International Development Committee 

Oral evidence: FCDO Annual Report and Accounts 2022-23, HC 346

Tuesday 5 December 2023

Ordered by the House of Commons to be published on 5 December 2023.

Watch the meeting 

Members present: Sarah Champion (Chair); Theo Clarke; Mr Ian Liddell-Grainger; Nigel Mills; David Mundell; Kate Osamor; Mr Virendra Sharma.

Questions 1 -154

Witnesses

I: Sir Philip Barton KCMG OBE, Permanent Under-Secretary, Foreign, Commonwealth & Development Office; Nick Dyer, Second Permanent Under-Secretary, Foreign, Commonwealth & Development Office; and Corin Robertson, Director General, Finance and Corporate, Foreign, Commonwealth & Development Office.

Examination of witnesses

Witnesses: Sir Philip Barton, Nick Dyer and Corin Robertson.

Q1                Chair: This is a one-off evidence session of the International Development Select Committee with two permanent under-secretaries. We have Sir Philip Barton, who is the Permanent Under-Secretary for the Foreign, Commonwealth & Development Office, and Nick Dyer, who is the Second Permanent Under-Secretary for the FCDO, with a specialism in development. Thank you very much for being here. Thank you also to Corin Robertson for coming; Corin is the Director General for Finance and Corporate at the FCDO. This session is looking at the 2022-23 annual report and accounts, but we might go off-piste a little bit as we have such experts in the room with us. Thank you very much for your time.

I will direct the first question to you, Sir Philip then come to Nick with the same question. This is your warm-up question. How successful do you consider FCDO’s delivery of development objectives to have been in the last financial year?

Sir Philip Barton: First, thank you for inviting us once again. I am genuinely delighted to be here with Nick. His appointment and the creation of the role is part of the strengthening of the development side of the Department, alongside the Development Minister and other changes we have made. We are also meeting two weeks after we published the White Paper, which I imagine you will want to ask us about.

The last time I appeared in front of you was about a year ago. I remember explaining to the Committee the challenges we faced at that point around the resourcing that we had had and the in-year changes we were again having to make. I will be honest with you and say that I think that is reflected in our reporting. Last year was a challenging year for the Department and for our development work.

Q2                Chair: Those challenges, in summary, were the Home Office spending about a third of the ODA budget on hotels for refugees here?

Sir Philip Barton: In-country refugee costs leading to an in-year change, yes. Within that context, we did carry on delivering a set of very clear development outcomes. We had an overall approach, and those outcomes were across the waterfront, but they did mean that we needed to make some changes in-year last year.

Q3                Chair: Wasn't the main change that over the summer period you had to freeze funding of projects, because you did not know what your budget was at that point?

Sir Philip Barton: We had a pause and we had some criteria on which we judged whether or not to carry on projects in emergency, life-saving and other humanitarian work. Our criteria were applied while we worked with the Treasury to find out how much we would have to reduce our budget by. Once we had certainty, we were able to lift the pause. We empowered teams to make the reductions needed to stay within the reduced envelope.

Q4                Chair: On a scale of one to five, one being, "Yes, we kind of did okay," to five, "We achieved everything that we set out to do in the last year," where would you pitch yourself?

Sir Philip Barton: I always underscore myself, but I will give myself an ambitious 3.5.

Q5                Chair: So 3.5 for the FCDO’s delivery or 3.5 for you, as the gaffer?

Sir Philip Barton: I think the two are intertwined. This is a team sport. I was then and am now too, as accounting officer, an overall permanent secretary and civil service leader of the Department, but I recognise I don’t achieve anything without everyone else in the Department. I don’t divide the two up, to be honest.

Q6                Chair: Thank you very much. Three and a half is better than 50%, but still a long way from the ambitions that I know you and your team have around development. Nick, reflecting on the last year, which Sir Philip has already described as a challenging year, how do you think we delivered on our development targets?

Nick Dyer: Can I start by also saying how delighted I am to be in this role, which I still maintain is one of the best in international development?

Chair: I would agree.

Nick Dyer: I am very pleased to be working alongside Philip. The development objectives last year were framed by the then international development strategy, which had a focus on our investment work, humanitarian, women and girls, and delivering on our health and climate activity, so the framing was quite clear. We did have the allocations up front, so going into the year we were in reasonable shape in terms of being clear about what we were trying to do. We were slightly blown off-course by the requirement to make the difficult decision to adjust the budgets in-year. As Philip said, we had a process by which we did that.

That said, I think we should be incredibly proud of some of the things that we delivered. The main issue last year was Ukraine, of course, and I think we did an incredibly good job in Ukraine in helping some of the 17 million people in need and the 3 million people who were displaced. This was a good test and I think we demonstrated the value of the merger in bringing together our development, humanitarian and political, into a comprehensive approach to delivering in Ukraine.

We also did a very good job last year in taking forward our guarantees policy, which was a way in which we unlocked additional money for real-world impact at zero up-front costs to the UK purse, and at quite low risk. We were being innovative in the type of instruments that we were pursuing. And we did a great job on our women and girls strategy. That set a great framework for our work for women and girls. to give just one small example, Honduras agreed legislation in 2022 to allow all women and adolescents access to emergency contraception. That is a very good example of the sort of things that we can do through our engagement.

So I wouldn’t say it was all negative. We did some very good things last year and we should recognise that, but we were blown off-course. I think Philip’s description is broadly in the right ballpark, because we maintained our emphasis on the prize and our teams did some fantastic work even in some very difficult circumstances.

Q7                Chair: I would agree that your teams did and continue to do fantastic work. This Committee recognises that. We also had a backdrop of—you have alluded to some of it—Covid, conflict and climate. You used the phrase “blown off-course”; I can see that Covid, climate and conflict blew you off-course, but I would say losing a third of your budget is more like blowing you out of the water. Again, you politely say you adjusted the budget in-year, but one third is a pretty hefty part of the budget in-year. How did you, as a team, respond to that on the hoof?

Nick Dyer: First of all, we should recognise—I think all of us would agree—that supporting refugees is part of our development objectives and something that we need to do.

Chair: Preventing them from becoming refugees is the core of development work, I would say.

Nick Dyer: That is true. That is why over the last 10 years we have spent over £3 billion on supporting the refugee response in Syria, in the region, in Jordan and in Lebanon. We do this. It was a policy choice by the Government to stand up the Ukraine scheme. In the past, I think this Committee has been content with the Syrian refugee scheme and the Afghan scheme. These are policy choices that have led to knock-on impacts on our budget, but they were choices that recognised that we want to help people to avoid persecution and conflict. I don’t think we should necessarily apologise for those schemes and the cost of those schemes, but the in-year adjustments were done with consideration.

We did draw on and think about lessons that the NAO gave us in the cuts that were made from 0.7% to 0.5%. We were quite deliberate in thinking through what we wanted to protect. We were very explicit that we would protect our funding to Ukraine, our funding to the overseas territories, our humanitarian funding and any funding that would support the wellbeing and welfare of people. Beyond that, you had to think hard and pause your funding. That went on until the November autumn statement, when we had greater clarity on our budget adjustments. I think we were very considered; we also took into account the value for money considerations and impact on our suppliers and what would be the right choices to make.

At the end of the day, we had to adjust the budgets, but we were very clear that the choices had to be made by the country teams in post, because they were the best place to be able to make choices about what to pause and what to continue.

Q8                Chair: Isn’t that just shifting responsibility and blame to the in-country teams?

Nick Dyer: I don’t think it is, because we are always clear that development is contextual. You have to take into account what you are facing, the circumstances in which you are operating. Teams on the ground know best which of their projects and programmes they can delay, and whether there are other donors who can step in and do it instead of the UK or share the burden. We can’t second-guess that from the centre.

Q9                Chair: Sir Philip, I think it was in your time rather than yours, Nick, when the first three rounds of reductions, cuts—whatever you want to call them—happened. The evidence we were getting was that those country teams were not that involved in the process of making those cuts. Is that why you shifted to involving them more when you had more control over the situation?

Sir Philip Barton: There are different components to it. The first round before the merger was mostly the GNI impact of Covid in the stepdown from 0.7% to 0.5%. There was some strategic direction to that. It was a more significant reduction than the one last year and done at more pace and in a more centralised way. Last time around, I think the component in which, as Nick described, we asked teams out in our global network was obviously mostly around the bilateral work.

Some of the other things we did to stay within the reduced envelope was to look at the pipeline of multilateral expenditure and think about whether that was somewhere we could delay some significant spend. As I just said, there was some central decision making around the nature of the programmes being run, so I think it was a mixture of empowering teams on the ground, as Nick has described, for programmes that they were running to think about it, but also taking decisions at the same time.

Q10            Chair: You are the accounting officer, so did you ask for direction from the Ministers around the major reductions that you were making?

Sir Philip Barton: I did not ask for direction because it was a ministerially and properly taken decision.

Q11            Chair: Nick, could I challenge you on one thing? You are right to say that you should be proud of the support that we gave to refugees from Ukraine. You also said that this Committee was positive about the support that we gave for Afghan refugees. We wrote quite a strong report on that and we were not all that complimentary. We know that that is still ongoing. We cited some of the confusion over the merger still being midway through. In your assessment, are we now in a more stable position with the merger than we were 18 months ago—we will come to this in more detail—and if there is another refugee crisis, will we be able to respond to it in a better manner?

Nick Dyer: First, apologies if I misrepresented the Committee. I thought I was referring to Syria, so my apologies.

Chair: You did say Syria as well, but you tagged Afghanistan in the middle and I noticed.

Nick Dyer: Fine. My apologies. Are we in a better shape to respond? Our people in the organisation were telling us that what they wanted more than anything was predictability of spend because the lack of predictability in making choices in year was very difficult for people. We did a number of things as a result of that. For this year, 2023-24, we did two things. We held back some resources, so we held back some money because we were trying to manage our risks in-year. We also asked one part of the business that had some additional money, which was the Africa division, to take that at risk, so it knew that we might come back knocking on the door. Our teams are telling us, “That’s fine. Just tell us what is predictable and what is not predictable and we will manage within that.”

This year, for instance, we have been able to release resources from the money that we held back to respond to the Gaza crisis. That has been a positive way of responding to the pressures in-year. In ODA management, we have tried to improve the way that we manage the budget to try to bring that kind of flexible response in light of real-world events.

Q12            Nigel Mills: How much for Gaza?

Nick Dyer: We started with £27 million, which was the allocation, and subsequently we have allocated an additional £60 million.

Q13            Nigel Mills: Out of £11 billion ODA spend, is it?

Nick Dyer: Total ODA spend is running at about £12 billion, yes.

Nigel Mills: It is not big.

Sir Philip Barton: No, but if there is a need for more money we will look at that initial allocation.

Chair: I think there is a need for more money.

Q14            Mr Ian Liddell-Grainger: You had me thinking about something else there. Nick, you have been in post a fairly short time. What effect do you think your appointment has had within the FCDO on international development? Where do you see your role? What do you see as your priorities? At the end of it, what do you see as success?

Nick Dyer: Philip and I have both been clear that my role is an expansion of the perm sec capability in the organisation; it is not an additional layer. That is the starting point. I see I have three roles in the organisation. One is overall accounting officer responsibility, personal responsibility to Parliament for the ODA programming, but also accountability for the delivery and development of the aid development strategies.

The second is that I am a senior member of the executive management team. I am responsible, as Philip is, for the corporate development, corporate management and governance of the organisation in its transformation. I am also a full member of the permanent secretary community across Whitehall, so part of the leadership of the entire civil service and civil service reform.

On the ODA piece, the priorities I have set myself for ODA are fourfold. One is ODA management, so this in-year management and how we help our teams to both know what to do, and how to do it better. We have a slightly different challenge for 2023-24, which maybe we could come back to.

The second is accountability so that we are sure that the money will be spent well. One of the things that we have done since I started the role is introduce a new development committee as a sub-committee of the management board, because we want to make sure that the organisation is more fully focused on things like strategy and portfolio results, that we are responding to scrutiny, and capability, so the accountability function.

The third thing I am focusing on is capability within the organisation, whether we have the right development capability, and then the fourth thing is delivery, so the things that I need to focus on or only I can do. For instance, the White Paper is part of that delivery; I am sure we will come on to that. I am spending quite a bit of time on international financial architectural reform, so MDB and World Bank reform, and also spending quite a bit of time on things like Gaza. These are things that only I can spend particular time on. Those are my priorities.

What does good look like? I think it is an organisation that has clarity in what it is trying to do with its development activity—hence the White Paper—an organisation that is fit for purpose by having the appropriate capability and is on top of getting value for money and spending the money well—which is the accountability part—and having real-world impact.

Q15            Mr Ian Liddell-Grainger: Can I come back to the various committees and sub-committees you have set up? Why did you feel it was important to start to set up other committees within the system? Was there a structural defect somewhere, or was it just that it would ease the load on the workforce?

Nick Dyer: We were taking development issues at various committees, standing committees within the organisation, and I felt—and I think Philip agreed—that we just wanted to give more airtime to the development issues, whether that is strategy or results or capability. Particularly scrutiny is an area I felt we could improve on, because we have ICA and the IDC and we have external scrutiny on us. I just wanted to make sure that we were following that up properly.

Q16            Nigel Mills: Is part of that the White Paper? Did you feel once the White Paper came out that you needed strengthening to make sure the White Paper was dealt with in the right way? We see a lot of these come and go over the years.

Nick Dyer: There is a lot in the White Paper. It is to 2030, quite deliberately. We will go through a process now with the new Foreign Secretary and the Minister for Development deciding what we will do in the short, medium and long term and which parts of the White Paper we will focus on.

Q17            David Mundell: I just wondered if you had noticed any change of emphasis since the arrival of the new Foreign Secretary, because when he spoke at the food summit he appeared to place a lot more emphasis on development and the “D” in FCDO than we have heard from some of his recent predecessors.

Nick Dyer: Philip might have a view on this. It is a bit difficult to speak on behalf of somebody who has only been in post for three weeks.

Sir Philip Barton: Three and a half weeks.

Nick Dyer: But what I would say is on the first day that he arrived, he took the White Paper, he read it word for word overnight and he gave quite a lot of comments on it. The foreword that is in here is his personal foreword, he wrote it, and I think that illustrates a real interest and commitment to development. He will probably have some priority areas. He was very committed to the women and girls when he was in post before and I would expect that to continue, but clearly we are having ongoing conversations with him about what he wants to focus on. He was a Prime Minister who drove development quite actively and I can see and observe that he remains very interested.

Sir Philip Barton: I agree with that. He is clearly very interested. He was previously as Prime Minister and remained so after he left office as Prime Minister. He has brought that into the Department.

Q18            David Mundell: Does that make it easier to take forward your role in particular, Nick?

Nick Dyer: I think it signals very clearly to the whole organisation that development is an issue that we need to engage with. I think the organisation has been and is increasingly doing so and maybe this will just reinforce that.

Q19            Nigel Mills: We now have a Development Minister who attends Cabinet; we now have effectively a separate permanent secretary for development; and we now have a new Committee. Have you semi-unmerged the Department back to having FCO plus D now?

Sir Philip Barton: I understand why you asked that question, but I don’t think that is the right characterisation. If you look at how we deliver our work, we are still integrated. For example, where we are doing our geographic work—Yemen is a good example—we are doing it together, but it is not political work, our humanitarian work. That is where we are getting real benefits from the merger, by being together in diplomatic and development expertise, as it were. We have learnt lessons about what worked well, what was working less well and where there have been gaps in capacity, including at leadership level. We are aiming to improve, but it is not a de-merger.

Take the wiring: although Nick and I are both accounting officers, there is still one set of accounts that we will both approve. The fundamentals of the merger remain in place, including overseas in the network as well.

Q20            Nigel Mills: Semi-detached rather than detached then?

Sir Philip Barton: I am sorry to disagree with you, but I don’t think that is a fair description. We have strengthened the development capability at ministerial and senior official levels, rather than detaching anything.

Q21            Nigel Mills: I have to say, I made the mistake of reading some of your accounts—I guess that is the session we are having today, isn’t it—and you have four priority outcomes, priority outcome 1 being, “Build economic diplomacy by seizing global opportunities”. There is a bit of BII in there, but there is not much about development. Priority outcome 2 is, “Strengthen the security and resilience of the UK and our allies by defending our interests around the world”. There is almost no mention of development in the whole of that one, which seems a bit strange. I thought development would be a great way of strengthening our security and the resilience of our allies. Priority outcome 3 is pretty much all about development, but it feels as if even there you do not have an intermingled strategy; you have, "Let's have a separate paragraph on development in this."

Sir Philip Barton: If you look at the second one, there is some development under that as well. It is not just about our “develop country allies”, it will be around the resilience of other countries that we are developing. It will be in that stream, partnership work. Some parts of our work are much more development-heavy than others but I think through all of those outcomes there at least some part is development.

Nick Dyer: I would add three things. First, if you look at the foreword to the White Paper, it is very clear that development has become a lot more difficult—you mentioned Covid, conflict and climate—but it has become even more important because if we are going to deliver our wider geopolitical objectives, outputs 1, 3 and 4 in the report and accounts, we have to do development well. That is very clear, so it is part of our ability to deliver on our foreign policy objectives. Specifically one of the things the White Paper is very clear about is that we want to spend the bulk of our highly concessional resources in the poorest countries. That doesn’t mean we need to forget about the rest of the world. There are other things that we need to do that can shore up some of the wider geopolitical and foreign policy objectives. For instance, giving a guarantee to Indonesia to help with its energy transition is good development, but it supports our Indo-Pacific objectives. It is supporting a clear development objective but also a foreign policy objective. I would also—

Q22            Nigel Mills: Haven’t you written any of this in the financial statement?

Nick Dyer: To be fair, the Indonesian guarantee was this year rather than last year, but it will be in this year’s report and accounts.

Q23            Nigel Mills: You have nine “what nexts” in that section on security. It is a bit hard to find any mention of development in any of them. It kind of feels like you have a separate thing, “Let’s have a separate section,” which might be fair enough.

Sir Philip Barton: Some areas of our work, our security work through NATO, that won’t have much development in it, if any, but the point I was making is that if you look at the priority outcome, although there is one that is mostly development, there will be some development in most of the others in one way or another.

Nick Dyer: There are some areas. Some of our hard defence intelligence and security work will not be development. I would agree that there probably is some scope for us to think harder about where some of the different parts of the office overlap and where activity could be shared. For instance, on our defence and intelligence work, our humanitarian work, our development work, if you think of a Venn diagram, they all overlap and right in the middle is a sweet spot of doing activities that will benefit all of them. That is probably an example of areas where we could do a bit more thinking about how to unlock those collective benefits.

Q24            Chair: That is a nice neat tidy Venn diagram that you drew. From the outside looking in, it feels a bit more like a mad pinball machine, in that you have had the integrated review, the integrated review refresh, various strategies have come out, the White Paper has come out and you have had however many different foreign secretaries and Development Ministers. I am just thinking about something like the CSSF, which, with where the integrated review was at the time, it made sense to make the cuts in the areas that the cuts were made, but then the world shifts or the Ministers shift and then suddenly you are out of step with that and you have pinged off in a different direction. How is it working under that sort of pressure?

Sir Philip Barton: I think the integrated review refresh essentially says that the world we were in—more contested, less predictable, more volatile, with a significant impact on development outcomes—was, not least because of Russia’s invasion, materialising faster than perhaps initially envisaged. The central point in the refresh is continuity rather than change. Clearly, there were some updates and a particular focus on economic security and resilience, including of the UK, and that led to an adjustment and a combining of a couple of other funds on the cyber-security side in the old CSSF to create the new IS. I think in that part, Chair, there is continuity. Nick may want to add but I think the White Paper is designed to build on rather than replace the international development strategy from last year. The international development strategy was an evolution of the original approach to development taken by the Government from 2020 on.

Q25            Chair: So the White Paper is effectively the long-term train lines that you are setting yourself on?

Sir Philip Barton: Yes.

Q26            Chair: Is that to buffer against all of these political pinballs bouncing?

Nick Dyer: For me, it feels more settled; we feel more settled.

Chair: You might, but you could get a whole new Government and a new Minister.

Nick Dyer: But in terms of feeling settled and policy direction, for the first time in the FCDO we have laid out two years of our forward projections of what we will spend and where. We have a settled structure and clarity internally about how we are managing ourselves. It has always been the case that we have been buffeted by real-world events. The question then is: how can you do that in a way that is agile and can you move people across the organisation in a way that doesn’t undermine the predictability of your budgets?

For this year, we have a slightly different problem we are facing right now, which is that the Treasury has just written to us, following the autumn statement, to say we no longer have to give up the £1.5 billion that originally it asked us to, because GNI has grown and some of the non-ODA costs we were expecting have fallen. Of course that is a much better problem to have than cutting and we are talking to Ministers now about how to accommodate that. These things always happen, they always have done. The question is whether you have built in enough agility and responsiveness to be able to accommodate it. I think we are in a much better place than we were two years ago.

Chair: I fully accept your answer about external factors buffeting and needing to respond to them, but I can’t think of any time in my lifetime when you have been quite so buffeted by internal factors of changing staff and changing political priorities. Again, credit to your team for the resilience that you have shown in trying to focus on the poorest in the world.

Q27            Mr Ian Liddell-Grainger: Can I come back to capacity? It was one of the areas you talked about. Listening to what David and other colleagues have said, do you feel there is the capacity to do everything you need with the structure that you have just gone through for the delivery of—well, the White Paper will go on slightly longer than that, but for the medium term is the capacity you have adequate to do the job you need to do?

Nick Dyer: I think of capacity in three dimensions. The first is whether you have sufficient development expertise in programme management or professional staff. Over the past couple of years that has evolved, so we have lost some expertise, but we have also grown our own internally, so there has been an evolution of the balance of our expertise. We have some challenges with programme management in some parts of the world, less so in others, so that is a bit patchy and needs to be organised in a slightly different way. There is one question about our development capacity.

The second dimension is whether the non-development staff are building their understanding of what development is and how they can help in the organisation. We are trying to put in place mechanisms to deliver that.

The third dimension is about the real deep expertise that we cannot build in-house because we just can’t afford to. The White Paper explains how we are trying to build centres for excellence, which are places with real expertise in particular areas that we can offer to developing countries to help develop their knowledge and their policy capability. We are trying to deliver on all three dimensions at the same time.

Q28            Mr Ian Liddell-Grainger: Do you have an organigraph of everybody? It would be interesting to see the organigraph with the four areas, including the sub-committees, all laid out. Is that possible to—

Sir Philip Barton: There are two things. One is that our governance structure has a supervisory board; that has the development committee on it. Then there is an organogram that shows, if you like, who reports to me, who reports to Nick and the DGs underneath. We are happy to write to the Committee. We are announcing a minor change later this week to make it a bit clearer what is going to Nick on the international climate side, but that sets out who reports to whom.

The key thing is that Nick and I work in a matrix way. Nick looks at development work across the organisation wherever it is being done and I will look at the non-development side across the organisation, but we can happily share an organigram.

Q29            Mr Ian Liddell-Grainger: Nick was talking about a fairly interesting structure that you are changing to be able to cope with all this. It would be interesting to see how everything will fit together. It all changes fairly regularly. Can I come on to that? I am interested to know whether the changes you put in stabilised the Department? Do you feel things are more stable now than they were?

Sir Philip Barton: I do.

Mr Ian Liddell-Grainger: I knew you would say yes, but is it justifying—

Sir Philip Barton: I do acknowledge we have had, in addition to the real-world events—Covid, Russia’s invasion of Ukraine and various other challenges, the civil war in Sudan—this series of different Ministers, and we have had, but not because of the merger, three years of in-year significant reductions in the development budget. That has been challenging to manage. I think we are in a more stable period now. As Nick has described, we have given the organisation more predictability around its budgets. To your point about people, we do have a capability framework, not just on the development side but across the board, of the human capabilities we think we have and need for the future. We will organise around that as we think about everything and where we need to invest. We might be doing things differently, but it is also how people can think about their careers and their professional skills. Overall, yes, it does feel more stable.

Nick Dyer: Can I add something about structure? I think there is a difference between how we are structured and how Philip and I work. For instance, Philip and I meet formally once a week, but we talk every day. We have a shared office, so there is only one entry point into our office. If people want to send something it only goes into one place and then our teams allocate it out. But we also run a shared box, for want of a better word, of the material we look at every day. We run it electronically, so we have material that both of us look at and our basic starting point is that neither of us should be doing the same thing.

Q30            Chair: In terms of headlines, what would make that cut? We don’t need the detail of what it is, but what sorts of things are you flashing to your teams that ought to go in the joint box as opposed to the two separate ones?

Sir Philip Barton: An organisation-wide decision on terms and conditions that will affect everybody is something that Nick and I should both take a view on, even though ultimately a decision would be for me to take. That is the sort of issue where Nick and I would both take a view. A submission around what next on some MDB reform element is something I might show a passing interest in, but it is certainly for Nick to take a view on before the advice went to Ministers rather than me. In contrast, a hard security issue would be something that I would look at rather than Nick.

Q31            Chair: With those examples, is it more the structural, logistical side rather than the content, or it could be content as well?

Nick Dyer: There is a lot of corporate governance in there. Philip can see all my things that I receive and I can see everything that Philip receives. We do look at each other's work, things that go to each other, because it is a process of transparency so that there are no surprises and we are very clear about what each other is working on. If there are things that I see in Philip’s area that I think I have a view on, I will give my view; ditto Philip will comment on things that he feels that he should in the things that I look at. It is the clarity of being transparent, because at the end of the day, given we are accounting officers, we both need to be happy with how each other is carrying out our accounting officer responsibilities. That is the basic requirement.

Q32            Kate Osamor: Regarding finances, do both of you need to look at each other's budgets and sign them off or do you have your own DG of sorts that would look over everything? Do you have to work like that?

Sir Philip Barton: At the macro level, as principal accounting officer, I delegate to DGs as heads of business units actual budgets, ODA, non-ODA, people and programme, but Nick—it is a formal delegation from me as principal accounting officer—leads the accounting officer oversight of all of the development money, wherever it is, across the whole Department. Therefore I only take an interest if there is something very significant that Nick brings to my attention. I let Nick do the day-to-day and I focus my mind on the remainder.

As Nick said earlier, the key thing about the creation of his role is it is a horizontal increase in capability at perm sec level rather than a deputy function, which obviously is the model in some other Departments. With second permanent under-secretaries, it is deliberately putting more in at the top, as it were, hence the importance of being able to look up. It is not that we are twins, but we are working in a very joined-up way so that we are not creating tension across the Department by doing left hand/right hand.

Q33            Kate Osamor: Nick, you said something to us about being able to hold money back and I just wanted to ask a bit more about that. How is that possible? I understand a bit more from what Philip just said about how you work, but does it impact the wider budget if you can withhold—not withhold, sorry, that is not the right word—if you can hold back money? You also said that you were able to speak to the Africa team and relay that same message. Do you think that will impact the budget itself, and encourage, unfortunately, it to be cut even more if you can hold money back and only produce it when there is a real dire need?

Nick Dyer: In previous years we have always had a crisis reserve, which is holding money back for unexpected events to hit. In effect, we cut the crisis reserve in the 2022-23 period of accounts because we were squeezed for money, but we have reintroduced a crisis reserve for this year. In effect, you are allocating out the non-crisis reserve, you then have the money that you can draw on. If there comes a point in the year where you think you are not going to need it, then you just allocate it out.

Q34            Kate Osamor: So it is a different fund, as opposed to cutting a project?

Nick Dyer: Yes, correct.

Kate Osamor: Excellent, thank you.

Q35            Mr Ian Liddell-Grainger: Could I move on to something else? You have had four secretaries of state, which is interesting. You now have one. We have just been debating how you get to the Secretary of State when he is in the Lords, which for us is a bit of a new departure. What effect does a secretary of state have on the Department? You have had an awful lot of changes. What effect do you see? They come in with new ideas and new thoughts. You can think of the last four. I know, Nick, you haven’t served under four, but certainly you have, Philip. What are the differences?

Sir Philip Barton: I will not comment on individuals, but in any Government, particularly in the international space—that is diplomacy, security and development across the world—you have established international policies, going back to Boris Johnson and the original integrated review, and Rishi Sunak was the Prime Minister when it was refreshed. Those are statements of the Government’s international policies and that is the context in which any foreign secretary of the day works. I think the strategic policies aren’t changed by a change of secretary of state, but inevitably when you have a change of foreign secretary, individuals will be more or less interested in particular areas and will, like anyone else, work in their own ways. That is where, as civil servants, our job is to adjust and work for the secretary of state we have, but within the overall construct, it is usually a pretty settled international policy of the Government of the day under the Prime Minister.

Q36            Mr Ian Liddell-Grainger: I find that interesting because I came in with two of those Secretaries of State, including the present one, and I know exactly what they are like. They are interventionists in their own way. Two are former Prime Ministers. I am intrigued that they work under what the Government say but then they have their own agendas. What are those agendas? Where did Boris, for instance, see his future? I think it is a bit early under David, but certainly Boris. What were Boris’s pets? I am intrigued. It will be in the book next week, by the way.

Sir Philip Barton: Take what William Hague did as Foreign Secretary, for example. He established and championed the PSVIC initiative and I think we are seeing the benefits of his championing. That is an example of something that he was personally motivated to do something about in the world for good. The Prime Minister of the day supported that, but that is an example of a Foreign Secretary putting, in his case, his personal stamp on his approach to the position of Secretary of State.

Nick Dyer:  On the development side, all Secretaries of State understand that, particularly overseas, these are long-term multiyear investments and you cannot change a programme when it is in flight. They tend to focus on the allocation—whether there is a difference in the balance of allocations between multilateral, bilateral, and between particular countries. They might have a view on that as well as on thematic priorities. Liz Truss had a particular interest in BII and investment, so she focused heavily on that. James Cleverly was interested in girls and women; he launched the women and girls strategy in Sierra Leone and was clear to the whole organisation that it needed to implement it. They tend to have thematic priorities that they will ask us to prioritise.

Q37            Mr Ian Liddell-Grainger: Once we get the new Secretary of State, and they say what they would like—you have given two very good examples of that—does that impinge on the Department in any way? You would then need to take on another priority to be able to deal with it. Does it become an issue or not?

Sir Philip Barton: In the civil service, people understand that it is our job to work for the Ministers of the day. That is an important feature of our democracy. Of course, having a new Minister means you brief the new Minister, taking them through the issues and so on, adjusting to their views and ways of working. People understand that is part of the job.

Q38            Chair: I will ask for clarification. You spoke about the crisis fund and that withholding money is effectively replenishing the crisis fund. Do you view the £1.5 billion as part of the crisis fund or are you looking to allocate that?

Nick Dyer: The £1.5 billion I have mentioned will need to be allocated. We are talking to Ministers now about how best to do that.

Q39            Chair: What is the crisis fund budget for this financial year?

Nick Dyer: For 2023-24, in effect we held back £250 million, and £50 million of that was what we termed a “crisis response” because our revealed experience over a number of years is that you need about £40 million to £50 million for those genuinely unexpected crises.

Q40            Chair: Such as the tsunami?

Nick Dyer: Yes, that’s right. That is the £50 million. With the other £200 million we were expecting to have to pay some debt relief for Somalia and Sudan. Of course, Sudan will not happen now. When we realised that we did not have to pay the debt relief and the risks for the debt relief had gone down, we released that money to spend on additional climate activity and humanitarian activity.

Q41            Chair: Therefore the bulk of it was actually a contingency fund rather than a crisis fund?

Nick Dyer: It was, indeed.

Q42            Chair: Did the crisis fund not used to be £500 million?

Nick Dyer: The crisis fund used to be £200 million, with the possibility of it going up to £500 million in an Ebola-type situation—that is what drove the desire to give it £500 million. The additional £300 million was always held at risk in the business, so it used to be £200 million, but in practice we only ever spent £50 million on unexpected crises. The other £150 million used to be allocated towards the end of the year for those humanitarian crises that were protracted.

Chair: Too many of them.

Q43            Kate Osamor: Sir Philip, in front of the Treasury Committee last week, the Chancellor confirmed he did not predict a return to 0.7% GNI on ODA in the next five years. Were you aware of this before he made that statement?

Sir Philip Barton: In the usual way, the Chancellor does not widely put out what he will say in any fiscal events to any Permanent Secretary of a Department. Overall, though, it is not a surprise. The policy is well-established and to return to 0.7% depends on when the two tests that have been set are met, so the time arrives and what the Chancellor announced again in his autumn statement was not a surprise.

Q44            Kate Osamor: I appreciate that, but how does this impact on the Department’s work, especially when there are these commitments in the White Paper that you are already working towards?

Sir Philip Barton: The overall time is unchanged so in a sense it was not news for us. It did not lead to us making a significant adjustment that we are some years away from a return to 0.7%. I think that the overall impacts we have seen on the financial side have not been around that long. While the step down had been made and the criteria agreed, it has actually been the in-year pressures we face because of the in-donor refugee costs as Nick talked about, where there is slightly better news or less bad news this year with the £1.5 billion. Depending on how the economy develops and the likelihood of the tests being met in that timeframe, we will in due course begin to think about what we would do in the years ahead to be ready for a step back up in 2027-28, if that is how it turns out.

Q45            Kate Osamor: Do you think that you may have to cut more programmes or not be able to pursue new programmes because you will not go back to the full budget, or the budget as we know it to be?

Sir Philip Barton: No, the significant step down was made a couple of years ago when the original decision to move from 0.7% to 0.5% was taken. We did what we needed to do immediately, but also looked at the longer term. Nick might want to add, but we have now managed to allocate out for this year and next and discuss with Ministers what we can do in light of the decision around the £1.5 billion. Nick, do you want to add on the medium term?

Nick Dyer: That is right. All of our forward plans are premised on the basis of 0.5%.

Q46            Kate Osamor: So you were aware or you were not surprised.

Sir Philip Barton: Correct.

Nick Dyer: I was not surprised. We were looking at the forecasts for debt payment and the amount of debt in the UK, and 2027-28 was not a surprise to us.

Q47            Nigel Mills: Mr Dyer, I think that you said you are the accounting officer for ODA spend. Is that just the spend in the FCDO or is that the spend across the whole of Government you are responsible for?

Nick Dyer: No, the way that it works in Government finance is that the accounting officer is only responsible for the expenditure in their Department. I am only responsible for the FCDO ODA.

Q48            Nigel Mills: Do you oversee the whole ODA budget—who is spending what and making sure everything spent is ODA-eligible? Is that in your remit?

Nick Dyer: We have put in place a number of mechanisms to improve the level of co-ordination across Government. At official level, we established a director-general level committee that meets quarterly to discuss key strategic questions. Andrew Mitchell and the Chief Secretary to the Treasury set up the ODA board, which also meets quarterly to look at the key issues facing the ODA budget. They have discussed in-donor refugee costs and the international climate fund, and they are about to discuss refugee costs. These are mechanisms put in place to improve co-ordination. I am conscious that it does not always work as well as we want it to. I am aware of the ICAI report on the Blue Planet Fund, which says that strategy engagement could be better across Government. Those are good reminders to us that we need to improve in some areas.

Q49            Nigel Mills: The FCDO publishes information by territory and by programme, but we do not get that for the other Departments that spend ODA. Is that something the programme board would like to see happen? Is that something that could be done?

Nick Dyer: “Statistics on International Development” has all the expenditure in a particular country from each Government Department, both FCDO and non-FCDO Departments. It is in the public domain.

Q50            Nigel Mills: Okay. I will take you back to the long exchange we had last year on the Ukraine refugees’ impact on the budget. Has that worked its way through now? Arrivals from Ukraine are much lower now, aren’t they? You do not currently have your budget squeezed by so many in-country refugee applications.

Nick Dyer: There are a number of moving parts on this. The Home Office can explain this much better than I can but you are correct to say that the bulk of the Ukrainian refugees who are still in the UK are dropping out of the numbers, because it was only for the first year. Also, the number of small boat arrivals is down by 20% to 30%, I think. On the other side, costs have gone up a lot because of inflation and the cost of living. There are two competing pressures on the in-donor costs. As a result, I am not quite sure where it will land this year.

Q51            Nigel Mills: There was some suggestion that people who have been determined to be here illegally were not eligible for ODA spend. Given that we have just passed a Bill that determines that anyone who comes via a small boat is here illegally, spend on them would not count as ODA. Is that something that you have analysed and have a view on?

Nick Dyer: I have seen the analysis that others have done, including ICAI, but the Government have not assessed that yet.

Q52            Nigel Mills: Do you have a view on what impact Gaza might have on your budget? You mentioned that there were a few tens of millions, but do you think that by the time we get to the end of this financial year it will look more like hundreds of millions, or do you not know yet?

Nick Dyer: It is difficult to say at this point. It depends on a number of factors. First, what are the needs? Secondly, what are other donors doing? Thirdly, what is our best added value in contribution? Fourthly, once the humanitarian situation is over, what is the best way to invest in the long-term stability and security of Gaza and the West Bank, including reconstruction and rebuilding that will be needed? Who will pay for that? There are a number of different moving parts, as there is for Ukraine, actually.

Q53            Nigel Mills: Do you have enough flex in your budget to be able to accommodate that if it is needed?

Nick Dyer: As I say, there is flex in the way that we manage resources at the margin, but if there is a requirement to put hundreds of millions into one particular area, a new area or new funding, that is a different scale of challenge than if it is in the tens of millions.

Q54            Nigel Mills: That is a realistic scenario here, isn’t it?

Nick Dyer: It is also over a number of years, most likely, particularly reconstruction. Reconstruction takes years.

Q55            Nigel Mills: That is not realistic by March. Is this a sensible way for you to manage the budget? Should some of these crisis things come out of a separate pot? I think that the Government found £1 billion for you last year, but can you do long-term development if your budget suddenly and unexpectedly gets depleted by a large sum? Does that help us build long-term relations and develop effective projects in that situation, or should it be done like a war would be in a different way?

Nick Dyer: It is a policy choice, the balance of effort you want to put into your humanitarian crisis response and how much you want to put into long-term development. As we said in the White Paper, the expectation for 2024-25 is that we will spend £1 billion on our humanitarian response. That is the choice that Ministers have made, which is slightly over 10% of our overall budget. To the extent that new things happen, our first port of call is to accommodate it in that humanitarian response. If we cannot, we will look to see how we can add additional resources. This is something that we have done for years. It is a question about the relative balance of effort you want to put into each.

Q56            Nigel Mills: Finally, we are hearing news about a potential threat in Guyana, which is ODA-eligible. Is that on your radar that a problem might arise or do you think everything will be okay there?

Sir Philip Barton: This is the issue with Venezuela. This is something we are looking at very closely. The Foreign Secretary is taking a keen interest in it.

Q57            Kate Osamor:  Sir Philip, the White Paper commits to making half of BII's investments in the "poorest and most fragile countries" by 2030, but your Department confirmed to Bond only last week that to date BII has invested only 37% of its resources in these countries. How realistic is the 2030 deadline and how will you ensure that BII is more transparent and committed to this outcome?

Sir Philip Barton: Nick should add, but I think that 2030 gives us a bit of time. It is also a five-year strategy process with BII. There will be a new five-year strategy period by then. We will ask BII to set out a strategy for meeting that target if I remember that right, Nick. We are confident. It will take a bit of work and we want to be ambitious in this space that BII can do that. It is in a long-term investment business so it does take time to adjust the overall portfolio but we are clear in what we want it to do in future in the overall balance of that portfolio. Nick, do you want to add to that?

Nick Dyer: One thing I know about BII is that it would not sign up to a commitment if it did not think it could achieve it. This deliberately covers the remainder of this five-year strategy period and into the next one. Seven years is a reasonable amount of time to ask them to scale up. We have heard from the Committee about transparency. We want BII to be more transparent and we are looking to publish a roadmap by the end of the year showing how we will go about doing that.

Q58            Chair: Will you publish it or will BII publish it?

Nick Dyer: A roadmap will be published by the end of the year.

Chair: This is interesting.

Q59            Kate Osamor: Yes, it is interesting because the first DFI Transparency Index published earlier this year ranked BII 12th out of 21 non-sovereign DFIs for transparency. I believe you said you are giving them five years, but currently they are not in the position that they should be. How will you ensure that within the next 12 months at least they are closer to being able to deliver? Unfortunately, if they are supposed to be investing in the poorest and most fragile countries and they are not doing that at the rate that they should be, seven years is quite a long time. Meanwhile, not only will there be more fragile states, sadly, but there are those already in existence that need BII or something of that nature to invest in them to build up those countries.

Nick Dyer: Holding BII to account on the 50% is not a function of whether they will be more transparent. You may wish it to be more transparent so you can see it, but the way that we will hold BII to account on the 50% is through the existing governance mechanisms. We have quarterly shareholder meetings with BII, we have an annual shareholder meeting which I will do shortly, and the director general has a monthly conversation with the CEO. We have well-established governance mechanisms by which we will track all of their strategic commitments, including the 50%. I am confident that we have the right mechanism in place to ensure and to be able to track the BII delivering on the 50%.

Q60            Kate Osamor: Maybe I am not hearing you correctly, but are you saying that the 50% is not a priority?

Nick Dyer: Yes, it is; we would not have it in the White Paper otherwise.

Q61            Kate Osamor: When you meet with them, do you discuss that they are not in those fragile states, or do you discuss where they are? What happens in those meetings?

Nick Dyer: In the quarterly shareholder meetings we look at their management information—where they are investing, what they are investing and how much they are investing. The reality with BII is that it takes a good 18 months to identify a new investment, work it up and then disburse the resources. That is why you need seven years to get from 37% to 50%. It will take some time to get to that point. However, we have the management information in place internally to be able to track all the commitments they are making as part of the policy and strategy commitments that they have made to FCDO.

Q62            Kate Osamor: Will you be able to write back to us or report to us as to how things are going over these next 18 months or two years? The work that they are focusing on is about risk. We understand they go into countries where there is a lot of risk. We appreciate that. We have had a whole discussion with them about that, but there is the other side of the work that they are lacking in, and that is what we are trying to focus on. Those of you who are in front of them, how do you make sure that they focus on the fragile states and not only invest on the business side of their model, which I believe is what you are speaking to them about?

Nick Dyer: I am happy to write to you to set out and explain how they intend to do it and how we will hold them to account.

Q63            Chair: I will reinforce the part of Kate's question that I do not think you answered, which was that the White Paper is very clear on the Government's ambition for BII to become the most transparent bilateral development institution. Your answer to how that will happen is that you will do the same things you have always done with governance. How do you intend to go from 12th out of 21 to 1st out of 21 for transparency by just using the same governance mechanisms?

Nick Dyer: It is a bit like: how does the FCDO become the most transparent and how do we improve our rating? Various components make up that ranking. In the FCDO circumstances, the fact that we have now published two years of forward budgets and we are publishing all of our business case summaries—we have now published about 42 of them—will improve our ranking. We have understood the components. The issue for BII, similarly, is to understand what the components are that have led to that low ranking and to work out what it needs to change—

Q64            Chair: Have you done that piece of work yet?

Nick Dyer: This will be the roadmap. That work is in train.

Q65            Chair: Is the roadmap the same as the report or are these two different things? You said that there is a report coming out by the end of the year.

Nick Dyer: The roadmap report. Yes, they are the same thing.

Q66            Chair: The roadmap and the report are the same thing. We have 20-something days until the end of the year, and even less parliamentary time. You are bringing out that document before the House rises?

Nick Dyer: I cannot say when it will come out but I will certainly look into it and get back to you.

Q67            Chair: You said it will come out at the end of the year.

Nick Dyer: Yes, but I cannot determine whether it will come out before the House rises.

Q68            Chair: Do you mean it will come out before 31 December?

Nick Dyer: That is the implication, but I will check on this—

Q69            Chair: Surely you are in charge of this.

Nick Dyer: Indeed and I will check on this and write back to you to clarify.

Q70            Chair: So you do not know when the report is coming.

Nick Dyer: I have been assured and I have said to you that the report will come out by the end of the year.

Q71            Chair: Do you know what is in the report? Do you know what will happen to get the transparency?

Nick Dyer: I do not know all the details.

Q72            Chair: Are you involved in the report?

Nick Dyer: I have not been to date but I will ensure that I am.

Q73            Chair: Could that be one of the reasons why BII is not so transparent because the most senior person for development does not have hands-on oversight?

Sir Philip Barton: Chair, I think to be fair—

Chair: Sorry. Could Nick answer that?

Nick Dyer: I do have hands-on oversight in that I am involved in the governance of BII—

Q74            Chair: Which does not work because BII is 12th out of 21.

Nick Dyer: It depends on how you judge whether the governance is working or not. That is one element of governance. I will certainly ensure that I understand what is happening with the improvement of the governance and get back to you on that.

Q75            Chair: BII has either £6 billion or £8 billion worth of assets, which is effectively taxpayers’ cash. I would expect you to know rather than having to get back.

Nick Dyer: What are you asking me to know? Are you asking me to know what is BII’s strategy, where are they investing, what are they investing in?

Q76            Chair: No. First, I am surprised that you are not hands-on, or if not hands-on, not across the detail of one of the biggest assets that your Department has; secondly, that you do not know when the report is coming out; and thirdly, that you cannot give us any insight to answer Kate’s question about transparency.

Nick Dyer: I can assure you that there is a team and a number of senior people who are involved in the day-to-day engagement of BII and its oversight. I am also involved in its oversight with the shareholder meeting, which I will conduct quite soon. On the transparency, the roadmap will be out by the end of the year.

Chair: You are telling us stuff you have already told us. I will take at face value your assurances that we will get all of that information. Thank you. I will pass you over to Virendra.

Q77            Mr Virendra Sharma: Sir Philip, the autumn statement noted that ODA spending would remain at around 0.5% of GNI until the tests are met to return to 0.7%. What does “around 0.5%” mean?

Sir Philip Barton: In the legislation, there is a legal obligation to meet 0.7% exactly, unless the Government say that they cannot for reasons that are set out. It was a process that the Department for International Development and then FCDO had in our capacity as what is known as spender or saver of last resort to act as the Department that tried to produce that exact figure in the calendar year of ODA spend. Initially, after the step down from 0.7% to 0.5%, we were asked to try to hit 0.5% exactly just as presumably we tried to hit 0.7%. The Chancellor said a year ago, and repeated this year, that we would not be asked to try to hit it exactly. We would aim to spend around that amount, but it could be a bit more. I think it was 0.51% last year and I do not know yet exactly what it will be this year. I think that allows for slightly less pressurised decision making in the last few days of the year than trying to hit a precise figure against a best estimate of actual GNI and therefore what the percentage is worth in pound terms before you have all the final figures from the Office for National Statistics. I am not being flippant, but “around 0.5%” means around 0.5% rather than aiming for it precisely.

Nick Dyer: May I add to that? In the autumn statement of 2022, the Treasury allocated an additional £2.5 billion towards ODA to partially cover some of the in-donor refugee costs. The expectation is that we are actually going to spend more than 0.5%, as we did last year in 2022. I suspect that will be the case in 2023. We did not want to say we will precisely hit 0.5% because we will not. We will be over 0.5%.

Q78            Mr Virendra Sharma: How much flexibility does the FCDO have within that commitment to spend more ODA if it so wishes? Is there flexibility in that?

Sir Philip Barton: We are set up in the usual way with an overall envelope in the three-year spending review period initially. As we have discussed in this session and the previous one, there have been in-year changes to the budget. Compared to other parts of Government funding, the curiosity is the Department’s role as spender and saver of last report on the ODA side, which means we adjust the margin each year to try to get an overall figure. We do not have flexibility around our overall budget. That is set in the usual way as other parts of Government funding are.

Q79            Mr Virendra Sharma: Nick, you told the Public Accounts Committee that £500 million due to go to multilateral organisations had been delayed from 2022-23 until this financial year. Did you have the budget for this expenditure in 2023-24?

Nick Dyer: One of the issues of multilateral spend is that you can shift it from year to year. We had a challenging in-year adjustment to make in 2022-23, so we chose to create some space by moving the £500 million multilaterals. I would have to check precisely whether we have then moved the same amount into 2024-25 because we have moved additional multilateral spending into 2025-26 and 2024-25 as well. I would have to check the precise flow of funds.

Q80            Mr Virendra Sharma: How did you decide which organisations you should delay funding for in 2023-24 and which organisations were they?

Nick Dyer: I would have to write to you on the precise organisations, but it is a combination of a request and negotiation with the organisations themselves. Some of them are more willing than others. It depends partly on their cash management, how much resource they have, what other commitments have been made by other donors, and how reliant they are on the FCDO funding than others. One of the more flexible ones is the World Bank, which is normally quite willing to move funding both forward and back. I will have to write to you on the precise number.

Q81            Mr Virendra Sharma: This Committee has been repeatedly told by organisations that they need certainty of funding. What reaction did you see when you told these organisations their funding was delayed?

Nick Dyer: It has been very difficult for our supply chain to accommodate adjustments at short notice and we are very conscious of that. When we were going through the ODA pause, we tried to take into account the impact on our supply chain to avoid some suppliers potentially falling over and not being able to continue to operate because of the impact of the funding. We recognise that and that is why the business is asking us to provide more flexibility in the budget allocations. As I explained before, this is what we tried to do by saying, “This proportion of your budget is predictable and this proportion you may have to manage in-year and between years.” We have done that in part for the teams to be able to manage their programmes and to give our suppliers certainty with the supply chain.

Q82            Mr Virendra Sharma: Andrew Mitchell has told us that there is a significant impact on the reputation of the FCDO when funding is cut. What steps are you taking to restore faith in the FCDO as a delivery partner?

Nick Dyer: One of the core messages of the White Paper is that we will work on building mutual trusted partnerships. We want to have a development relationship where we listen to our partners and respond to their needs and requirements, to have a different type of relationship. The White Paper is an attempt to signal that those partnerships are important, as well as the areas of work we want to focus on and where we want to see changes in the broader international system. I see the White Paper as part of trying to rebuild that reputation.

Q83            Kate Osamor: Sir Philip, I want to ask you some questions about workforce and staff engagement. Why is the FCDO staff turnover increasing and employee engagement dropping?

Sir Philip Barton: Our turnover is around 10%. It has gone up a bit. It has not gone up dramatically. I think that, for the size of the organisation we are, it is not unduly large. Corin, Nick and I talk about whether there are pockets where we find it hard to retain or recruit people. Some of those are places that all of Government struggles with, such as data and digital technology. We have to think about whether there are particular bits of our development capability that have slightly higher turnover than average and what that tells us about where we need to invest for the future.

Corin might want to add to this, but on the second part of your question around staff engagement, to be honest with you, I think that we as a Department and the people in the Department had a tough few years. The impact of Covid-19 on our work, on the resources available to us and on our people wherever they work in the world, including our country-based colleagues, was significant, as it was on people in all walks of life. As an organisation working internationally, I think it was particularly tough on us. We have had significant in-year reductions in our resources which has been hard on people. It is difficult to say to a partner, “I am sorry, but I will no longer be able to do these things that I thought I was able to do with you.” That is a tough thing to ask people to do. They have been incredibly professionally resilient in the way they have gone about that, but I think it has been challenging. Corin, do you want to add on the staff engagement side?

Corin Robertson: Yes, thank you. We have not yet had the scores on our people survey for this year, but looking at the scores from last year and previously, we are slightly below the civil service average when it comes to staff engagement. We were at 61% and the average across civil service was 65%, probably for the reasons Philip says. We have been fairly steady this last year and the year before in the majority of our results. The one that did go down quite a bit—and I think it did for other Government Departments as well—was around pay and benefits where it dropped around 8% with staff feeling the cost of living pressures, both in the UK and around the world. We will wait for the results again this year and take forward an action plan on the back of that.

Q84            Kate Osamor: The “2022 Civil Service People Survey” said that there were issues around pay and benefits. Have you not been able to start working on the results of that survey, which came out last year?

Sir Philip Barton: On the pay side, for both our country-based staff and our UK colleagues, whether they are senior civil service or in the delegated grades, we have tried to secure the best possible deal within the overall framework, which is set by the Treasury and the Cabinet Office. That has been our approach. For our country-based colleagues, we have secured flexibility to allow us to take account of differential labour markets and inflation rates, recognising that we work across the whole world. As a Department, we did the best we could within the overall civil service pay settlement arrangements to do something about pay, recognising the cost of living pressure, as Corin said. Other things that last year’s people survey told us that we very consciously tried to do something about include how we lead change, how we give clarity around people’s purpose and mission, and how we invest in our line management capabilities. That is what we did on pay in particular.

Q85            Kate Osamor: Are you confident that the people who filled in the survey have been listened to and there have been changes?

Sir Philip Barton: Yes. I am very confident because we had a deliberate and serious set of conversations at leadership levels and we asked leaders of individual teams—both in the UK and overseas—to look at what the results for their particular areas tell them and to act on them. We acted at an organisation level but we also empowered and asked our leaders across the world and across the organisation in the UK to act in their particular circumstances as well. I hope that people feel we listened to what they told us in completing the survey last year.

Q86            Kate Osamor: As a snapshot, what came back? Can you remember what local issues needed to be addressed, for example?

Sir Philip Barton: If you look around the world, there are a lot of challenges around pay. We had a very tough pay settlement for our country-based colleagues two years ago, so pay was a big theme across the world.

Q87            Chair: Why was it so tough, Sir Philip? Can you give us the details?

Sir Philip Barton: For the UK civil service, there was a public sector pay freeze and we were asked to implement a flat rate globally for our country-based colleagues that did not take account of differential inflation. In some countries where there is very high inflation, we essentially pegged to the dollar, so we were insulating the local inflation. In countries that had medium rates of inflation but still serious impact on real pay, if you did not have some sort of uplift, it was really tough.

Q88            Chair: Before then, you would have looked at the country you were in.

Sir Philip Barton: Yes. We have now won the agreement of the Treasury to reintroduce the flexibility allowing us to take account of differential labour markets and inflation rates around the world. We have been able to address that in the last two years.

Q89            Kate Osamor: Are country-based staff people that are local, born and bred in the area, as well as English?

Sir Philip Barton: They are hired locally, yes. Most of them are born and bred, but they do not have to be born and bred. They are hired locally.

Q90            Kate Osamor: Did they fill out the survey as well?

Sir Philip Barton: Yes. It is for everybody.

Q91            Kate Osamor: Did it come up that their salaries were not good enough?

Sir Philip Barton: Correct.

Q92            Kate Osamor: In comparison to what other people were getting paid side-by-side—people getting paid in pounds?

Sir Philip Barton: It is not so much that they compare themselves to UK colleagues. It is more that they will compare themselves to other missions or other international organisations, or the overall high inflation in the country. You have to do something about that pay. That has an impact on the other real-terms value of their salary.

Q93            Kate Osamor:  Sir Philip, where there are gaps in the workforce, are you able to tell us where these are and how you ensure that you recruit to fill those gaps?

Sir Philip Barton: I will ask Corin to say something about what we do to recruit more on the data and digital side and I will let talk Nick about development.

Corin Robertson: We need to ensure that we have increasing capability in the data and digital side, where we are trying to integrate more innovation, data and digital work across our policy areas both in our consular teams and our IT teams. That is an area where we need to buy in the resource and recruit people with the skills and capabilities that we need in order to do the job. It is a competitive market. That is an area where we do not have the full skillset we need at the moment. We rely a lot on contingent labour, for instance, be able to get the work done. We have identified that as an area where we want to build more capability and attract more talent going forward.

Sir Philip Barton: We are working as part of the wider cross-Government work across the data, digital and technological professions to build in-house capability in this area. This includes looking at where there is a profession-wide flexibility around pay, for example, to make best use of that to attract people in. When you look at individual countries and country-based staff, it is very country-specific. If I look at the UK workforce, we are still seen as an attractive place to work. We are still very popular when we go out to recruit, but we need to make sure we recruit the right sorts of capabilities. We are very deliberate in thinking about the sorts of people and skills, particularly where we need to attract them from the outside. That is a particular focus on the development side. Nick, do you want to add about the development capability work we are doing?

Nick Dyer: Yes. On the development side, one of the areas that I am keen to scale up quickly is our centres of excellence work. This is the deep expertise that we can make available as part of our development offer. Internally, we are keen to professionalise our programme management work. We are getting our programme managers to be accredited to the professional accreditation from central Government to boost their career opportunities and to recognise the importance of skills that they bring to the organisation.

Within the professional cadres, it is a mixed picture. In health, I think that we have probably lost more senior health advisers than we have replaced but we have brought people at a more junior level, so the balance of that has shifted a bit. Some of the cadres are probably okay. In other cadres, we have not recruited fast enough. It depends on what professional skillsets you are looking at.

In building the capability of the non-professional development staff, we are making an effort to introduce training courses for heads of mission and deputy heads of mission as well as staff across the organisation, as part of our capability work to get some basic understanding of what development is about, as well as the different levels of accreditation of the courses that we are making available.

Q94            Chair: You highlighted health. Did you drill down into why that was? Was that because of the Ts and Cs or was that because of the pandemic? Why do you think that was?

Nick Dyer: It was a combination of things. Our health teams were pretty worn out by Covid. There was a lot going on for many of our teams and people because it was a difficult time to operate. We always do get turnover anyway and our most senior people are in high demand in other places. Some of them have gone to philanthropic organisations, and some have gone to other donors.

Q95            Chair: Would those places be paying more?

Nick Dyer: They would all be paying more, a lot more.

Q96            David Mundell: Can I clarify what the current status of Abercrombie House in East Kilbride is and what the commitment is to senior staff being based in Scotland? In the heyday of the International Development Department, it was the joint headquarters for your Government Department. We do not seem to hear very much about it now.

Sir Philip Barton: When the new Department was created we were very clear about having joint headquarters, the continuity of that, and as part of the overall commitment moving jobs out of the south-east for Places for Growth agenda, we said that we would move 500 jobs from the south-east up to Scotland, to make a total of 1,500. To be honest with you, we went backwards and found, for a combination of reasons, that wider Scottish public sector pay was higher so we lost some people to the wider public sector in Scotland.

David Mundell: Because the public sector pay was higher?

Sir Philip Barton: Because the wider public sector pay was higher, we lost some people on the finance side.

Chair: The Scottish Government was paying more than the UK Government?

Sir Philip Barton: The wider public sector, yes. We took an organic approach and encouraged people to move up there rather than thinking about it in terms of business units. That was not working. Therefore, we are now in the middle of a more centre-driven approach. We have asked each DG across the whole organisation to look at their overall workforce and think about what are the roles that can move up there. We have the returns coming in now. We will sit down over the next couple of years and look strategically at the roles that we can move up to Scotland to make sure that we meet the overall target that we set at the beginning. It was a slightly revised timetable of 1,500, but we are determined that first, we make a reality of joint headquarters and secondly meet the target. We changed our approach because it was not working and was not delivering.

Q97            David Mundell: What would be the relative seniority of those people? That has always been part of the issue. It is not just the number of people. There is a very large number of UK civil servants in Scotland, but there are very, very few senior civil servants.

Sir Philip Barton: Correct. There are two things on that. First, there is a headline target across Government but there are going to be harder targets around senior civil servants working outside of the south-east. We have seen, if I remember rightly, a slight increase in director numbers working from Scotland. What we have not yet considered and we will have to consider is how best and when to have more senior people. The Treasury have director generals working from there and we will look at having more senior people doing that. There are some challenges, including how people who need access to highly classified work can do that, but we will invest—

Q98            Chair: Is that still not happening? We went up there two or three years ago and that was meant to be happening.

Sir Philip Barton: We will look at investment to allow that to happen.

Chair: Sir Philip, has that happened or not?

Sir Philip Barton: No, that has not happened.

Q99            Chair: We saw that and raised that—I am looking to my team. It was a good two years ago that we went, if not longer.

Sir Philip Barton: We are looking at the investment required to make that happen. There are some other things that we will need to think about like the nature of people’s roles and how they can be done effectively from Scotland.

Q100       Chair: Why do you want people to move to Scotland? When we went up there it was gorgeous so I can see from a personal position why you would want to move up there, but why do you want 1,500 people to move up to Scotland?

Sir Philip Barton: The overall approach of the Government through the Places for Growth agenda of wanting the civil service to work across the whole of the United Kingdom is a very important agenda and as a Department we want to play our part in that. I am clear that the FCDO needs to represent the whole of the United Kingdom, including its constituent nations, Scotland, Wales and Northern Ireland. Having a joint headquarters somewhere else is a strong reflection of that. I think that we will be able to recruit differently and positively in the future as well, so it is an important statement of who we want to be as a Department and a reflection of the whole of the country.

Q101       Chair: What I hear from David and what we heard from the staff that were up there is that they were seen as a centre of excellence around development and they had specific roles and remits. Is this an example of politicians changing priorities and you having to follow those priorities? That is what it feels like—that the new Government wanted this thrust out into the regions and for the current Government it seems less of a priority but you are still looking at 1,500 who are in the wake or the lag of those political decisions being made.

Sir Philip Barton: It is still a priority for the current Government and we want to play our part in that. I have been honest with you that we tried an approach and it did not work so we have changed our approach to be more deliberate to make sure that we do meet the ambition.

Q102       Chair: If they literally do not have the kit to be able to do that job—

Sir Philip Barton: We are looking at how to invest to make sure that the facilities are available. What we want is not just to be a development enclave but to be a place where you can have a career working across all of our types of work. By way of example, we have recruited some additional people to help with our consular call handling and response work. We deliberately recruited so that they could work out of Scotland rather than from here. That is just one example. The idea is that people will be able to have a career based there. They might spend some time down here or overseas depending on exactly where they work but they will have a broad variety of jobs available up there.

Q103       Chair: Currently that career would be at a lower level because you do not have security clearance, so it is not really a career, is it?

Sir Philip Barton: It is more about access to highly classified kit to communicate effectively. That is a constraint at the moment but we will fix that.

Chair: I feel another visit coming on.

Q104       Kate Osamor: I have a question for Nick, but you may also want to answer, Sir Philip. Only 27% of UK-based senior civil servant directors, and 43% of senior civil servant staff, identify as female, with even lower percentages of staff identifying as BAME or disabled. Why are these percentages so low?

Sir Philip Barton: Looking at the Department as a whole on gender, you are right. If you look at seniority, there is a drop-off. This is partly talking about old FCO, because that is when it started. However, if you look at the leadership positions we have a reasonable story to tell in the most senior positions. If you look in the middle there is a challenge. It is something that we are deliberately looking at, what we need to do to support women and why there is a drop-off step-by-step from grade 6 SCS1, SCS2 that you have identified. What are the barriers and how can we make sure that that carries on changing over time? At the most senior levels, we have a slightly better story.

On the minority ethnic side, it is a similar story. Overall we are a bit below where we should be in overall numbers, but again it drops off at more senior levels. We have some deliberate interventions around—we have a Lift programme and a Summit programme. They are designed to help colleagues from an ethnic minority background progress in their careers. It is everything from masterclasses to sponsorship and mentoring arrangements, recognising that we do not yet have people in the more senior positions reflective of the overall percentage.

Q105       Kate Osamor: I will come to Corin in a moment because obviously you are the woman sitting there and I have not asked you a question on this issue. Sorry to put you on the spot, but how did you get to where you are?

Corin Robertson: What is the right answer to that one? I have been in FCDO and FCO previously. I joined straight from university,  worked my way up and have had a range of roles along the way. However, when I think about the challenge that we have for getting more women into the senior civil service within FCDO I reflect on my experience and the things that made a difference.

Q106       Kate Osamor: Has anyone asked you about your journey and how you got there?

Corin Robertson: Yes, for me it was partly opportunity and taking the opportunities when they came about. I have two kids, and I had the flexibility of being able to take some parental leave and then come back. I had a period when I first got into the senior civil service of working part-time for a few years after my second child. That made a massive difference to me in terms of encouraging me to go for promotion to senior management. That is something that we are looking at as well, how we can do more of that to encourage more women to go for the jobs at the next level up.

Kate Osamor: Sorry to put you on the spot.

Corin Robertson: It is okay. Another thing that helped me, and that we are trying to do more of across the organisation, is mentoring and support and sponsorship schemes to have those relationships, not just for women but across our ethnically diverse colleagues as well, to ensure that we can identify talent and to make sure that we have good mentoring and sponsorship schemes in place. I have a very supportive husband as well. It has been a team effort.

Kate Osamor: Thank you. Hopefully, you have listened and this can be part of the plan to ensure that more women feel comfortable a put themselves forward, especially because, as you rightly said, having a child and trying to get back into the workforce can be very challenging, not for the woman but for everyone around.

Q107       Chair: Were you FCO or D?

Corin Robertson: I was FCO.

Q108       Chair: One of the things that seemed very good at the announcement of the merger was that at ambassador level you could come from either FCO or the development side. In practice, how many of your ambassadors, and at what levels, are now women and from the development sector? Has it worked, in practice?

Sir Philip Barton: We would have to get back to you on gender in terms of ambassadors because they are different grades and I do not have it broken down by head of mission.

Q109       Chair: Is it possible that you could break it down on grades and head of mission to see if that promise, which was a very attractive one, was followed through in reality?

Sir Philip Barton: On heads of mission with a development background, it is certainly true that we have a higher number than pre-merger. That is a positive benefit of—

Q110       Chair: That higher number could be going from 2% to 3%.

Corin Robertson: It is 13% of our heads of mission who are former DFID colleagues.

Q111       Chair: Do you break down, when there are opportunities, where the applicants are coming from to see if people are applying and, if those people are applying, if there is a distinction between which background they come from and who gets through in the end?

Sir Philip Barton: We try to look at people in terms of skills and experience they bring rather than the departmental heritage, so I am not sure that we do break it down in that way.

Q112       Chair: It would be interesting, if only for myth-busting, because it is something that we hear—that it is offered there but the top jobs are always going to the FCO people rather than the development people.

Sir Philip Barton: I think that we do have data on that.

Nick Dyer: I am not conscious of it.

Chair: Yes, but you are at the top. People at the top tend not to be. It is about people in the middle trying to make their way up. It may well be a myth.

Sir Philip Barton: We would need to have a look at the numbers.

Q113       Chair: The other thing is that there was a lot of chuntering about terms and conditions and I heard a lot of FCO people saying that development people got much better terms and that the merger was going to be a good thing for bringing that together. Nick, in terms of Ts and Cs from where development was, have we levelled everyone up to development or have we pushed everyone down to where FCO was?

Nick Dyer: It is quite clear that there were differences in terms and conditions.

Chair: Different jobs and stresses and opportunities as well.

Nick Dyer: There were also a number of myths about who got paid more than others. If you look at the raw numbers, they did not quite correspond with the myth, so that was always difficult to handle. However, we are doing two things. For people based in the UK, we now have one set of terms and conditions, both for allowances and pay. Everybody has moved this year on to the same terms and conditions.

Q114       Chair: With respect, that was not the question. The question was whether you have levelled everybody up or levelled everybody down or are you saying that it was a myth that there were better packages if you were on the development stream than the FCO stream.

Nick Dyer: Philip will come in on this. People have entered the single terms and conditions at the place where they are at.

Chair: Regardless?

Nick Dyer: In terms of their current terms and conditions. Some people were not getting, say, the London allowance—ex-DFID people were not getting the London allowance and now get the London allowance. They have levelled up on the London allowance.

Sir Philip Barton: Do you want me to carry on?

Chair: Briefly.

Sir Philip Barton: We unified pay scales, for each grade, the range. We mostly tried to be as generous as we could compared to the FCO and the old DFID. However, individuals stayed on the salary they were on unless they were below the bottom of the scale, in which case they were moved up. In any organisation you can be at the same level when you are promoted, what pay rises you have had, where you are on a particular scale—it is not unusual for people to be on different points of the scale even if they are doing jobs that are the same or very similar. However, with the different allowances, the London allowance being the biggest one, we have equalised that at the old FCO level. Therefore, in a sense that is a levelling up of the allowance. It is a bit complicated.

Q115       Chair: That is good and legal and I would expect that. If I was on £80,000 on the development stream and my anticipation was that on that stream I would be on £100,000 in five years if I met all of my targets, and I stay at £80,000 but now my expectation is that I could only reach £90,000 in five years, I would see that as a real-terms cut in my future. Has anything like that happened?

Sir Philip Barton: No, because we essentially have not had progression pay in the civil service over recent years. The only way that your salary went up was inflation. The Department at senior levels has reintroduced progression pay but no one from a legacy Department could have had an expectation of progression in the way you describe. It will not have been met so that issue will not have arisen.

Q116       Chair: Okay, but the potential, even if it was not automatic is on a par? As a development person or as a Foreign Office person I will not feel disgruntled that I have lost something over the merger?

Sir Philip Barton: I do not think in absolute pay terms. Partly because of the myths that one legacy Department was paid less than the other, some people thought that they were going to get a very, very significant pay rise. That was never going to be true or affordable. People now have digested the fact that that has not happened.

Q117       Chair: The most basic way to see it is whether your bill for salaries is roughly the same as it would have been pre-merger.

Sir Philip Barton: The broad answer is yes. The very broad answer is yes to that question.

Chair: If you want to come back with any more detail—

Sir Philip Barton: Another way of illustrating it anecdotally is that I now hear people complaining more about other parts of Government being paid better rather than complaining about people within the Department. I take that as a sign of success.

Chair: Everybody does.

Q118       Theo Clarke: Sir Philip, could I ask you about pre-posting training on development? I understand that it is now mandatory for heads of mission with development programme budgets of over £1 million per year. How many posts meet that £1 million threshold for mandatory training?

Sir Philip Barton: I do not have a number in front of me. We have created, as part of the international academy, a diplomatic stream to that. As Nick described earlier, that is offering training at different levels; some of it is the leadership level for heads of mission and deputy heads of mission and some of it is more foundational for people who need to know a little bit about development, but it is not a core part of their role, unless Corin has a figure.

Corin Robertson: For the outgoing heads of mission and the deputy heads of mission and fast stream when they start, it is automatic. They will all get the development training as part of their induction programme. We can check on the number of individuals who have gone through that this year.

Q119       Theo Clarke: If you do not have the figures to hand, it would be helpful to know the number for the posts and the number of FCDO staff who have attended those development training programmes, if you could write to the Committee.

One of the key recommendations in our report on atrocity prevention was that the FCDO would have mandated atrocity prevention training for all ambassadors and heads of UK missions. Has this training now been put into place?

Sir Philip Barton: I do not think, from memory, that we accepted that recommendation. We do recommend for those where it is going to be most relevant that they should do the training, but we decided that it was not something that we should do on a blanket basis.

Q120       Theo Clarke: So rather than it being mandatory, they are encouraged to do it, or it is not even there at all?

Sir Philip Barton: It would not be for every single head of mission, depending on where their assignment is.

Q121       Chair: Our concern, which sadly has been playing out over the last few years, is that conflict tends to bubble up where you least expect it. Just giving training to people in the areas that are currently in conflict does not necessarily safeguard us from being able to spot it and prevent it from emerging. Thank you, that is something that we will raise with the Minister.

Nick, at the Public Accounts Committee two weeks ago, you described the increase in resources on work related to the war in Ukraine. Were these additional resources brought in from outside of the FCDO, or are these staff and resources that have been reallocated from with FCDO?

Nick Dyer: Both the staff and the resources have come from within the FCDO, but the bulk of the resources have come from our use of guarantees rather than allocation from the aid budget. We have agreed $5 billion worth of guarantees to Ukraine’s economic reform programme, but that is not from the aid budget because that is a risk that we have taken on our balance sheet.

Q122       Chair: What impact has that internal shifting had on the rest of the work?

Nick Dyer: There are two aspects to that. One is the ODA allocation, which was about £215 million in terms of the grant, which was the smaller part of the amount of the resources that were allocated to Ukraine. That would have been accommodated by adjustments to the other budgets in the normal way.

In terms of staffing we have had a process internally where we have asked in the short term—in the normal way that we respond to crises, we have a crisis list where 20% of people are on the crisis list and they can be allocated at very short notice to work on a crisis when it hits. When we reached a steady state, we built up the teams that were working on Ukraine in the region and allocated staff in line with the needs on the political and development sides.

Sir Philip Barton: We found that it was challenging when a crisis hits—no notice in Sudan would be an example of that—and we need a core of people who could immediately move in to respond to that. However, you can only do that for three or four weeks. Therefore, we built a model where we have 20% of staff in the UK on these response lists and we call on them as things move to a period where you are not running an immediate crisis response, but you need sometimes a significantly enhanced effort. We have built mechanisms for reprioritising within the Department so that you can then put in an enhanced team. For example, at the moment we have an enhanced taskforce working on Israel-Gaza issues, which is no longer working 24/7 but is an expanded effort to what we had before the Hamas attacks.

Q123       Chair: Is that just FCDO or is that across Departments, that 20%?

Sir Philip Barton: That is an FCDO business model because we have repeated crises globally that we have to respond to. The two things across FCDO are that when we are in a crisis response stage, we have embedded with us other bits of Government that we are working closely with, typically the Ministry of Defence and the Home Office when we are dealing with evacuations, and other parts of Government as appropriate. Secondly, there is, a cross-HMG surge capability that we have in the past seen whether we can use, but we start by looking at how we can flex our resource.

Q124       David Mundell: Sir Philip, can I ask some questions about Hera, the FCDO’s new HR and finance system, and in particular what impact on the day-to-day work of staff has there been as a result of the migration to the Hera system?

Sir Philip Barton: First on why we did this, the FCO had a system to deal with its finances and HR systems that was beyond the end of its life. It was costing a lot of money and was creaking. Secondly, you want to have a single system in a Department. The programme had already started but the merger provided an impetus for that. We now have in place a single system for all of our HR and finance processes, which includes how we do our programme management in terms of the tech behind that. That is now rolled out, implemented and working effectively. We have ironed out the usual range of teething problems that you have and we are looking at how we can build on it.

For example, it now has a module called Hera Learn, which is how people can access online training and that sort of thing, and we will increasingly use it for wider things, for example thinking about how we can use it to know what skills we have across our people across the whole Department and can quickly see that. That is the overall programme. If I remember rightly, we will come off the GMPP at the end of this year and formally the programme is then business as usual.

Q125       David Mundell: Is the exercise essentially complete?

Sir Philip Barton: Yes.

Corin Robertson: That is right, yes. It comes off the government major projects portfolio at the end of this calendar year. It was implemented in November 2022 and we have migrated the data. It is fair to say that there is still some functionality in the system that we have not yet made the most of. That is part of the business change that we are leading across the organisation. In terms of the basics of being a system that is operational all the data has been migrated from the three legacy systems and we have already started to do some of the elements, as Philip mentioned, such as Hera Learn. That is all in train. The other thing is that it is part of the overseas shared services cluster for Government as well so it is part of the cross-Government platform for shared services. There are 28 Government Departments that are on our platform, on the Hera platform, overseas.

Q126       Theo Clarke: Are there lessons that the other Departments here in the UK could learn from this exercise? In the last year or so we have seen a number of departmental mergers and structural changes. Are there lessons learnt that can be shared with Government colleagues?

Corin Robertson: We did conduct a lessons-learnt exercise as part of the programme and as part of the GMPP scheme, and it is an important part of doing it. There were a number of different recommendations as part of that, which we have shared on the back of the IPA report. It is challenging to be implementing a system of that scale in the middle of crises on the back of the merger. That was one of the reasons why we said when we came to the Committee last year that there was a delay in the programme. We reprofiled the programme to finish at the end of 2022 as opposed to earlier. That was quite important. However, it did stay within budget and has stayed within budget.

There was a big data migration, two data migrations, with 1.6 million records altogether and 21,000 users. Managing that scale was a challenge but we did it within the new timeframe. Another thing on lessons learnt is not underestimating the importance of that business change, not just the technology but working with the organisation and teams across the organisation to make sure that they understand what they need to do and what the changes are going to be and how to make the most of the benefits that can be unlocked through using the new system.

Sir Philip Barton: The final bit about other mergers is we did share our experiences with those providing shared services to the new Department of Science, Innovation and Technology and the Department for Energy Security and Net Zero, for example, although our model had to be a bit more complicated because of the nature of our work and the international part. However, any lessons that applied to them they knew about.

Q127       David Mundell: Following up on the point about the budget, the 2022-23 annual report did not, despite the introduction of Hera in the year make any reference to its cost. Why were those costs not included in the report, and what were they?

Sir Philip Barton: I do not know why they are not in the annual reports; we would have to get back to you. The total budget spent at the end of 2022-23 was £99.7 billion against an overall budget of £101 billion.

Q128       Chair: Are there any other £100-million gaps in the accounts that we should be aware of?

Sir Philip Barton: I do not think it is a gap. The money will be there but whether it is identified as Hera rather than overall expenditure on capital and IT, I would have to check. The money will be covered in the accounts, it is just whether it is marked as Hera. I am not sure.

Q129       David Mundell: In previous accounts for 2021-22 it was separately identified It would helpful to understand that. Is there any figure available as to how much has been spent on the merger?

Corin Robertson: Yes, the total cost of the merger is £24.7 million. That excludes Hera costs because we have taken them out as a separate cost. £24.7 million is the overall cost of the merger.

Q130       David Mundell: What was that compared to the initial estimate?

Corin Robertson: The initial estimate of what we thought the merger cost? That is a good point.

Sir Philip Barton: It was not done as a cost-saving exercise.

Q131       Chair: We are not asking that question, we are asking what were the anticipated costs.

Sir Philip Barton: I would have to check what the anticipated costs were.

Q132       Chair: What were the headings that the £24 million has gone on? Is that new stationery and consultants?

Corin Robertson: It is the full package going across all the different work strands, whether it is integration of IT, integration of HR policies or a range of things. It included the consultancy costs as well as the non-Hera-related technology costs. In the figures that we released for the merger in 2021-22, the full cost of the merger, we did include Hera costs in it, but we concluded that for this year it made much more sense to take the Hera costs out because it is a separate programme.

Q133       Chair: Politically it makes much more sense, I can see that. Has the merger happened?

Sir Philip Barton: The merger? Yes.

Q134       Chair: Could I pick away at a couple of little points? The Hera system recently got an amber rating. Has that been lifted? Are we in a strong green position now?

Corin Robertson: Yes, we are now rolling out the GMPP at the end of this calendar year.

Q135       Chair: East Kilbride got it and is fully integrated?

Sir Philip Barton: 

Nick Dyer: It is integrated around the world.

Q136       Chair: Great. One of the problems identified with the Afghanistan—I have forgotten the word; it is not extraction, is it?

Sir Philip Barton: Evacuation.

Chair: Evacuation, thank you very much; I have been watching too much television. The problem was the two IT systems between the two different Departments. Are you confident that now that horrendous consequence could not happen again because you are all on the same system?

Sir Philip Barton: Yes. We did a lesson-learning exercise after the fall of Kabul and the evacuation period. The way we responded to the Russian evasion of Ukraine, the Sudan crisis and now the crisis in Israel and Gaza, has shown improvement in our systems, and the IT issue that you are talking about is now fixed and we are on a single system.

Chair: Thank you. we have two more questions from Virendra if you will indulge us. They should not be at the end because they are probably the most important questions for this Committee.

Q137       Mr Virendra Sharma: The equalities impact assessment concluded that “The impact of the ODA reductions on FCDO programmes with a strong focus on fostering equalities is expected to be severe.” In the context of these severe cuts, how will the FCDO meet its objectives for women and girls as set out in your new strategy?

Nick Dyer: The equalities impact assessment report gave a summary overview of what we thought might be the impacts in 2023-24. As a consequence, we did make some allocative changes to try to mitigate some of that. We put more money into our Afghanistan allocation—an extra £44 million in to make it up to £100 million—in part to address the expected consequences for women and girls. We did similar responses in Somalia, Yemen and Syria. Therefore, in part, we were adjusting and responding through the budget.

In terms of the women and girls strategy, the strategy is clear about two things. One is the areas that we want to focus on—educating women and empowering girls, including sexual and reproductive health, and ending violence against women. It makes a clear commitment that we will ensure that 80% of all our spending by 2030 has a reference in the allocation towards women and girls, either directly or indirectly. That is a clear statement of intent about the importance, the centrality and the desire to mainstream our work on women and girls across the organisation.

It is quite clear to say that James Cleverly, when he was Foreign Secretary, was very supportive of the women and girls strategy. He wrote to all heads of mission to say that he expected that it would be implemented and that they would take it seriously. We know that Andrew Mitchell is very committed to it and I have a full expectation that the new Foreign Secretary will be too.

Q138       Mr Virendra Sharma: What has been the immediate impact of ODA reductions on outcomes for women and girls across the FCDO portfolios?

Nick Dyer: It is difficult to summarise it in aggregate. Some of it will be indirect. For instance, in 2023-24, the equalities impact assessment said that in Ethiopia we will train 41,000 fewer teachers. That will have an indirect impact on both boys and girls in terms of the future deployment of those teachers. There was also an example in the strategy about the reduction in the coverage of contraceptive services. Those are specific examples of where there might be an impact.

However, what our teams tend to do when they project a reduction is a number of things. In many cases, they just delay the programme, so they are just shifting it to the right. It will happen but it will happen later. In some cases, they will seek other donor support to make up the gaps that come from our own adjustments. In some cases, as I said with Afghanistan, we found new resources and redeployed resources to boost the budgets.

Q139       Mr Virendra Sharma: Sir Philip, witnesses told the Committee of insufficient FCDO engagement with organisations of persons with disabilities. How will the White Paper improve that?

Sir Philip Barton: I am sorry to hear that you have received that feedback. We have an overall programme and we have ambition through all of our work and how we are internally as well to make sure that we take account of the views of the organisations of individuals with disabilities.

Q140       Mr Virendra Sharma: We were also told that the FCDO do not hold sufficient data. Without data broken down into characteristics, how can the FCDO develop best practice on disability inclusion?

Sir Philip Barton: We have an overall programme to increase the data capabilities of the Department and I am sure that we will be looking at that in this context as well. Some of that is around having deep expertise, and some of it is around making sure that everyone is data literate and knows how to use data in making evidence-based policy recommendations and evidence-based programmatic design.

Q141       Mr Virendra Sharma: Are you satisfied that you have sufficient data on disability?

Sir Philip Barton: On the data question rather than the expertise question I would have to check, unless you know, Nick.

Nick Dyer: We know that one of the big challenges in development is data disaggregation, in terms of disaggregating by gender, by disability, by marginalised groups. For disability, this is something that we have been very aware of for a number of years. What I would say about disability is that disability is a bit like nutrition. It is one of these agendas that very few donors take an interest in and it falls through the cracks because it does not belong to one Ministry in many of the countries.

Q142       Mr Virendra Sharma: Are you confident that you have sufficient data or are you not confident?

Nick Dyer: I do not think that we do have sufficient data in the developing community on disability.

Q143       Chair: What are you doing with that?

Nick Dyer: There are a number of things that you can do through your programmes, which are quite bespoke and unique to a particular area in terms of collecting disability data. I know that we have been working with the likes of the World Bank to try to improve the way that we can improve the data measurement and try to collect more data across a whole range of disaggregated groups. There is a range of things that we have done in the past, but getting good data in countries that have poor institutions and poor data collection themselves is a very difficult endeavour.

Q144       Chair: Sorry, but you have known that there has been an issue around this for a couple of years. We have been giving out £15 billion or £10 billion. That is a lot of money. If you were only looking at the bilateral projects that the FCDO is funding, are you saying that you are not asking the people we are giving cash to to give a breakdown of the people with disabilities accessing those schemes?

Nick Dyer: I am happy to get back to you to explain what we are doing internally within our programmes and more broadly in terms of—

Q145       Chair: I get the lobbying and that other people do not take it on, but the question Virendra was asking is about what you are doing.

Nick Dyer: Certainly. For our programmes that we are doing on, for instance, assisted technology, where we are helping people with disabilities to have full—

Q146       Chair: It is the same frustration that we have with women and girls, that there are separate projects rather than integrating it in all of FCDO. I would expect that FCDO money is going to the most marginalised people. That tends to be an intersectionality of gender, faiths, disabilities and location. Are you asking all FCDO projects—I will help by saying bilateral projects—who they are reaching and how they are reaching them, or is it just being asked around disability on disability-focused projects? If we are funding a school, do you make it a requirement that there is level access to get into the school?

Nick Dyer: I would need to check in all circumstances whether that is the case in terms of all our bilateral programmes. I can imagine that if we were doing a debt-management project in country X, we would not be building in a disability indicator into that programme.

Q147       Mr Virendra Sharma: I do not think that this is an issue of any further argument. We were told that your Department does not have sufficient data on disability. With your contribution now to mean it has reconfirmed that you do not have it, to have a best practice what are you going to do to get that data to have the best practice in the organisation? What are you going to do in the future?

Nick Dyer: If you are asking me to say what I am going to do right now, I am happy to get back to you.

Mr Virendra Sharma: That is what I want to know.

Nick Dyer: I can commit to the Committee, as part of my new role in this organisation, to take away this question about data disaggregation and come back to you on it.

Q148       Mr Virendra Sharma: I do not want to be rude. I accept that you do not have it. You say that you will come back to me on what plan you have for the future. When you go back to your organisation, when you go back to your desk with your colleagues, how are you going to plan it in the future? You will write to us. I do not want the answer straight away.

Nick Dyer: I am happy to accept the challenge that we do not have sufficient disaggregation data either in the organisation or international development more broadly. That is a statement of fact; we do not.

Q149       Chair: How long have you been in post?

Nick Dyer: Five months.

Chair: And was it not a priority, for you to know exactly where taxpayer money is going to help people? I know you and I know that you care about this sector and I know that you support all people developing and that we have highlighted two groups that have been identified by successive governments for decades as being the most marginalised and excluded. Why is it not higher up your list?

Nick Dyer: The question of telling as compelling a results story as we have done in the past is very much on my list of priorities. That is why we have created this development committee so that we can do portfolio results analysis. We can tell a very good story at the project level. I think in some sectors we can tell a reasonable story at the aggregate level, but at the portfolio level we do not have the systems in place to tell a consistent story. I care a lot about the question of results.

At the project level I am sure, but I would need to check, that there are some very good projects disaggregating across the groups that we are concerned about, but I do accept that there is a broader question around the disaggregation of data in the sector. That is something that I do worry about and I do care about and will be and is something that I will take forward in my time working with this Committee.

Q150       Kate Osamor: Nick, I want to draw you back to your comments that you made on Gaza and the extra money that the Department has put forward. How are you able to track if the humanitarian aid is getting to those people who need it? We can see from reports that it is next to impossible to get across the Rafah border. Secondly, at the weekend it was published on the website that the Ministry of Defence, the FCDO and the Home Office—my question is who is paying for the surveillance flights? Is it coming out of the aid budget or is it a joint venture between the three Departments?

Nick Dyer: The surveillance flights are not coming out of the aid budget.

Kate Osamor: That is what I wanted to know, thank you.

Q151       Chair: How are you able to monitor if the aid is getting to those people who need it? Because there are issues at the border.

Nick Dyer: This is an active conflict and we are relying on the Egyptian Red Cross, which is the key implementing partner, and UNRWA to be doing the aid deliveries. We are flying resources and equipment, in terms of helping logistics, into El Arish in the border area of Egypt, and those are being put on to Egyptian Red Cross, WFP and UNICEF trucks and they are taken into Gaza. We are relying on those organisations to do the distribution inside Gaza. We would be relying on their reporting mechanisms in terms of who gets what where.

This is an incredibly difficult circumstance in which to be operating, for all the people involved. We know that over 100 aid workers have already been killed, so it is an incredibly dangerous operation. Given that we are not on the ground, we have to rely on our third parties, which we trust to be able to do the distribution.

Q152       Kate Osamor: Can you confirm who is paying for the surveillance flights?

Sir Philip Barton: The Ministry of Defence made the announcement so I would imagine that it is paying for them. The FCDO is not.

Q153       Chair: I have a couple more questions if you will indulge me. We are mid-COP. The UK committed and recommitted to contributing £11.6 billion to the UK’s international climate finance between 2021 and 2026. We are halfway. How much has been disbursed?

Nick Dyer: The first two years was about £32 billion. I do not have those figures in this pack.

Chair: Could you email them to us?

Nick Dyer: We will send them to you.

Q154       Chair: I am aware of how much of your time we are taking. As a follow-up, a note has been handed to me. We did an inquiry on Covid-19 in developing countries and the secondary impacts of that. We published a report on 26 January 2021. In that, one of our key recommendations was that FCDO should publish disaggregated data. In the Government’s reply, you committed that you would. Nick, I am aware that you have been in post for five months and it was two and a half years ago that that commitment was made. Could you follow that up and let us know what is happening?

The final question is to you, Sir Philip. We are yet to receive a response about when the Foreign Secretary can come in front of this Committee. If you could shuffle it to the top of his pile, I would be extremely grateful.

Sir Philip Barton: I am very happy to, Chair. I know that he is committed to doing so and is looking actively at when that will be possible. I will remind him.

Chair: That is very kind. Thank you, all. You know that we take scrutiny and following up on previous answers very seriously. Thank you for being here for so long and thank you for being so open and honest with your answers. We have a lot of things to follow up on in both directions. The team has no more questions, thank you very much.