The prime minister failed to answer the most important questions about merging the FCO and DfID

The prime minister has announced that the Department for International Development (DfID) will be merged with the Foreign and Commonwealth Office (FCO) into a new Foreign, Commonwealth and Development Office (FCDO). He argued that the change will ensure better coordination between different parts of the UK’s foreign policy, and the decision to axe DfID will please many in his party who have long questioned its existence.

However, as our previous research has shown, the decision to merge (or dismantle, or create) departments must be carefully thought through – since such moves generate costs as well as benefits.

The prime minister has always wanted this merger

This announcement is no surprise, and the government had prepared the ground. As a backbencher in 2019 Johnson called for DfID to be abolished, telling the FT that “if ‘Global Britain’ is going to achieve its full and massive potential then we must bring back DfID to the FCO.” Once he became prime minister, briefing about the possible merger ramped up, and in his February reshuffle he appointed a team of joint ministers to the FCO and DFID. Taking the time over the merger, which will not be complete until September, and not announcing it in a big bang, is a sensible step, as the least successful changes to government structures tend to be those announced with little or no planning.

In his statement to MPs, the prime minister argued that the merger will mean the UK can speak with one voice internationally, with the government following the model used by the majority of advanced countries by combining foreign and development policy in one department. Johnson argued that the current set-up means there is no one decision-maker judging the UK’s foreign policy priorities against each other – forgetting, perhaps, that this is arguably the role of the prime minister, and the cabinet as a whole.

Merging government departments brings risks

Any changes to departmental structures have costs: setting up new IT systems, moving officials between buildings and levelling up salaries all cost money (at least £15m, and often greater, depending on the size of the department). But these upfront costs are generally dwarfed by the hit to productivity which occurs as officials spend time getting used to the new arrangements – previous departmental changes have tended to take about two years until the new organisations were operating as effectively as possible.

The merger of the FCO and DfID brings particular risks. The prime minister argued that it will maximise the value for money of the UK’s aid budget (although he did not explain how it would achieve this). But as former international development secretary Justine Greening has argued, “people in other departments, particularly the Foreign Office, didn’t always spend the aid wisely.” Johnson argued that the skills and culture of DfID officials, who focus on evaluating the impact of spending and maximising value for money, will be preserved in the new department – to ensure that the prime minister achieves his objective of maximising value for money, these skills must be preserved. 

The biggest question is: why merge the FCO and DfID now?

While the prime minister explained why he was making this change, he failed to answer the most important question of why he was making it now. He argued that the pandemic has revealed the need for the various parts of the UK government that operate overseas to work together more effectively, but making this change now – even with a few months to sort it out – will tie up those parts of government and distract them from their role in the coronavirus response. This includes repatriating UK citizens abroad and supporting developing countries in their response to the crisis.

And setting aside the pandemic, the FCO and DfID – and their successor department – have packed in-trays. As the prime minister explained, the UK takes on the rotating G7 chair next year and needs to organise an international summit on climate change by the end of 2021. Given departmental changes generally take two years to bed in, many officials will still be dealing with the fallout of this change while they are (meant to be) dealing with some of the most important global issues – including, of course, the international impact of Covid-19, particularly in developing countries.

At the same time, there will inevitably be an inquiry into the government’s response to the pandemic. Any actions that are seen, with hindsight, to distract from the response will be judged harshly – meaning this move, at this time, is particularly risky.

Any changes to departmental structures mean costs in both the short and long-term; the question is whether those costs are outweighed by the benefits of the change. Johnson has decided that they are, and that the time is right to press ahead with the merger. Today’s announcement will please his grassroots. It remains to be seen whether it will lead to better outcomes for the UK around the world.