16 July 2015

For outgoing FCO Permanent Under-Secretary Sir Simon Fraser, the defining experience of the current era was the 2008 financial crash. After five turbulent years in post, and against a challenging backdrop of austerity, Fraser argues that the Foreign Office has achieved great things. It is leaner, more efficient and increasingly diverse. But with more austerity on the way, he warns his successor and ministers that they may have to reimagine how it operates if the UK is to retain its global network.

As he retires after six years as a Permanent Secretary, first at BIS and since August 2010 at the FCO, Sir Simon Fraser reflects on the FCO’s response to austerity and the need for reform, its relationship with wider Whitehall, and his efforts to develop a more diverse workforce and inclusive Departmental culture.

The FCO and austerity

Sir Simon Fraser speaking at the IfGFraser began by talking about his time as Permanent Secretary at BIS in 2009, before the drive for austerity had kicked in. He acknowledged that the pre-austerity public sector – with its “away days” and some “excessive” senior salaries – was ripe for reform and he saw many benefits from the austerity-driven changes.

Fraser talked about the changes to the FCO: it has opened fifteen new embassies and reduced its running costs by 20 per cent, against a backdrop of a 10 per cent budget cut since 2010. Although Sir Simon supported the protection of UK aid spending and the two per cent commitment to defence spending, he lamented that the FCO’s relatively small budget was unprotected in the coming Spending Review. As “the glue that holds everything together” in co-ordinating the UK’s policies abroad, Sir Simon said it arguably deserved similar protection to the larger budgets of DFID and the Ministry of Defence, whose operations overseas would only stand to benefit from a strong FCO.

There were now fewer overseas postings for its staff; terms and conditions had been pared back; the hiring of locally-engaged staff abroad (currently 84 per cent of all FCO staff abroad) had been taken about as far as it could go. With more austerity to come Fraser argued that further cuts will require a serious rethinking of the way that the FCO, and wider Whitehall, operates. For the FCO, this will probably mean more pooled funding, joint teams, and better sharing between departments of the costs of doing HMG’s business overseas. But he also warned that his successor will have to think about how to prioritise what the FCO does, and ‘getting better at prioritisation’ will require the involvement of ministers too.

The FCO and Whitehall

One of the topics Fraser raised was the role of the FCO in foreign policy across Whitehall. He described the FCO as Whitehall’s “convening” and leading department when it comes to foreign policy. But, in the end, the Prime Minister has the final say.

Since May 2010, the National Security Council (NSC) has brought all relevant departments together to discuss national security issues, including foreign policy. Fraser said that, far from being a threat to the FCO, the NSC had been a multiplier, as the FCO could use its expertise to give the best advice before NSC meetings, make the best arguments at NSC meetings, and would then be in pole-position to implement its decisions.

However, he later acknowledged that the FCO needed to get better at working within Whitehall. From the audience, Sir Jeremy Greenstock, the UK Permanent Representative to the UN between 1998 and 2003, argued that criticisms of the FCO’s lack of domestic understanding (of aligning foreign policy with domestic policy and understanding parliament) did not imply an intellectual failing, but rather that FCO networks were too weak in Whitehall and the wider UK. As Fraser put it, the FCO may not be so good at understanding the Whitehall machine and perhaps its “elbows were not as sharp as others’.”

Diplomatic excellence

Describing achievements since 2010, Sir Simon singled out improvements in the FCO’s consular services, which had historically been the Cinderella part of the service. The FCO was today much better at responding to crises, such as the recent terrorist attack in Tunisia. The response stood up within three hours and within two days nearly 100 UK personnel were in Tunisia.

Fraser also talked about his focus on people and the need for the FCO to get the most out of staff. He argued the case for diplomatic expertise, acknowledging the value of bringing in outsiders, but arguing that the FCO’s home-grown expertise was unrivalled. He talked about the work done with the diplomatic excellence programme and in the new Diplomatic Academy to focus on its people. But he also saw room for improvement. It is, for example, unusual for someone who, like Fraser, has eight years’ outside experience, to come back into the FCO and get on. Fraser actively brought people back into the FCO at director-level, from other departments and from the private sector. He pointed out that every member of the FCO Management Board has experience of working outside of the department.

FCO and Diversity

Fraser conceded that, in the past, the FCO’s culture had been too narrow, too white and too male. He argued that this had improved on his watch, but acknowledged that there was still much more to do to achieve greater diversity in the full sense of the word.

He acknowledged it was a shame there was no women on the shortlist to replace him as PUS. He also noted that the FCO had yet to appoint a woman ambassador to its most prestigious posts, like Washington and Paris, but emphasised that women were now ambassadors in both Beijing and Kabul. He put this down to the ‘pipeline’ of diversity in the organisation, pointing out that the FCO had ‘started’ further behind the rest of Whitehall, having been the last department to abolish its ‘marriage bar’ – as late as 1973. He anticipated that there would be some “competitive” female candidates to replace his successor, both from within the FCO and outside it.

On wider diversity, although 12 per cent of its total workforce is from minority ethnic backgrounds, at senior levels FCO leadership is almost exclusively white. Fraser said there had been a cultural switch, to understanding that diversity not only matters but is also good for the FCO, leading to better decisions and outcomes.

Fraser concluded that, after five demanding years, there was much to celebrate, with achievements in efficiencies, driving up standards and improving delivery. But he felt the Civil Service could always do better, because “better never ends”.