Leading article

There’s only one sane way David Cameron can meet the foreign aid target

International aid could be redefined to include some kinds of military intervention

30 May 2015

9:00 AM

30 May 2015

9:00 AM

In this week’s Queen’s Speech, the government promised as usual to cut red tape for businesses. But David Cameron is remarkable in his enthusiasm for simultaneously wrapping his own government in red tape. He has proposed a law to prevent the Chancellor raising rates of income tax, and in one of the last acts of the coalition he pushed through a law which commits British governments for ever after to spent at least 0.7 per cent of Gross National Income (GNI) on international aid.

There is little chance of the Prime Minister failing to meet his self-imposed spending target. Civil servants at the Department for International Development (DfiD) have proved themselves to be more than equal to the task of shovelling money in the direction of developing nations. The National Audit Office raised concerns about an apparent spending spree by DfiD of £1 billion in the last weeks of 2013 — at a time when the Treasury announced that economic growth was likely to exceed its forecast for the year, therefore requiring extra aid spending in order to hit the 0.7 per cent target.

At 0.71 per cent of GNI, Britain now has by far the highest aid budget of any major developed nation. France spends 0.41 per cent of GNI on international aid, Germany 0.38 per cent, Japan 0.23 per cent and the US 0.18 per cent. Whether the budget — £11.7 billion last year — is achieving anything useful is another matter. If David Cameron hoped that his self-imposed target would bring Britain prestige and influence, it is becoming clearer by the week that a more realistic outcome may be national embarrassment, as evidence grows of misspending.

Last week the aid watchdog the Commission for Aid Impact issued an amber-red warning for the way in which DfiD is spending money on private consultants. The commission concluded that there was too little monitoring of some projects and that help was not getting through to the very poorest groups. Meanwhile, there are reports of consultants being paid £1,000 a day.

The Public Accounts Committee raised its own concerns in January, finding that aid money channelled through a DfiD subsidiary, the Private Infrastructure Development Group, had been spent on oil and gas plants connected with fraudsters. The group’s staff were also found to have overspent on business-class flights to the tune of £75,000.

While the public image of aid tends to revolve around famine and earthquake relief, only 8 per cent of Britain’s aid budget goes on humanitarian relief. A further 20 per cent goes on medical programmes, but the bulk is spent on development projects of more dubious worth, and which seem to have aims other than bettering the lives of the poor. The £30 million being spent on ‘green mini-grids’ in Kenya, for example, seems to be inspired more by climate change policy than the desire to provide electricity for poor Kenyans. Its biggest boast, according to DfiD’s website, is that it will reduce carbon emissions by 260,000 tonnes a year.

Other schemes have the ring of personal crusades or of hare-brained PhD theses, such as the £1.5 million being spent on a project entitled ‘prevention of violence against women and girls through football’. The aim, says the bumf, is ‘to fill critical gaps in evidence on the effectiveness of sport in changing the dangerous social norms associated with violence against women and girls’.

With astonishing hypocrisy, the government is spending £30 million ‘strengthening public expenditure management’ in Bangladesh. Quite what an administration which is still running a £91 billion deficit has to teach other governments on balancing the books is not clear.

When the government defines achievement purely in terms of money spent, waste is inevitable. If David Cameron had set a target, say, for reducing HIV infection in Botswana by 2020 or reducing child poverty in Namibia by 20 per cent by 2018, and had then set a maximum budget by which this might be achieved, DfiD would have meaning-ful targets. Instead, DfiD crows about spending money as if it were a good in itself.

It is not going to be easy for the Prime Minister to extract himself from the promise to spend 0.7 per cent of GNI on aid, however embarrassing the tales of waste and excess. But there is one way he could help himself: by merging the aid target with that for defence. The government is not committed to spending 2 per cent of GNI on defence, which is supposed to be a condition for Nato membership.

Much of the defence budget over the past 20 years has been spent not on defending Britain but on helping to fight tyranny in countries which are of little direct threat to Britain. Is that not a form of aid? Indeed, as Rory Stewart, the former chairman of the defence select committee, has argued, without defence all other aid becomes worthless, because it cannot be properly dispensed without security.

David Cameron could save his blushes by redefining international aid to include military intervention in foreign countries when the intervention is not influenced by a direct threat to Britain. Do that, and the government will have no trouble sticking to the 0.7 per cent aid target — without having to fritter money on £1,000-a-day consultants and green energy for Kenyans.


Got something to add? Join the discussion and comment below.

You might disagree with half of it, but you’ll enjoy reading all of it. Try your first 10 weeks for just $10

Show comments
  • Left Outside

    This is embarrassingly bad.

    • Jaria1

      Correct Left Outside .
      It should be quite simple to study requests for aid as they would to the National lottery
      Complication the issue by bringing in outside advisers covers up lots of waste.
      Whilst its correct to state that we contribute o.7% we note that wealthy contries get no where near those figures.
      This at a time when cutbacks are being made due to underfunding.
      Again im puzzled but watching countless requests depicting distressed children on TV.
      As someone who has been very much involved with a childrens charity collecting has become harder and harder probably due to having forced chsrity money money to compete with.

  • Jaria1

    Foreign aid is a very bad advertisement for democracy as all major parties are signed up for it and while the public in general are against the amount and the way it is spent have no chance of doing anything about it. When i let my feelings known to Conservative head office i am told that i should be proud ! I am not.

    • Frank

      You seem to believe that Conservative HQ is there for Britain. It is not, it is there simply to try and secure the election / re-election of the conservative party. In other words, it is rather like a trade union acting purely for the benefit of its members. You will also be talking to people who have chosen to make their life in politics, so they are probably, by most standards, mildly deranged!
      I imagine that you might get a more interesting reaction if you complained to either DFID, or the FCO. They claim to be interested in feed-back!!

    • Callum GG

      Public opinion seems more complicated than just against it.
      This poll (JAN 2015) shows a majority in favour of increasing it. http://www.independent.co.uk/voices/comment/how-popular-is-foreign-aid-spending-it-depends-how-you-ask-the-question-9972216.html

      I don’t like how our aid is spent propping up undemocratic governments, but don’t trust the polls!

  • Frank

    Some years ago I had a meeting with people at the FCO about putting together an aid project for the Lebanon. In my innocence, I suggested that we could use the aid money to buy British made trucks to carry out the project, British made filters, etc. The FCO people listened to me and then politely told me that it was against the rules (whose rules?) to use aid money to support British industry (so the trucks would have to be chosen by the recipient of the aid) and secondly that Claire Short had determined that no aid money should be spent north of the Sahara (this was almost a decade after Short had left ministerial office!). What was mildly surprising was how pleased they were about both points. I pointed out that it seemed sensible to raise the profile of Britain as a friend in these areas and that it seemed insane to not tie our aid to British products (as the French do), but they smugly told me that this was not how Britain carried out its foreign policy or its aid programme.
    As for DFID and all its parasite feeder fish feeding off the aid bonanza, we should probably not expect the National Audit Office to be nearly as critical as it should be (you only have to look at the NAO’s reviews of the MOD’s procurement programmes to realise that the NAO doesn’t really do hard hitting analysis). Must be the civil service thing – no-one should be criticised – all a learning experience, etc, etc.

    • Nyemba M’membe

      It is called tied aid only stopped recently because prices were being inflated and there was room for corruption.

      • Frank

        Yes, I do understand this problem, but to just hand millions to recipients is also a guaranteed way to see money spent on other things and fails to help British industry / commerce. It is after all quite easy to have a small tender process when British equipment is acquired so that you know you are paying the proper price for a truck, etc.

        • Nyemba M’membe

          its not all cash! it is just that if it is cash it is not tied any more…Britain can give a bus as aid if they want! “ODA Flows are transfers of resources, either in cash or in the form of commodities or services. Since DAC statistics concentrate on transactions likely to have a development impact, loans for one year or less are not counted. Repayments of the principal of ODA loans count as negative flows, and are deducted to arrive at net ODA, so that by the time a loan is repaid, the net flow over the period of the loan is zero. Interest is recorded, but is not counted in the net flow statistics. Where official equity investments in a developing country are reported as ODA because of their development intention, proceeds from their later sale are recorded as negative flows, regardless of whether the purchaser is in a developed or a developing country.” http://www.oecd.org/dac/stats/34086975.pdf

          • Frank

            DFID should be able to buy a British bus and give it as aid, but under current rules they cannot do this.
            Cash (Budget Support) is less and less given to recipient countries as history shows that when you do this, the first place to benefit is the local Mercedes showroom and or Swiss bank accounts.
            DFID also believes that NGOs are more expert than their own DFID staff (possibly very true when it comes to specific areas), so putting aid through NGOs was seen as being more efficient. A vast amount of aid is funnelled through investment companies which invest in commercial firms thought to benefit developing countries, eg mobile phone operators in Africa – quite why British Government International Aid money should end up being invested in commercial companies is something that is very peculiar, but until Parliament sees fit to address this, lots of private equity types will carry on making lots of money out of DFID.

          • Jaria1

            My opinion is clear and you and Nyemba can argue about detail to your hearts content.
            We are sending about £13 billion away when we have to borrow of tax the population to reach these targets as I say which are a greater proportion than any other country.
            How can anyone be proud of giving this money away when at the same time having to impose austerity on those you are supposed to represent.
            For some reason the gvt tell me i should be proud Im certainly not proud and very frustrated that the electorate are powerless to do anything about it.

        • Nyemba M’membe

          How much of this money reaches developing countries?

          This is unclear. Because what counts as aid can be so varied, and as money often passes through multiple intermediaries – with overhead costs at each step – analysts have struggled for years to understand where much of this money ends up. In 2010-11, only 15% of the UK’s bilateral aid spend was classified as “budget support” – money given directly to developing country governments. The bulk of UK bilateral aid flows through intermediaries such as NGOs, while spending through multilateral institutions has increased.

          Last year, reports of £500m spent by DfID on UK-based consultants stoked controversy over whether the department was getting value for money – and why the vast majority of big DfID contracts are still going to British companies, more than a decade after the UK fully “untied” its aid budget. Many thought “untying” (and opening up competition to non-donor firms) would mean money would flow to companies in developing countries.

          Greening has said all organisations that receive and manage DfID money, including NGOs, private companies, sub-contractors and sub-agencies, will be required to publish spending data. That should make it easier to see how much money makes it to developing countries. However, no firm deadline has been set for this.http://www.theguardian.com/global-development/2013/mar/20/uk-aid-spend-important-works

  • Jaria1

    Nothing to do with party politics all three are signed up to .
    If you ask me a question ill answer it Frank you have no need to tell me what i think.
    Im complaining about the lack of democracy highlighted in this case by an overwhelming number of MPs from all parties in favour of Foreign aid not just one.
    You might recall that Blair admitted spending his first term in office ensuring that Labour were relected.
    Digby Jones spoke of how different our legal aid was spent as opposed to foreign donors never give cash but bring in their own firms to create a better infrastructure.
    Dont let your rabid anti Toryism cloud your judgement.

  • Nyemba M’membe

    In 1970, The 0.7% ODA/GNI target was first agreed and has been repeatedly re-endorsed at the highest level at international aid and development conferences:
    in 2005, the 15 countries that were members of the European Union by 2004 agreed to reach the target by 2015
    the 0.7% target served as a reference for 2005 political commitments to increase ODA from the EU, the G8 Gleneagles Summit and the UN World Summit http://www.oecd.org/dac/stats/the07odagnitarget-ahistory.htm

  • Nyemba M’membe

    Before you voice opinions first know what exactly you are talking about: What is aid or Official Development Assistance:

    Exclusion of military aid – The supply of military equipment and services, and the forgiveness of debts incurred for military purposes, are not reportable as ODA. On the other hand, additional costs incurred for the use of the donor’s military forces to deliver humanitarian aid or perform development services are ODA-eligible.

    Peacekeeping – The enforcement aspects of peacekeeping are not reportable as ODA. However, ODA does include the net bilateral costs to donors of carrying out the following activities within UN-administered or UN-approved peace operations: human rights, election monitoring, rehabilitation of demobilised soldiers and of national infrastructure, monitoring and training of administrators, including customs and police officers, advice on economic stabilisation, repatriation and demobilisation of soldiers, weapons disposal and mine removal. (Net bilateral costs means the extra costs of assigning personnel to these activities, net of the costs of stationing them at home, and of any compensation received from the UN.) Similar activities conducted for developmental reasons outside UN peace operations are also reportable as ODA, but not recorded against the peacekeeping code. Activities carried out for non-developmental reasons, e.g. mine clearance to allow military training, are not reportable as ODA.

    Civil police work – Expenditure on police training is reportable as ODA, unless the training relates to paramilitary functions such as counter-insurgency work or intelligence gathering on terrorism. The supply of the donor’s police services to control civil disobedience is not reportable.

    Social and cultural programmes – As with police work, a distinction is drawn between building developing countries’ capacity (ODA-eligible) and one-off interventions (not ODA-eligible). Thus, the promotion of museums, libraries, art and music schools, and sports training facilities and venues counts as ODA, whereas sponsoring concert tours or athletes’ travel costs does not. Cultural programmes in developing countries whose main purpose is to promote the culture or values of the donor are not reportable as ODA.

    Assistance to refugees – Assistance to refugees in developing countries is reportable as ODA. Temporary assistance to refugees from developing countries arriving in donor countries is reportable as ODA during the first 12 months of stay, and all costs associated with eventual repatriation to the developing country of origin are also reportable.

    Nuclear energy – The peaceful use of nuclear energy, including construction of nuclear power plants, nuclear safety and the medical use of radioisotopes, is ODA-eligible. Military applications of nuclear energy and nuclear non-proliferation activities are not.

    Research – Only research directly and primarily relevant to the problems of developing countries may be counted as ODA. This includes research into tropical diseases and developing crops designed for developing country conditions. The costs may still be counted as ODA if the research is carried out in a developed country.

    Anti-Terrorism – Activities combatting terrorism are not reportable as ODA, as they generally target perceived threats to donor, as much as to recipient countries, rather than focusing on the economic and social development of the recipient.

    Britain was part of the main countries making these rules
    Annex • • • • • • • •

  • Nyemba M’membe

    Today is the 29th of May 2015 how come you are already writing this in the future? “This article first appeared in the print edition of The Spectator magazine, dated 30 May 2015”

    • Jaria1

      Not sure Nyemba.
      I am a yearly subscriber to the Spectator and get EMailed a copy a few days before I receive it in the post

    • Bertie

      The Spectator send out an email on the thursday PRECEDING the friday hard copy release…!

  • Oli

    Having a target for overall spending doesn’t preclude also having other targets, like those you mention.

    Ideally, introduce mandatory cost-effectiveness targets for DFID’s budget and enforce them rigorously – that way you get the most possible impact for your money.

    If we want to make development money MORE effective, the last thing to do is incorporate military spending into the budget. Last time I checked, bombing developing countries has a significant negative impact, so is even worse than the department just wasting it.