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Government departments ‘struggle’ to spend overseas aid budget, says Audit Office

18 July 2017


Government movers: the International Development Secretary, Priti Patel (right), leaves 10 Downing Street after a Cabinet meeting, on Tuesday. Also pictured (left to right): the Government’s Chief Whip, Gavin Williamson; the Culture, Media and Sport Secretary, Karen Bradley; the Leader of the House of Lords, Baroness Evans

Government movers: the International Development Secretary, Priti Patel (right), leaves 10 Downing Street after a Cabinet meeting, on Tuesday. Also pi...

THE Government has struggled to fulfil its commitment to spend 0.7 per cent of the national income on overseas aid, a report from the National Audit Office (NAO) suggests.

The NAO warns that government departments had risked “undermining value for money” in a last-minute dash to meet the target in 2016.

The Government has met the 0.7 per cent mark since 2013 (three years after it was proposed by the Coalition), but only became legally obliged to do so when the International Development Act came into effect in June 2015.

A new UK aid strategy was produced jointly by the Department for International Development (DFID) and the Treasury in the November last year. This proposed that, while DFID would continue to contribute the most to foreign-aid spending, a greater proportion (30 per cent) would be administered by other departments by 2020.

It transpired that 14 departments were involved in spending the £12.1-billion foreign-aid budget in 2015, though 80.5 per cent of it ended up being covered by DFID, the NAO report says.

Last year, however, because the Treasury required other departments to spend 90 per cent of their financial-aid allocation within the calendar year, there had been “a risk that expenditure might be rushed, potentially undermining value for money”, the NAO says.

Smaller departments with fewer resources had struggled to meet their aid spending targets, despite improved management and support from DFID, which reduced its proportion of the foreign-aid target to 74 per cent. Five of the 11 bodies investigated by the NAO, the report says, “spent more than half their 2016 calendar-year budget” in the last quarter.

This included the Department of Energy and Climate Change, which spent 98 per cent of its £311-million foreign-aid budget in the final quarter. The departments of Health; Culture, Media, and Sport; Environment, Food, and Rural Affairs; and the cross-departmental Prosperity Fund, also struggled, the report says. These were compared to the Ministry of Defence, whose spending was spread from 51 per cent in the first quarter to just six per cent in the last.

Meanwhile, only two of the 11 bodies investigated — HM Revenue and Customs, and the Department for Business, Energy, and Industrial Strategy — were able to forecast “within 10 per cent accuracy” their spending in the last quarter.

The NAO report concludes that the decision by the Government to assign other departments and funds to help meet the 0.7 per cent target had left “gaps in accountability” and responsibility for the overall implementation and progress of the UK aid strategy.

The Treasury and DFID must therefore focus on “developing ways of capturing the overall effectiveness” of UK aid expenditure, the NAO says, while continually assessing “coherence” across government departments.

Remarking on the report, Christian Aid was positive about the level of spending, but agreed that assigning 30 per cent of the foreign-aid budget to departments that were “less experienced and less transparent in using aid money” than DFID was “clearly risky”.

The head of advocacy at the charity, Laura Taylor, said: “There is a danger that public trust is undermined by a government policy that does not hold all aid spending to the same set of standards.”

Further funding increases to other departments, such as the Foreign Office, should therefore be frozen until the same standards could be met, she said. “This should give them time to focus on the quality of their aid spending before the quantity they are asked to spend increases too significantly, and will help to ensure that aid is spent on what matters most — improving the lives of the poorest people in the world.”

In a press statement, DFID denied media reports that budgets had been “wasted”, or were sitting unused. The Secretary of State was “driving a robust value-for-money agenda that includes a line-by-line review” of its overseas spending, “a crackdown on profiteering suppliers, efficiency savings, and increased use of payment by results”, it said.

A spokesperson continued: “Other government departments have direct responsibility for their share of the development budget and are accountable to Parliament and UK taxpayers for how they spend ODA [Official Development Assistance]. The International Development Secretary continuously reviews all DFID spending, and stops programmes deemed not to be delivering value for money, or which fail to meet international development objectives.”

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