Implications and impacts of merging the Foreign Commonwealth Office and the Department for International Development

10th July 2020

When elected, one of the powers available to the Prime Minister is the ability to merge, disband and establish new departments.1 This has occurred numerous times throughout modern government and has most recently included the creation of a Department for Business, Energy and Industrial Strategy, which replaced the Department for Business, Innovation and Skills in 2016, and the founding of the Department for Exiting the EU in 2016 that has since closed in January 2020.2 3  When creating new departments the Prime Minister is only restricted by the number of Cabinet Ministers currently comprising the Cabinet for which the number cannot exceed 21.4 On 16th June, Boris Johnson announced his intentions to create a ‘Whitehall Super Department’ merging the Department for International Development (DFID) and the Foreign, Commonwealth Office (FCO) into the Foreign, Commonwealth and Development Office (FCDO), due to be up and running by September 2020.5 This article will look into the roles played by the FCO and DFID as well as how a merger may be implemented, looking at the possible advantages and disadvantages in creating a new FCDO.

Of the two departments being merged, DFID is the largest in terms of spending and employs 3,600 staff based in London, East Kilbride, and around the world.6 The department’s main focus is to end world poverty and has gained world-renown for its efforts in tackling ‘poverty and disease, mass migration, insecurity and conflict’.7 The second department, the FCO, unsurprisingly is used to promote the UK’s interests overseas with the official website listing its duties as ‘supporting our citizens and businesses around the globe’ whilst working with ‘international organisations to promote UK interests and global security, including the EU, NATO, the United Nations, the UN Security Council and the Commonwealth’.8  Whilst the UK government created a legal requirement for the spending of 0.7% of its Gross National Income on aid under David Cameron in 2015 (the only G7 country to do so), it habitually exceeds this target. A better way of understanding the divergence in focus between the two departments is to analyse the areas of aid investment for both.9 10 According to the House of Commons Library, in 2018 DFID’s top three areas of investment were reported to have been in ‘humanitarian aid’, ‘health’ and ‘economic infrastructure and services’. Comparatively, the FCO spent nearly half of its aid allocation on ‘administrative costs’ with its next two highest areas of spending being on ‘multisector or cross-cutting projects’ and government and civil society’.11  Additionally, it should be mentioned that in 2019 DFID spent 73.2% of the UK’s £15 billion worth of official development assistance in comparison to the £675 million spent by the FCO.12 13

Various manifestations of the Department for International Development and the Foreign Commonwealth Office have been merged and demerged, primarily along political lines, since 1964. Founded as the Ministry for International Development under Harold Wilson’s Labour government, the department was first merged with the Foreign Office under Ted Heath’s 1970 Conservative government before being consequently re-demerged during Wilson’s second term of office in 1974. Continuing with the trend, Margaret Thatcher remerged the International Development ministry back with the Foreign Office in 1979 which remained as such until Labour retook power in 1997 under Tony Blair, at which point the modern iterations of the Foreign Commonwealth Office and the Department for International Development were created. Bucking tradition, David Cameron’s new Conservative government increased the DFID budget in 2010.14 In line with traditional Conservative ideology, Boris Johnson has long been a proponent for the abolishment of DFID and was a vocal advocate for the remerging of DFID and the FCO whilst a backbencher in parliament in 2019. His reasoning for this stance was the belief that the merger would be needed in order to fulfil the ambition of a ‘Global Britain’ which would better ensure that aid was used to serve the ‘national interest’.15 16  This is a relatively common belief across Whitehall in which some believe that the long-term poverty reduction goals of DFID and the short-term promotion of British interests by the FCO have made for a disjointed foreign policy strategy, with DFID’s aid policy specifically being seen as ineffective in attaining maximum UK orientated returns.17 18 Further highlighting this viewpoint, was the current Prime Minister’s claim during the announcement of the FCDO that ‘for too long… UK overseas aid has been treated like a giant cashpoint in the sky’.19 In addition to this, Boris Johnson alluded to a move that is expected to be made with the introduction of the FCDO towards a more UK centric aid policy which is more greatly influenced by its security and commercial interests by pointing out that ‘we give as much aid to Zambia as we do to Ukraine, though the latter is vital for European security. We give 10 times as much aid to Tanzania as we do to the six countries of the Western Balkans, who are acutely vulnerable to Russian meddling’.20  The government has further justified the decision to follow the examples of Canada and Australia in merging the two departments by stating that it would place ‘our world-class aid programme at the beating heart of our foreign policy decision making’ whilst also strengthening ‘our position in an intensely competitive world’.21 22 After the announcement of the merger, the Overseas Development Institute (ODI) released a statement in which it said that ‘Building a more sustainable and just world undoubtedly needs a whole government effort, including the considerable diplomatic clout of the Foreign Office’.23  Similarly, the Westminster Foundation for Democracy also emphasised the opportunities which the FCDO would present such as the ability to ‘reshape key policy priorities, partnerships, and delivery mechanisms’ as well as pointing to previous times the FCO and DFID have worked in tandem such as the Western Balkans Democracy Initiative that has seen DFID work closely with British embassies across the Western Balkans to address multiple governmental and societal issues. Further, the foundation stated that combining FCO’s political acumen, diplomatic skills, and understanding of soft power with DFID’s commitment to robust, long-term, evidence-based interventions along with its development expertise – could make the critical difference.24 However, whilst the ODI recognised the potential opportunities for the success in their statement, they also raised concerns that any merger must not result in the politicisation of UK aid and recommended that the International Development portion of the FCDO must still have Cabinet-level representation.25 These briefly mentioned concerns by the ODI echo that of the majority of the aid industry which has been in uproar since the announcement was made, leading to three former Prime Ministers calling the decision a mistake.

As mentioned previously, the announcement of the FCDO was met with immediate criticism, both for its capacity to diminish the influence of Britain’s world-leading development projects and the timing of the announcement, during the ongoing COVID-19 pandemic.26 Reacting to the news, Labour leader Sir Kier Starmer announced that, should he be elected Prime Minister, he would re-establish DFID. David Cameron, who prioritised International development during his premiership, stated that the decision would mean ‘less expertise, less voice for development at the top table and ultimately less respect for the UK overseas’ with Tony Blair, who founded the department in 1997, describing himself as ‘utterly dismayed’.27 In addition to this, the announcement saw a number of aid experts warn of potential ‘brain drain’ as a result of the merger.28

Whilst the government are claiming they are following the example of their close partners and fellow commonwealth members such as Canada and Australia, it should be noted that there is not a general consensus around the success of these mergers. In fact, Canada’s merger of its International Development Agency with its Department of Foreign Affairs and International Trade to form the Global Affairs Canada department has led Canada to fall in the Commitment to Development Index rankings by the Centre for Global Development from 11 in 2012 to 17 in 2018. Stephen Brown, a professor for political science at the University of Ottawa, has put forward the idea that the merging of the two departments resulted in a decrease in efficiency due to the forcing together of ‘different bureaucratic cultures and career paths, making individuals more generalist than specialist’.29  A similar issue was seen in Australia who integrated their AusAID agency into the Department of Foreign Affairs and Trade, also in 2013. The Australian merger saw the same negative consequences in the ‘culture clash’ has been identified by Stephen Brown in the Canadian merger and resulted in an ‘exodus of senior-level aid expertise’ similar to the one aid experts are warning the UK about.30 The merger also resulted in a ‘loss of strategic vision’ and the reorientation of aid priorities to closer resemble international trade policy and thus led to ‘a loss in quality in aid delivery’.31 32

This reorientation of aid priorities is something many fear will happen with the new FCDO, with the Trade Union Congress (TUC) stating that the formation of the TUC behind the motivations of a ‘Global Britain’ would risk UK aid being diverted to ‘serve our foreign policy and commercial interests in a post-Brexit world.33 Mirroring this fear, Bond, the international development network, has raised concerns that the merger would put the UK aid budget ‘in the hands of those with little expertise in global health systems, humanitarian response, reducing poverty and disease prevention’.34 These fears appear to be well-founded as the Prime Minister has repeatedly tied the merger to the need for UK aid to generate greater UK-centric returns. The website, Developing Economics has warned that ‘institutionally tying aid to UK foreign policy objectives… would shift humanitarian aid away from the immediate needs for relief and longer-term development’.35 The Oxford Research Group have also raised this point, pointed to the fact that DFID usually provides a ‘longer-term view of conflict-affected countries’ whereas the FCO has a ‘greater prioritisation of short-term national interests, like value for money and seeking to gain influence’, a perspective which many fear will become the dominant viewpoint of the new department.36 This perspective is once again revealed when looking out how each department spends its money. Between 2014 – 2018, DFID spent over half its budget on low-income and least developed countries. In total, the department spent 61% of its budget in areas where over 20% of the population were living in extreme poverty and only 9% in places where extreme poverty accounted for less than 5%. The opposite is true of the FCO which saw 78% of its aid go to middle-income countries and only 9% to where poverty levels were over 20%.37 There is a fear that the restructuring of the departments, alongside the explicitly stated need for aid to be spent in the national interest, could lead to a reduction in scrutiny over how money is spent by the new FCDO. In regards to this more than 70 parliamentarians  have signed a cross-party letter calling for the retention of the Commons International Development Committee and the Independent Commission for Aid Impact once the merger has been completed, both of which have ensured DFID money has been spent wisely.38 Arguably there would be further need for more scrutiny after the merger, especially when taking into account that the FCO has been criticised for ‘spending UK aid on projects that advance security and diplomatic interests, rather than reduce poverty’ as well as for lacking transparency, having only recently been able to raise its transparency review score from ‘poor’ in 2018 to ‘fair’ in 2020, previously ranking 38th out of 47 in the aid transparency index.39 40 41 On the other hand, DFID has always been world-leading in terms of transparency, ranking first in the EU and third in the world, having been found to offer ‘the greatest level of impact and value for money’.42 43

A final criticism regarding the planned merger is the timing of its announcement as we are currently in the middle of a global pandemic. Even in non-pandemic conditions, the creation of new departments is both expensive and time-consuming. The setting up of new IT systems, the moving of personnel and the levelling up of salaries have been estimated by the Institute for Government to cost over £15 million with these initial costs ‘generally dwarfed by the hit to productivity’. Further to this, the Institute has pointed out that previous departments have on average taken roughly two years before being able to operate as effectively as possible.44 When putting this into the context of a global pandemic, many have questioned the wisdom of merging the FCO with DFID now. During a parliamentary debate on the matter, Labour MP Stephen Doughty questioned the Prime Minister’s decision to ‘undertake a large-scale restructure, which will cost millions of pounds of public money… [which will] abolish a Department that is the most transparent, the most effective and a global champion at delivering value for money for British taxpayers’ calling it ‘irresponsible and counterproductive and wrong’ to do so in the middle of a pandemic. A stance echoed by SNP MP Chris Law who has called it ‘unforgivable’.44 Bond, Action Aid and UNICEF, amongst a myriad of others, have warned that the scrapping of DFID would put ‘the international response to COVID-19 in jeopardy’ as well as undermining ‘hard-won gains in the area of women and girls’ rights, including girls’ education, freedom from violence and resilience in the face of the climate crisis’.45 46 Compounding the disruption the merging of DFID and the FCO will have on global affairs is the fact that the UK is scheduled to ‘organise an international summit on climate change by the end of 2021’ as well as take the rotating G7 chair in the same year.47

Whilst not unanimous, it would appear that, although the two, in places, do overlap, the merging of the Department for International Development with the Foreign Commonwealth Office would diminish the capacity for DFID to continue effectively distributing aid and fulfilling its mandate, as has been seen in Canada and Australia. The timing of this merger will only serve to exacerbate the disruption that would have already been caused by creating a Foreign Commonwealth and Development Office. However, to mitigate the disruption caused, and to aid in the transition, it would be wise to appoint ‘a dedicated minister for international cooperation at Cabinet-level’, as recommended by the Overseas Development Institute, as this, to some extent, would ensure more effective International Aid policy implementation.48