Hon Julie Bishop l Palladium - Sep 04 2020
Working with Common Purpose: What the UK's FCDO can Learn from Australia's DFAT Merger

Julie Bishop, Palladium Board Member and former Australian Minister for Foreign Affairs

The Hon Julie Bishop is a member of Palladium's Board of Directors and served as Australian Minister for Foreign Affairs from 2013-2018.

UK Prime Minister Boris Johnson’s announcement of a merger between the Foreign and Commonwealth Office (FCO) and the Department for International Development (DFID) is an important step in strengthening UK influence around the world.

The Prime Minister in his speech to the House of Commons described the imperative of this reform as a prudent response to “strengthen our position in an intensely competitive world”.

This was precisely my motivation for Australia as I announced on my appointment as Foreign Minister in September 2013 that the statutory aid agency known as AusAid would be merged with the Department of Foreign Affairs and Trade (DFAT). At that time, while Australia’s international aid program, like DFID, was operating effectively to its mandate and funding many meritorious projects around the world, it was not necessarily aligning with the strategic goals of our nation.

As an independent agency, it had developed laudable internal agendas which were focused on achieving better outcomes for some of the poorest communities in the world. This work was not always adequately recognised by recipient nations and thus did not achieve the level of goodwill towards Australia that one would hope and expect.

"The UK must ensure every arm of government is working in the same direction and with common purpose."

These independent operations were appropriate for what Prime Minister Johnson has described as a “relatively benign era” in the 20 years or so after the collapse of the Soviet Union and the end of the Cold War.

We are now in an era of rapidly escalating great power competition and nations such as the UK must ensure every arm of government is working in the same direction and with common purpose.

Australia’s Foreign Policy Whitepaper released in 2017 described a more contested and competitive global environment that has only increased in the intervening years.

The 2018 United States National Defense Strategy has a focus on the “re-emergence of long-term strategic competition with China and Russia” that has contributed to “an increasingly complex global security environment, characterized by overt challenges to the free and open international order”.

In this more hostile international environment, it is critical that all arms of foreign policy are coordinating and working to achieve common goals. At times, this may mean the urgent allocation of funds to development projects that support the national interest and international order. This can be far more effective when foreign and development policy is united under a single department.

Lessons learned in Australia

There are cautionary lessons from the Australian experience that I feel certain will inform UK civil servants as they seek to implement this reform.

The first is to acknowledge that there will be an inevitable clash of cultures and disagreements over policy direction. This is unavoidable in the merger of any two organisations and has been the subject of seemingly endless study in the corporate sector. There had been considerable staff movement in Australia between DFAT and AusAid, with some staff achieving seniority more rapidly than their peers.

These tensions must be taken seriously and handled with considerable empathy and sensitivity, as staff in both organisations will be anxious about their career prospects.

A majority of staff are likely to be open-minded and hoping to find greater opportunity; however, a significant minority will be highly resistant to the changes. The key to a successful merger with the least possible disruption is to have a project team with clearly assigned responsibilities that reports directly to the Permanent Under Secretary and the First Minster of State.

Clear leadership and attention to detail will be crucial during the challenging days of the initial merger.

One of the approaches I took in the merger process was to seek a relatively quick organisational merger with minimal change to policy and program implementation in the short term. This ensured little disruption to overall management of the international development budget.

I am pleased to note that Prime Minister Johnson has committed to maintaining the budget at 0.7% of gross national income. Many development partnerships are based on long-term goals of supporting communities to lift themselves out of poverty and certainty of funding over many years is crucial to success. The Australian Government took what I regard as regrettable decisions to cut the international development budget at a time of rapidly increasing competition for influence in South Pacific island nations in particular.

While this sent mixed messages about Australia’s commitment as a partner, the merger enabled the government to make significant strategic investments in the national interests of recipient nations and our citizens.

There are valuable insights into potential challenges contained in a 2019 review of the merger, undertaken by a former Deputy Director of the international development agency Richard Moore. Mr Moore found two main narratives had emerged.

The first was a “positive story of integration” where DFAT has “bedded down its new development cooperation business” and that “independently vetted results appear strong”. He noted that “early morale problems have largely receded and many former AusAID staff have moved into new roles, including 20 in Head of Mission or deputy positions.”

On the other hand, he referred to a “counter narrative” where there had been a considerable loss of skills and leadership from the ranks of former development agency officials, leading to “idiosyncratic” policy management and greater reliance on a “dwindling number of highly experienced officers”.
He found that one of the key points of concern was that “many development professionals feel their skills and expertise are not highly valued” within the merged entity.

"Clear leadership and attention to detail will be crucial during the challenging days of the initial merger."

For critics of Prime Minister Johnson’s reform, it is important to note that the Australian reviewer concluded that these ongoing challenges were “not to argue for a return to the old system, but for the building of a new one that more reliably integrates long-term development and diplomatic interests”.

UK officials need to view the merger process as a long-term project that will need careful management to ensure all feel as empowered as possible in the interests of a more efficient, effective and coherent policy on overseas development assistance.

The morale and motivation of staff in the merged entity will be a critical element in ensuring that the UK’s voice as a significant development partner continues to resonate in support of freedom, stability and economic prosperity across the developing world.