Fourth Report - Effectiveness of UK aid: potential impact of FCO/DFID merger

The government defends the merger of FCO and DFID, stating it reflects the Prime Minister's commitment to a unified British foreign policy and will maximise global influence. It argues the timing was right to shape the new department's objectives and unify the international COVID-19 response.

The government counters the committee's concerns, stating the merger is a key moment to maximise international impact and will make the UK a stronger force globally. While acknowledging potential costs, it states these are being monitored, commitments made to minimise them, and will be factored into the forthcoming Spending Review.

The government justifies the merger by citing efficiency and influence, noting that long-term cost savings may occur but are not the primary goal, and that work has begun to monitor short-term additional costs. It does not commit to presenting a formal, quantified statement to Parliament as requested.

The government justifies its decision to merge DFID and FCO, stating it will enhance aid by aligning development and foreign policy and is considering international evidence from other mergers, without directly addressing the committee's observation about other substantial donor countries typically separating policy and implementation.

The government affirms its commitment to protecting the most vulnerable and poverty reduction, stating this is central to its work and reflected in current ODA priorities such as humanitarian crises and support for vulnerable countries.

The government commits to achieving the Sustainable Development Goals but defers setting out specific foreign policy priorities and how they will be achieved to the Integrated Review.

The government confirms its commitment to poverty reduction and states it will undergo the necessary process to transfer responsibilities under the International Development Act to the new FCDO, maintaining the legislation and the 0.7% aid spending commitment.

The government rejects the recommendation to appoint a dedicated Minister for Development who attends Cabinet and the National Security Council, stating that the Foreign Secretary is currently responsible for development and aid spend.

The government states it strives to ensure all programming is effective and meets ICAI standards of 'green/amber' where applicable, affirming its commitment to improving the effectiveness of UK aid. However, it does not commit to setting a formal target for this achievement within the specified timeframe.

The government commits to prioritising ODA spend for 2020 on key strategic objectives, including humanitarian crises and the COVID-19 response, and will continue to invest in multi-annual programmes and local leadership of projects.

The government details its plan to develop staff skills in the new FCDO by prioritising learning and development, embedding best practices from the Infrastructure and Projects Authority, integrating operating frameworks, and utilizing technical advisers and existing learning platforms to maintain high-quality programme management.

The government commits to improving global aid transparency and maintaining high standards, stating that work has begun to integrate data systems and that the FCDO will be assessed in the 2022 Aid Transparency Index, but it does not commit to all UK ODA funding meeting the ‘good’ standard within the next year.

The government states that its strategy for multilateral relationships and future ODA allocations, including the balance between bilateral and multilateral channels, will be considered as part of the Integrated Review and determined by the 2020 Spending Review.

The government agrees on the importance of parliamentary scrutiny and notes that the structure and remit of select committees are ultimately a matter for Parliament, suggesting a new committee will likely be set up to scrutinise the new department.

The government confirms ICAI will continue to provide independent scrutiny, but its mandate will be broadened to include policy recommendations. A review has been commissioned to ensure its remit and methods align with the new department's aims, rather than retaining it in its exact current form.

The government commits to parliamentary and independent scrutiny but states that the specific form these arrangements will take following the merger will be set out in due course.