DFID only spent 72% of UK official aid last year. Does that matter?

The UK Government released its data on 2017 official development assistance (ODA) spending today. As required by law, the total went up to match 0.7% of the UK’s GNI, reaching £14.1 billion, an increase of 5.1% over 2016. The UK was the third largest ODA donor in 2017, some way behind Germany and giving just over half of what the USA provides. Sweden, Luxembourg, Norway and Denmark are the other four governments which meet the 0.7% target (a target I have long questioned, and I was against the idea of making it a legally binding in the UK).

Predictably, there is already some criticism about the proportion of this money being spent by DFID and other departments. And I expect there to be more – just as in previous years. The proportion DFID spent has gone down from 88.6% in 2013 to 72% last year. Other departments spending comparatively large proportions were the Department of Business, Energy and Industrial Strategy (5.4%), Foreign and Commonwealth Office (4.5%), The Conflict, Stability and Security Fund (3.9%), and the Home Office (2.4%).

From Statistics on International Development, Final UK Aid Spend 2017. Nov 2018. UK National Statistics Office.

One of the criticisms levelled at the other departments is that their stewardship of ODA resources lacks transparency. This is not just something NGOs and other outsider critics have been saying, but was also raised by the Independent Commission for Aid Impact and the House of Commons International Development Committee, both of which have a statutory role scrutinising UK overseas aid. This is a valid criticism. DFID is better – and better practised – at sharing information on its programmes, and conducting and sharing evaluations of their impacts. Scrutiny and transparency of international aid is essential because, unlike some other government spending, there a very wide – a legitimately wide – range of views about the best way to spend aid, especially the ‘development aid’ portion, designed to promote progress in other people’s countries and lives. After all, there are many legitimate definitions of progress, and even more ideas about how to get there – no-one really knows what works. (That’s what politics is mainly about, and look how many different ideas and proposals that throws up, both on where we ought to head for and the best way to get there…) So it’s really important that we can all see which pathways to progress for others the UK decides to support and promote, and have a chance to raise questions. It is especially important for people in the countries where aid is being spent to be able to see what is being proposed and what is done, and have  influential voices in the debates and decisions being made about their progress.

But let’s not get carried away by the degree of scrutiny available, even for DFID spending. Let’s not assume that people in developing countries really do have as much voice as ethics and theory – and my last paragraph – would suggest. Aid programmes in places like Nigeria and Pakistan (two of the top recipients of UK aid) are not designed democratically. And fully 37% of ODA was ‘core multi-lateral’, i.e. it was given to multilateral agencies (the UN, World Bank, etc), and thus became far harder to scrutinise.

From Statistics on International Development, Final UK Aid Spend 2017. Nov 2018. UK National Statistics Office.

Multilateral agencies have varied degrees of impact. Many of them do much highly effective work, and are the subject of a large amount of outside lobbying and criticism by NGOs and the like, designed to ‘keep them honest’. But it would be difficult for even their strongest fans to claim they are subject to genuinely detailed transparent scrutiny of their effectiveness and efficiency. If they were, far more of them would have closed down years ago, or at least become sharper and leaner.

So it’s clear that even DFID – which after all provides much, probably most, of that multilateral aid – isn’t as transparent and scrutinised as some voices might suggest. In truth it is hard to hold a single agency to account at central level for expenditure of such large sums on such a vast range of different programme types, and in so many different and dispersed locations. In fact, suspect that some of the voices calling for DFID’s share of aid to go back up are doing so, not wholly (or even much at all) because they feel other government departments are hugely less transparent. I think there is another motive for their criticism, which is that for many in the aid sector, DFID represents the true, pure-blood believers, flying the aid banner and holding the aid blazon. Aid money being spent by other departments is – almost by definition – a dilution of the blood, a fraying of the banner, and a sullying of the blazon, irrespective of the purposes and uses to which that aid is put.

I have not analysed the various uses of the 28% of aid allocated to other departments of state. I am sure much of it is well spent, achieving relevant impact, and much is not.  I would venture to say the same about DFID’s allocations. I would also ask those who advocated an aid budget that would legally have to increase every year in line with GNI, irrespective of other factors, what did you expect?

It seems like basic economics that if you decide arbitrarily on a budget for a given area of spending (by enshrining the 0.7% target in law), rather building a budget based on an agreed set of policies and needs, you create a perverse incentive, almost guaranteeing that everyone who might, will try and fit their programmes to the ODA criteria. Especially when aid goes up by an incredible £5 bn (a more than 50% increase) over six years during a period of government cutbacks in almost every other area of spending, as it has done. So I think we just have to get used to ODA being allocated across different departments, at least until the 0.7% target is done away with.

Furthermore, it’s been accepted for years now, that ‘development’ encompasses a very wide array of interacting issues and themes, from micro-credit, through peacebuilding and security, water, sanitation, health, education, energy, agriculture, fisheries, land reform, justice, journalism, democracy, the business environment, local and international trade, anti-money laundering, climate change, the environment, and so on…. The Sustainable Development Goals cover most of it. If it’s right that progress can be seen through all these lenses and more – and I certainly think it is – it seems only right as well, that much of the capability the UK government can bring to bear on these issues is going to reside in other parts of Whitehall than DFID, and far beyond. So it would be weird if ODA money wasn’t being spent widely across those departments and far beyond. I think we need to get used to it.