Foreign Office merger has diminished UK’s aid capability, finds watchdog

Britain’s capability and expertise on foreign aid has been diminished since international development was merged into the Foreign Office, the UK’s public spending watchdog has found.

The National Audit Office, which reports to parliament on public spending, said the transfer of the department to the Foreign Office, overseen by Boris Johnson, had caused a loss of dedicated senior roles in development.

It said this had undermined credibility and accountability of the UK’s development power, on top of the government’s cuts to the aid budget after the abandonment of the target to spend 0.7% of national income.

Charities said the findings of the report were accurate, as there had been a lack of preparation and consultation around the merger of the Foreign Office and the Department for International Development, which took place in 2020.

The NAO said the new department had made substantial progress in the merger but that more work was needed to clarify its needs, resolve outstanding HR and IT issues, and move ahead with culture change. It also said the merger had cost at least £24m but that the potential benefits and savings of the merger had not been tracked.

“FCDO’s development capability has reduced since the merger. FCDO has changed leadership structures and roles to integrate development and diplomacy.

“As a consequence, in some overseas posts the loss of dedicated senior development roles has reduced capacity and undermined FCDO’s credibility and official development assistance (ODA) accountability,” the report said.

“While there has been some replacement through internal accreditation and external recruitment, the number of expert development adviser roles fell by 14% from 867 in 2019 to 747 in 2022 … FCDO has been aware of the risk of not sustaining its international development skills and expertise, which it currently rates as ‘severe’, and is working to mitigate this risk.”

Gareth Davies, the auditor general, praised the Foreign Office for taking “sensible action” to get the merger back on track against a backdrop of global challenges, including the pandemic and geopolitical crises in Afghanistan and Ukraine.

He added: “However, more than three years on from the merger, there is still work to do to resolve remaining issues, ensure the basics are delivered and achieve the long-term benefits of a fully integrated department.

“More broadly, government needs to understand the costs of such major change, including the disruption and consumption of management capacity, and weigh these carefully against the anticipated benefits.”

Aid organisations and political opponents have repeatedly criticised the government’s decision to go ahead with the merger, arguing it would damage the effectiveness of Britain’s aid spending.

Gideon Rabinowitz, the director of policy at Bond, the UK network for organisations working in international development, said: “The FCDO merger was undertaken without consultation and adequate preparation and has led to a damaging reduction in the government’s development expertise. Three years on, it is alarming that the department itself rates the risk of not sustaining its international development skills and expertise as ‘severe.’

“These critical shortcomings must urgently be addressed to ensure the FCDO can effectively champion development goals within the department and across government and respond to urgent development needs.”

Oxfam said it was “deeply concerning” that international development expertise had been a “casualty” of the “ill-advised” merger.

A spokesperson for the charity said: “There were plenty of warnings that the biggest losers from the merger would be people living in poverty around the world, yet the government chose not to listen.

“Its decision to spend large parts of the aid budget in the UK has made matters much worse. With conflict, climate change and inequality hurting low-income communities around the world, we need a strong, independent and properly resourced international development department that is committed to forging partnerships with the global south and making a real difference in the fight against poverty.”

An FCDO spokesperson said: “The merger has given us the integrated capability needed to grow, and drive our foreign policy, national security and international development objectives in a more effective and joined-up way.

“As the report notes, we have made significant progress in our aims, bringing together our expertise to tackle crises and further UK interests.

“We know there is more to do, and remain committed to the mission of the FCDO. Our recent actions, such as the appointment of a second permanent undersecretary with a focus on development, have allowed us to better bring together diplomacy, consular support and development to achieve more for the UK.”