The new FCDO needs to show it can do both parts of its job well

Since the prime minister’s announcement in June that the Foreign and Commonwealth Office (FCO) and the Department for International Development (DfID) would be merged to form a new Foreign, Commonwealth and Development Office (FCDO), officials in Whitehall have been hard at work getting the new department ready. The top management team, including the new permanent secretary, were announced last month, and the FCDO officially starts its work this week. While much has been done, there are still many outstanding questions about how the new department will manage both its responsibilities – foreign policy and development.

Setting up a new department takes years, not weeks

More than two months have passed between the prime minister’s announcement and the new department actually coming into existence. This is much longer than many departmental mergers, which often take place overnight. But in reality, the work will continue long after the new department officially begins its work. Previous Institute for Government research has shown that the changes required to make a new department work take years to work through. Some of these are practical issues like working out who sits where and how reporting lines change – which will be particularly complicated given the FCDO’s global reach. And with a combined budget of more than £13bn, compared to the FCO's £2.4bn in 2018/19, the foreign secretary will have a lot of new responsibilities to get his head around.

But on top of these practicalities new departments must tackle more knotty issues like how to maintain staff morale and build a culture that recognises and values the work of all parts of the new department. While the FCO and DfID work closely together, they are very different organisations. Many in the development sector have expressed concern that the new department will not value development expertise as much as DfID did, and that this will lead to an exodus of talent. To stop that happening, ministers and senior officials will have to show that the expertise and experience of officials from both the predecessor departments is valued in the FCDO.

The government needs to allay fears over the future of the aid budget

DfID had been in existence for over two decades, and built a reputation as a world-leading (a boast this government likes to apply across the board) aid department. And in recent years a key part of its mission was the government’s legal requirement to spend 0.7% of national income on overseas aid, a law passed by David Cameron. The Conservatives pledged to respect this in their manifesto last year, but this could still be an early source of tension in the new department.

The pledge does not mean that the aid budget never shrinks. The pandemic has caused a recession, meaning national income has shrunk – and the aid budget has followed, with cuts of nearly £3bn taking place this year. Fears that this is not just a one-off will have been exacerbated by the briefing over the weekend that the government is considering removing the legal requirement on aid spending.

Development must be an equal partner in the FCDO if it is to prove greater than the sum of its parts. If it is not, the new department will fail to meet the foreign secretary’s claim that it will "maximise the impact of our foreign policy",^[1] and the UK’s reputation in the development field will suffer.

As they establish how the two departments will work together, FCDO ministers and officials will also be dealing with many foreign policy priorities. In 2021 the UK takes on the rotating presidency of the G7, an opportunity to show what "Global Britain" really means. It is also, with Italy, hosting the delayed COP26 climate summit, an important milestone in the global effort to tackle climate change. The coronavirus pandemic of course continues to take effort and attention away from other issues.

The UK must also prepare for November's US election result, while continuing to reassess its relationship with China. Closer to home, the Brexit transition period ends on 31 December 2020, and the FCDO – which the PM said would allow the UK to speak with one voice overseas – will need to work ever closer with the Department for International Trade, whose priorities may yet clash with those of the new department.

The FCDO will also have a busy autumn at home. One of the first tasks of the new department will be to negotiate its budget for the next three years in the upcoming spending review. It also needs to be ready to react to the findings of the integrated review of foreign and defence policy, which is due to report in the coming months. Both reviews could lead to new priorities for the FCDO. Dealing with all of these issues – some of which the UK has chosen and some of which it has not – at the same time as establishing a new foreign policy ‘super-department’ (to use the prime minister’s phrase) will not be straightforward.

It will take time before we know whether this merger has been a success

When Boris Johnson announced the creation of the FCDO, he said he wanted the new department to ensure that the UK’s developmental and diplomatic efforts could best work together "to safeguard British interests and values overseas" and "to seize the opportunities ahead". Sarah Champion MP, chair of the Commons’ International Development Select Committee, told an event at the Institute that she would consider the merger a success if "the British public is very proud of our international work… and that as a country we feel, morally, we’re on the right page". It will take a number of years before we know whether the merger has met either of these tests.

1. https://www.gov.uk/government/news/foreign-secretary-commits-to-more-effective-and-accountable-aid-spending-under-new-foreign-commonwealth-and-develo…