June 23, 2020

By Tricia Katebini, CPA, MBA, Senior Manager, Audit

On June 16, United Kingdom (UK) Prime Minister Boris Johnson announced a merger between the Department for International Development (DfID) and the Foreign and Commonwealth Office (FCO). Together the two departments will become the Foreign, Commonwealth and Development Office. Johnson said the merger will “unite our aid with our diplomacy and bring together our international effort.” The Foreign Secretary will be “empowered to decide which countries receive — or cease to receive – British aid, while delivering a single UK strategy for each country, overseen by the National Security Council,” Johnson told parliamentarians. Ambassadors will oversee all the UK’s work in country.[i]

Why the Merger?

Globally, the trend has been to merge international development functions back into foreign affairs ministries, as for example in Australia, Canada, Denmark, Norway and New Zealand. DfID is therefore something of an outlier in retaining its independence.[ii] Over the years, DfID has garnered a strong reputation for transparency, impact and value for money in aid spending, but foreign aid has become unpopular with the media and some elements of the Conservative party. Meanwhile, FCO has scored poorly for its transparency and delivery of Official Development Assistance. [iii]

What is the Potential Impact?

There are concerns about what the merger could mean for the future direction of UK aid. In December, over 100 charities had signed a statement warning the government that merging the two departments would be damaging. [iv] The current FCO is already engaged in international development activity, spending around 4.5% of the aid budget (around a quarter of the total aid budget is spent outside DfID). Increasing numbers of its diplomatic staff have come from a background in DfID, and in many countries the two are housed in the same building. So DfID and FCO already operate in overlapping spheres.[v] The decision has been presented as an opportunity for encouraging greater efficiency, coordination and cooperation in Britain’s global policy, and the government has maintained it remains committed to maintaining spending on international development. [vi]

Kevin Watkins, chief executive at Save the Children, said “The removal of a department with explicitly humanitarian objectives would mean that the needs of the world’s poorest would be pitted against considerations of narrow national interest”.[vii]  The timing of the merger comes as a surprise, as the UK continues to struggle with the coronavirus and the prospect of a severe economic downturn. Some expected the integrated review of international policy to be the roadmap for the merger, as the merger has been has long since been advocated for by Johnson; however, the review of the policy has since been paused due to the pandemic.[viii] Nigel Harris, chief executive at Tearfund, said, “It is my heartfelt prayer that we will continue to see the UK Aid budget focused on fighting poverty and providing life-saving assistance to those in desperate need.” [ix]

Next Steps

Keeping abreast of industry alerts is critical. Visit GRF’s COVID-19 Response page for the latest updates, as well as subscribe to our industry alerts for breaking news straight to your inbox. For technical questions, contact Tricia Katebini, CPA, MBA, Senior Manager, at tkatebini@grfcpa.com or 301-951-9090.

[i] https://www.devex.com/news/breaking-dfid-merged-with-fco-97489

[ii] https://www.theafricareport.com/30557/uk-africa-dfid-merger-signals-shift-to-promoting-british-national-self-interest/

[iii] https://www.devex.com/news/breaking-dfid-merged-with-fco-97489

[iv] https://www.civilsociety.co.uk/news/boris-johnson-plans-merger-of-dfid-and-fco.html

[v] https://www.theafricareport.com/30557/uk-africa-dfid-merger-signals-shift-to-promoting-british-national-self-interest/

[vi] https://www.devex.com/news/breaking-dfid-merged-with-fco-97489

[vii] https://www.civilsociety.co.uk/news/boris-johnson-plans-merger-of-dfid-and-fco.html

[viii] https://www.devex.com/news/breaking-dfid-merged-with-fco-97489

[ix] https://www.civilsociety.co.uk/news/boris-johnson-plans-merger-of-dfid-and-fco.html