The merger between the Department for International Development (DFID) and the Foreign and Commonwealth Office (FCO) in 2020 has limited the UK’s foreign aid management capabilities, the National Audit Office (NAO) has noted in a report.
At the height of the pandemic, Prime Minister Boris Johnson decided to merge DFID, the country’s development aid agency, with the Foreign Ministry (FCO). When the announcement was made, the presumption was that combining diplomacy and development would both improve outcomes and safeguard British interests overseas. However, more than three years later and with more than £24 million spent on merging the two departments, British development efforts continued to be hampered by inefficiencies.
The NAO, the UK’s public spending watchdog which reports to the parliament, found that there seemed to be little in the way of any preparation undertaken before the merger, with no measures put in place to measure the anticipated benefits.
“The FCDO (combined department) was undertaken without consultation, warning, or adequate preparation. Three years on, it is alarming that the FCDO itself rates the risk of not sustaining its international development skills as severe,” said Gideon Rabinowitz, the director of policy at Bond.
As a result, what occurred was a loss of experienced staff, drastically reduced budgets, gyrations in strategic priorities, and the abrupt pull out from key development projects, including those being conducted in partnership with other countries.
Oxfam, the UK’s leading charity fighting global poverty, has referred to the FCDO’s development blunders as “deeply concerning” and has lamented that so much of the government’s development expertise has become a casualty of the “ill-advised merger.”
The FCDO, meanwhile, responded to the NAO report by saying:
“We have made significant progress in our aims, bringing together our expertise to further UK interests. We know there is more to do, and we remain committed to the mission of the FCDO.”
Key findings from the NAO report
According to the National Audit Office’s (NAO) report, the British government has spent a minimum of £24.7 million in direct costs on the merger between the DFID and the FCO to form the FCDO. These costs include having to bring in outside staff, hire consultants, and IT expenses, but the figure does not include indirect costs such as a loss of productivity.
Some of the key findings from the NAO:
- The FCDO did not do enough in the early stages of the merger to set out a clear vision and direction for the department.
- Implementing such a merger in the middle of the pandemic made everything more difficult.
- The initial schedule to merge the two departments’ portfolios was unrealistic in both scope and timing.
- The FCDO had to rescope its integration plan in 2022 in order to get the merger back on track.
- The merger has been quite difficult and disruptive for many staff, particularly with the decision to close DFID’s headquarters building in London and new rules requiring some staff to get security clearances.
- Even today, the FCDO has no system in place to track the promised benefits of the merger, including cost savings, organizational improvements, or improved efficiencies.
- On a more successful note, the FCDO has been able to increase the accountability and visibility of international aid since the merger was announced.
The NAO did have words of praise for the FCDO for having taken a number of steps in 2022 to get the merger back on track, including rescoping its priorities and implementing new, more transparent and accountable operational frameworks. Nonetheless, the report noted that there is still much work to do in resolving remaining issues and ensuring that the fundamental basics of development aid are delivered.
A key timeline of events
- June 2020 – PM Boris Johnson announces the merger
- July 2020 – The government slashes development spending by almost £3 billion due to pessimistic GNI forecasts
- September 2020 – The merger is officially launched
- November 2020 – The government announces that its ODA budget will be “temporarily” reduced from 0.7% of GNI to 0.5%, which has since become permanent
A timeline of key events regarding internal leadership changes:
- September 2020–present: A permanent Under-Secretary
- July 2023-present: A Second Permanent Under-Secretary
- June 2020: A Director General acting as Senior Responsible Owner for the merger is appointed
- September 2021: A new Director General acting as Senior Responsible Owner for the merger is appointed
- May 2023 – A new Director General acting as Senior Responsible Owner for the merger is appointed
- September 2023-present – A new Director General acting as Senior Responsible Owner for the merger is appointed
- June 2020-September 2021: Dominic Raab is appointed as Foreign Secretary
- September 2021 – Liz Truss is appointed as Foreign Secretary
- September 2022 – James Cleverly is appointed as Foreign Secretary
- November 2023 to present – David Cameron is appointed as Foreign Secretary
- September 2022 – Vicky Ford appointed as Minister of State for Development
- October 2022 to present – Andrew Mitchell appointed as Minister of State for Development
Clearly, these rotating, and often overlapping, positions of the merged FCDO have also contributed both to the delays in integration as well as a lack of focus on crafting a holistic approach to using aid in achieving Britain’s diplomatic objectives.
Calls to reverse the merger decision a predictable disaster
As the National Accounting Office (NAO) report notes, decisions about making changes in the way the government is organized in Britain are made unilaterally by the Prime Minister with no need for parliamentary approval.
In 2020, when Prime Minister Boris Johnson announced the merger, it was claimed that having the Foreign Secretary make decisions on aid would achieve a more “coherent and integrated approach” to UK overseas priorities.
Almost immediately after the announcement of the DFID and FCO merger, staff and stakeholders raised concerns about the lack of clarity of vision as well as the future direction of the department. Even as recently as January 2023, the FCDO Management Board noted that the perceived lack of clarity of vision and direction was still a significant issue for its staff. And, in an open letter, more than 200 UK aid and development leaders called on the government to reverse its decision to merge the two departments, stating that doing so “suggests that the UK is turning its back on the world’s poorest people.”
