Running Out of Credit? The Decline of the Foreign Office and the Case for Sustained Funding

On Tuesday 18th June the BFPG hosted the launch (sponsored by the Coalition for Global Prosperity) of a new report by BFPG Associate Sam Goodman ‘Running out of Credit? The Decline of the Foreign Office and the Case for Sustained Funding’ in the House of Commons. A panel of speakers discussed the funding challenges faced by the Foreign and Commonwealth Office today and explored the importance of adequate funding for a ‘Global Britain’ foreign policy strategy.

The panel included:

Tom Tugendhat MP, Chair of the Foreign Affairs Committee

Hilary Benn MP, Chair of the Exiting the European Union Committee, Former International Development Secretary (2003-2007)

Sir Malcolm Rifkind, Former Foreign Secretary (1995-97)

Dame Margaret Beckett MP, Former Foreign Secretary (2006-07)

Sir Simon Fraser, Permanent Under-Secretary, FCO (2010-15)

Sam Goodman, Report author, BFPG Associate

Theo Clarke (Chair), CEO, Coalition for Global Prosperity

The panel discussion and following Q&A explored a number of key themes that the report highlighted, from the reduction of core diplomatic spending, to Britain’s changing place in the world.

The impact of cuts to the FCO budget

The panellists agreed that cuts to the FCO budget were damaging British credibility on the international stage. Sam Goodman, the report’s author, highlighted the report’s finding that core diplomatic spending as a percentage of public expenditure has collapsed, which Dame Margaret Beckett suggested has constrained the Foreign Office’s ability to pursue foreign policy. Sir Malcolm Rifkind stressed the need for more diplomats posted abroad, especially in the context of an “expansionist Russian foreign policy”.

A query from a member of the audience prompted a discussion about Overseas Development Aid (ODA), and the distorting effect that this has on the FCO budget. Whilst the FCO has had an increase in its overall budget figures due to ODA spend, Sam Goodman explained that the money that the FCO is actually in control over is ever-diminishing.

Britain’s role in the world

The report brings to light an important question about Britain’s role in the world, and the sort of foreign policy strategy it should pursue. There was a general consensus amongst the panellists that Britain needed a clearer strategy and foreign policy ambition, with Sir Simon Fraser quipping ‘we have a lot of empty slogans about our role in the world, and they need to be backed up with content’. Others zoomed in on specific policy areas, such as Margaret Beckett, who linked climate change and conflict and stressed the need for the FCO to focus more on climate change to help avoid international crises. Hilary Benn meanwhile, explored how Brexit has affected the UK’s international image and soft power credentials, whilst Tom Tugendhat focused on alliances, saying that in the next phase of British foreign policy-making, he would like to see the UK working much closer with democracies from around the world.

The fragmentation of British Foreign Policy

In the report, Sam Goodman makes the case against dissolving the Department for International Development (DfID) back into the FCO. Panellists suggested that DfID had done well in its brief of delivering international development and aid projects. Sir Malcolm Rifkind highlighted that the independence of both DfID and the Department for International Trade (DIT) is important because of the specialist skills that roles in these departments require. Hilary Benn added that when the FCO, DfID, and the Ministry of Defence (MoD) work together, this maximises their potential.

On the creation of the Department for Exiting the European Union (DExEU), Sir Malcolm Rifkind called it ‘strange’ that the FCO was excluded from the Brexit process. Sir Simon Fraser suggested that over his time in the FCO, European Union issues had shifted towards becoming part of the domestic policy agenda, and therefore the FCO would not necessarily have been naturally placed to take on the Brexit negotiations.

Most of the panellists were in agreement that any rearrangement of the structures of Whitehall would be costly and time-consuming, and it would be better to instead maximise potential in the pre-existing structures. Dame Margaret Beckett stated that the real issue was a lack of coordination between departments and called for a cross government approach to international policy supported by all areas of government. Sir Simon Fraser suggested that the Foreign Office could take the lead on this, becoming the coordinating group for international policy across Whitehall, much like the Treasury is for economic policy.

Public and government engagement on foreign policy

Dame Margaret Beckett in particular stressed the need for increased awareness and engagement on foreign policy, both across spheres of government and the general public. She said that there is a ‘total lack of understanding as to why we need the Foreign Office’. Others agreed, with Sam Goodman highlighting the work of the British Foreign Policy Group in increasing national engagement in foreign policy. An audience question prompted a related discussion of diversity in the Foreign Office. Sir Simon Fraser noted that diversity in the Foreign Office is a concern, especially socioeconomic and regional diversity, commenting that the FCO has ‘too many people from the South East’.

The launch event was a great success with interesting discussion and debate from panellists and audience members alike. To read the full report ‘Running out of Credit? The Decline of the Foreign Office and the Case for Sustained Funding’ click HERE.

The views expressed in this article are those of the author and do not reflect the views of the BFPG. The BFPG is an independent not for profit organisation that encourages constructive, informed and considered opinions without taking an institutional position on any issue.
Flora Holmes

Flora Holmes is a Researcher at the British Foreign Policy Group.