Spending review: FCO to become slimmed-down business lobby

By Peter Wozniak

The Foreign Office will have a quarter of its budget shaved and will shift its focus almost entirely to promoting British exports and business abroad.

William Hague’s department will see many of its more traditional diplomatic functions cut back or sidelined.

“Non-essential” programmes will be axed and many FCO workers in embassies and high commissions will be made redundant.

The purpose of the department will be reduced to a strict focus on “championing British companies to win exports and secure jobs at home”.

This new economic remit will include a “centralised corporate service function” and a “Foreign Currency Mechanism” to monitor global exchange rates, the spending review document stated.

In order to fulfil the 24% cuts demanded, many offices abroad will now be shared between the FCO and the Department for International Development (DfID).

Much of the burden is set to be borne by cutting “backroom staff”, a familiar theme in this spending review, in order to direct money to the “frontline”.

Some schemes will nonetheless see funding increased, such as counter-terrorism and conflict prevention, already revealed in the strategic defence and security review yesterday.

The peacekeeping budget will also be unaffected.

The prime minister had previously intimated the dramatic change in role for the foreign office from traditional diplomacy to a purpose-made lobby group for promoting British business.

The announcement by the chancellor today therefore included few surprises for analysts.