Rushed DFID and FCO merger likely to be costly, disruptive and severely impact UK's superpower status

• Read the report's summary
• Read the full report: Effectiveness of UK aid: potential impact of FCO/DFID merger
• Inquiry: Effectiveness of UK aid
• International Development Committee

DFID and FCO merger

As it publishes its final report into the Effectiveness of UK aid, the IDC raises concerns about the lack of consultation ahead of the recent announcement merging the two departments. An evidence-based rationale should be made to Parliament explaining why the decision was taken, particularly at a time when the global community is fighting COVID-19 and the UK aid budget is facing substantial, multi-billion pound cuts.
 
Since its inception in 1997, DFID has grown development expertise envied around the world. The IDC heard glowing reviews of DFID's work to help the world's poorest people and retaining development specialists is paramount if the UK wishes to continue being a global superpower. There are fears the UK merger may reflect the worst aspects of similar mergers in Australia and Canada, with both experiencing a loss of experts that damaged those countries' international reputation while being incredibly costly. The Government must therefore set out how it plans to retain DFID staff, and to preserve its life-saving projects in developing countries. 
 
Poverty reduction must continue being at the heart of the Government's aid strategy, ensuring projects are targeted at the world's poorest and most vulnerable. The IDC welcomes the Prime Minister's commitment to continue spending 0.7% of GNI on development, but the Government must also continue to adhere to the OECD DAC definition of Official Development Assistance (ODA), poverty alleviation and gender equality. A Cabinet-level Minister with ODA oversight will ensure this remains a Government priority.
 
The Government's future aid strategy must be transparent and value for money, and it is imperative that there are robust scrutiny mechanisms in place. Therefore, the IDC recommends that the House of Commons creates an ODA Select Committee responsible for scrutinising UK aid spending and echoing the Independent Commission for Aid Impact's (ICAI) remit. It is also recommended that the Government retains ICAI to provide thorough, independent scrutiny.

Chair's comments

International Development Committee Chair, Sarah Champion MP, said:

“We have now come to the end of our Committee's deep-dive into how effective UK aid is. Our evidence shows DFID has a glowing reputation overseas, its expertise envied and its aid programmes delivering a lifeline for many of the world's poorest and most vulnerable. DIFD gives the UK considerable international standing and is something we should all be proud of.
 
“It is deeply disappointing that the Government failed to recognise these strengths as it made its impulsive move to have the FCO swallow up DFID. Now we are on the brink of this expertise being lost and our international reputation being damaged beyond repair.
 
“The fact that there was no consultation, seemingly no evidence as to why this is a good idea, really lets down the communities that UK aid is there to support. The Foreign, Commonwealth and Development Office now has an enormous remit, and I sincerely hope development is not side-lined.”

The IDC's full list of recommendations are:

1. The Government should present a statement to Parliament setting out an evidence-led rationale for any change; quantifying expected costs and how intended benefits justify the costs; and showing how both will be measured and controlled.
2. Poverty reduction should continue to form a central part of the Government's international policy. Accordingly, it should commit to targeting the majority of the UK's ODA spend towards the very poorest countries. The Government should also set out how its refreshed international policy intends to work towards attainment of the Sustainable Development Goals and ensure that no-one is left behind.
3. The Government should appoint a Minister for Development with responsibility for the totality of the UK's aid spend, and that this Minister attends Cabinet. We also recommend that this Minister attends the National Security Council.
4. The Government should set a target for all Foreign, Commonwealth and Development Office programmes to achieve a minimum ICAI grading of 'green/amber' within the next year.
5. The Government should maintain a commitment to multi-year programming and grants to locally led projects in order to safeguard hard-won development gains. In its current review of ODA spending, it should prioritise life-saving projects across the global south. 
6. To safeguard the effectiveness of UK aid interventions, the Government should set out how it intends to capture and retain DFID expertise in doing development well, and what plans are in place to rapidly train FCO staff in the skills necessary to manage effective and poverty reduction focused development programmes.
7. The Government should set out how it intends to ensure that ODA administered through the new FCDO meets high standards for transparency in its programming. Consequently, it should commit to all UK ODA funding meeting the transparency standard of 'good' within the next year.
8. As part of the Integrated Review, the Government should set out its strategy for development spending through multilateral institutions over the next five years, including the proportions of UK ODA to be spent through bilateral and multilateral channels, whether it intends to honour existing agreements and how it will it will seek to influence these organisations to ensure that UK aid spending is spent in the best possible way.
9. The creation of a House of Commons Select Committee on Official Development Assistance (ODA), with a remit for scrutiny of the totality of the UK's ODA spending.
10. The Government retains ICAI in its current form in order to provide thorough and independent scrutiny of the UK's aid budget.
11. Drawing upon the highly effective model of cooperation between the National Audit Office and Public Accounts Committee, the new ODA Committee should have responsibility for receiving and considering ICAI's reviews. It should also have responsibility for the other aspects of cooperation and coordination with ICAI in which we currently participate, including recruitment of the Chief Commissioner and other commissioners; agreement of the forward work programme and commissioning work.

Further information

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