NO issue gets tempers flaring like Britain’s foreign aid budget. Since 2013 the UK has been committed to spending 0.7 per cent of national GDP on foreign aid, with the commitment becoming law in 2015. Ever since, the foreign aid budget has consistently risen to higher than £14bn in 2017.
Every year, we’re treated to headlines about the latest shocking waste of taxpayer cash. Although the TaxPayers’ Alliance is against such a high foreign aid budget, and always has been, there is little appetite amongst MPs to scrap it.
With everything else going on in Parliament, and giant NGOs baying for the blood of anyone who dares criticise the aid orthodoxy, nothing will change.
So we decided to break the deadlock.
Our latest report explores what is wrong with Britain’s foreign aid spending and, if the target isn’t changing anytime soon, suggests how it can be reformed to make sure every pound is spent as effectively as possible to protect taxpayers’ interests.
The first place to start is the legislation itself. Daft wording in the law means that the target has to be met within the calendar year, rather than the usual (and sensible) financial year.
For years this has hampered effective planning and led to huge amounts of money being shovelled out the door, as a last minute aid top-up. Even a small change here could greatly improve how the foreign aid budget is used, and could be done without any actual changes to legislation itself.
But this is only the tip of the iceberg. Our research has revealed that a plethora of rules and restrictions, set by international organisations like the OECD, restrict Britain’s ability to get the most out of our money. In some cases, they have even inhibited Britain’s ability to help our allies overseas when they have been struck by natural disasters, such as when Hurricane Irma devastated the Caribbean in 2017.
When British territories in the area were ravaged, the UK couldn’t use the aid budget to help them. According to international rules, these islands were ineligible to receive assistance paid for by the foreign aid budget. That is despite 85 per cent of homes in the British Virgin Islands for example, being destroyed or damaged by the hurricane.
Boris Johnson, Foreign Secretary at the time, noted that the scale of devastation reminded him of Hiroshima at the end of the Second World War.
This was the perfect case study of aid gone wrong. Eventually, thanks to efforts spearheaded by then aid secretary Priti Patel, the UK secured rule changes to let the Government use money from the foreign aid budget to help those territories get back on their feet. But those reforms take time, and agreement from international bodies.
In an ever-changing world, Britain must have rules which remain relevant to our national interest and best support development in poorer countries. We identify other areas where such reforms are badly needed, including anti-piracy, drugs-busting and cracking down on organised crime.
But we shouldn’t have to wait for permission to do it. Without a single change in the law, the UK could immediately start implementing the reforms while negotiations began. To borrow a phrase, we could take back control of aid.
However, before taking back control of anything, Britain must also get its own house in order. The foreign aid budget is actually spent by multiple departments and funds throughout Whitehall, not just in the Department for International Development.
Yet it is only that department which faces a range of strict rules to ensure money isn’t wasted on often pointless projects – such as in China, where it has been used by other departments to support their film industry and lower salt intakes.
Allowing the aid budget to be used by more departments could work well, but as things stand it all too often leads to lower standards. If money isn’t to go to waste, these departments should be held to the same bar as DfID itself, with increased oversight from the Secretary of State for International Development. That way, voters will know exactly who to blame.
Ultimately, if the Government wants to make high levels of foreign aid expenditure acceptable to taxpayers, the Government must make clear that it is willing to use it responsibly. These reforms would be a great place to start.
Jeremy Hutton is a policy analyst for the TaxPayers’ Alliance.