The £17m it costs Britain annually to run its embassy in Paris, a former home to Napoleon’s sister, is justified on the grounds that grandeur is required to impress political elites. In the words of Pauline Neville Jones, former political director of the UK’s Foreign Office: “If you want to be important in France then you need to be grand.”

It also means, however, that Foreign Office resources are tied up acting as an unofficial arm of the National Trust, the UK’s main guardian of stately homes, rather than in putting Britain’s case to the French public. The running costs of the Foreign Office’s £1bn property portfolio seem untenable in an age when Sir Michael Jay, the department’s permanent secretary, has warned that job cuts will be necessary to help meet the costs of hosting the European Union and Group of Eight summits next year. An increase of £100m in the Foreign Office’s budget this year will barely cover the costs of setting up in Iraq and improving embassy security. Of course, most governments can raise revenue by selling embassies in costly capital cities and relocating to cheaper – and often more secure – buildings further out of town. Other foreign ministries are recognising the logic of moving out. In Kensington Palace Gardens, London’s “millionaires’ row”, the Russians and the Dutch have recently sold properties.

The UK Foreign Office’s “asset recycling programme” has helped the reallocation of funds, selling off 230 ambassadorial homes since 1997. But property sales raised a mere £13m in 2002-03, a derisory saving given the department’s requirement to cut 2.5 per cent of its running costs. European countries have more scope to reduce costs by sharing diplomatic premises. Nordic countries have long practiced co-operation and after the fall of the Berlin Wall, the first embassies in the Baltic states were shared between the British, German and Scandinavians. However, most European governments believe that national prestige requires national buildings. This will only end when leading EU countries collectively decide to end their diplomatic contest. Plans for a new EU External Action Service provide the perfect opportunity. Britain should champion a proposal to give the new service, staffed by diplomats from EU member states, powers to issue visas and passports. This would allow non-essential embassies to close.

It has been 25 years since Nicholas Henderson, a former UK ambassador in Paris, warned that EU integration would erode the importance of Britain’s embassies in European capitals. Influencing public opinion across the continent is more important than ever, but the original purpose for maintaining embassies appears increasingly irrelevant. In the early 20th century, an ambassador’s telegram was the only way for governments to follow political developments abroad. Now much of this information can be found by a civil servant in London via Google. Leaders of major allied countries, and those further down the ministerial chain, rarely go more than a few days without speaking, a fact that further lessens the need for the intermediary skills of ambassadors.

Yet, with so much of domestic politics now dependent on international decisions, foreign services have never been more important. But finance ministries everywhere increasingly use the trappings of 19th-century diplomatic life as a convenient excuse to impose tight financial settlements. The former US ambassador in London, Raymond Seitz, complained about having to run his official residence on a “beer budget”. In the UK, Treasury officials regularly criticise the Foreign Office’s largesse; and in France, diplomatic personnel went on strike last year in protest at budget cuts which, they claimed, had left them without paper.

Over the next few years, the UK Foreign Office is measuring the contribution of Britain’s overseas posts to the department’s “strategic priorities” on immigration, terrorism, crime and securing energy supplies. Reports suggest that minor posts such as Iceland and Mauritius will face cuts. But with the UK government planning to sack 104,000 civil servants and compiling a “doomsday book” of government property and the Foreign Office reviewing its functions, a change in British diplomatic priorities has never seemed more likely.

Rob Blackhurst is editorial director of the Foreign Policy Centre.

Published in The Financial Times on Friday 27th August 2004, http://www.ft.com