Mitchell: UK must restructure FCDO to regain aid 'superpower' status

The Foreign, Commonwealth & Development Office, or FCDO, has effectively lost control of the foreign aid budget, and the latest round of aid cuts, which amounts to about 30% of the budget, is “fierce and draconian,” according to Andrew Mitchell, minister for international development.

Domestic aid spending costs, which fall under the purview of the U.K.’s Home Office department and take money away from international programs, are “open-ended,” making it “extremely difficult” for the FCDO to plan aid programming, Mitchell told politicians on the international development committee, which scrutinizes government aid spending and policy.

And due to years of aid cuts, he added, the U.K. is no longer a “development superpower.”

His remarks Tuesday seemed to repudiate the U.K government’s approach to foreign aid policy since 2020, which has been characterized by opacity, defending the troubled 2020 merger of the Foreign Office and the Department for International Development, and aid cuts of £4.6 billion ($5.6 billion).

As development minister, Mitchell now has great sway over those things. On Tuesday, he said his commitment to transparency was “absolute.”

“Let’s not beat around the bush. We are not a development superpower at the moment. That is something that is bemoaned around the world by our many friends and people who look to Britain for leadership on development,” Mitchell said.

During his wide-ranging and frank remarks, Mitchell also declared:

• The U.K. had lost the trust of former partners because of the aid cuts.

• The FDCO did not deem responding to the drought in Somalia as “essential” aid.

• He wants to restructure the FCDO after the “suboptimal” merger.

• There are 200 development positions vacant in FCDO and “morale issues” among staff.

Restructuring FCDO is necessary in order to regain the U.K.'s lost “superpower” status, he said, adding that Foreign Secretary James Cleverly has already approved work on examining this possibility.

The comment was an admission that “the merger has failed, and the government knows it,” tweeted Preet Gill, international development spokesperson for the opposition Labour Party.

Winning back trust

Mitchell also said that “we will have to win back the trust” in the U.K.: “If the budget gets changed and you are unable to fulfill the commitments you have made, that is clearly very bad for the country’s reputation and very bad for development.”

Mitchell, a former Department for International Development, or DFID, secretary and leader of a parliamentary rebellion against the aid cuts, was asked by members of Parliament, or MPs, about the extent of the Home Office’s spending on refugees in the U.K. — the first year of which is allowed under aid spending rules set by the Organisation for Economic Co-operation and Development’s Development Assistance Committee. A rise in the number of refugees from Afghanistan and Ukraine has sent aid costs soaring to an estimated £3 billion in the U.K., up from £1 billion last year. But the total cost is unknown.

Asked if he knew what his budget was and if he could plan, Mitchell replied: “I do not know what the full extent of the Home Office demands will be. … This is an open-ended cost and we do not know.”

Mitchell said he is working with Chancellor Jeremy Hunt, who oversees the government finances, to “drive them down,” with Hunt in November allocating an extra £2.5 billion over two years to help ease the budget strain. Mitchell told the committee that the money was “ringfenced for ODA budget” rather than just for the Home Office.

Planning aid spending is “extremely difficult,” Mitchell said, despite the budget having some built-in flexibility for humanitarian costs, which tend to be unpredictable.

FCDO usually controls the majority of U.K. aid, spending 71.6% in 2021, though its share has been declining compared to other government departments in recent years. Committee chair Sarah Champion asked Mitchell on Tuesday if FCDO would end up with around 25% of the aid budget “if the Home Office carries on the way it’s been going.” Mitchell replied: “Those figures sound about right.” 

The result is the third round of cuts to the aid budget in as many years — a process which Mitchell said is having a “pretty severe” effect on FCDO staff, as well as the people losing the support of programs.

The cuts would need to be “salami-sliced” to ensure they are done by the end of the fiscal year in early April, according to Mitchell. “We are requiring these cuts across the whole of the portfolio of the bilateral spend” amounting to “around 30%,” he said. He described them as “very, very fierce and draconian cuts.” FCDO teams overseas will decide which programs will be affected.

“The pain involved in making these cuts is very real,” he added.

Assessing the impact of aid cuts

He told the committee that “impact assessments are taking place” to understand the effects of taking away development programs. Previous impact assessments on the aid cuts have been a source of controversy, with the government reluctant to release information that showed women, girls, and people with disabilities were disproportionately harmed by its actions.

Mitchell’s “salami slice” approach was described as “alarming” by Abigael Baldoumas, policy and advocacy manager at Bond, the network for U.K. INGOs. 

“UK aid should not be diverted away from supporting communities already facing climate change, conflict and poverty. This is morally wrong … we need to accelerate the return to 0.7 [% aid budget] as soon as possible,” she told Devex by email Tuesday.

Mitchell also revealed the U.K. aid freeze which took place over the summer, “except for certain very restricted and defined areas, was absolute” but had now been lifted, though the budget was still “incredibly constrained.”

The freeze was necessary “because the budget was effectively out of control,” he said. But the freeze had allowed the government to begin “regrouping,” added Mitchell.

“You’d have to make a very, very strong case on humanitarian grounds [to get funding] while the pause was in operation,” said Mitchell. This did not include Somalia, for which extra funding was announced only last week “which would have been caught by the pause and are now not caught by the pause,” according to Mitchell. He said the money went to support the World Food Programme and people who are internally displaced.

Spending exempt from the summer’s aid freeze “had to be absolutely critical,” Mitchell told MPs.

But his predecessor, Vicky Ford, told the MPs in October that the aid freeze exempted aid spending “vital to protect against immediate threat to life and wellbeing,” spending that would prevent the need for more aid, or spending to “prevent delays to accessing healthcare, primary education, sanitation and clean water.”

A “key worry and anxiety” for Mitchell was the development expertise in FCDO, which was stymied by “morale issues” among development staff, with 200 development roles unfilled. “We need to do a lot more to recruit, motivate and retain people in their work,” said Mitchell. He said the department was “very much on our guard” against aid being poorly spent by untrained officials.

During Tuesday’s hearing, Mitchell also laid his five ministerial priorities, which are: increasing the quality of official development assistance, or ODA, increasing the quantity of ODA, working with the International Development Committee as an “ally and friend” in achieving development objectives, making FCDO “work better,” and improving public support for aid and development.