UK Development Ambitions: the Impact of the 2020 FCO-DFID Merger

Authored by Professor Amelia Hadfield, Head of the Department of Politics, and Chair in European and International Affairs at the University of Surrey, and Chris Logie, a Law with International Relations graduate. 

The following blog appeared on 28 October on the Political Studies Association blog page:


Since the establishment in 1997 of a separate Department for International Development the business of International Development has been kept separate from the UK’s premier Foreign Policy department: the FCO. Yet as of the 2nd of September, less than three months after its first announcement, DFID’s 23 years have come to an end, replaced by a merged FCO and DFID to form the new Foreign, Commonwealth and Development Office (FCDO). While this new “super department” as described by Prime Minister Johnson will handle even more of the UK’s policy abroad,[1] doing so brings considerable challenges for the UK’s international ambitions.

The objectives of the merger were explained by Johnson as empowering the Foreign Secretary “to make decisions on aid spending in line with the UK’s priorities overseas, harnessing the skills, expertise and evidence that have earned our reputation as a leader in the international development community.”

Stark Changes?

This statement alone marks a stark change from the last major aid strategy from 2015 which itself was heavily criticized by aid organizations for diminishing the DFID’s founding goal of poverty reduction by placing bottom of the overall four goals. Official suggestions “that distinctions between diplomacy and overseas development are artificial and outdated” only reinforce this point. Despite commitments to create “more effective and accountable aid spending”, it is clear that the UK’s aid spending through the FCDO is likely to be more heavily influenced by the UK’s own foreign policy goals (including the still largely opaque “Global Britain” philosophy) than by the more explicitly humanitarian goals of DFID.

There is of course some validity to the changes wrought by the merger. Internationally, there has been a trend of departmental mergers so the UK is arguably simply following the example of states such as Australia, Canada, Denmark, Norway and New Zealand. Even the EU, as the world’s most generous ODA patron has itself transformed much of the philosophy and structural placement of development policy, rendering its goals steadily more strategic and its delivery modes more transactional. Indeed, DFID itself underwent a degree of alignment, corresponding in recent years with more narrowly conceived British interests, rather than widely interpreted humanitarian ones, and the government has been slowly moving towards passing more control to the FCO regardless of official headings.

Despite these pragmatic changes, it would however be inaccurate to describe the merger as either wholly necessary or a guarantee of future efficacy. Across its two plus decades of existence, DFID has built a reputation as a “world-leading” international aid provider and has been repeatedly praised for its efficacy and transparency. DFID for example received strong marks from such sources as the UK’s own Independent Commission for Aid Impact (ICAI) and the cross-party International Development Committee in the House of Commons for the power of its aid giving. Likewise, DFID gained widespread praise for its transparency, for example the Aid Transparency Index 2020 placed DFID considerably ahead of the FCO, a pattern repeated across countries with separate foreign and international development ministries. However, none of these developments necessarily bode well for the FCDOs changed mission, and indeed are likely to be diminished in terms of fiscal ambitions and humanitarian goals.


The wave of criticism following the merger’s announcement is telling. Most notable among these was the unprecedented condemnation of the merger by three former prime ministers: Tony Blair, Gordon Brown and David Cameron, with Gordon Brown in particular warning that the UK could lose DFID’s strategic, long-term soft power dividends in exchange for spending on unpredictable short-term foreign policy goals. This echoes previous warnings from the ICAI that aid must remain focused on “on building long-term opportunities, rather than securing short-term advantage”. There are therefore very real risks involved in swapping DFID’s internationally recognized development efforts and spending for the solely cost-effect approach undertaken by many states, particularly at a time when the UK is attempting to prevent the reduction of its overall diplomatic capacity as a result of Brexit. Let’s look in detail at a few of these.

First, mergers and acquisitions. As above, the ‘sandwich diplomacy’ allowing large strategic policies, and whole ministries, to be bundled together (e.g. merging foreign affairs and development departments) “can threaten both the quantity and quality of aid”. As Save the Children argued in 2017, merged departments mean conjoined agendas, while can result in duplication rather than a genuine net increase.  Australia and Canada are good examples of this, both of whom have undertaken such mergers, yet remain far off “the internationally agreed 0.7% aid target”.[2]

Second, the issue of ‘who manages’ aid is left blurry, both within the ministry, and in terms of private third-parties contracted to manage aid budgets and programmes arising from such mergers. These third parties do not necessarily have the expertise, nor are bound to ministerial. performance targets to ensure high quality aid disbursement, increasing the risk of conflating donor interests with those of developing countries themselves.

Third, global clout. As above, DFID’s hard-won global credentials will not be simply rolled over into the FCO’s structure or goals. DFID has been an acknowledge leader in development in its own right,  as well as far-sighted collaboration with other departments, regional and global businesses, NGOs, research institutes and universities that have situated it at the heart of “a powerful British ecosystem” of global development. Evidence for this is Britain’s top ranking on the Soft Power Index, as well as the central role DFID has played in driving forward the UN Millennium Goals of the early 2000s, and the UN Sustainable Development Goals that now replace them (including key global objectives like pandemic responses and gender equality).

Lastly, overall effectiveness. DFID’s global reputation for aid effectiveness and leadership translates domestically into bang for UK taxpayers’ bucks. DFID has a strong reputation for both ensuring that aid packages themselves represent value for money, while working collaboratively with donor countries and third-party aid organizations to ensure their own high standards. Can the merged ministries commit not only to effective 21st century aid packages (both structured and emergency-based) but to replicating the high levels of transparency and aid effectiveness with both recipients and NGOs, globally?

What’s Needed Now?

Keep an eye on Britain’s ranking in the Aid Transparency. Much of DFID’s effectiveness arose precisely because of its independence from other ministries, most notably, the FCO. As a result, its independence has underwritten the trust of other donors and aid recipients alike”, ensuring that its prime objective is poverty reduction, (as originally enshrined in the International Development Act of 2002) “and not the UK’s broader diplomatic or national interest”. Will this independence – so vital to promoting confidence with both other donors (e.g. the US, Canada, the EU) and trust with recipient states be eroded with the merger, or can the new ministry ensure that the genuine needs of impoverished communities worldwide take priority?

The FCDO needs to bear mind not only the requirements of their OWN new agenda, but also the work to be done in connecting intelligently with the 20% plus of UK aid spent by other UK government departments. With the envisaged demands on the British economy arising from both Brexit challenges as well as overwhelming Covid requirements, cross-government spending on any and all programmes are likely to be scrutinized more closely than ever. 

In addition, stick to the philosophy of poverty reduction, and ensure that  – whatever the agenda of the new merged department – that principled humanitarian aid remains the primary goal. Covid reductions will force difficult choices, but the UK needs to reserve a decent amount of external giving in those areas that will make the largest material difference for the poorest communities, including health, nutrition, and education, with clear spending packages for those requiring the greatest amount of humanitarian assistance, including the conflicts in Syria and Yemen.

Another ‘must-do’ is to ensure effective use of spending and accountability to the British taxpayer. As above, DFID maintained a reputation for ‘value for money’, including both parliamentary scrutiny and public accountability, specifically to the Foreign Affairs Committee. In addition, a robust cross-government replacement for the International Development Select Committee (which ceases as a result of the merger) to ensure DFID’s initial levels of transparency are maintained, as well as ensuring input from key third parties, including the Independent Commission for Aid Impact (ICAI), as an independent overseer, particularly in terms of reporting regularly to either Parliament, or a parliamentary committee.   

Lastly, to ensure that humanitarian issues and development strategies continue to be heard within and across government, particularly those which touch on security issues regarding third countries, a new position – preferably a chief secretary – with oversight for these issues must be established. Ideally, this cabinet-level position would ensure not only coherence of new UK aid plans, but reinforce the UK’s customary relationships with major international bodies, as well as its aid commitment of 0.7% of GNI.

Next Steps

With the transfer of policy priorities, the UK government must now make tough decisions as to how it distributes aid, and who it chooses as its partners. The UK’s aid budget is finite, and a meaningful change of policy emphasis will require spending patterns to be changed and hard choices made, particularly when set against the backdrop of massive financial contractions as a result of Covid spending. Currently, large proportions of UK aid is given to African and Asian countries, both bilaterally and through various international organizations and initiatives. If public suggestions made by the Prime Minister regarding switching aid spending to the Balkans and Ukraine for instance were followed through, funding would inevitably be drawn away from other regions and causes, where it may already be doing public good, as well as the issue of breach OECD rules regarding the sustained use of such funds.

There are also practical aspects to consider regarding how well the department will operate day-to-day. The Institute for Government has warned of a number of potential issues while leave “many outstanding questions about how the new department will manage both its responsibilities”. Among these is the issue of how to develop an effective combined workplace culture, how much expertise from DFID will be retained and fostered, along with locational issues like how to maintain a sustainable presence at DFID’s major site at East Kilbride in Scotland. These are all questions which will take a number of years to make proper assessments on. On top of all of this is the ongoing Coronavirus pandemic which has affected both the direction of the UK’s aid and how the new FCDO operates in practice. In sum, if the UK is to make the merger a real success, the government must make a concerted effort to transfer DFID’s unique advantages into the FCDO, in particular its transparency and efficiency. An effective practical merger will make a huge difference to how strongly the department operates going forward. Policy-wise, the UK must carefully tread its path as it follows its new stated goals while avoiding tension with its past mission statement. An updated aid strategy with clear parameters is key here. With finite resources the government will also need to make the new policy work without causing harm to existing aid partners and harming its own foreign policy goals in the process. Nevertheless, there is a reason that these mitigations are necessary – the merger creates far more obvious downsides than upsides. With the US Presidential Election fast approaching, the Brexit transition period ending and the UK hosting the COP26 climate summit and G7 Presidency in 2021, the new FCDO has its work cut out.

[1] Pre-merger the FCO handled 4% of UK aid spending and DFID 73%, therefore the FCDO now handles the vast majority of all UK aid spending.

[2]  Indeed, Australia has seen its overall ODA decrease after the 2013 merger, including the disappearance of its high-profile programme AusAid.