Recommendations & Conclusions
5 items
2
Conclusion
53rd Report - Cost of maintaining the F…
Acknowledged
Much of FCDO’s overseas estate is in poor condition, and its estates maintenance backlog would cost an estimated £450 million to resolve. FCDO’s first priority with its overseas estate is providing a safe and legally compliant estate for staff and visitors. However, 933 of its 6,500 properties (around 15%) fail …
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Much of FCDO’s overseas estate is in poor condition, and its estates maintenance backlog would cost an estimated £450 million to resolve. FCDO’s first priority with its overseas estate is providing a safe and legally compliant estate for staff and visitors. However, 933 of its 6,500 properties (around 15%) fail to meet its own condition targets and a £450 million overseas maintenance backlog has built up over time. FCDO acknowledged that the state of its overseas estate was quite shocking and that it was a severe risk to the organisation. FCDO also has an estimated £2.1 billion 2 pipeline of larger estate renewal or replacement projects. Since 2010, FCDO has funded its estate requirements through large asset sales, in particular in Bangkok and Tokyo. However, FCDO and HM Treasury have agreed that major asset sales are no longer viable, and, in the 2025 Spending Review, FCDO agreed with HM Treasury an annual settlement of £50 million resource funding and £100 million capital funding to maintain its estate. This new funding model alone will not address the scale of the current backlog, and FCDO’s estate remains one of its top department risks. FCDO’s 2025 Spending Review settlement also requires it to make 5% efficiency savings annually. FCDO acknowledges that getting its overseas estate right is one of its top priorities. It has committed to reduce the size and complexity of its estate, prioritise its resource and capital spending to have the greatest impact, and to identify efficiencies. recommendation FCDO should: a. Ensure that it builds upon the more certain funding for its overseas estate it received in the 2025 Spending Review to put its overseas estate onto a sustainable footing. b. Alongside its Treasury Minute response, write to the Committee setting out its plans for reducing its maintenance backlog, prioritising its resource and capital funding, and achieving efficiencies from its estate. c. Write to the Committee within six months categorising which build
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Government response AI summary
The government agrees with the recommendation to put its overseas estate on a sustainable footing, reduce maintenance backlog, prioritise funding, and achieve efficiencies, but provides no specific details on how or when these actions will be taken or when the requested plans will be submitted …
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HM Treasury
11
Conclusion
53rd Report - Cost of maintaining the F…
Acknowledged
Since 2010, FCDO has funded its overseas estate capital and maintenance projects through property sales. It has generated £1.47 billion from sales, largely from a sale in Bangkok in 2018 and a partial sale of its Tokyo site in 2022. FCDO has been able to access these funds flexibly, subject …
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Since 2010, FCDO has funded its overseas estate capital and maintenance projects through property sales. It has generated £1.47 billion from sales, largely from a sale in Bangkok in 2018 and a partial sale of its Tokyo site in 2022. FCDO has been able to access these funds flexibly, subject to the standard HM Treasury spending controls, and this has allowed it to complete or start around 200 capital projects since 2018. However, the NAO report concluded that this approach to funding its estate requirements was unsustainable.27 As part of the Spending Review 2025 negotiations, HM Treasury agreed with FCDO that the system of funding its estate through major sales of estate was no longer viable, and that FCDO required a more sustainable funding model for the overseas estate portfolio. Subsequently, in the 2025 Spending Review, FCDO secured an annual settlement of £50 million resource funding for day-to-day spending to maintain its estate and £100 million capital funding for larger projects.28 20 Qq 30, 65 21 Qq 49, 65 22 C&AG’s report, paras 8, 14 23 Q 27; C&AG’s report, para 2.7 24 C&AG’s report, para 3.5 25 Q 49 26 C&AG’s report, para 14 27 C&AG’s report, paras 1.18-19 28 Q 27; C&AG’s report, paras 1.18-20; Spending Review 2025, CP 1336, 11 June 2025; Foreign, Commonwealth & Development Office Main Estimates Memorandum 2025 to 2026, 16 May 2025 10
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Government response AI summary
The FCDO will launch an Overseas Network Review (ONR) in January 2026 to rationalize the overseas estate and examine whether there are assets to release. Pending the outcome of the ONR, the estate strategy will focus on creating a safer, smaller, and more secure estate, …
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HM Treasury
13
Conclusion
53rd Report - Cost of maintaining the F…
Acknowledged
FCDO’s overseas estate is diverse, including not just offices and residences but also churches, schools, cemeteries and amenities for staff.33 The overseas estate must also adapt to a wide variety of conditions, including different local laws and requirements, the presence of locally skilled labour and access to material supplies. Consequently, …
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FCDO’s overseas estate is diverse, including not just offices and residences but also churches, schools, cemeteries and amenities for staff.33 The overseas estate must also adapt to a wide variety of conditions, including different local laws and requirements, the presence of locally skilled labour and access to material supplies. Consequently, FCDO’s delivery models for day-to-day management of its overseas estate vary across its posts: 84% have responsibility for maintaining their own estate. This is done through in-house teams or local contractors with support provided from FCDO’s central estate function, ESND, in Whitehall. The remainder are managed through two regional facilities management contracts in Europe and Asia.34 FCDO told us it wants to develop a centrally owned but locally flexible strategy that allows it to make the best use of its assets.35
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Government response AI summary
FCDO’s overseas posts are responsible for managing their own operations, including their estates, with support from the Estates, Security and Network Directorate (ESND).
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HM Treasury
14
Conclusion
53rd Report - Cost of maintaining the F…
Acknowledged
Posts have responsibility for maintaining their estates. This is funded through budgets allocated to posts by FCDO’s geographic directorates.36 The Head of Mission in each post—the Ambassador or High Commissioner— has the discretion to decide, within the broad budget areas allocated, how 29 Qq 27, 65 30 Q 27; HMT, …
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Posts have responsibility for maintaining their estates. This is funded through budgets allocated to posts by FCDO’s geographic directorates.36 The Head of Mission in each post—the Ambassador or High Commissioner— has the discretion to decide, within the broad budget areas allocated, how 29 Qq 27, 65 30 Q 27; HMT, Spending Review 2025, CP 1336, 11 June 2025 31 Q 28 32 Q 61 33 Q 32; C&AG’s report, para 1.2 34 C&AG’s report, para 2.9 35 Q 32 36 Q 57; C&AG’s report, para 2.17 11 they will use it locally.37 As we noted in our June 2025 report on Condition of government property, a failure to carry out regular maintenance can lead to bigger problems, such as water leaks or roofs collapsing.38 Reactive repairs cost more than preventative maintenance and are poor value for money.39 FCDO has, however, historically prioritised spending on addressing immediate risks, rather than on carrying out all required preventative maintenance and has found that posts routinely fail to monitor and maintain their property.40 FCDO plans to publish in October 2025 a revised maintenance strategy, drawing on lessons learned from its outsourced facilities management contracts in Europe and Asia, which will give posts clearer guidance on their maintenance responsibilities.41
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Government response AI summary
FCDO’s overseas posts are responsible for managing their own operations, including their estates, with support from the Estates, Security and Network Directorate (ESND).
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HM Treasury
25
Conclusion
53rd Report - Cost of maintaining the F…
Acknowledged
ESND provides support to posts in managing their estates by setting corporate standards, and providing guidance and technical assistance. FCDO commissions around 75 regional specialists to support posts: regional technical leads that provide advice on maintenance to posts, and technical works supervisors that provide maintenance in secure areas. FCDO also …
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ESND provides support to posts in managing their estates by setting corporate standards, and providing guidance and technical assistance. FCDO commissions around 75 regional specialists to support posts: regional technical leads that provide advice on maintenance to posts, and technical works supervisors that provide maintenance in secure areas. FCDO also commissions a worldwide inspection programme which includes mandatory inspections to check the safety and compliance of equipment and machinery at posts.70 FCDO explained that these inspections cover what it classifies as high-risk maintenance activities, such as fire inspections, electrical testing inspections and gas inspections. FCDO told us that it is trying to provide as much guidance, information and support to posts as it can, and going forward it will need to look at how to ensure posts have the skills, knowledge and information required.71 64 Q 71 65 C&AG’s report, para 2.9 66 C&AG’s report para 1.6 67 C&AG’s report, paras 2.18-19 68 Q 53 69 C&AG’s report, paras 2.18, 2.20 70 C&AG’s report, paras 1.6, 2.14 71 Qq 36-37, 53-54 16
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Government response AI summary
The government describes FCDO's role in managing its overseas estate, the challenges it faces, and the support it provides to posts.
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HM Treasury