Could DFID be absorbed by FCO?

LONDON — United Kingdom Member of Parliament Boris Johnson has once again called for the Department for International Development to be scrapped and rolled back into the Foreign & Commonwealth Office.

“We can’t keep spending huge sums of money as though we were some Scandinavian NGO,” he told the Financial Times. The present system is leading to “inevitable waste” as money is “shoved out of the door.” In the future, aid should cohere “much better with U.K. political and commercial objectives,” Johnson suggested.

DFID was removed from FCO by Labour in 1997 to safeguard the independence of development policy from commercial interests. In the 20 years since it has established a reputation for itself as a leader in global development. Yet Johnson isn’t the only politician who wants to abolish it. In recent years, there have been a number of calls to remerge the departments.

For example, Grant Shapps, Conservative MP and former minister for DFID, said in 2017 that DFID should be scrapped due to “out of control spending.” Another Conservative MP, Tom Tugendhat, said last year that bringing overseas development back under FCO control would help meet the challenges of the post-Brexit era.

“Had the Conservatives come back with a big majority [in the 2017 general election, in which Theresa May won a minority government], we suspected they might have seriously considered merging the departments,” Ian Mitchell, a senior policy fellow at the Center for Global Development, told Devex.

Many are concerned about the impact such a move would have on development spending. Oxfam GB’s Head of Advocacy Toni Pearce said a merger would be “very concerning,” given that DFID “significantly outperforms” FCO on effectiveness and transparency. It is consistently rated among the world's most effective aid agencies, and was ranked third in the 2018 Aid Transparency index, while FCO — which currently spends around 4.5 percent of U.K. aid — fell near the bottom.

Katherine Nightingale, head of advocacy and policy at CARE International UK, said bringing DFID back under FCO would put its focus on poverty reduction at risk, with money instead being diverted to support defense or business interests.

Could the merge happen?

The justification often given is that a joined-up approach between DFID and FCO would create greater coherence and efficiency. In reality, changes such as these are “generally driven by political motivations,” Mitchell said. “It doesn’t seem to be that it’s more effective; it seems that it’s a political choice to integrate.”

Having a single voice for the U.K. internationally and perceived greater control over foreign spending appeals to some and is a way to win over aid skeptics, Mitchell explained. In the minds of some MPs, “development should be secondary to our U.K. foreign policy objectives.”

But Michael Aaronson, former chief executive of Save the Children UK and now executive director of the Centre for International Intervention, emphasized that DFID and FCO have distinct roles.

“DFID is one of the most respected and influential actors in the world of international development; it relies on the FCO to provide the diplomatic framework within which it can operate, and the FCO relies on DFID to deliver the aid programs. Their roles are complementary and equally important, but different,” he told Devex.

The issue is complicated by the cross-government aid strategy, which has seen departments other than DFID spend more of the U.K. aid budget each year, with concerns from aid advocates that the poverty reduction focus is being watered down. FCO’s share of official development assistance rose by about 50 percent between 2015-2017.

Brexit may also be having an impact. “I think at some level, the Brexit question is raising some interest in how development can be used,” Nilima Gulrajani, senior research fellow at the London-based think tank the Overseas Development Institute, said.

Effective or risky?

There are different potential models for a merger, explained Gulrajani, who has researched past mergers in Australia, Canada, and Norway. First, there’s full-scale integration, where “even the development label or unit is lost.” Second, the development unit can be subsumed, but holds on to some sort of identity. And third, DFID could become a unit that doesn’t set policy, but simply implements it. In the U.K. context, the second option is most likely, Gulrajani believes.

The effectiveness of a merger largely depends on the political motivations behind it and the operating environment, experts said. Take Canada, for example, where the Canadian International Development Agency was merged with the Department of Foreign Affairs and International Trade to become Global Affairs Canada in 2013. The aim of the merger was not primarily to underline development spending, and critics at the time feared development interests would be sidelined in favor of commerce and foreign policy objectives.

Both Gulrajani and Mitchell believe the merger hasn’t proven significantly beneficial for development. Canada’s overall ranking on the Commitment to Development index dropped to 17 in 2018, down from 11 before the merger in 2012.

Gulrajani said it would similarly be “a risk” to merge DFID with FCO. “It’s not a merger from a position of strength on the development part,” she said, “because the current environment is one of political uncertainty and fiscal stress and that doesn’t help the ambitious principled approach to development.”

Still, asked if the merger could happen, she answered: “Logistically it could, but it’s a political question. Countries have had it happen to them, so it’s not off the table.” It comes down to what leadership wants.

However, Claire Godfrey, head of policy and campaigns at Bond, the U.K. network for development organizations, said she’d be surprised. “There’s no real case for such a merger from an effectiveness and value for money perspective, given that aid programs currently managed by the FCO — such as the Conflict, Stability and Security Fund and the Prosperity Fund — have displayed very weak levels of transparency and their effectiveness has been questioned by both ICAI [the UK aid watchdog] and Parliament,” she said.

Mitchell also suspects a merger is unlikely to happen any time soon. “It would impact on effectiveness and won’t satisfy the aid skeptics,” he said.

“The general Whitehall view about machinery changes is that they’re disruptive, expensive, and a distraction ... I suspect the difficulties of implementing Brexit will make a strong case against it.”

Update, Jan. 24: This story was updated to clarify comments made by Tom Tugendhat MP