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Pound's slide hits Foreign Office Pound's slide hits Foreign Office
(1 day later)
MPs have called on the Treasury to provide the Foreign Office (FCO) with additional funding to cover shortfalls caused by the pound's declining value.MPs have called on the Treasury to provide the Foreign Office (FCO) with additional funding to cover shortfalls caused by the pound's declining value.
At a time when all Britons are finding the pound does not go as far as it once did, the FCO's work abroad means it is feeling the pinch more than most.At a time when all Britons are finding the pound does not go as far as it once did, the FCO's work abroad means it is feeling the pinch more than most.
The Foreign Affairs Committee says the removal of Treasury protection against currency fluctuations is another blow.The Foreign Affairs Committee says the removal of Treasury protection against currency fluctuations is another blow.
The pound's value against the euro and dollar has slid in recent months.The pound's value against the euro and dollar has slid in recent months.
It is now trading at around 1.10 euros, compared with 1.50 in 2007, and has crashed to around $1.45 in trading against the American dollar.It is now trading at around 1.10 euros, compared with 1.50 in 2007, and has crashed to around $1.45 in trading against the American dollar.
The bulk of what Britain's diplomats do abroad is paid in foreign currency - so the plunging pound has hit Foreign Office budgets much harder than any other government department.The bulk of what Britain's diplomats do abroad is paid in foreign currency - so the plunging pound has hit Foreign Office budgets much harder than any other government department.
The FCO uses "hedging" arrangements to limit its exposure by securing foreign currency in advance at a fixed rate, but told the committee it acknowledged that it will face "a tougher challenge" to fund its activities in the next financial year.The FCO uses "hedging" arrangements to limit its exposure by securing foreign currency in advance at a fixed rate, but told the committee it acknowledged that it will face "a tougher challenge" to fund its activities in the next financial year.
Meanwhile, the FCO warned that anticipated increases of more than £3m a year in the cost of subscriptions to international bodies like the United Nations may force it to cut other programmes.Meanwhile, the FCO warned that anticipated increases of more than £3m a year in the cost of subscriptions to international bodies like the United Nations may force it to cut other programmes.
The committee's chairman, Labour MP Mike Gapes, said it was "deplorable" that the department was forced to shoulder alone the cost of subscriptions which benefit the whole government, and urged the Treasury to cover them.The committee's chairman, Labour MP Mike Gapes, said it was "deplorable" that the department was forced to shoulder alone the cost of subscriptions which benefit the whole government, and urged the Treasury to cover them.
Job securityJob security
The FCO expects its overall funding to grow from £1.6bn in 2007-08 to £1.7bn by 2010-11. In the year ending 2007 it was able to spend £58m less than expected.The FCO expects its overall funding to grow from £1.6bn in 2007-08 to £1.7bn by 2010-11. In the year ending 2007 it was able to spend £58m less than expected.
The committee report also highlighted dissatisfaction among Foreign Office staff about their career prospects and changes within the service.The committee report also highlighted dissatisfaction among Foreign Office staff about their career prospects and changes within the service.
The FCO's own staff survey last year found just 35% believed the promotion process was fair and objective, while feelings of job security had dropped by 14% to 42%.The FCO's own staff survey last year found just 35% believed the promotion process was fair and objective, while feelings of job security had dropped by 14% to 42%.
And an independent "cultural audit" carried out last year found that most staff "loved" working for the FCO, but uncovered criticisms of the department's "too conformist, consensual, bureaucratic and risk averse" culture.And an independent "cultural audit" carried out last year found that most staff "loved" working for the FCO, but uncovered criticisms of the department's "too conformist, consensual, bureaucratic and risk averse" culture.
The FCO said in a statement: "We welcome the report and will respond to specific points raised by the committee in our formal response."The FCO said in a statement: "We welcome the report and will respond to specific points raised by the committee in our formal response."
Shadow foreign secretary William Hague said the report suggested "serious shortcomings".
He said ministers must "explain what they intend to do about these failings, and should make clear that they will accord a higher priority to the Overseas Territories and visits to Asia, as the report recommends".
Lib Dem foreign affairs spokesman Ed Davey said: "If Britain's commitment to supporting the United Nations is undermined by Treasury penny pinching, just as President Obama wants the US to focus more on the UN, this would be the most short-sighted, self-defeating policy imaginable."