EXCLUSIVE: What would happen if DfID and the FCO merged? Experts and insiders share their views
A much-anticipated takeover by the Foreign Office of the Department for International Development has yet to materialise – but the appointment of an entirely joint ministerial team has sparked curiosity and concern. Beckie Smith speaks to those in the know about what it could mean
As the December 2019 general election approached, Whitehall was bracing itself for the possibility of monumental change. Among the briefings suggesting a series of machinery of government changes was the rumour that the Foreign Office would reabsorb the Department for International Development, two decades after DfID had become an independent ministry.
The reports were no great surprise as Boris Johnson – who looked set to return as prime minister – had told the FT less than a year earlier that, as foreign secretary, he had wanted to create a “unified Whitehall voice” for the UK’s post-Brexit foreign policy.
The merger didn’t happen; but change did come in Johnson’s February reshuffle. Anne-Marie Trevelyan replaced Alok Sharma as international development secretary, and Johnson appointed seven joint FCO and DfID ministers – meaning the two departments had one joint ministerial team.
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Rumours of a looming merger in the autumn have persisted. But for now, DfID remains intact, with its own secretary of state in the cabinet.
Sir Simon Fraser, who was Foreign Office permanent under-secretary from 2010 to 2015, is sceptical about the new arrangement. “In bureaucracies, it’s good to have clarity, in terms of structure and line of management. So I think it’s a bit confusing as a structural issue,” he says of the joint ministerial team.
“My concern would be: is this efficient? Who are those ministers really answering to? How are they physically going to operate between two departments? And how are the civil servants in both departments going to manage to relate them?”
So far, few of those questions have been answered. Confirming their briefs in February, current FCO chief Sir Simon McDonald said all of the junior ministers would report to both Trevelyan and foreign secretary Dominic Raab – but neither department would say at the time what the arrangements meant for their operations.
More recently, McDonald said the two departments were "working through the consequences of closer alignment" and that this would be an important area of focus for the government's upcoming – though currently paused – integrated review of foreign, defence and development policy. No.10 has said the review will determine “how the whole of government can be structured, equipped and mobilised to meet” global challenges.
“One of the tasks we have from the prime minister is to align terms and conditions between the two departments. This is in two big chunks: one is in terms and conditions for UK-based members of staff, the other is our local colleagues in the network,” he told the Foreign Affairs Committee.
Still, Fraser’s predecessor, Lord Peter Ricketts, thinks the joint ministerial team could bring “real benefit”.
When he was at the Foreign Office, he says, “it was always frustrating how difficult it was to do good, effective joint-working between the departments”. While the two Whitehall offices worked well together, this was not always the case overseas.
He recalls that as DfID grew in size and influence, it developed a network of overseas offices that operated “pretty much as separate, distinct organisations alongside the embassy or the High Commission”.
“It was never efficient and never seemed to be a good idea,” Ricketts says. Differing payscales meant embassy staff were enticed over to work at the better-resourced DfID, and this made for a “competitive and sometimes quite frictional relationship, because one group of staff were on a better package than another group of staff, both working for HMG in the same country”.
Fraser says some progress has been made in bringing the two departments’ international operations closer together since then, in which time DfID’s regional directors and heads of programme have been instructed formally to report to the British ambassador in the host country. “That is important, because that was one of the problems – because DfID had a very delegated structure of authority and budget, the DfID representatives in the field were very influential people and sometimes, the relationship with the ambassador was quite tricky,” he says.
"To give every minister in the Foreign Office responsibility for both the development budget, and the security and the bilateral relationship for the country, is, I think, asking for trouble"
Ricketts says he expects the government's integrated review review “will emphasise the need for a strong coordinating Foreign Office to do the best job possible of projecting Britain abroad”, and for DfID to retain its development objectives.
He says the two departments need to “get away from having two separate missions, two separate operations; they need to be much more integrated and that needs to be led from London – and that’s where I would hope to see the biggest gain from this approach [of having joint ministers]”.
“That’s much more useful than trying to crunch the two departments back together again in Whitehall, which I don’t think is necessary or a good idea. They do different jobs.” He notes that the NSC, on which both departments sit, serves as a forum for “wider discussions to make sure that our foreign and development policies are working together”.
Not everyone is convinced the joint ministerial team is a good idea.
“There is never an argument against the Foreign Office and DfID working very closely together,” says Lord Chris Patten, who spent three years as minister for overseas development at the Foreign Office in the late 1980s overseeing the Overseas Development Administration, DfID’s predecessor. In fact, he says there would be “no harm” in making the development secretary deputy to the foreign secretary, provided both remained in cabinet.
“But to give every minister in the Foreign Office responsibility for both the development budget, and the security and the bilateral relationship for the country, is, I think, asking for trouble,” he says.
“If you’re a minister whose principal purpose is to secure a vote in the [UN] Security Council, or votes in the UN for this or that British interest and you’re a minister responsible for, say, African countries, you’ll of course bend the development budget to sustain the political ambitions which you’re having to meet, unless you’re a saint.”
Patten is dead-set against an FCO takeover of DfID – and sees the appointment of a joint ministerial team as a soft merger. “As soon as you make DfID a part of the foreign service, you’ll get all sorts of leaking of money from what should be developmental purposes... into paying for things like subsidies for security forces in developing countries and political contacts. And I just think that would be wrong,” he says.
Ricketts also warns there could be “all kinds of conflicts” over money in a merged department. “Are you going to use your aid money purely for some sort of direct foreign policy objective and forget whether it complies with the OECD regulations, or not? I think those sort of things are better sorted out between two separate cabinet ministers."
“I don’t really think that the period when development was part of the FCO was a very happy time,” he adds. He refers to the Pergau dam affair, in which hundreds of millions of pounds of UK aid were given to Malaysia for a project civil servants warned was uneconomic. The aid, which had been tied to a major arms deal, was declared unlawful in 1994 – and partly spurred DfID’s split from the Foreign Office in 1997.
More subtle conflicts of interests, are a risk too, Patten says. He says there was “no great attempt” to use the ODA budget for political or security purposes while he was minister. “But I think what did happen was that if Foreign Office ministers had to choose between standing up for the administrative costs of the foreign service, or for the British Council, the foreign service would win.”
The potential for tension has grown since then, he adds. “As the DfID budget has – quite properly – increased, there’s been a growing squeeze on the Foreign Office budget, which has made people start to suck their teeth about whether we’ve got the balance right.”
He says the Foreign Office budget should be increased, but stresses that money should not be effectively transferred from aid budgets to do this.
“You’ve either got money for development or you haven’t, and as soon as you start distorting the uses of development assistance, you undermine the case for any development assistance at all.”
James Acworth, who worked for the ODA in Cameroon in the 1990s during its transition into DfID, sees a merger as a logical extension of recent changes to the UK’s aid spending.
When Acworth joined the ODA, he says, “they were quite proud to say there were no strings attached [to aid funding]... it was all determined by indices of poverty and promoting human rights. There was no link to trade. That has clearly been reversed.”
A 2015 aid strategy which focused on promoting global prosperity and security “in Britain’s national interest” brought with it a greater emphasis on mutual benefit. The £1.2bn Shared Prosperity Fund was launched that year to promote growth in developing and middle-income countries, counting towards the UK’s target to spend 0.7% of its GDP on Official Development Assistance. It had the explicit – if secondary – goal of creating opportunities for British businesses.
And a quarter of the UK’s £14bn aid budget is now spent by other departments, with the Foreign Office among the biggest spenders.
Acworth, who has since worked for several international development organisations, is concerned about going further down this path. “I certainly think the mandate should be very clear and there shouldn’t ever be any compromise of positions on what the government is or isn’t prepared to say about governance or human rights because there’s some other interest. I think that’s where the risk lies,” he says.
As well as ideological debates, mergers create practical challenges. “They tend to create a lot of disruption. And goodness knows, everyone’s got enough on their plate,” Fraser says.
Tim Durrant, associate director at the Institute for Government, elaborates: “It always takes a long time for the changes to bed in... there’s an upfront cost of moving people around and sorting out new IT systems, new HR systems and that kind of thing.”
Merging departments with different pay scales, like the FCO and DfID, adds to these costs. And then there is what Durrant calls the harder-to-quantify “longer-term hit to productivity”.
He says when the Department for Business, Innovation and Skills and the Department for Energy and Climate Change merged into the Department for Business, Energy and Industrial Strategy in July 2016, many of DECC’s staff felt their department’s identity and culture had been lost.
“People very strongly identified with DECC and the mission that the department had; they were there because they cared about sorting out climate change,” he says.
“In a lot of ways, it was seen as having been subsumed into the business department, and the words ‘climate change’ were taken out of the name of the new department. So there was a sense that what had previously been a policy priority was no longer being prioritised.”
“If you fold it into the Foreign Office, all the brilliant people who have given DfID its reputation around the world as the prime example of global Britain, in terms of British influence and effectiveness, will leave"
He says the hit to morale showed in the 2016 civil service people survey, when 52% of BEIS staff said they had a clear understanding of its purpose and objectives – down 31 points from BIS and DECC’s combined scores the previous year.
There are clear parallels between DECC and DfID, which attracts people who are passionate about development. Ricketts recalls: “It was clear to me that DfID had been a real success in terms of creating a department with a real culture and set of values – and a strong international brand.”
Andrew Mitchell, who became DfID’s first Conservative secretary of state in 2010, believes an FCO takeover would damage that identity and lead to an exodus of staff.
“If you fold it into the Foreign Office, all the brilliant people who have given DfID its reputation around the world as the prime example of global Britain, in terms of British influence and effectiveness, will leave. They’ll all go and work in the international system.
“There’ll be people on the phone to the brilliant key officials in DfID within minutes of the decision being made and they will be poached. We will at a stroke have collapsed the preeminent and most respected engine of international development in the world,” he says.
There is little debate over the strength of DfID’s culture and brand overseas.
Fraser says the joint ministerial team could be a “first step towards a progressive transition” to a full merger. He says he’s “not against that”, but adds that it would only work under certain conditions. “The difference between now and [before DfID split off from the FCO] is that the aid budget has become so much bigger and DfID has become so much more of an influential international organisation – and it would be really bad, it seems to me, to lose that.
“So if you were going to merge them, I think you would end up with a very strong, quasi-independent identity for DfID. A DfID brand would have to be maintained with structures to support it.”
In fact, Fraser suspects that a merger would lead somewhere that is “not going to be all that different from where we are heading now”. The aid budget would likely remain ring-fenced, he says, and DfID’s successor would retain development specialists rather than diplomats.
And the sheer number of staff between the two departments would necessitate separate buildings, he adds; “they can’t all sit in King Charles Street”.
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