Source · Select Committees · Public Accounts Committee
Recommendation 11
11
Acknowledged
FCDO's unsustainable estate funding model via property sales replaced by an annual departmental settlement.
Conclusion
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
Government Response 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, reducing costs and carbon emissions, and collaborating with other diplomatic services. The estates strategy is due to be updated next in Spring 2026.
Government Response
Acknowledged
HM Government
Acknowledged
1.3 An FCDO Overseas Network Review (ONR), which fully launches in January 2026, will look at the overall size and shape of the FCDO footprint. This will inform the FCDO in rationalising the overseas estate, which is comprised of around 6,500 properties, and examining whether there are assets to release. 1.4 Currently, the FCDO prioritises investment in its overseas estate according to a methodology that assesses most urgent need based on criteria agreed by the Executive Committee. The current emphasis is on interventions that tackle health and safety requirements and staff security, to ensure the FCDO fulfils its common law duty of care to staff and visitors. 1.5 Pending the outcome of the ONR, the estate strategy will continue to focus on creating a safer, smaller, and more secure estate, reducing costs and carbon emissions, and collaborating with other diplomatic services. The estates strategy is due to be updated next in Spring 2026.