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and close estimate’, owing to the more limited resources at the Service’s disposal. In order to get some systematic sense of how well SIS was serving its customer departments, moreover, intelligence reports were sent out accompanied by a Comment Sheet (or ‘crit sheet’, as it was commonly known), asking the customer to grade the report from ‘A’ to ‘D’. Detailed statistics were kept at Head Office of the number of ‘A’ and other crits scored by stations. But, as is so often the case with performance-indicator schemes, there is the risk that measures of performance themselves become targets. So it was with the crit scheme. It was found that stations sometimes pursued ‘A’ crits on easy targets to the detriment of devoting effort to more difficult and more important requirements, a tendency reinforced by customer departments with voracious appetites for low-grade intelligence doling out ‘A’ crits in order to encourage the flow of reports. Thus a system introduced for the best of intentions did not always produce the desired result.

Budget considerations (as ever) underpinned all Service activities during the later 1940s. Menzies believed his initial peacetime allocation was adequate for SIS’s needs, but, as austerity began to bite in Britain, allocations were cut across the board and all spending was closely scrutinised. The old system where the Chief himself, or Pay Sykes, personally scrutinised and authorised the spending of even relatively minor sums of money, did not survive the war, and with the appointment in January 1946 of a senior Air Ministry official (and former Lancashire county cricketer) to be the new Director for Finance and Administration (as recommended by the Chief’s reorganisation committee), civil service procedures and accounting systems were gradually introduced. This took time, but in November 1949 Sinbad Sinclair reported to his production conference that Finance and Administration would in future provide Regional Controllers with a monthly statement of expenditure in their area ‘only one month in arrears’. Station accounts would be provided three months in arrears, and Controllers were sternly instructed that they ‘must not go beyond their Budget allocations without the matter being referred to V.C.S.S. through D.F. & A.’ But old habits (if that is what they were) died hard. The same month Ellis (Controller Far East) reported a proposal ‘made by the Far East for raising funds through the sale of opium confiscated by the Customs Authorities’. Ellis said that the matter had two aspects: the ‘moral issue of dealing in opium’ and ‘the legal financial aspect’. In this case he had advised ‘Far East’ against the operation on the reasonable argument that ‘time would have to be devoted to it at the expense of Production work’, and on the mildly more surprising grounds (though it is just possible that this was a joke) that ‘we might get involved with rogues and undesirable characters’. His colleagues were not against the matter in principle and agreed ‘that there might be occasions in which raising funds by irregular means would be justified’, but they would have to be approved on a case-by-case basis. SIS’s new postwar situation, thus, meant that not only was there generally less money available but that any schemes proposed would be much more closely scrutinised by the Foreign Office than hitherto.

Relations with MI5

Between 1946 and 1950 much time and effort of both Menzies and his MI5 opposite number was taken up with sorting out the relative responsibilities of the two services. While MI5’s primary concern was for security intelligence within the United Kingdom – usually defined as ‘up to the three-mile limit’ – and in British territories overseas, SIS’s was for gathering intelligence outside British territory. In practice the dividing line between the two agencies was rarely very clear-cut, and arguments about their respective areas of responsibilities were endemic in the relations between them. During the war, distinctions had become particularly blurred, both accidentally and deliberately, through the