The real lessons the UK can learn from the AusAID merger

LONDON — Since the merger of the United Kingdom’s Department for International Development with the Foreign & Commonwealth Office was announced last month, much has been made by the government of international precedents. “We will learn from the examples of Australia, Canada, and New Zealand, all of whom run their development programs from their foreign ministries,” Prime Minister Boris Johnson told the House of Commons. Ministers have since used these examples to suggest that the reorganization will bring the U.K. closer in line with other donors from the Organisation for Economic Co-operation and Development’s Development Assistance Committee. But for those in the development community who observed these mergers closely, the prime minister’s words were cause for concern. In particular, the 2013 merger of AusAID, Australia’s former development agency, with the Department of Foreign Affairs and Trade is often viewed as an example of what not to do, having had a negative impact on the country’s development work. In the years since then, Australia has built up a body of evidence on the strengths and weaknesses of the merger through reviews conducted by the Office of Development Effectiveness, an independent arm of DFAT that assesses the quality and impact of aid program deliverables. This literature could prove critical for the U.K. in preparing for the challenges that will emerge, experts said, urging the government to learn from Australia’s mistakes by ensuring that a clear strategy is followed and that expert staff members are valued. The AusAID merger The Australia merger came as a surprise, an early act from the newly elected Liberal Party government that had not been mentioned ahead of the vote. As in the U.K., it was largely perceived by the development community as a politically motivated move to rein in a growing and increasingly autonomous AusAID and came alongside rhetoric about the national interest. From a development perspective, the merger has widely been seen as negative. Combined with budget cuts impacting the aid program following the 2013 federal election, it led to a severe loss of development talent. A combined total of about 2,000 years’ worth of expertise eventually drained out of the department, according to a 2019 report on the merger written by Richard Moore, AusAID’s former deputy director general for Asia. This greatly impacted bilateral relationships as development programs were increasingly outsourced. “If the government wants to retain the U.K.’s hard-won reputation as being the most knowledgeable bilateral partner ... then it needs to organize to that end.” --— Richard Moore, former deputy director general for Asia, AusAID Development policy also became more politicized, observers said. “What we've seen in [the] Antipodes [Australia and New Zealand] is that when you integrate an aid program, the ethos of the aid program changes. As you might expect, now that it’s been merged into a foreign ministry, an increasing share of aid is devoted or given with a view [to] advancing donors’ own interests,” said Terence Wood, research fellow at the Development Policy Centre of Australian National University. Instead of concentrating on the highest-impact work, programs emerged that were more focused on advancing the national interest, such as a project to electrify Papua New Guinea with the goal of countering Chinese regional influence, Wood said. In Australia, there were just over two months to prepare for the merger following the announcement — a timeline similar to that faced by the U.K. But AusAID was a much smaller organization than DFID. It’s all in the strategy The first lesson from the Australian experience, according to Moore, is that an overall strategy is crucial. In Australia, there was no in-depth analysis of international strategy until 2017, several years after the merger. That left the country’s development goals “unarticulated,” and consequently “DFAT is not resourced or set up to pursue them, to our strategic detriment,” he said. To avoid the same pitfalls, Moore told Devex the U.K. government should “provide strategic clarity, get your goals right, then line everything up to achieve that.” The U.K.’s integrated review of international policies — which has now restarted after a pause because of the COVID-19 pandemic — is a chance to formulate the strategy that DFAT lacked, he added. “If it [the integrated review] arrives at something that is cohesive, where development is genuinely part of the mix, where the world-class expertise that has been in DFID ... [is] still valued and is brought into that bigger whole ... that would be a big early success. Then you would expect the new Foreign, Commonwealth and Development Office to then be structured in order to advance that,” he said. Even if the U.K. government decides to pursue a more “transactional, short-term” aid policy, it should be transparent about this, Moore added. “Sending mixed messages … that's the worst of all possible worlds,” he said. “There is no point in either the department or its staff overinvesting in trying to deliver something more sophisticated than is wanted,” he added. “On the other hand, if the government wants to retain the U.K.’s hard-won reputation as being the most knowledgeable bilateral partner ... then it needs to organize to that end. This necessitates a different set of skills, structures, policies, and processes. … Pretending that you can have it all without a lot of deliberate effort and engineering tends to deliver the most muddled model — and the least effective one.” Valuing development specialists The loss of development specialists as a result of a merger — as seen in Australia — is also a key concern for U.K. development observers. Correspondingly, treating specialist staffers well, with fitting responsibilities, is crucial to prevent them from leaving. “You can imagine that in a merger, it would be possible to come up with a model that preserved expertise — it’s just that we didn’t get it right,” Wood said. “With fewer expert advisers, less expert advice can be readily drawn upon when aid projects are being developed,” impacting the quality of programs, he added. “They [DFAT] lost almost all of their health expertise,” echoed Ben Rolfe, a former lead health specialist at the organization. Ultimately, that increased the influence of locally employed health specialists overseas, contradicting the idea of using aid to further foreign policy influence. “All the big vision of what we were trying to achieve in health disappeared,” he said. It is not just about specialist knowledge of development but also about how to get things done in government, such as briefing politicians and catching the attention of a minister, Rolfe added. “That is what worries me about integration in the U.K. … You can always buy in expertise, and DFID has done that for years. But it's [about] having a cadre of people that understand the machinery of government and development objectives, and that’s critical to retain.” The maintenance of a “career pathway for people who are specialists in aid” is therefore needed, Wood said, adding that a genuine appreciation within FCO that aid is a technical area will go a long way in retaining staff. Choosing a model While details about what the U.K. merger will look like are still few and far between, the government appears to be pursuing a model of full integration, where the two departments are blended together, as opposed to a model in which a foreign ministry houses a distinct development agency. Among DAC donors, this model is also used by Australia, Denmark, Hungary, Poland, and Slovenia, according to a paper by Nilima Gulrajani of the Overseas Development Institute. This was a “bad model in our experience,” Wood warned, describing it as “disruptive,” while Rolfe characterized it as a “hostile takeover.” While some specialist aid functions such as evaluation remain, Australia’s “deep integration” means that “day-to-day running of [bilateral] aid projects falls almost exclusively to the country desks and to diplomatic posts and is managed in a way in which there is no guarantee people with any aid experience will be running aid projects,” Wood said. For DFAT staff members overseas, Moore noted that the need to merge development work with other embassy responsibilities has also meant “development work gets more squeezed.” This can also confuse incentives when, for example, dealing with the classification rules for official development assistance. “I think Britain should retain at least a core of dedicated development people, not just in London but in the field,” Moore suggested. “You can imagine that in a merger, it would be possible to come up with a model that preserved expertise — it’s just that we didn’t get it right.” --— Terence Wood, research fellow, Australian National University Development Policy Centre For Wood, New Zealand’s model of adding the aid program as a new division within its Foreign Ministry — instead of full integration — “seemed to work better when it came to preserving expertise and also to minimizing disruption.” “Not all mergers are the same,” he cautioned. Trying to “minimize both the pace and magnitude of the change” will help limit the impact on programs. Change can be good Despite the drawbacks, there were some positives that emerged from Australia’s merger, the experts said. One key benefit, according to Moore, is the “extra political heft” that comes from development being part of broader foreign policy objectives. “That is a real advantage,” he said. “When there is [a development goal] sufficiently important [that] it becomes a national interest priority, a combined department can make it happen more easily.” He added that humanitarian responses to regional disasters have also benefited from the merger. Wood echoed this sentiment and said that when “Australia's main foreign policy goals are development goals, integration has facilitated better cooperation between aid workers and the diplomatic side of the Foreign Ministry.” DFAT now has a better understanding of the challenges of good aid delivery. But “the ultimate effect of the merger will depend on a range of individual decisions,” Wood said, and impacts will likely emerge “on an issue-by-issue basis.” “It will be really important for people in the United Kingdom who care about their quality of aid to make sure they are proactive and engage with the government but also try and hold the government to account,” Wood said. In response to the issues raised in this article, a spokesperson for Australia’s Department of Foreign Affairs and Trade said: “DFAT maintains a commitment to international development capability in its workforce. The integration of DFAT and AusAID has resulted in a number of synergies, including bringing the weight of Australia’s diplomatic network to support our development program. “Priorities for Australian development assistance are agreed in consultation with partner governments. Australia’s development program, working in sync with other assets such as trade agreements, help deliver a larger development dividend to partner countries.”