring those numbers down?

We have done a lot over the last year, such as the training for heads of mission, whom I also speak to every time before they go out on their postings. We have just got the survey results back from the 2025 people survey, which will now allow us to track the extent to which issues have developed or reduced in different parts of the organisation.

May I just add to that? I think I am right in saying that our dignity and respect at work policies are now mandatory training that everybody has to do. We are saying to all our posts with high scores that they now need to have a dedicated action plan on what they are going to do about bringing them down, so that they can understand and address the bullying and harassment scores and what is driving them. We have some examples in the organisation of zero bullying and harassment, so we need to learn and share the lessons of why some parts of the business are particularly good at this, and why some parts of the business are particularly poor. We have also identified a cadre of staff who can be—first responders is the wrong word—people to whom others can turn if they have a problem and want to speak up about it. Those people can then help them take it forward and pursue that concern. We are trying to put that in place to deal with all these issues. The reality is that we are a little bit stuck on this issue. If you go back and look at our previous surveys, it has run at a similar level for quite some time. We are trying to address this through practical actions that can get at the problems at local levels. Ultimately, this is about the local level, and it is very dispersed and different across the organisation.

That raises a lot of concern. If it has been a consistent issue for a number of years, presumably the action that you have been taking has not been working. Are you making any reflections on different action that perhaps needs to be taken instead?

That is why we have turned to mandating that people do the training and the action plans; why we are trying to learn the lessons from where we have had successes in the past; and why we are creating this cadre of first responders. These are all things that we have put in place in the last two years to 18 months to really try to make an in-road into this.

You are making proposals in relation to performance-related pay. How will you ensure that discrimination does not feature in that, given that you are at a consistent percentage and things do not seem to be changing? How will you make sure that woman or BAME colleagues are not affected by performance-related pay?

In the way that we have made important changes to the pay system at the margins this time round, we have looked specifically at the distribution of appraisal outcomes for protected characteristics in the Department. We will monitor those very closely as we now start to implement those changes. The right answer to your question is about making sure that our appraisal and performance system is scrupulously fair, and not one that some colleagues in the Department think privileges some people over others. That comes back to your opening question about culture; it is about making sure that people genuinely see all their colleagues as equals in a performance appraisal system, rather than there being a sense that some people are given an advantage. I have not seen anything other than our system being fair, but I am constantly on the lookout for that, because perception is as important as reality here.

Do you mind if I take that first, Nick? I am sure you will have a bit to say as well. We are thinking about all these issues at the moment. The factual answer for you today is that I am confident, and I hope Nick would agree with me, that the development capability of the Department is good and has been stable over the last couple of years. Some facts and figures for you: we have around 1,000 expert advisers on our books; around 1,000 project delivery staff; substantial headquarters staff in London and Abercrombie House supporting that effort and supporting Ministers’ policy development; plus dedicated development directors and development counsellors in key posts overseas. As we sit here today in 2025, the development capability of the FCDO is still one to be envied across a lot of foreign and development ministries around the world. We are, though, in a world of a declining ODA budget over the next couple of years. One of the things that Nick and I are having to think about very intensively is how we do not now just try to pickle our capability in 2025 and say, “We absolutely must preserve that.” As you say, the shape of that development capability will probably need to shift strategically over the next couple of years. We are very clear, and I think you are right, that some of this will focus much more on specific in-country expertise where the demand from the partner is for British capability, British advice, and sometimes the British brand in helping them think through some of the development challenges they have. That is part of the bigger shift in our development policy that Nick might want to touch on if there is time. We also have to face the fact that over the next few years we will not be doing some of the big, large-scale bilateral aid programmes managed from the UK or in-country that we used to, so there will be reductions in some of those areas. It is about trying to keep that capability at the level we need it for the future of the aid programme, rather than pickling it to deliver an aid programme that, honestly, we do not maintain in the same way any more. Is that fair?

Yes, I think that is very fair. The only two things I would emphasise is that even without the cuts we would have had to change, because the world is changing. What our partners want from us is changing and they want to see more investment in growth and jobs. They want to see the private sector more engaged. They want more technical knowledge and expertise rather than money in many cases. So that is changing. Currently we have a portfolio of about 560 projects with a portfolio value of about £57 billion. That is going to come down because, as we cut, that portfolio will shrink. As the portfolio shrinks, we will need fewer people delivering the portfolio. That allows us to do what I have always wanted to do, which is have fewer of our people, frankly, spending money and working on the transaction of spending money. That will release them to do the things that Olly has said: to talk to Governments about what their development needs are, to engage at the international level, and to shape global policies around things like violence against women and girls, which the Foreign Secretary has just launched a new coalition around, or illicit finance. We are going to have an illicit finance summit next year. We will put our people into things like that and use our people to shape the World Bank to do better in fragile and conflict-affected states.

Sorry, Fleur, we have lots of questions to get through. I am so sorry, but I am mindful of the time.

Just to reinforce what Olly has said, we need to change the shape of who we have and what they do. That is the process that we will go through over the next 12 to 18 months.

I am sorry, Chair, but I want to respond to one other thing that was in Ms Anderson’s question. I know that this is apocryphal, and Nick will be honest, but when we talk about this to the Department, we are not met with glum faces. The development experts in the Department, as Nick has said, understand that the world is changing, and they want to help shape it. Of course, in any organisation that is shrinking, there are morale challenges. Those are not unique to development; they are across the organisation, although I pay tribute to our colleagues for the way in which they are holding up. When Nick and I went to the development festival of learning before the summer and talked to them for two or three days about the skills that they need for the future, people were really up for it.

Richard wanted to ask some questions about development, and so did Alex. John would then like to go back to the questions that Abtisam was asking. Then we will move on to the subject of the British Council.

The Committee has been running an inquiry into disinformation, and over the past couple of months, we have visited a lot of countries in Eastern Europe and seen with our own eyes the scale of Russian influence, something that the Department knows well. We were a bit surprised to see the reduction in spending in the eastern European neighbourhood by 17%.

Hang on, let’s not get into that. We were talking about the national security and migration question.

It is an ODA question as well, but I am happy to come back to it later.

I am sorry; I am completely losing the plot. I will return to John, then we will move on to you after that.

I would like to return to some points that Abtisam raised. You have understandably been reluctant to put a figure on the number of job losses across the Department, but is it not the case that the Insolvency Service has been told that up to 1,885 jobs are at risk?

As I tried to explain earlier, Sir John, the reality is that we were asked for an estimate of what the maximum total losses might be. That is 25% of our workforce.

So it remains the case that 1,885 jobs could be at risk?

That is a possibility.

Abtisam explored with you the consultation that had taken place with the unions. You have said that HR were in very regular contact with them, but they believe very strongly that the procedures have not been followed under the civil service redundancy principles, nor has the redundancy mitigation process been followed, with the consequence that you are now formally in dispute with the PCS.

I was not aware that we were formally in dispute with them, but I am conscious that they are—

They sent you a letter on 7 November.

Yes, I have seen the letter.

They state that they are in dispute.

I think your HR know that you are in dispute.

We have gone through all this painstakingly with them, Sir John, and we have tried our very hardest to observe the Cabinet Office protocols on exit. There are two things that I would like to mention. First, those protocols are drafted for quite large-scale exercises. We are talking about very small numbers of senior colleagues, who we know well and want to treat very well, and we are in constant dialogue with them. Rather than the PCS needing to write to me, I am meeting these people very frequently and talking to them about how we are managing their process in a way that gives them clarity and dignity. Secondly, in so far as we have been under pressure against those Cabinet Office protocols, it has been a function of the fact that, to my deep frustration, one of the things that we ought to have been able to do at an early stage in this process is to offer people quotes based on their pension entitlements. We have been dependent for those quotes on an organisation called MyCSP, which runs the civil service pension scheme. As a matter of public record, sadly, they have not performed well under that contract and have just been replaced. That has meant that we have not been able to meet our own aspirations for giving people clarity as quickly as we want to, but we hope that we will be solving that very quickly now.

None the less, under your dispute resolution protocol, you are supposed to suspend the process while you resolve the dispute in conversation with the trade union.

My HR department has been meeting with the unions, including the PCS, fortnightly throughout this process. I and other senior members of the Department have been meeting the concerned individuals very frequently indeed, and they are very clear on what we are trying to do and the timetable that we are trying to follow.

But if you have been meeting them fortnightly throughout the process and they are very clear, why have they sent you a letter saying they are now formally in dispute with the FDCO?

I am afraid you will have to ask them that, Sir John. I do not understand, honestly, and I am a bit disappointed about it. I have tried my best, I promise, to be as open and consultative as I can be since I have started this job. I have taken the view that the last thing I want people in the Department—serious colleagues who have given a lot to this country and faced real hardship over the course of their careers—to think is that there are secret plans they are not aware of, or intentions for them that they do not know. I have tried to be as transparent as I can about the macro picture, both in my conversations with those colleagues and in my conversations with the unions. Obviously if the PCS are dissatisfied, we will continue to meet them, as we meet the other unions, and try to correct any misapprehensions they have about the process. As to why they have chosen to use that language, I am afraid you will have to ask them.

I want to ask you one other question, which is very narrow but is of great importance to some of your staff, and that is about the Student Loans Company’s attitude to the provision of student loans to those undertaking overseas postings. You will be aware that they appear to have now stated that those people’s children no longer qualify for student loans. Are you going to be able to resolve that?

We must resolve it, Sir John. To reassure the Committee, the issue that Sir John raises currently affects fewer than 10 FDCO families around the world, but that is fewer than 10 too many. The issue—forgive me; I am not a technical expert on the student loan contractual parameters—arises from the fact that if you are continually not resident in the UK for more than a certain number of years, you forfeit your entitlement to claim a student loan on your child’s behalf. There are exemptions for members of the armed forces, as Crown servants—

But not MOD civilians?

We are not clear on quite how that is applied with some other Departments. We think there are some inconsistency issues here, between home civil servants and Crown servants and diplomats. I am in regular dialogue with both the DfE and the Student Loans Company to try to resolve it. We are investigating at least two different ways of trying to resolve it as we speak.

Sir Olly, you have told us in the past when we have asked you about the funding position of the British Council and of the World Service that you would be in a position to provide more details in the autumn. Are you now in a position to provide more details?

I am not, Sir John, I am afraid.

When are we going to hear?

We need to work through our allocations for the three years starting in April—the country and business plans I was describing to the Committee earlier. We need to work those through with Ministers over the next few weeks into early next year. We do not have settled allocations either for workforce, coming back to the questions you asked me earlier, or for the estate, so the questions that Mr Morello was asking. The arm’s length bodies, importantly but not only the British Council and the World Service, will also be part of that allocations exercise. We have done a lot of work, including with the council and with the BBC, but those decisions we have yet to take with Ministers.

When are we talking about? Are we talking about at the end of the year? In three months’ time? This has been dragging on for a long time, and it is very important. We keep being told “soon” and “shortly”, and things like that.

The work with the British Council has been going on intensively over this period, Chair. It is not as if we are sitting there wondering what to do and not talking to them, I promise. We have been talking to them actively, including at my level, with Scott, who I know came and gave evidence to the Committee six weeks ago. We want to have good, sustainable budgets in place for 1 April. That means we obviously need to be getting those out to budget holders a good time in advance of 1 April. When between now and then—

“A good time in advance”. What does that mean?

We are not sure yet, Chair. We must go through a proper process with Ministers on this as well, so that does take a bit of time.

But you have two organisations that are staring at some very unpleasant choices, and the longer this drags on, the worse it is. First, the British Council, which is perhaps the most serious, is talking about having to go into insolvency unless it can be given confidence that its funding will be sufficient to meet its costs, and it still has this loan issue hanging over it. Are you able to give it any reassurance that it will not have to pursue that option?

If I go off too much on a tangent, Chair, shut me up, but I would like to give Sir John a full answer. As we have talked about in previous evidence sessions, the thing that I and my team—and I think, to be fair, Scott and his team—are most worried about is the fundamental sustainability of the British Council’s model. In 2024-25, it made £800 million. It received £160 million-odd from us on top of that. Its sustainability is fundamentally about whether it has a business model that can endure and make money to preserve its international presence and network. We do not have confidence that there is yet a plan that delivers that sustainability. It is not for want of Scott trying; we are talking to him and his team about it often. The two points you raise about the debt are important, but they are not actually at the heart of this. At the heart of it is the fact that the British Council’s earnings took terrible damage during covid, but covid was also, to some extent, a veil for bigger changes in their market. The shares of their biggest competitor in English exams have fallen by more than half since the beginning of covid. The way in which English is taught and examined in the world has changed dramatically over the last five or six years, and I think the British Council would be the first to admit that their business model has not kept pace with that dramatic change in their context.

We have heard evidence about this and we are aware of it; we are aware that there is a challenge. We are aware that it is more than the debt that arose during covid, and we appreciate that covid can be seen as a “veil”, and that that there is more that is a problem. We get all of that. The worry is that in the meantime we get these alarming stories about the British Council waiting to find out what is going to happen, decisions needing to be made and everyone waiting with bated breath. That is against a backdrop of serious decisions that may need to be made by the British Council. We hear that. Our job is to scrutinise the Foreign Office. Nobody can tell us what is going on. There are not even any blinking accounts for us to look at. What are we supposed to do? We keep asking, “When is a decision going to be made?” and we keep being told, “Soon.” You will understand our frustration and our concern.

I do very much, Chair.

Can I just clarify something? Are these not ministerial decisions that need to be made?

At the end of the day, they are funding decisions that need to be made. We are being told by the British Council that potentially 40 offices will close across the world. We are also being told by the BBC World Service that unless they get an uplift, which they are still in discussion with you about, they will be unable to maintain the current number of language services. Now, are you seriously willing to accept both of those outcomes?

And we have just come back from Bosnia. Quite frankly, there is not a country more in need of a language broadcast service that is in any way truthful. There are plenty of places where, frankly, we should be looking at expanding our services.

May I deal with the two institutions separately, because they are slightly different problems? With the British Council and their global network of offices, the core point I am making is that that is 84% sustained by their commercial business. The Foreign Secretary could double the grant in aid to the British Council, but they might still need over the next five years to examine very carefully whether all those offices are commercially sustainable and reasonable. I suspect—they may even say this to you themselves—they would conclude that that is not the case, even if they had no anxieties about their debt position or solvency.

Surely, the case for maintaining offices is not whether or not they are commercially sustainable; it is about ensuring that there is British influence and presence in some of the most challenging places in the world.

The British Council achieves that in a variety of ways, Sir John. We are trying to break down in our work with them which parts of their network are fundamental to our projection of soft power—that is your point. A lot of what they do is about that, but not all of it. They have offices around the world that are there to sustain their English language teaching and exams business, primarily. Whether those offices should continue to be in those places ought to be a fundamentally commercial decision for the British Council trustees. In any organisation that is a commercial business but that also has a public policy good at the heart of what it does, distilling what things are for whom to decide, and ensuring that they are sustainably funded, is complicated. But we are trying our best to ensure that we do not just fall into the trap of saying that, with an organisation that has made £50 million or more of losses every year in the last five years, if the FCDO simply waved a magic wand, that business would be sustainable for the future. Until we know for sure that putting further grant in aid into it is for public policy purposes that give value for money to us and Parliament, we are going to keep asking them for more granularity as to how they are making the commercial business properly sustainable.

And the World Service?

The World Service is a slightly different story, which is why I wanted to break it down a bit. The backdrop here is that the balance of revenue and grants in aid is different: the FCDO provided 37% of its income through grants in aid this year, and the rest comes from the licence fee[1]. As you will know, Sir John, that whole system is up for debate in the forthcoming charter review, but that is another story. The proportion that we are funding them this year is a 34% uplift[2] on the grant that the Department gave to the World Service in 2024-25. We have deliberately made a substantial investment in the World Service over the last year and half. We are going to work through with them what they think—it is for them to propose this—the rational investment in existing channels and new language services should be, and whether they should close some language services because there is not the demand or the public policy support for them that there might have been some time ago. We start from a position where the FCDO has tried to show very considerable financial support to the World Service. That has sustained them with the number of languages that they currently offer. We need to check with them what their proposals are for how they flex that over the next few years. We start from a healthier position, and with a strong commitment in terms of grants in aid from the FCDO.

We were led to believe that you would be able to come and tell us the details at this session. The British Council is perhaps the most urgent, in that the potential failure to resolve this could lead to the most drastic outcome. Can you give us some indication of when you will come back to the Committee, perhaps with the British Council, to give us those details?

I will answer that question for you properly, but I can only do so when I have established with Ministers what timetable they want to follow and what announcements they want to make at what time. Once that is clear, I would be very happy to attend with or without the British Council and explain where we have got to.

We will ask the Foreign Secretary next week.

Coming back to Russian influence and disinformation in eastern Europe, considering the FCDO’s commitment to confronting national security threats while supporting Ukraine and deepening security partnerships in eastern Europe, I was surprised to see a reduction in the support for the eastern European neighbourhood from £14 million to £11 million—a 17% reduction in the annual report. Is that just a function of the ODA reduction? What is the impact of that reduction in spending going to be?

Unless my colleagues know off the top of their heads, may I just check whether that is the integrated security fund allocation or our own departmental programme funding? Nick, do you know?

I think that is our own departmental funding. I think it is in the annual report. I would make the point that we need to look at the complete funding across all Government Departments, including the ISF component, but I do not have in front of me what that might be.

Is there a reduction across the board in FCDO funding in the eastern European neighbourhood, if you include the ISF and other programmes?

I am not sure we have that to hand.

Tim has found the reference—thank you for your patience. That is just our ODA commitment to the eastern neighbourhood, which is of course a function of ODA classification and will also be an incomplete picture. If you are specifically interested in FCDO-managed funds applied to the eastern neighbourhood, we can probably get you a fuller answer. [Interruption.] Sorry, Tim has also pointed out that by more than an offsetting amount we have spent more ODA in central Asia over the same period, so I would need to look carefully at where we have been shifting funds around between those two geographical areas.

I have a couple of other security-related questions on ODA prioritisation. We heard earlier about the movement of the migration and conflict directorates into separate areas. I have heard anecdotally that the conflict part, despite moving to the humanitarian department, will be reducing in number, and some of the NGO partners have seen large reductions in conflict prevention and conflict resolution programmes—I should note that I am the chair of the all-party parliamentary group on conflict prevention, conflict resolution and peacebuilding. I see that there are also large reductions in funding to programmes in Syria, Yemen and Lebanon. What is the rationale for this step away from working on conflict that we are seeing, when there is such a link between illegal migration, one of the Foreign Secretary’s top priorities, national security, countering terrorism and the like?

I will have a first crack; I know Nick will want to come in on some of those specific bilaterals. I must say that I fundamentally disagree with the idea that we are stepping back from conflict as a focus of the Department’s work. Both in terms of programme and the policy and diplomacy activities of the Department— whether that is Ukraine, the focus that the Foreign Secretary has put over the last couple of months on Sudan or the work the Department has been incredibly heavily engaged in around Gaza, both humanitarian and political—or all the most obvious and most deeply worrying conflicts that Ministers and, I am sure, parliamentarians are anxious about, the Department is absolutely at the heart of those and has surged into those areas over my short term as Permanent Under-Secretary. It does not feel to me, sat in my office, as if we are moving back from conflict. On the contrary, dealing with and trying to support Ministers in managing, mediating and reducing conflict is absolutely in the DNA of most of my colleagues. What there have been are some changes in the way we do our ODA programming, which, as Nick started to explain much earlier, have been to some extent driven by the reduction in the ODA/GNI ratio to 0.3%, but also to reflect wider changes in the world. Even within those changes to our bilateral programme that you asked about, on which I will let Nick respond, we have preserved and in some areas even enhanced our ODA support for Ukraine, Sudan and Gaza—three areas of the world most horribly exposed to conflict implications as we speak.

Let me say three things. First, in terms of looking at what is in the annual report, it can be quite difficult to interpret what is actually going on, because what you have in the annual report in the annex on the spend is 2024-25 actuals against 2025-26 projections on budget. What happened in ’24-25 in Syria, for example, is that we started off with a £97 million budget, but during the year, because conflict broke out, we transferred additional resources into Syria and ended up at £150 million, which is what you see in the annual report. The differences between the two years are in part because of the uplifts that were seen in ’24-25. As Olly said, we did make a decision in ’25-26 to protect certain parts of the world—Ukraine, Sudan, Palestine—so we have made a bet in certain parts where we want to shore up and underpin our activities. I would say two other things. One is that it is not only how much, but what we are doing in those countries. A good example of that is Nigeria. The team in Nigeria have thought hard about how they work across the development and security spaces in northern Nigeria, where there are huge conflict pressures and an Islamic insurgency. They are providing humanitarian support, particularly through local organisations, to engage communities. They are investing in agriculture to build resilience, they are working through the security fund to work with the Nigerians on counter-terrorism, and they are working with the MOD and the Nigerian army to build their understanding and engagement in northern Nigeria. It is working right across all those three areas, and I think that is where the real value comes in our work: the interface between the security and development work in those spaces. The final thing is that it is not only about what we do. The biggest funder in Syria, Jordan and Lebanon is the World Bank. They vastly exceed how much we spend, and what we do with shaping how the World Bank operates in these places is as much a part of our story and our impact as what we do. We have worked hard over the last two years to ensure that the World Bank is investing heavily in fragile and conflict-affected states. They have a good story and approach in those spaces. They have just agreed a new conflict strategy, which we are pleased to see, because making the World Bank work better in those spaces is part of getting this right.

Thank you, Nick. The diplomatic network, and the work that officers in the FCDO are doing around this, is very good. I think there is a particular concern about civilian peacebuilding organisations that are working in areas that are maybe not the top priorities that you talked about, to prevent conflicts that might happen in the future.

I think that is the point. The point is that there are certain conflicts that become well known across the world, and nobody doubts the investment that we are putting into those. It is the ones that are slightly below the radar that may end up being terrible conflicts of the future that we are concerned the Government may pulling away from. Is that right?

Yes. The peacebuilding work and the on-the-ground, grassroots efforts are not quite as high profile as the conflicts in Ukraine and Sudan.

And it something that we are supposed to be really good at.

Absolutely. Finally, on the prioritisation of the development budgets—this may just be a quirk of the way things are calculated—I was a bit surprised that, while we are seeing reductions in eastern Europe and the middle east, there has been an increase in the Americas and the Indo-Pacific region, with a large increase in spending in Indonesia. I just want to understand the rationale for that, because it does not seem to fit the priorities of the Foreign Secretary at the moment.

The work we do in Indonesia is twofold. One is actual support in helping Indonesia to transition away from coal and into clean energy. It is one of the major future emitters of carbon, so it is a good country to be engaging with. The other work we do involves running out of Indonesia our wider work with ASEAN. The UK now has ASEAN partnership member status, and that comes with some expectations about funding some ASEAN activities, so we have had to uplift some of our activities in Indonesia to cover that ASEAN partnership work as well.

On the increase in funding for the Americas, is that for disaster response? What is the rationale for that?

Most of our work in the Americas is concentrated around Brazil in terms of climate work, and a number of other Government Departments, particularly DESNZ and DEFRA, have quite big climate and forestry projects in Brazil. Similarly, we are doing some climate work in Colombia, and we have done some conflict work in Colombia in the past. Beyond that, it is very little.

So climate spending is increasing, while other areas are reducing. Is that the summary?

Correct me if I am wrong, Nick, but I think quite a big part of the overall number in the Americas is spent on our overseas territories, where there is an uplift from year to year. That is partly because of the disaster response that we had to do, but there are also preventive and resilience measures.

Yes, and quite a bit of that is non-ODA as well.

I have questions on migration, but does anyone want to ask about ODA?

The rules on ODA are quite strict, aren’t they, Nick? It might be best for you to answer that.

Using ODA for military purposes is not possible; you cannot do that.

Such as conflict prevention.

Sorry, I am slightly confusing myself. Is this about us using MOD resources to fund security activities?

Part of our spending review outcome was an additional £200 million uplift in non-ODA resources to the FCDO, but half of that has to be what they call NATO-qualifying—that is, activities that we could do in the FCDO that, in effect, would spend some of that 2.5% NATO resource that has gone into the MOD. We are currently going through an exercise in the FCDO to think through how we would find activities that would be NATO-qualifying, but also spend that non-ODA uplift.

We are very interested in this, because it does seem that there is important work that the Foreign Office has been doing that, if you look at it, could well be seen as defending our nation, albeit indirectly. We want to make sure that that continues.

Yes, and that is now understood.

Good. I hope it is understood in the MOD as well—that is the only thing.

If I may come in on this, Chair, I would like to dig into this movement of money from one Department to another, and specifically from FCDO to Home Office budgets for in-donor refugee costs. My understanding is that it is expected that the ODA in-donor refugee costs this year are likely to be £2.2 billion, and that that will be used to support 32,000 asylum seekers in hotels in the UK. That is money that might previously have been spent on keeping people safe and secure in their own regions. It has been said that the Home Office has no incentive to reduce ODA spend on hotels because it comes out of FCDO budgets; what would you make of that?

This one I can answer pretty crisply: that is a misconception, Mr Foord. As I was trying to explain earlier, it used to be the case that the Government’s budgets for overseas development assistance were set basically as a piece of arithmetic: you did a forecast of your gross national income, worked out what percentage of that GNI you intended to spend as ODA—obviously with 0.7% being the legal aspiration—and derived from that how you were going to divvy that up among Departments, with an important chunk of it, for a very long time, having been the DAC-recognised practice of scoring in-donor refugee costs to that ODA budget. That link was broken at the spending review, so the Home Office has a forecast for its in-donor refugee costs, which it—

Yes, that link was broken at the 2025 spending review, but I want to go back a bit further in history. In-donor refugee costs rose from 3% of ODA in 2016 to 29% of ODA in 2022; I want to explore how that happened.

Two things were driving that: one was the Afghan relocation scheme after the fall of Kabul, and the other was the Ukraine schemes that came after the war started. Subsequently, it has basically been about the small boats that have come across the channel. To answer your question, the Home Office has a really big incentive to reduce hotel costs. That is nothing to do with ODA; it is just the Government’s commitment to get all migrants out of hotels by the end of this Parliament. Also, they are under a lot of pressure because of a commitment to increase the speed of asylum decisions. Both of those are the two drivers on how much ODA is spent on supporting refugees in the UK.

I understand the pressure being exerted by others in Government on the Home Office to reduce spend on asylum hotels. Of course, the Committee is scrutinising the FCDO. Mr Dyer, you were the special envoy for famine prevention and humanitarian affairs from September 2020, and the DG for humanitarian and development from March 2022. What pressure did you exert on the Home Office to reduce the amount of ODA spend in this way?

We have had regular conversations with the Home Office about its forecasts, and what its projections were on funding. It went to £4.3 billion in 2023, because that was driven by Ukraine, Afghanistan and the small boats. Since then, it has come down an awful lot. We have had regular cross-Whitehall conversations with the Home Office through the ODA board, chaired by the CST and the Minister for Development, on exactly this question about asylum costs and what can be done about reducing them. It always comes down to the same things. One is the speed of asylum claims, because you only cover the first-year costs of an asylum seeker in the UK. After the second year, the costs are no longer covered by ODA, so the speed of the decision is the most important thing. If you can make that decision, and people can then go out and work, the costs fall down and reduce. The other is the use of hotels. The Government have now made a decision to try to get people into dispersed accommodation, which is seven times cheaper than using a hotel. Those are the drivers, and the Government committed to make progress on both of those.

Given the changes that we saw at the spending review earlier this year, where the FCDO is no longer the ODA spender or saver of last resort, are you pressing for a cap on the proportion of ODA that can be spent by the Home Office on in-donor refugee costs?

In effect, the Home Office has been given a cap by the Treasury over the next three years, based on how much it is forecasting will be spent on ODA to support refugees in the UK. If it exceeds that, the Home Office will have to find the money—it will not be given additional ODA money to do it. If it comes under that cost, the question is what it will do with that saving. The Home Office has a projection, and it has to work within that projection.

Mr Dyer, I am sure you will agree that money spent on international development overseas has so much more purchasing power than it does when spent on hotel bills in the UK. What do you make of the proposal that you—or, at least, your role—could have formal oversight of value for money for ODA across Government?

One of the changes made in the SR this time was that the Treasury gave the Foreign Office the role of agreeing what the allocation for ODA should be across Government. That is really unusual, and the Treasury rarely gives that choice.

Or any power away at all, let’s face it.

Or any power away at all. It agreed that we would propose the allocations across Government, and of course, it would then have to agree them. We commissioned all Government Departments to give us evidence notes on what their proposals were, and we used them to recommend what the ODA strategy should be across Government. We have specifically looked at the two biggest categories that other Departments spend on: research and development, and climate change. You also have the Home Office spend, which is separated out from that. We made the proposals to the Treasury, which it accepted—as you can imagine, that was quite a difficult and involved process. We now have agreed with the Treasury a revised ODA board. It is a cross-Government body, chaired by the CST and the Minister for development, and its job over the next three years of the spending review will be to hold to account Governments, including ourselves, for how we are applying and implementing that strategy.

But that will be a board, not a single accountable individual responsible for ODA value for money. What do you make of the idea of having a single individual responsible for this?

What I make of it is that it doesn’t fit with how we manage public money in the UK, which is that Government Departments are given delegated authorities and delegated levels of expenditure, and the individual permanent secretaries are responsible for the money they are provided with, as Olly and I are. That is just how it is done in the UK. Given that, how can you provide greater co-ordination, coherence, consistency and oversight? Well, that is what we have done with this governance structure, the ODA board, which will work with all the Government Departments. Second best? Possibly, but I think it’s as good as you will get within the framework in which we operate.

We still have some questions on Europe and on climate and nature, but we are running out of time a little bit. We will get to climate and nature, but first let’s get through the questions on Europe, which are really important.

Sir Olly, six months on from the 19 May summit, can you outline the different roles played by the FCDO and the Cabinet Office when it comes to the UK-EU reset?

Certainly. The overall co-ordination role is played by the Cabinet Office, supporting the Minister for the Cabinet Office, Nick Thomas-Symonds. That means that the interface with the EU institutions in negotiating the specific outcomes of the May summit is owned and co-ordinated by them. The roles we play are as follows. We are of course responsible for our posts around Europe, which includes overall responsibility for ensuring a good mission in Brussels itself—UKMis Brussels. We are also responsible for making sure that the Foreign Secretary is properly advised and equipped to have her say as a senior member of the Government on how we approach those negotiations and bring to bear the insights she gains both from her network of Foreign Minister colleagues, and of course from what our posts provide. Finally, there are aspects of what was agreed back in May, particularly around some of the dialogues on foreign policy, where bits of the Foreign Office are specifically the policy lead in dealing with the institutions.

I want to dig into some of the comments that your colleague, the second PUS, made earlier about resourcing and staffing. It was mentioned that resource choices will be made around value for money and around policy outcomes. In that context, what assurances can you give the Committee that the UK mission in Brussels and resources here in London are sufficiently resourced and staffed to manage the reset and the elements of that that the FCDO is leading on?

The short answer is that, in the general process that has been a theme of this session, we will be looking both at that overseas lay-down and at the specific resourcing of our policy teams in London, to make sure that we are playing all those roles I described to you as effectively as we can within an overall resource envelope. There are many different ways of measuring the impact of our missions overseas, but, thanks in part to geography and in part to the depth of the political relationships, our missions in Europe are way above average in terms of ministerial visits and interactions with senior colleagues in host Governments. On pretty much any activity-based measure, the impact of our network in Europe is very high indeed.

Can you say what impact the ongoing restructure might have on our presence in Brussels or on the ability to advise on the reset?

Not in advance of the other allocations that we have been describing in this meeting, but I think it is fair to say that the new Foreign Secretary continues to think that our traditional partnerships, including our European partnerships, are an absolutely vital theme of the way she wants to run the Department, so I would be very surprised if her guidance to me was not to maintain the level of commitment to Europe as a practical set of partnerships and alliances.

One question that sometimes comes up in this Committee is how well we are resourced to negotiate vis-à-vis the Commission. I do not know whether you had any thoughts on that, or whether you are able to shed any light on the depth of knowledge we can draw on in the UK.

I did not apply to my doctor for a note to talk about European negotiations today, so perhaps I will steer clear of the practicalities. All I can say is that we train our staff superbly for this work. That is one of the things we have to preserve in the FCDO,. We have a very high-quality research analysts division attached to each of our geographical commands, and our European research analysts think very deeply about the stance that our European partners take on particular issues, how the dynamics work in the negotiating room in Brussels and between capitals and Brussels and our history of interacting with that dynamic. That service is not just for our own team at headquarters and at UKMis; I hope we provide the service to Whitehall colleagues more broadly to make sure that they understand those dynamics and are sensibly prepared and trained for them.

The FCDO jointly delivers climate finance with DESNZ, DSIT and DEFRA. Under the previous Government, there was a commitment to spend £1.6 billion on international climate finance between 2021 and 2026, but the Independent Commission on Aid Impact raised concerns about the double counting of ODA. Humanitarian aid was wrongly being reclassified as climate spending on this commitment. This only came to light because of an FOI request by Carbon Brief. I have some of the info here. It said that “after the reclassification, money for humanitarian work in nations including Afghanistan, Yemen and Somalia is now being double-counted as climate finance to help the UK hit its goal.” Some of the projects that have been double-counted include work to provide food and basic necessities. What steps are being taken by the FCDO to address these concerns about the reclassification of ODA as climate finance?

If I can just jump in on the most important part of your question—Nick will have more to say, I am sure—this is an £11.6 billion commitment to climate finance over those five years.

Sorry.

It is a really important part of the reorientation of the ODA programme that Nick and the team have been working through with the Minister for Development and other Ministers over the last few months. We are on track to hit that target, which I think is by the end of 2026.

Formally, yes.

I have not seen the brief you have there, Ms Kumaran, but I am confident that the way in which we manage and measure our ODA is among the most impressive things I have seen in the Department. On that note, Nick, do you have anything specific on allocation and double counting?

This was obviously a major commitment—even more so because it was made when we were at 0.7%, and we sustained it in the cut to 0.5% and the cut to 0.3%. This has been a major commitment by the Government. One thing I would say is that it has never been a fund. That is often what people confuse. They think we set aside £11.6 billion and we identify climate projects. What we have always said is that a whole range of things across our portfolio can count as climate finance; we would identify the projects and then count them up and see whether we hit the £11.6 billion. That has always been the approach. About two years ago, we decided that we were missing a major part in what we counted as climate finance, which includes what we were doing through our humanitarian programmes. I would argue—I dispute the briefing you have in front of you—that some activities we are doing through our humanitarian work are building resilience, such as helping people to respond to flooding. For example, we are building dykes in South Sudan; that is a climate adaptation activity, and we should be counting it. Two years ago, we identified all the additional parts of the business that we were missing, and we added those to our counting. I think that was a valid thing to do.

It is not a brief that I have; it is the response to a freedom of information request by Carbon Brief. Prior to being elected, I worked in climate diplomacy. It is great to hear what we are doing on flooding and helping climate resilience globally, but some of the projects include work on providing food and basic necessities. I am really pleased that the UK is doing that, but there is no explicit link to climate financing in any of that, and double counting can be quite misleading. Does the FCDO see why people would be concerned that ODA is being double counted?

I would need to look at the precise details, and I am quite happy to do that, but I would be surprised if we or anybody had gone through the process of identifying each of the humanitarian projects that were to be included in the counting. What we actually did was, on the basis of experience, take a certain percentage of our humanitarian programming—I cannot remember what it was; something like 15% or 20%—and said that that was likely to cover climate activities. You could take 20%, and then look at 20% of our humanitarian portfolio and say, “Well, that does not count as climate,” and you would probably be right if you just take a snapshot of any 20% of the programme. I would have to look at it.

I am happy to share it.

I shall be happy to look at it.

Finally, does the FCDO still have climate as one of its priority areas? I know the previous Foreign Secretary stated that it did, but has the direction of travel been the same under the new Foreign Secretary?

Yes.

So it is one of the six?

Obviously the Foreign Secretary is give evidence to the Committee next week, but she has maintained Mr Lammy’s guidance to the Department that those themes are the ones that we ought to be concentrating on.

When I went to Belém and to the Amazon, I met some of the people who lived there—people who had been slaves on a plantation, and they were trying to get the rights to their land, which they had lived on for hundreds of years. The Foreign Office had supported them in their legal quest to get recognition for their land. I have no idea whether that was climate or international development funding, but it was money well spent, and it was really good to see.

I have one quick question. Are you able to say that UK diplomatic traffic and diptels that are “official” and “official-sensitive” level are secure?

I will not hide behind this, but you will understand that there is a limit to what it is sensible for me to say. We put our normal diplomatic traffic, which you describe, on the lowest tier of our secure system. That means that we cannot assure ourselves of its impermeability to a determined state threat. We can take active measures to protect it, and I am confident that most of the time we do, but I cannot swear to you that we do all the time. That means that we have to think very carefully about the kinds of communication we put at that level.

Unless anybody else has a pressing question, we can finally let you go. My apologies for running over. Thank you very much for your time. We appreciate it. [1] Note by witness: When saying “… the FCDO provided 37% of its income through grants in aid this year…” I misspoke. What I meant to say was: “… the FCDO provided 38% of its income through grants in aid this year…” [2] Note by witness: When saying “The proportion that we are funding them this year is a 34% uplift on the grant that the Department gave to the World Service in 2024-25.” I misspoke. What I meant to say was “The proportion that we are funding them this year is a 31% uplift on the grant that the Department gave to the World Service in 2024-25.”