Recommendation 9

HM Government Acknowledged

9.1 We agree that our diplomatic resourcing should be led by our strategic foreign policy priorities, and it is these that determine our resourcing decisions. The FCDO secured a £65 million (5%) increase in non-ODA funding in the 2020 Spending Review to cover rising operating costs which support not only our diplomatic service, but the UK’s wider presence overseas. The Spending Review has also provided for the continuation of £60 million funding to maintain our enhanced diplomatic presence in Europe. New funding will support the merger and creation of FCDO; rising operating costs; improvement to our global estate, including upgrades to our embassies in Washington, Paris, and Ottawa; and an increase in FCDO’s UK presence outside London and the South East. 9.2 In the new FCDO we will combine international development with diplomacy, focusing our efforts where the UK can make a difference, ensuring the UK is a force for good across the globe. This includes ensuring we have the right staff and programmes in the right places across the globe, including on non-ODA eligible work such as strengthening cooperation with European and NATO allies on security and intelligence. The ODA eligibility of FCDO operational costs are determined by the OECD Development Assistance Committee’s directives. Where staff activity is ODA eligible, it is right that we continue to capture it as such. 9.3 The seismic impact of the pandemic on the UK economy has forced us to take tough but necessary decisions, including temporarily reducing the overall amount we spend on ODA. We remain a world leading aid donor spending 0.5% of GNI. We will spend more than £10 billion next year to fight poverty, tackle climate change and improve global health. We will do aid better across Government, even if the budget is smaller, to deliver maximum impact for every pound we spend. We will return to spending 0.7 of GNI on ODA when the fiscal situation allows. 9.4 As a result of the Spending Review, the FCDO will take on a greater role in ensuring the coherence and coordination of all UK ODA, with the Foreign Secretary deciding the final allocation of aid to other Departments to ensure a coherent approach. All programmes proposed across Whitehall will be assessed against a new framework. Failing or underperforming projects will continue to be closed. This will mean 93.5% of the UK’s aid will either be spent by – or allocated to others by – the FCDO through a ‘double lock’ with HMT.