At the end of the Thatcher era, the UK government spent £234 million of British aid money building a dam of dubious economic value in Malaysia, in exchange for a lucrative arms deal. In a landmark case at the High Court, the deal was declared unlawful, and the affair became known as the Pergau Dam scandal: the worst “arms for aid” scandal in British aid history.
That scandal was the worst of a number of controversies that led, in 1997, to the establishment of the Department for International Development (DfID), a separate government department to allocate the UK aid budget. Twenty-three years later, Boris Johnson has announced that the aid and foreign policy briefs are to be again managed under the one roof, as the department is to be reabsorbed into the Foreign Office, becoming the Foreign, Commonwealth and Development Office.
Why? This has been a popular idea among Conservatives for some time, especially so now that Britain is reshaping its role on the global stage post-Brexit. There has long been a feeling among Conservatives that the 0.7 per cent of national income that is earmarked for overseas aid is wasted in efforts to meet that target, and that the money could be better leveraged in a way that might be more advantageous to the UK’s wider foreign policy interests.
The best example of this is in Boris Johnson’s own comments on the issue while he was foreign secretary. “If ‘Global Britain’ is going to achieve its full and massive potential then we must bring back DfID to the FCO. We can’t keep spending huge sums of British taxpayers’ money as though we were some independent Scandinavian NGO,” he told the Financial Times in January 2019.
And indeed, DfID does, arguably, run with the efficiency and expertise of an independent NGO. The department is run by experts in the field of international development, who target spending on projects that deliver the most effective results within the department’s single-focus on alleviating global poverty and promoting sustainable development. The department has an international standing as a leader in the field of development, and, its defenders would say, represents a pillar of the UK’s soft power on the international stage.
Boris Johnson’s reasons for merging DfID and the Foreign Office are the very same reasons for which others, including some in his party, will view the announcement with alarm. There are concerns, as exemplified by the extreme case of the Pergau Dam scandal, that the merger will muddy the waters of the government’s aid priorities, and will damage the UK’s standing as a global leader on the issue.
But there are also the practical implications. As the Institute for Government has noted, these reorganisations don’t necessarily deliver the intended outcome. While the hope may be for foreign policy to shape aid priorities, the opposite may well prove to be the case: it is development policy which has the much larger budget. There are also the huge costs of machinery of government changes at a time when the government is handling the public health and economic impact of coronavirus, and negotiating its future relationship with the European Union.
But, for those wishing to reform the British aid agenda, as well as those hoping to defend it, a merger of DfID and the Foreign Office should perhaps not be the main concern. The 0.7 per cent spending commitment is the largest point of contention in this debate. Those who wish to see UK aid upheld emphasise that the aid budget is enshrined in statute; the government would have to break a Conservative manifesto pledge to change it via legislation. (In real terms, the aid will shrink massively anyway, given that the economy has contracted by nearly 20 per cent.) The OECD, meanwhile, has a strict definition as to what constitutes legitimate aid spending; as it stands, the scope for another Pergau is limited.
The issues to watch in this regard are the government’s position on the aid budget, and on whether the government considers withdrawing from the OECD. Meanwhile, the government will hope that this sends a message about a new, pragmatic approach to aid as it enters a new era.
But there are questions as to whether the merger will achieve the government’s aims, whether those aims are positive for the UK, and, perhaps above all, whether this is the right moment for a reorganisation of Whitehall.
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