Is it time to fold DFID back into the FCO?

One of the issues raised during the recent UK general election campaign was, whether to maintain the Department for International Development (DFID) as a separate department of state, or fold it back into the Foreign and Commonwealth Office. DFID was established by New Labour in 1997, and has garnered a reputation internationally not only for spending most of the UK’s large aid budget, but for doing so in a highly professional, thoughtful and organised way. Through its actions and its advocacy, it has rightly been seen as a leading voice in global discussions about how best to deliver development and humanitarian aid.

Nevertheless, I was for many years sceptical about the need for DFID. Losing the aid budget and the staff who administered it, undermined the FCO’s capacity and clout. Meanwhile DFID’s own work was for many years undermined by an overly technical approach, lacking an understanding of how poverty is interwoven with the political economy in developing countries. Claiming that the UK was separating overseas aid from its foreign policy – as many people in the aid sector still claim – seemed somewhat disingenuous. It always seemed to me as a British citizen, that helping people escape poverty and recover from disaster was a core political choice, and was thus central to our foreign policy, not divorced from it. I still think that overall, it would have been better to administer overseas aid within an expanded FCO, and our embassies abroad, rather than separately.

The UK government is committed to providing at least 0.7% of GNI in official overseas assistance. As other government departmental budgets were progressively squeezed following the financial crash, it was inevitable that they would try and get their hands on some of the growing annual aid budget that now totals about £14bn. And so it has proved: DFID now spends less than 75% of official UK aid, with the rest going to the FCO and other ministries. As reported by numerous sources, including Parliament’s International Development Select Committee, DFID consistently scores far more highly than the FCO and other departments on measures of aid effectiveness and aid transparency, implying that other departments aren’t learning from its professionalism and expertise, even as they administer more of the resources DFID was established to spend.

On the face of it, then, there is a good case for folding DFID back into the FCO. Doing so would strengthen the link between UK’s aid and foreign policies, and restore some of the FCO’s lost clout and influence both at home and abroad. It would also potentially improve the effectiveness of the aid that is already spent by the FCO, by bringing across DFID’s better systems. Meanwhile, it would also improve some the programming now under DFID’s control, which would benefit from the FCO’s better knowledge of the political economy in developing countries.

However, I’ve come to believe this would be a major mistake. DFID has put down roots, and pulling those up would be a massive distraction from the task of delivery. The effort required, and the disruption caused by the process of reintegration would undermine the UK’s effectiveness as one of the world’s main – and most thoughtful – providers of aid. DFID has already fixed much of the excessive ‘technical’ bias it once showed, and should continue this process as a stand alone department. And any merger done today would further reduced the UK’s ‘soft power’ – which is already on the wane. Most of the world is puzzled by our decision to leave the EU – an organisation many countries would love to be able to join – and by our loss of influence in doing so.

Instead of folding DFID back into the FCO, the government should continue to improve collaboration among all externally facing Whitehall departments, thus ensuring that aid is transparently and effectively used, that aid spending is a treated as a foreign policy tool, alongside other instruments that help reduce poverty, prevent and support recovery from disaster, and promote liberal values and development progress across the world.

To borrow its domestic slogan, if the new government wants to help ‘level up’ the world, it should make this a key foreign policy goal and ensure that DFID, the FCO and all externally facing departments are working coherently towards it, rather than wasting resources on a government reorganisation that would send a message to the rest of the world that the UK no longer wishes to be an agent of humanitarian help and progressive change.