Reeves to cut allowances of British diplomats overseas
British diplomats based overseas will have their living allowances slashed by Rachel Reeves under plans to reduce costs.
The Foreign, Commonwealth and Development Office (FCDO) is reviewing the payments made to embassy staff around the world after this week's spending review, which will force the department to make day-to-day savings of 7 per cent in real terms.
Ambassadors and other senior diplomats will have their 'specific allowances' for overseas postings 'reviewed and revised' as part of the efficiency drive.
Diplomatic sources told The Telegraph they now fear having to pay their own rent in foreign countries, if housing allowances are reduced.
Foreign staff receive a variety of extra payments under the FCDO's 'Overseas Employment Framework', including a general allowance for working overseas, additional payments for spouses and 'danger money' for working in hostile countries.
The department does not routinely publish the cost of overseas allowances, but a Freedom of Information request in 2017 revealed that the annual cost is in excess of £23 million.
Diplomats subject to cost-cutting for two years
Ms Reeves, the Chancellor, slashed administrative budgets of all Whitehall departments in her spending review on Wednesday, but the Foreign Office has borne the brunt of the cuts and will be forced to save £78 million a year.
The latest spending figures also reflected a significant cut of the overseas development aid (ODA) budget, which is administered by the FCDO, to find an increase in defence spending.
A 'departmental efficiency' document published alongside the spending review said the FCDO would 'reform the Overseas Employment Framework to modernise and simplify the end-to-end overseas allowance package for staff, streamlining provisions to make the system more transparent'.
It added: 'Aspects of the package will be combined to reduce processing costs, while the monetary value of specific allowances are being reviewed and revised.'
Diplomats told The Telegraph that they have faced cost-cutting measures for more than two years, and that hospitality expenses were now very closely scrutinised by the department.
One said that even the cost of a cup of coffee with a diplomatic contact overseas would require extensive justification, and that many civil servants choose to pay for expenses out of their own pocket.
Exact measures to be decided
Other allowances, such as the policy to pay thousands of pounds a year for the children of diplomats to attend private boarding schools in the UK, have already come under scrutiny in recent years.
In November, the FCDO wrote to top boarding schools to ask for the children of diplomats to be given discounts on their school fees, to offset the cost of Labour's tax raid on private schools.
Foreign staff are usually given a generous stipend to pay for living expenses, to allow them to rent a property overseas while maintaining a home in the UK.
But some choose to sell their homes in the UK when working abroad, allowing them to live without any housing costs while away on a posting.
The Telegraph understands that the exact 'modernisation' reforms to diplomatic allowances have not yet been decided.
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Telegraph
23 minutes ago
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Reeves has already done irreversible damage to Britain
Less than a year after taking office, Rachel Reeves already looks to have inflicted irreparable damage on Britain's economy. Last autumn's budget saw the largest fiscal loosening of any event outside of July 2020 since the Office for Budget Responsibility's foundation, with a spending increase of almost £70bn enabled by £36bn in tax raids and a tweak to definitions of government debt. This had three easily foreseeable effects. The first was that the choice to raise taxes through employers' National Insurance, and therefore directly on payrolls, rather than slower-adjusting wages and prices, contributed to a sharp contraction in the labour market that a rise in public sector spending does not appear to have fully offset. The number of payrolled employees dropped by 274,000 between May 2024 and May 2025, with April's fall of 109,000 the steepest monthly decline since the pandemic. 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The Guardian
26 minutes ago
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The Guardian
an hour ago
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Friday briefing: The historic and controversial assisted dying bill nears its final hurdle
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'People often talk about parliament at its best, where MPs make extraordinarily powerful speeches on both sides that are very passionate, where it doesn't become party political. It's just about taking on your opponent's arguments, rather than aspersions made about what people's motivations may or may not be. I think that we have seen that start to disintegrate over the past six months, on both sides,' Jessica told me. Those who support the bill accuse the other side of being driven by well-funded rightwing Christian groups, with people not disclosing religious motivations and instead claiming safeguarding concerns that are often theoretical or implausible, Jessica added. They've also been accused of using procedural tactics to delay the bill. On the other side, critics of the bill say that Leadbeater's treatment of colleagues who oppose her has been poor. They argue there are so many loopholes, and that this is all being pushed through as a cost-saving measure for the NHS. 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LabourList provides a useful overview of Labour MPs who have switched sides. There are also people who won't be there, because the date of the bill changed a few times. 'So a lot of it's up in the air. David Lammy, for example, who is against the bill, will be in Geneva for a meeting of foreign ministers because of the international crisis. There are lots of different things going on in the margins, in terms of who can or can't be there, which makes turnout really important,' Jessica said. What happens next? If the bill passes its third reading in the House of Commons, it then has to pass the Lords, where there will be more debate and scrutiny. But, Jessica said, once a bill like this, about a major issue of conscience, passes the elected house, she has no expectations that the Lords will block it. 'The pro side hope that it would get royal assent, which would mean it becomes law by around October. After that, there's a four-year implementation period,' Jessica said. 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