The Dfid/FCO merger is an expensive distraction—but we have to make the best of it

When Boris Johnson announced the merger of the Foreign Office and Department for International Development (Dfid) he said that he wanted to be more transactional with British aid and to align it more closely with his “Global Britain” agenda. But critics, including former International Development Secretary Rory Stewart, believe that dismantling Dfid will not solve the real problem facing the UK: that there is no confident vision for the UK and its role in the world. Questions about who Britain will trade with after the Brexit transition period ends, how it should position itself between its two traditional allies the EU and the US and how much it is willing to invest in projecting itself as a global power still remain unanswered. Furthermore, they fear that the merger will damage Britain’s brand as a world leader at delivering aid transparently.

Dfid is a highly professional and well-respected organisation. It was set up in recognition that British national aims can sometimes differ from those of a developing country. The department has had a good track record at spending money on aid, according to the aid watchdog the Independent Commission for Aid Impact (ICAI) and has its own Cabinet-level minister who can represent development interests at the National Security Council meetings chaired by the prime minister.

However, if it is managed properly the merger does create opportunities to improve the way foreign policy is delivered. For example, it could help make sure embassy activity in-country is properly co-ordinated, that programming is better informed by political expertise and that the overall quality of programme management—particularly the £1.2bn FCO-administered Conflict Stability and Security fund (CSSF)—is improved. All of this is important for ensuring that there is no repeat of Britain’s most famous aid scandal, the Pergau Dam affair of the early 1990s, where aid to Malaysia was administered by diplomats who agreed that hundreds of millions of pounds could be linked to a major arms deal.

“I think it’s good that ambassadors will have responsibility for aid delivered from their embassy. It could sometimes feel a bit odd when the Dfid country office didn’t see the aid budget as part of the UK’s toolbox when we wanted to push forward other work. The decision to give aid can be very political and it does give us influence,” said one FCO staff member.

John Casson, who was previously a No 10 adviser and the UK’s Ambassador in Cairo between 2014 and 2018, told the BBC that he hoped that the merger will blend the best of the FCO's political agility with the best of Dfid's delivery skills. But his fear is that the new department may comprise the worst FCO short termism with Dfid's bureaucratic caution.

To avoid this “worst case” happening it will be important to try and allay the fears of Dfid staff who may feel that that this is a hostile takeover.

“I’m heartbroken to be honest,” said one Dfid staff member. “I’m proud of Dfid. I joined because I believe we should be reducing poverty and that aid shouldn’t be tied to a political agenda. We are really respected internationally and I’m worried that aid will be used to oil the wheels for trade deals rather than to help the people who need it the most.”

Another said they were upset at the way the announcement was made. “It’s not really a surprise. But I had thought they were going to consider this during the cross-government Integrated Review (IR) this autumn rather than just announce it. It feels a bit rushed.”

The merger will bring together two very different departments. Both will need to change. Dfid is often described as being about the “money,” whereas the FCO is focused on developing relationships with people. Dfid has a smaller, more senior workforce mainly focused on programming, works to longer term goals and devolves power to its country offices overseas. The FCO is often crisis driven, has a larger workforce across the globe and power is more centralised. It will be important to try and focus on each other’s strengths.

“I think we can learn a lot from Dfid. We have got better at it but the FCO doesn’t prioritise programme management compared with political work. Maybe Dfid’s expertise will help with that,” said an FCO staff member.

But it will need to be managed slickly to avoid befuddling the workforce and distracting them from doing their jobs. “I’m worried that the merger is going to be a bit painful and that it will create more bureaucracy,” said one FCO staff member. “There will be a lot of tension between Dfid’s devolved model and the Foreign Secretary’s desire to be consulted on decisions.”

And diplomats need to be realistic that combining forces with Dfid won’t necessarily mean an increase in resources for diplomacy. Rather, it might mean that more money goes towards trade priorities as Britain tries to work out its role in the world post-Brexit.