HC Deb 11 November 1971 vol 825 cc261-2W
Mr. Kimball

asked the Secretary of State for Foreign and Commonwealth Affairs whether he has now completed his consideration of the Duncan Committee's recommendation for the establishment of an Overseas Diplomatic Estate Board.

Mr. Godberr

The aim of this ecommendation was to provide the Diplomatic Estate overseas with high grade commercial management and assured finance. Despite careful and sympathetic examination, the proposal has certain unacceptable disadvantages:

  1. (a) An Estate Board would not have the room for manoeuvre which the Duncan Committee assumed. It would have to remain accountable to Parliament; it would have to conform to the rules governing public expenditure, especially abroad, and its commercial judgment would be limited by the need to take account of political, prestige and security factors.
  2. (b) The Board could never operate as a competitive commercial enterprise as was intended, for it would he a monopoly supplier to a single customer, the Foreign and Commonwealth Office, who could not look elsewhere. Thus it could always show a profit on capital, simply by charging its customer appropriately high rents. If the Foreign and Commonwealth Office were to challenge the rents it would need to employ its own estate surveyors to check that they were fair.
  3. (c) The Board would in any case cost more than present departmental arrangements, and a lengthy and expensive valuation of the diplomatic estate would have to be made before it could be transferred to the Board.
  4. (d) An Estate Board as envisaged by the Committee might not be entitled to the immunities and privileges enjoyed by British Government Departments and 14er Majesty's Missions.

Nevertheless, practical measures are being taken to permit more flexible and more effective management of the Overseas Estate. First, Her Majesty's Government will establish a comprehensive and more stable programme for the acquisition or building of property over a 10-year period amounting to some £5 million a year. Secondly, wider financial delegations have been made to the Department of the Environment so that decisions on purchasing and building can be taken much more quickly. Thirdly. improved management accounting and information systems will be introduced. The Business Team has been invited to help on this.

Her Majesty's Government believe that these arrangements will not only achieve in time the economic advantages foreseen by the Duncan Committee, but will also make an important contribution to the effectiveness and morale of the Diplomatic Service abroad.

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