UK development power diminished since Foreign Office merger, watchdog says

Britain’s international development power has diminished since the merging of two Government departments into one foreign affairs office, the UK’s public spending watchdog has found.

The loss of dedicated senior roles overseas as a result of the change in leadership structure has undermined credibility and accountability, according to the National Audit Office (NAO).

The findings are part of a report by the watchdog into the progress of the merger of the Foreign & Commonwealth Office and the Department for International Development.

The two departments were were controversially replaced in 2020 by the Foreign, Commonwealth and Development Office (FCDO) under the leadership of Boris Johnson, who said it would deliver better value for money on aid spending.

The NAO said the new department has made substantial progress but that more work is needed to clarify capability needs, resolve outstanding HR and IT issues, and move ahead with culture change.

There are examples where a more integrated approach has improved FCDO’s ability to respond to international crises and events, such as the support for delivery of Covid-19 vaccines across the world during the pandemic, the watchdog said.

However, the department does not know the full costs of the merger and has chosen not to systematically track its benefits, including cost savings, organisational improvements and efficiency gains, according to the report.

The NAO said: “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.

“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 also lost development capability around programme management for its ODA programmes, with 25% of such positions in the major programmes portfolio reported as vacant in January 2024.

“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, head of the NAO, 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 fold international development into the Foreign Office, arguing it would damage the effectiveness of Britain’s aid spending.

Oxfam said it was “deeply concerning” that international development expertise has 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 Under-Secretary with a focus on development, have allowed us to better bring together diplomacy, consular support and development to achieve more for the UK.”