Criticism of UK aid: it’s time for aid advocates to make a choice

Recent articles in British newspapers The Times and the Mail question whether the British Government is able to spend over £12 bn per year on overseas development aid. This in a context of large government cuts in other expenditure,  while parliament legislated in 2015 that Britain is required to spend at least 0.7% of the UK’s Gross National Income (GNI) on aid.

The various criticisms which have been levelled at Britain’s aid programme include:

• An over-reliance on expensive consultancy firms which make large profits and reportedly pay their senior staff extremely handsome salaries and bonuses
• An over-reliance on multi-national organisations, to which the government enstrusts some 40% of the annual spend, but over which it has limited control
• A habit of transferring large sums to internationally held funds towards the end of the year, in order to meet the annual spending targets imposed by parliament
• Programmes and projects which aren’t effective
• Examples of seemingly nonsensical projects – some quite small, such as funding a game show in Ethiopia, others very large such as the story of the unusable airport in St Helena.

There will always be those in the UK (and in developing countries) who simply don’t believe in overseas aid, feeling that we should first look after our own needs, or that it is somehow creating a moral hazard to help others out of their own difficulties. I will not address their criticism here – and I doubt most British newspapers fit into that category, anyway.

Regarding the criticisms listed above, I would suggest there are two main responses. The first is to accept that aid programmes will not always be effective, and commit to transparency, continuous improvement and accountability. This, successive governments have done, and it is right and proper for journalists, think thanks, citizens and MPs to continue holding successive governments’ feet to the fire. Neither UK taxpayers nor the people aid is intended to help, deserve anything less. All I would add here is that humanitarian and development aid is, and will always be, a complex, messy and difficult field, so it will be best served by well-informed criticism based on whether it achieves, or is likely to achieve results, in reference to specific problems or goals.

The other response is really about deciding how to balance an equation which currently does not add up. Let’s consider a few key points.

At least half of British Aid is destined for “fragile states”, i.e. poorly governed, unstable places in or at risk of conflict. Corruption and incompetence are unfortunately all-too-common bedfellows in such places. Aid programmes in such contexts are hard to design and implement; they need to be adaptable; they need to be implemented and overseen by expert, politically aware people motivated by achieving the right result for the people they are trying to help, and they need to be done by – or done in genuine partnership with – representatives those being helped. All of this is time consuming.

DFID and the other government departments responsible for spending over £12 bn per year have had their staffing numbers slashed since 2010, even as they have been saddled with the task of spending a budget which had risen by almost 50%. Not surprising therefore, that they have had to outsource so much of their expenditure to opaque multi-laterals and profit-making  project delivery companies. Not surprising either, that they have bundled their spending into ever-larger “projects” which are much harder to implement in the adaptable and beneficiary-oriented manner I have just described.

At the time the 0.7% legislation was being debated, I expressed a view that it was a mistake, and would lead to a backlash against aid. My article was entitled Squaring the circle. Now that the backlash is happening, I’d suggest that there are two basic – and opposing – options available, in order to square the circle.

1. Reduce the amount of aid to a figure more easily manageable, by removing the 0.7% target so as to remove the perverse incentive which spending targets inevitably generate – according to basic economics.  This would also bring politics back into the equation, as the aid budget – and some of its details – would become part of the government budget approved annually by parliament and thus subject to regular debate and scrutiny. (The House of Lords has suggested removing the requirement to spend 0.7% of GNI within every 12 month period, and instead spread it over five years. But this would only only provide a temporary fix. )
2. Increase the number of qualified civil servants deployed to oversee and implement Britain’s aid projects, in line with the volume of aid – for example by increasing the numbers in line with the 30% increase we have already seen since 2010. This would allow them to pay continuous attention to ensuring programmes are achieving results and if not, to be adapted or terminated, rather than – as is too often the case now – focusing on getting the money out of the door. They could provide  more detailed oversight and accompaniment of multi-lateral organisations to which British funds are allocated. This change would also allow the government to restore some of the partnerships between the government and non-governmental organisations, through which some of the most effective humanitarian and development programmes have long been designed and delivered. This would go some way towards relieving DFID’s much-criticised reliance on profit-making consultancy companies.

Both options are politically difficult in one way or another. Both would go some way to making aid more consistently effective. One of them has to be adopted, and advocates of aid need to recognise this, otherwise they will lose the bigger argument. The alternative is to continue to pretend that the problem can be solved by tweaking (for example by insisting that consulting companies publish more financial details, or pretending that insisting on better ‘value for money’ will fix the problem – it won’t, as any honest public sector economist will admit). Those who support a generous UK aid budget need to get behind either reducing it to more manageable levels, or beefing up the government’s capacity to spend it well. Otherwise they are at risk of attempting to keep their cake while eating it.