Foreign, Commonwealth & Development Office main estimate memorandum 2024 to 2025
Published 18 July 2024
漏 Crown copyright 2024
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This memorandum gives background to the Foreign, Commonwealth and Development Office (FCDO) Main Estimate 2024 to 2025.听 The format of this document follows guidance from the Parliamentary Scrutiny Unit, to provide wider context on the department鈥檚 objectives and finances.
1. Overview
The FCDO鈥檚 enduring purpose is to lead the Government鈥檚 diplomatic, development, and consular work around the world. Our overall aim is to position the UK as a responsible, reliable, and effective international actor and partner, investing in the global relationships we need for the long term.
1.1听 Objectives
The FCDO鈥檚 priority outcomes as set out at the start of 2024 to 2025 by the last government were:
1. Shape an open and stable international order through strong alliances and future partnerships.
2. Protect our national and international security and mitigate the threats of strategic competition through building partnerships, strengthening deterrence and effective constraint.
3. Reinvigorate the UK鈥檚 leadership role in international development to tackle shared global challenges, respond to humanitarian crises, and support the Sustainable Development Goals (SDGs).
4. Support British nationals around the world by providing resilient 24/7 Consular services and agile crisis response.
听1.2听Spending controls
The FCDO鈥檚 spending is broken down into several different spending totals, for which Parliament鈥檚 approval is sought.
The spending totals which Parliament votes are:
-
Resource Departmental Expenditure Limit (鈥楻esource DEL鈥�) 鈥� programme funds, running costs, frontline diplomacy and development, the overseas platform, scholarships, grants to international organisations and other bodies supporting FCDO objectives, and associated non-cash items
-
Capital Departmental Expenditure Limit (鈥楥apital DEL鈥�) 鈥� investment in capital assets, capital grants, research and development, loan funding to the British Council, and investments and assets to create growth in the future for either the UK or our partner governments
-
Resource Annually Managed Expenditure (鈥楻esource AME鈥�) 鈥� less predictable day-to-day spending: In the FCDO鈥檚 case, this includes accounting adjustments for financial guarantees, impairments, provisions, foreign exchange, and the refund of certain taxes and duties paid by certain foreign and Commonwealth governments
-
Capital Annually Managed Expenditure (鈥楥apital AME鈥�) 鈥� the FCDO is required to record capital injections in its wholly owned self-financing public corporation, British International Investment (BII) as prescribed by the government budgeting rules
In addition, Parliament votes a net cash requirement, designed to cover the elements of the above budgets that require the FCDO to pay cash in year. 听
1.3听惭补颈苍 areas of spending
The graphics below show the main components of the FCDO鈥檚 proposed budget included in the latest Main Estimate and the proportions of funds to be spent on its main activities.听
Resource DEL: total budget 拢8.172 billion, 2024 to 2025 (拢 million)
| Description | 拢 millions |
|---|---|
| B: Funding for NDPBs within Departmental Group (Net) | 44.991 |
| C: British Council | 162.500 |
| I: European Union Attributed Aid | 286.000 |
| G: International subscriptions, scholarships and BBC World Service | 296.210 |
| H: International Security Fund | 864.030 |
| F: Centrally managed programmes | 1,105.560 |
| E: Core multilateral programmes | 1,612.102 |
| A: Operating costs, frontline diplomacy and overseas network | 1,738.731 |
| D: Regional bilateral programmes | 2,061.838 |
| Total | 8,171.962 |
Capital DEL: total budget 拢2.759 billion, 2024 to 2025 (拢 million)
| Description | 拢 millions |
|---|---|
| A: Operating costs, frontline diplomacy and overseas network | 333.137 |
| F: Centrally managed programmes | 446.332 |
| E: Core multilateral programmes | 750.689 |
| D: Regional bilateral programmes | 1,228.543 |
| Total | 2,758.701 |
1.4听颁辞尘辫补谤颈蝉辞苍 of spending totals sought
The table and graphic below show how the totals sought for the FCDO Main Estimate compare with last financial year:
| Category | Spending total Amounts sought this year (Main Estimate 2024 to 2025) | Difference (+/-), compared to final budget last year (Supplementary Estimate 2023 to 24) 拢 million | Difference (+/-), compared to final budget last year (Supplementary Estimate 2023 to 24) % | Difference (+/-), compared to original budget last year (Main Estimate 2023 to 2024) 拢 million | Difference (+/-), compared to original budget last year (Main Estimate 2023 to 2024) % |
|---|---|---|---|---|---|
| Resource DEL | 8172 | -10 | 0% | -6 | 0% |
| Capital DEL | 2759 | -830 | -23% | -882 | -24% |
| Resource AME | 521 | -332 | -39% | 102 | 24% |
| Capital AME | 420 | -13 | -3% | 140 | 50% |
| 听 | 听 | 听 | 听 | 听 | 听 |
FCDO budgets (拢 million)
| Resource DEL | Capital DEL | Resource AME | Capital AME | |
|---|---|---|---|---|
| Budget sought Main Estimate 2024 to 2025 | 8172.0 | 2758.7 | 520.7 | 420.0 |
| Supplementary Estimate 2023 to 2024 | 8181.8 | 3588.2 | 852.7 | 433.0 |
| Main Estimate 2023 to 2024 | 8178.0 | 3640.8 | 418.8 | 280.0 |
1.5听Key drivers of spending changes since last year
In addition to routine claims for depreciation and estates maintenance, the small decrease of 拢10 million in Resource DEL compared to 2023 to 2024 is because of the routine reserve claims for the Foreign Currency Mechanism, Differential Inflation and IFRS finance charge being postponed from the Main Estimate to the Supplementary Estimate.听This is offset by reserve claims of 拢37 million for the European Political Community Summit, the Machinery of Government transfer from Ministry of Defence of 拢66.5 million to the FCDO baseline for the National Cyber Transformative Programme (NCP), which forms part of the UK Integrated Security Fund from 1 April 2024, and an additional 拢15 million to support the costs of hosting migrants on the British Indian Ocean Territory.
The decrease in Capital DEL mainly arises from the FCDO鈥檚 Official Development Assistance (ODA) budget decrease in 2024 to 2025 at the Mains Estimate compared to the budget agreed at SR21. The FCDO鈥檚 ODA budget has been reduced by 拢991 million CDEL to manage the ODA eligible costs of in donor refugee costs across government, in its role as ODA spender and saver of last resort. This was a planned surrender completed in the Main Estimate and does not affect the UK鈥檚 commitment to delivering the ODA input target as agreed by the previous government.听Any further revisions to the ODA budget will be confirmed at the Supplementary Estimate.
听There was a routine reserve drawdown of 拢112.9 million for estates capital spend, but reserve claims to adjust for the IFRS 16 Capital requirement have been postponed from the Main Estimate to the Supplementary Estimate.
The full list of changes since the Main Estimate are set out in section 1.9 and the Data Annex, Table B.
1.6听New policies and programmes; ambit changes
The FCDO鈥檚 ambit has been updated to replace outdated text on the FCDO鈥檚 DEL income sources, update the AME non-cash provisions list to remove Advanced Market Commitments (AMC) and update the sources of cash and non-cash AME income.
1.7听 Spending trends
The table below show overall spending trends for the last three years and plans for 2024 to 2025.
| Category | 2020 to 2021 outturn (拢 million) | 2021 to 2022 outturn (拢 million) | 2022 to 2023 outturn (拢 million) | 2023 to 2024 outturn (拢 million) | 2024 to 2025 plans (拢 million) |
|---|---|---|---|---|---|
| Resource DEL | 9,941 | 7,857 | 7,428 | 8,022 | 8,172 |
| Capital DEL | 2,977 | 1,772 | 2,152 | 3,435 | 2,759 |
| Resource AME | 703 | 720 | 485 | 203 | 521 |
| Capital AME | 650 | 661 | 290 | 433 | 420 |
- Resource DEL: Outturn for 2021 to 2022 onwards reflects the decision to reduce temporarily the overall amount spent on ODA from 0.7 to 0.5% of UK Gross National Income (GNI). The growth in 2023-24 reflects increased ODA spend arising from an improvement in the GNI and the 拢2.5 billion Total DEL additional resources provided to the UK ODA allocation in 2022 and 2023 as part of the 2022 Autumn Statement to support the people of Ukraine and Afghanistan escape oppression and conflict and find refuge in the UK
- Capital DEL: Outturn for 2021 to 2022 onwards reflects the decision to reduce temporarily the overall amount spent on ODA from 0.7 to 0.5% of GNI. The growth in 2023 to2024 is primarily driven by increased ODA spend as referenced in Resource DEL movements above and the government鈥檚 ambition to invest capital in new strategic initiatives to support clean and green infrastructure in developing countries through UK-backed investment, loans and expertise. In 2024 to 2025 the FCDO鈥檚 ODA budget has been reduced by 拢991 million CDEL to manage the ODA eligible costs of in-donor refugee costs across government
- Resource AME: is used primarily for accounting adjustments to provisions and financial instruments such as loans and shares. AME expenditure, by definition, is volatile
- Capital AME: budget is used to make investments in the FCDO鈥檚 wholly owned self-financing public corporation, British International Investment (BII).听Capital injections into BII contribute towards the FCDO鈥檚 financial transactions target.听BII鈥檚 budgets are included in Capital DEL for 2024 to 2025 figures. The above table shows Capital DEL will be switched to Capital AME in this estimate
1.8听Administration costs and efficiency plans
In comparison to the Main Estimate 2023 to 2024, there is a net increase in Administration of 拢27 million (8%). 听This relates to a surrender of 拢6.8 million for changes to the National Insurance Contributions as announced in Autumn Statement 2022, cross department transfers, including a Machinery of Government movement of the Windsor framework to the Cabinet Office of 拢2.1 million and a reserve claim of 拢37 million for the European Political Community Summit.
The FCDO鈥檚 settlement is subject to our commitment to deliver RDEL efficiencies equivalent to 拢79.5 million by 2024 to 2025, of which at least 拢35.4 million will be non-ODA savings.听These savings are being delivered through the British Council鈥檚 transformation programme, workforce planning, various IT and estates efficiencies including handing back 22 Whitehall, and the natural closure of some non-ODA programmes.
1.9听Funding: Spending Review and Budgets
The following changes have been made to 2024 to 2025 budgets since Spending Review 2021 allocations were agreed:
Resource DEL:
- a reserve claim of 拢60.5 million from estates sale proceeds for maintenance as part of the estate programme
- a reserve claim of 拢43.9 million to increase the IFRS16 requirement for ring-fenced depreciation
- a net reserve claim of 拢25.3 million to increase the ring-fence for depreciation and impairments
- reserve claim of 拢37.0 million for the European Political Community Summit
- reserve claim of 拢15.0 million for the British Indian Ocean Territory
- a budget exchange from 2023 to 2024 to 2024 to 2025 of 拢14.2 million for the Integrated Security Fund
- a reserve surrender of 拢6.8 million for changes to the National Insurance Contributions as announced in Autumn Statement 2022
- a net decrease of 拢80.8 million for budget transfers with other government departments, including Machinery of Government movements for the Windsor Framework, the National Cyber Transformative Programme and the National Cyber Fund
- a budget switch of 拢19.0 million from non-voted to voted for EU Attributed Aid
Capital DEL
- a reserve claim of 拢112.9 million from the estates sale proceeds for contractually committed projects that are part of the estates programme of global new builds and refurbishments
- a switch of 拢420 million from Capital DEL to Capital AME for BII (required under Consolidated Budgeting Guidance rules) and
- a reserve surrender of 拢991 million to manage the ODA eligible costs of in donor refugee costs across government
- a net decrease of 拢60.9 million for budget transfers with other government departments
1.10 Funding: other funding announcements
Details of all new funding announcements by the FCDO, including those by the previous government, are on 天美影院.
2. Spending detail
2.1听Explanation of changes in spending
Resource DEL
The table below shows how the FCDO鈥檚 spending plans for Resource DEL compared with the Supplementary Estimate 2023 to 2024.听 As such, this will not correlate to the supporting notes below which provide an explanation of the difference between the Main Estimate allocations in Spending Review 21 and revisions for the current years鈥� requirements.
| Subhead | Description | This year (2024 to 2025 Main Estimate budget sought) 拢 million | Last year (2023 to 2024 Supplementary Estimate budget approved) 拢 million | Changes from last year 拢 million | Changes from last year % | See note number |
|---|---|---|---|---|---|---|
| A | Operating costs, frontline diplomacy and overseas network | 1,738.7 | 1,812.2 | -73.5 | -4% | I, II |
| B | Funding for NDPBs within Departmental Group (Net) | 45.0 | 41.9 | 3.1 | 7% | III |
| C | British Council | 162.5 | 176.6 | -14.1 | -8% | I |
| D | Regional bilateral programmes | 2,061.8 | 1,911.9 | 149.9 | 8% | I, IV |
| E | Core multilateral programmes | 1,612.1 | 1,803.7 | -191.6 | -11% | I |
| F | Centrally managed programmes | 1,105.6 | 893.5 | 212.0 | 24% | I, V |
| G | International subscriptions, scholarships and BBC World Service | 296.2 | 367.7 | -71.5 | -19% | I |
| H | Integrated Security Fund | 864.0 | 740.2 | 123.8 | 17% | I, VI |
| I | European Union Attributed Aid | 286.0 | 434.0 | -148.0 | -34% | I, VII |
I.听The net increase/decrease reflects the business planning assumptions following SR 2021. 听Any internal reallocation will be reflected in the Supplementary Estimate 2024 to 2025.
II. Plans for 2024 to 2025 include a drawdown from asset sales receipts for maintenance expenditure of 拢60.5 million, and reserve claims for IFRS 16 depreciation of 拢43.9 million, 拢37 million for the European Political Community Summit, 拢25.3 million for programme and admin depreciation and net budget transfers from other government departments totalling 拢37.5 million, which include net platform charges.
III. The net increase of 拢3.4 million from SR 21 is driven by an increase budget for Marshall Aid Commemoration Commission budget by 拢1.4 million to fund 10 additional scholarships, and 拢2.0 million for Westminster Foundation for Democracy to expand their work to support fairer, more inclusive, and accountable democratic systems around the world.
IV. Plans for 2024 to 2025 includes a 拢15 million reserve claim for the cost of migrants in the British Indian Ocean Territory and 拢4.1 million in transfers to other government departments, mainly the Cultural Heritage Protection programme.
V. Changes to the Plans for 2024 to 2025 includes:
- Machinery of Government transfer from the Ministry of Defence of 拢5.1 million for the National Cyber Fund
- net budget transfers of 拢44.0 million to other departments, including LEAF and UK Partnering for Accelerated Climate Transitions programmes
- a budget switch of 拢19.0 million from non-voted to voted for EU Attributed Aid
VI.听The increase in Plans 2024 to 2025 is driven by a Machinery of Government Transfer of 拢66.5 million for the National Cyber Programme (NCP) Transformative Programme and a Budget Exchange of 拢14.2 million from 2023 to 2024 to 2024 to 2025. Net budget transfers of 拢140.9 million were made to other departments.
VII. Under the EU-UK Withdrawal Agreement, the UK will continue to meet outstanding commitments to EU development programmes, the EU budget (MFF 2014 to 2020) and the European Development Fund until around 2027. A budget switch of 拢19.0 million is requested from non-voted to voted for EU Attributed Aid.
Capital DEL
The table below shows how the FCDO鈥檚 spending plans for Capital DEL compared with the Supplementary Estimate 2023 to 2024.听 As such, this will not correlate to the supporting notes below which provide an explanation of the difference between the Main Estimate allocations in Spending Review 21 and revisions for the current years鈥� requirements.
| Subhead | Description | This year (2024 to 2025 Main Estimate budget sought) 拢 million | Last year (2023 to 2024 Supplementary Estimate budget approved) 拢 million | Changes from last year 拢 million | Changes from last year % | See note number |
|---|---|---|---|---|---|---|
| A | Operating costs, frontline diplomacy and overseas network | 333.1 | 398.4 | -65.3 | -16% | I, II |
| C | British Council | 0.0 | 54.0 | -54.0 | -100% | III |
| D | Regional bilateral programmes | 1,228.5 | 545.4 | 683.1 | 125% | I,IV |
| E | Core multilateral programmes | 750.7 | 1,986.0 | -1,235.3 | -62% | I, IV, V |
| F | Centrally managed programmes | 446.3 | 603.8 | -157.5 | -26% | I, IV, V, VI |
| H | Integrated Security Fund | 0.0 | 0.6 | -0.6 | 0% | VII |
听 I. The net increase/decrease reflects the business planning assumptions following SR 21. Any internal reallocation will be reflected in the Supplementary Estimate 2024 to 2025.
II.听Plans for 2024 to 2025 include a drawdown of capital asset sales receipts of 拢112.9 million and net budget transfers from other government departments.
III. Since 2020 to 2021 HM Government have been supporting the British Council with their cash flow requirements through loan funding. The decrease of 拢54.0 million demonstrates that the British Council have not requested to draw down any further loan requirement in 2024 to 2025. This will be reviewed in the Supplementary Estimate.
IV. Plans for 2024 to 2025 includes an ODA surrender of 拢991.0 million to meet the ODA eligible costs of in donor refugee costs across Government in the FCDO鈥檚 role as 鈥�ODA spender and saver of last resort鈥�.听 This is made up of:
-
regional bilateral programmes 鈥� 拢492.5 million
-
core multilateral programmes 鈥� 拢300.9 million
-
centrally managed programmes 鈥� 拢197.6 million
V. Changes to the Plans for 2024 to 2025 includes a budget reallocation of 拢527.6 million from Subhead F to Subhead E following HMT鈥檚 approval to relax the Financial Transactions control budget.
VI.听Changes to the Plans for 2024 to 2025 includes:
-
a budget switch of 拢420.0 million from Capital DEL to Capital AME for British International Investment;
-
budget reallocation of 拢527.6 million from Subhead F to Subhead E following HMT鈥檚 approval to relax the Financial Transactions control budget and;
-
net budget transfers of 拢62.4 million were made to other departments mainly for the PACT (Partnering for Accelerated Climate Transitions) programme.
VII. Budget for the Integrated Security Fund is received as Resource DEL. 听A switch from Resource DEL to Capital DEL will be reflected in the Supplementary Estimate 2024 to 2025 if required.
Resource AME
The table below shows how the FCDO鈥檚 spending plans for Resource AME compared with the Supplementary Estimate 2023 to 2024.听 As such, this will not correlate to the supporting notes below which provide an explanation of the difference between the Main Estimate allocations in Spending Review 21 and revisions for the current years鈥� requirements.
| Subhead | Description | This year (2024 to 2025 Main Estimate budget sought) 拢 million | Last year (2023 to 2024 Supplementary Estimate budget approved) 拢 million | Changes from last year 拢 million | Changes from last year % | See note number |
|---|---|---|---|---|---|---|
| J | Other central programme and technical costs | 520.7 | 852.7 | -332.0 | -39% | I |
I.听Resource AME is used primarily for accounting adjustments and by definition is volatile. 听The reduction in Plans for 2024 to 2025 is because of a reduction in provisions and financial guarantees and impairments of 拢368 millions and a reduction in the provision utilisation and revaluation by 拢35 million.
Capital AME
The table below shows how the FCDO鈥檚 spending plans for Capital AME compared with the Supplementary Estimate 2023 to2024.听 As such, this will not correlate to the supporting notes below which provide an explanation of the difference between the Main Estimate allocations in Spending Review 21 and revisions for the current years鈥� requirements.
| Subhead | Description | This year(2024 to 2025 Main Estimate budget sought) 拢 million | Last year (2023 to 2024 Supplementary Estimate budget approved) 拢 million | Changes from last year 拢 million | Changes from last year % | See note number |
|---|---|---|---|---|---|---|
| K | British International Investment | 420.0 | 433.0 | -13.0 | -3% | I |
I.听Capital AME shows British International Investment鈥檚 forecast capital needs.
The Supplementary Estimate 2023 to 2024 included a transfer of 拢153 million for UK Climate Investment plc from Department for Energy Security and Net Zero to British International Investment.
2.2听Restructuring
The Integrated Security Fund (ISF) came into existence on 1 April 2024. It replaces the Conflict Stability and Security Fund (CSSF) and brings the National Cyber Programme (NCP) and the Economic Deterrence Initiative (EDI) with it into a single fund. 听The FCDO received 拢66.5 million as a Machinery of Government transfer from Ministry of Defence for the NCP Transformative Programme element which forms part of the Integrated Security Fund.
2.3 Ring-fenced budgets
Within the totals, counter terrorism, research and development, financial transactions, depreciation and the Integrated Security Fund, are ring-fenced and funding cannot be transferred into other parts of the core FCDO budget without HMT approval. 听The 2024 to 2025 ODA financial transactions ringfence was revised down from the original Spending Review agreement to allow the FCDO additional flexibility when managing the ODA reductions to fund the increase to in-donor refugee costs in the FCDO鈥檚 capacity as ODA spender and saver of last resort.
2.4听 Changes to contingent liabilities
The FCDO鈥檚 contingent liabilities have increased by around 拢2.1 billion from Supplementary Estimate 2023 to 2024 to Main Estimate 2024 to 2025.
The increase mainly relates to new financial guarantees of 拢4.2 billion, being World Bank guarantees of 拢1.7 billion for South Africa, 拢1.7 billion for Indonesia, 拢0.4 billion for Egypt and 拢0.2 billion for Ukraine. There is also 拢0.2 billion for the new Asian Development Bank IFCAP guarantee.
听The increase is mainly offset by a reduction of 拢1.3 billion in amounts payable to IFIs as a result of the encashment of promissory notes.听 The remaining difference arises from the revaluation of some guarantees and foreign exchange movements.
3. Priorities and performance
3.1 How spending relates to objectives
The Estimates were being prepared during a general election campaign and the priority outcomes were set in the previous Parliament.
The FCDO will set out what we will achieve over the current Spending Review period against a series of Priority Outcomes and corporate Strategic Enablers.听
It is not possible to reflect the breakdown of resources by Priority Outcome as the FCDO is not structured in this way.听 Our resources, both people and projects, are cross cutting and delivery of our objectives contribute towards all of our Priority Outcomes. 听
3.2 Measures of performance against each priority
The FCDO will set out in detail how we will deliver our priority outcomes, how we will measure our success and how we will ensure we continuously improve.听
Data on the FCDO鈥檚 2023 to 2024 performance will be given in the FCDO 2023 to 2024 Annual Report and Accounts expected in Summer 2024.
3.3 Commentary on steps being taken to address performance issues
Spending specifically designed to address performance issues includes:
听The estate: 听The FCDO continues to self-fund its estates projects. 听We will use 拢87.1 million of the 拢112.9 million Capital DEL drawdown from capital receipts. This will continue to fund the contractually committed projects that are part of the estates programme of global new builds and refurbishments.
This will fund the completion of new offices in Geneva, Bamako, Djibouti and Miami. 听There are also other large projects addressing urgent health and safety/end of life asset issues in Athens, Lagos, Nairobi and Cairo. 听We continue to invest other capital sales receipts in a long pipeline of smaller projects.
The FCDO will use 拢25.3 million from the 拢60.5 million drawdown capital sales receipts to cover Resource DEL costs. 听This will continue to fund smaller estates projects helping to reduce the backlog on largely health and safety maintenance works.
3.4 Major projects
The FCDO will deliver the following major projects as defined by the Infrastructure and Projects Authority (IPA):
- Echo 2: a joint project with the British Council to provide new network, telephony and video-conferencing services
- FCDO Integration Portfolio: is focused on essential internal changes in the FCDO for activities, such as delivering key technology and aligning HR policy, to enable it to operate effectively and efficiently as a single organisation (now completed with confirmation of closure expected in Summer 2024)
- Hera: a programme to replace the finance and HR information system (now completed with confirmation of closure expected in Summer 2024)
- a major refurbishment of the embassy and ambassador鈥檚 residence in Washington DC
Progress on major projects is recorded at:
Infrastructure and Projects Authority Annual Report 2022-23 - 天美影院 (www.gov.uk)
An update to the FCDO鈥檚 projects will be published in the next IPA report due Summer 2024 where we expect closed programmes to be removed.
4. Other information
4.1 Additional specific information required by the select committee
The FCDO set the 2024 to 2025 ODA budget in March 2023. 听The FCDO brought forward several multilateral payments from 2024 to 2025 plans into 2023 to 2024 to manage the 2023 ODA Calendar Year Target. Details of reprioritisation to ODA programmes in-year will be included in the Supplementary Estimate.
5. Accounting Officer approval
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This memorandum has been prepared according to the requirements and guidance set out by the House of Commons Scrutiny Unit, available on the Scrutiny Unit website.
The information in this Estimates Memorandum has been approved by myself as Departmental Accounting Officer.
听听
Signed by Sir Philip Barton, Accounting Officer, Permanent Under-Secretary, Foreign, Commonwealth and Development Office, 18 July 2024
听