Police and Crime Commissioners
Lord MacGregor of Pulham Market Excerpts(5 years, 10 months ago)
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Lord MacGregor of Pulham Market (Con)
My Lords, I feel extremely strongly about this matter, but time constraints mean that I can make only a few points. I want to concentrate on the Ted Heath issue. I declare a personal interest: I am on the committee of the Sir Edward Heath Charitable Foundation. I agree with every word that was said by the noble Lord, Lord Armstrong, and I am particularly grateful for the contribution of the noble Lord, Lord Campbell-Savours.
I knew Ted Heath very well over many years. Going back a very long time, in the 1959 election, I was between two universities. I was chairman of the Federation of University Conservative and Unionists Associations and Ted was the president. I was called from Scotland to come down to see him in the beginning of the 1959 election campaign and he asked me if I was free to canvass in his constituency—to look after his ladies—because he was involved elsewhere. I will always remember him saying, “I would just like to introduce you to my private political secretary because you will be seeing a lot of each other” and he introduced me to this woman. He meant during the campaign but actually we married shortly after it and have been happily married ever since, so I have a very strong personal interest in this.
I then became head of his private office in the mid-1960s, including the general election campaign at that time. I was surprised not to be asked by Wiltshire Police in its inquiry about any of this because I very often spent seven days a week—not always Sundays—with Ted, very closely. I knew how hectic and itemised his diary was; those diary items are now in the Bodleian Library but were not looked at by the Wiltshire Police in its inquiry. However, it would prove how difficult it was for Ted to drop off anywhere and engage in some of the activities he has been accused of. We had a police security guard everywhere we went. We went all over the country, campaigning in cities and staying in hotels. There was always a police security guard in the corridor and when we went abroad it was exactly the same. There has always been police security in Arundells and I simply do not believe that the activity that he is accused of could have taken place with all that constant security.
Like others, I wholly support everything that the noble Lord, Lord Armstrong, said, and I believe that the Wiltshire Police process has been deeply misguided. I too am shocked by the way in which the police spokesman appeared on TV. If you invite all and sundry to make accusations, knowing that there was no risk to themselves because of the cloak of anonymity, what do you expect? It is a botched process. The matter simply cannot be allowed to remain as it is. It is a gross injustice to one of our most distinguished and internationally respected statesmen.
The Minister, whom I greatly respect, will have sensed the strong feelings across the board on all sides in this matter and the necessary steps must be taken to put it right. I therefore entirely agree with what the noble Lord, Lord Armstrong, said about having a proper, independent inquiry. You could put it back to the Wiltshire Police, who claim they do not have the money for it—£150,000 is much less than what they spent on their own inquiry—but it would be much better to have an independent inquiry by a retired High Court judge. I urge the noble Baroness to set one up and put an end to what has been such a big blot on our political landscape.
International Development (Official Development Assistance Target) Bill
Lord MacGregor of Pulham Market Excerpts(9 years, 2 months ago)
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Lord Howell of Guildford (Con)
My Lords, I rise to support this amendment for non-Treasury reasons, which may be a relief to noble Lords. We all know that the Treasury is full of very clever people, but frankly the Treasury is not always right and therefore there would have to be good reasons, other than the very fine reasons put forward by noble Lords who have already spoken, for urging that there should be an extra annual check on this programme and target.
My reason is simply that other, more effective, ways of promoting overseas development, eradicating poverty and meeting development goals are emerging all the time. The concept of ODA was invented 30 or 40 years ago, possibly more, and many new ideas have developed for promoting development and for contributing to development in more effective ways since then. The truth is that in looking at this Bill and the idea of the 0.7%, your Lordships are really dealing with an old agenda. These were fashionable views 20 or 30 years ago. Aid and development techniques have moved on rapidly.
Official development assistance—the ODA concept that we are dealing with—is rapidly becoming irrelevant. The complex challenges the world is now facing require a radically different financing model, one that requires a comprehensive approach to financing, embracing all sources of public and private finance available to developing countries. Tying the development effort unconditionally and without annual review into an “ODA-able” programme is bound to divert resources from far more productive ways of helping the poorest and encouraging development in today’s conditions.
One of the major contributions developing countries need is peace and security through military assistance, techniques and training, none of which is “ODA-able”. We are deliberately limiting our capacity to help the development process in the conditions of the 21st century, so the case for annual review and revision by the Treasury to keep our development spending programmes up to date and effective seems unanswerable.
Lord MacGregor of Pulham Market (Con)
My Lords, I am very much aware of ex-Treasury Ministers speaking, but nevertheless I want strongly to reinforce the points made by the noble Lord, Lord Butler. Before I go on to my arguments, I state for the record that I wholly support the commitment and proud record of the UK on humanitarian and development aid. We are one of the world leaders. I do not agree with the noble Lord, Lord Davies, that it has to be enshrined in law to make that point, because our record and the level of spending to which we commit ourselves demonstrate that. This amendment in no way detracts from that.
I shall make four points in favour of this amendment, and I shall repeat very briefly what the noble Lord, Lord Butler, said. It all stems from my years of experience in dealing with public expenditure, in particular as Chief Secretary when the noble Lord, Lord Butler, was leading the programme in the Treasury under my noble friend Lord Lawson as Chancellor.
International Development (Official Development Assistance Target) Bill
Lord MacGregor of Pulham Market Excerpts(9 years, 3 months ago)
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Viscount Eccles (Con)
My Lords, perhaps I could make a very brief intervention. My noble friend referred to the Colonial Development Corporation. In my time it was the Commonwealth Development Corporation—now called CDC. It may come as some surprise to your Lordships that it is still 100% owned by the taxpayer, but that is now a well kept secret. When I was fortunate enough to be its chief executive, we were much interested in income as well as in expenditure. One of the difficulties and the need for flexibility in this target is that if you are interested in income as well as expenditure, you cannot very well set the figure before the beginning of the year with any great accuracy. You need some flexibility.
That leads me on to a thought that is also a very strong reason for there being flexibility, as the noble Lord, Lord Butler, said. Life moves on. Things change very rapidly. Without the flexibility to adjust to those changes, you can be in great trouble. It has always seemed strange to me that, ever since the great days of Lord Bauer and Lord Balogh debating aid seriously in this House, in the 15 years that I have been in this House I have not yet heard a really serious debate about third world, second world or whatever world development—not one. In those days, there were serious debates on the subject and they got down into the depths of it, as indeed my noble friend Lord Howell was trying to indicate—much, I think, to the disappointment of the House.
I end by saying that I hope your Lordships will not regard the whole business of overseas development as a shut subject: “There is nothing more to say about it, we all know the answers and so we set this fixed, rigid target”. Finally, I think the structure when ODA came under a Minister of State within the Foreign Office was a much better structure than the one we have today.
Lord MacGregor of Pulham Market (Con)
My Lords, I was not able to attend Second Reading because of long-term commitments in Norfolk. The noble Lord, Lord Lipsey, who has his name on some of the amendments today, is unable to attend because of other commitments, and asked me to give his apologies.
I would like to say at the outset that there are two themes in the amendments that we have put forward. One is the issue that the noble Lord, Lord Butler, raised, which I entirely agree with, and this amendment is relevant to that. The other is to do with making sure that aid is effective and that it deals with corruption and things of that sort. Those are the two themes. If we are to have this argument about this amendment, we shall go on all day. I want to make my point on this amendment in relation to the first theme and I do not want to repeat it afterwards, so that we can go swiftly through the remainder of the amendments. But if we are not even able to do that on this amendment, I have to say that I do not think that this House is performing its function of scrutinising legislation in detail. I say to those who fear a filibuster—and there is not; we have a number of objections for a number of purposes—that I intend to make most of my arguments on this amendment so that I do not have to repeat them. But if I am not allowed to do so, I have to ask: who is preventing this Bill going forward?
We all know that there is a tight timetable. It should have been a government Bill but it is a Private Member’s Bill, which adds to the difficulties, and we all know we are coming right up to the end of the Parliament. I want to try to make the Bill more effective, as I believe this House should do, and I hope I will be allowed to develop my argument on this amendment; otherwise, I shall have to repeat it on all the other amendments. Let me make my position on that clear.
I congratulate the noble Lord, Lord Purvis of Tweed, on his very impressive speech at Second Reading—of course, I have read the whole debate—and his recognition of some of the concerns we have. I am in total agreement with him about the importance of development aid and I am proud of the contribution this Government make and the lead they give internationally. But I have some concerns about the Bill. The first set is all about the points that the noble Lord, Lord Butler, made. I hope I do not have to repeat them on the later amendments.
Lord Low of Dalston (CB)
Perhaps the noble Lord might be able to help me and in so doing, I hope, help the House. I understand very well the argument that he is making. He has put it very clearly that he is against hypothecation of any proportion of GNI for any particular purpose. However, I am not quite clear on how this amendment assists that argument. If the noble Lord objects to the hypothecation of 0.7% of GNI for development aid, it matters not whether it is “the” target or “a” target; it is still a target. This amendment would not get rid of that hypothecation.
Lord MacGregor of Pulham Market
My Lords, there are two themes to all our amendments: hypothecation is one and the other is value for money et cetera. This is not the most important amendment to deal with hypothecation but it happens to be the first. That is the point. A lot of the other amendments—which I hope we can deal with much more swiftly because we will have dealt with the general arguments—are more designed to ease the target so as to deal with problems such as, for example, having in one given year to go on spending to meet the target when it might have been better to spread that over a few years. We have other amendments on those themes to deal with that problem. This is not the most important amendment but it happens to be the one where we can make the general case.
Lord Forsyth of Drumlean (Con)
My Lords, with some trepidation I rise to speak to this amendment. Perhaps I should make it absolutely clear that I am not against the Government spending 0.7%, 0.8% or 1% of gross national income on aid. I am not opposed to aid; indeed, I have raised quite a lot of money for women in India. For me, the central argument is what we are trying to do here. I hope that I can avoid the noble Countess calling me to order in speaking to this amendment.
By the way, I do not know why there is confusion about which “the” it is. The amendment says:
“Page 1, line 2, leave out first ‘the’ and insert ‘a’”.
We are talking about “a” duty of the Secretary of State rather than “the” duty.
International Development (Official Development Assistance Target) Bill
Lord MacGregor of Pulham Market Excerpts(9 years, 3 months ago)
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Lord MacGregor of Pulham Market (Con)
My Lords, before the noble Lord, Lord Best, leaves the Chamber it is highly appropriate that this debate follows the Second Reading of the housing Bill, which he has just introduced. That Bill originated in the House of Commons and was led, designed and carried through by my very good friend Richard Bacon MP, who is not only an admirable MP but was my successor as Member of Parliament for South Norfolk. I know him and his housing interests very well. I am delighted that the Bill is making such good progress, and I am delighted to see Richard Bacon here with us now. It is also highly appropriate that he listens to some of our debates now: he is an admirable member of the Public Accounts Committee as well as the House of Commons, has written an extremely well researched book about getting value for money and avoiding waste in whole sectors of government departments, and is a very strong advocate of value for money. In fact, that is what quite a lot of our debates are about today.
The amendment that I am dealing with now is straightforward and probing. Clause 1(2) says:
“Whether the 0.7% target has been met by the United Kingdom in any year is to be determined for the purposes of this Act by reference to the amounts specified for that year in an annual report”.
Subsection (3) says what an annual report means, but it does not say who determines whether that 0.7% has been met, and it must do so. Is it just the department, or is it underpinned and independently verified from outside? We believe that it should be the latter, and that this is best done by the Office for Budget Responsibility, which has established its independent position for establishing and verifying such issues. I beg to move.
Lord Purvis of Tweed (LD)
My Lords, I am grateful to the noble Lord for keeping his word this morning when he said that his subsequent contributions would be brief. I am not willing to accept his amendments because I do not think that the OBR is the appropriate body to carry out this function. The OBR has four main objectives, which are perfectly clear: to provide five-year forecasts on public finances, to use public finance forecasts to judge the Government’s performance on fiscal targets, to scrutinise costings of tax and welfare plans, and to assess the long-term sustainability of public finances. It also has an additional role: to assess the performance on the welfare cap.
The fundamental role of the OPR is for future forecasting and to have a relationship with, and report to, Parliament on that basis. However, thanks to the Independent Commission for Aid Impact—reporting to Parliament, as has been indicated previously in today’s proceedings—we now have a wealth of 40 reports, informed not least by the more recent work of the Office for National Statistics. Indeed in the latest report, which I am sure my noble friend has looked at, the ONS is quite clear that there is now a straightforward way of the ONS doing its work, informed by information from the Treasury and DfID and having clear reporting as to whether the UN target has been met. Reporting mechanisms have already been established in law. In addition, the International Development (Reporting and Transparency) Act 2006 is already on the statute book, providing, I hope, much of the satisfaction that the noble Lord seeks.
Given that explanation, and the fact that not only does the Bill offer a framework to be used but existing statutory reporting mechanisms have been in place for nearly a decade, I ask the noble Lord to withdraw his amendment.
Lord MacGregor of Pulham Market
I thank my noble friend Lord Purvis for that response. It is very helpful to have it on the record, and I beg leave to withdraw the amendment.
Lord MacGregor of Pulham Market (Con)
My Lords, the noble Lord, Lord Hollick, is very sad that he cannot be here—his name is on the amendment as the prime mover—because with his business interests he has a very strong concern about value for money. Unfortunately he has had to go because we are now at a quite late stage of a Friday afternoon for considering Bills.
The amendment is all about value for money. The clause to which it refers states:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.
The amendment queries why the Secretary of State has been given in the legislation the task of making arrangements for the independent evaluation and why it is not clear in the legislation where that independent evaluation has to take place. We believe that it should be the Independent Commission for Aid Impact.
Let me explain exactly why we believe it should be the Independent Commission for Aid Impact, and why that should be described in legislation and not left to the discretion of the Secretary of State. I will simply quote a number of passages from a report that came out very recently—indeed, I think it was on 19 January—from the House of Commons Committee of Public Accounts, chaired by the right honourable Margaret Hodge. It is a report on the oversight of the Private Infrastructure Development Group and graphically illustrates why it is important to have an independent evaluation of value for money on aid and not leave it simply to the Secretary of State to make the arrangements.
The report is absolutely devastating. It states, first:
“The Department’s oversight of PIDG”—
the Private Infrastructure Development Group—
“has not been sufficiently ‘hands on’. We are concerned that the Department has insufficient assurance over the integrity of PIDG’s investments and the companies with which it works and the Department has not done enough to put a stop to PIDG’s wasteful travel policies and poor financial management … the Department should do more to make sure PIDG takes a robust approach to the assessment and management of these risks. The Department was not well briefed on the specifics of individual investments which had attracted public concern”.
The committee therefore recommended:
“The Department must ensure that PIDG has a robust and appropriate approach to due diligence in general and that it receives detailed briefings when concerns are raised about specific investments”.
Next, the committee says:
“The Department’s weak oversight of PIDG means that some of PIDG’s operational decisions are at odds with the Department’s objectives”,
and therefore recommends that:
“The Department should review its oversight mechanisms for PIDG to make sure that it has an appropriate level of visibility of operational matters, and that sound financial controls are in place and that money is appropriately spent”.
Next, the committee says:
“The Department’s poor oversight of PIDG allowed money to sit idle in a bank account rather than funding projects … The Department is not using its position as the dominant funder to drive improvements in PIDG’s performance”.
It therefore recommends:
“The Department should use its 2015 multilateral aid review to develop a proportionate and risk-based approach to how it funds and oversees multilaterals, with a clear focus on whether its level of influence in multilaterals is commensurate with its level of funding, both in absolute terms and relative to other donors”.
Next, the committee says:
“Public confidence on spending on overseas aid through PIDG requires robust and independent information on the impacts achieved, which is currently lacking … While the Department has commissioned some independent evaluation of PIDG’s performance, it is too reliant on information from PIDG itself in making judgements about performance.
It therefore recommends:
“The Department should push PIDG to have a robust system to monitor and evaluate impacts using the Department’s own expertise to gain assurance over the adequacy of PIDG’s approach”.
Next, the committee says:
“The Department has failed to draw sufficiently on the insight of its country teams to influence the investment decisions PIDG is making. PIDG represents a major investment by the Department”.
I could go on.
That is not me; that is the Public Accounts Committee. That is why I believe that the department should not be responsible for deciding how value for money is evaluated but should give it to the independent committee that I suggest. I beg to move.
Lord Lawson of Blaby
Yes. I think that we have had sufficient discussion for the day about Clause 5(2), but we have still not had a satisfactory answer about the rather important Clause 5(1), which says:
“The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.
What the arrangements are should be and must be in the Bill. They were originally, because there was a schedule setting up a new body to do it. The schedule was taken out, and there is now a vacuum. We are not told in the Bill what these arrangements are, which body will ensure and evaluate the extent to which the ODA provided gives value for money, and so on.
My noble friend suggested in this amendment, “Why not use the ICAI and put it on a statutory basis?”, and that can be done. That seems very sensible, and I am rather suspicious about the rejection of this amendment, because it suggests that they are trying to weasel out of any effective independent evaluation. If they are not, what are the arrangements for the evaluation? Why not the ICAI, or why not restore the other body that was there originally? That must be in the Bill. I suspect, having heard the noble Lord’s obduracy on this point, that we will have to come to this again on Report. However, it is a very real point. No satisfactory answer of any kind has been given, either by the Minister or by the noble Lord, Lord Purvis.
Lord MacGregor of Pulham Market
My Lords, I share my noble friend’s concerns about this. We have been given very inadequate answers on this today, particularly from the Minister, and we will simply have to return to this on Report. It is a very important issue, because the size of the budget now, as my noble friend Lord Forsyth pointed out—about one-third of the defence budget—is huge. The taxpayer needs to be satisfied that the tasks have been properly and effectively carried out. It is one thing to set up an independent evaluation, which in the Secretary of State’s mind is an independent evaluation, and another thing to have one that is effective and that can convince us all that the department will undertake to get proper value for money.
That PAC report, which is probably one of the worst I have ever seen, does not give me a great deal of confidence that the Secretary of State is given total entitlement to set up the organisation that will reassure him about value for money. There are therefore some important distinctions here, and we have not yet had a satisfactory answer. As I said, it is a very important issue, and we shall have to return to it on Report. However, on that basis, I beg leave to withdraw the amendment.
“( ) The Secretary of State shall set up an independent inquiry into the independence, efficiency and effectiveness of the Independent Commission for Aid Impact.”
Lord MacGregor of Pulham Market
My Lords, it may seem a little odd, having been somewhat critical of how independent the Independent Commission for Aid Impact might be, to suggest that the Secretary of State should rely on that commission to set up an independent inquiry into independence, efficiency, and effectiveness. I do not wish to press this amendment; I am just seeking answers from the Minister.
In our Economic Affairs Committee report in March 2012—I accept that quite a lot could have changed since then—we were a bit concerned about the effectiveness of the Independent Commission for Aid Impact. It had only just been set up, so it was very early days, but I wanted to mention one or two of the points we made then, to enable the Minister to give us assurances that the concerns we had then should no longer be concerns.
We said that we were,
“concerned that the Commission is not in practice fulfilling the role which it has been given”.
That was largely based on the oral evidence that we received at the time in our inquiry, which failed to convince the committee that it was appropriately resourced for the work with which it was charged. That is a very important issue as regards our discussion on the previous amendment. How much the independent evaluating body is resourced is crucial. We went on to say that,
“it could be relied on adequately to fulfil its role. These are early days for ICAI, but we recommend that both Parliament and DFID monitor ICAI’s own effectiveness closely, and”—
this is the point—
“take steps necessary to ensure that both its work and its staffing are sufficient both in quality and in quantity for it effectively to discharge its duties”.
Therefore, the reason for tabling this amendment is to enable the Minister to reassure us on those points. I beg to move.
Baroness Northover
My Lords, I reassure my noble friends in relation to ICAI that it already reports to Parliament via the International Development Select Committee in the House of Commons. The International Development Committee scrutinises ICAI’s work; it holds a public hearing every year to consider ICAI’s annual report, and a special sub-committee has been set up to take evidence after the publication of each ICAI report. The committee also approves ICAI’s work plan. Noble Lords may also be aware—and this would have happened after my noble friend’s Select Committee reported—that a triennial review of ICAI was published in December 2013 and a further review is scheduled for 2016. Triennial reviews are designed to consider whether public bodies such as ICAI are meeting good standards of corporate governance, and so on, and whether they are still needed.
In addition to the above, the National Audit Office and International Development Committee can, of course, already review the independence, efficiency and effectiveness of ICAI if they wish to do so, and also provide regular assessments of value for money within DfID to the Public Accounts Committee of the House of Commons. I hear what my noble friend says about his previous concern being somewhat ameliorated, and I hope that this will give him further reassurance.
Lord Purvis of Tweed
My Lords, I have nothing to add from the point of view of the sponsors of the Bill to the reassurances that the Minister has provided. They are satisfactory, and I request that my noble friend withdraw his amendment.
Lord MacGregor of Pulham Market
I am grateful for that response, and it encourages me that the discussion that we had on the previous amendment on the role that we were giving to the independent commission is proper and correct, and that we need not have fears on that score. I am grateful to my noble friend for that answer, and I beg leave to withdraw the amendment.
EAC Report: Development Aid
Lord MacGregor of Pulham Market Excerpts(11 years, 6 months ago)
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Lord MacGregor of Pulham Market
That this House takes note of the report of the Economic Affairs Committee, The Economic Impact and Effectiveness of Development Aid (6th Report, Session 2010–12, HL Paper 278).
Lord MacGregor of Pulham Market
My Lords, I have great pleasure in moving the Motion that stands in my name. Before I attempt to summarise some of the key themes in our report I would like to make three preliminary points. First, I hope the House will conclude that it is a thorough piece of work. Our inquiry took nine months. We had, altogether, 30 sets of oral witnesses and written evidence from many more. Our report contains 28 conclusions and recommendations. I warmly thank our specialist adviser, Christopher Adam, Professor of Development Economics at St Cross College, University of Oxford, and our Committee Clerk, Bill Sinton, and his team for all their hard work, assistance and support to us.
Secondly, our report does not cover humanitarian aid for emergency relief following natural disasters, conflicts or social breakdown. We fully support Governments and NGOs in their responses to humanitarian emergencies which are no more than 10% of DfID’s budget. Our report focuses only on development aid which is nine-tenths of the official budget.
Thirdly, development aid is an emotive subject. There are many different views, strongly held. The members of our committee, who span the political spectrum and are members of all parties and of none, also hold strong views. I was anticipating an interesting and challenging chairmanship. In the event our report was unanimous, even on what we anticipated would be some controversial conclusions. I believe that that is because we based our report, as Lords’ reports do, on the evidence before us and the responses to the many questions we raised. I am delighted to see the interest that it has aroused, not least judging by the number of your Lordships who wish to speak in this debate. I anticipate that there will not be unanimity in the Chamber—indeed, the Government have already disagreed in part with our report—but I repeat that we were unanimous.
As the first words of our report say:
“One in five of the world’s population still lives on less than $1.25 a day. This poverty is a source of great human misery, and, if effective ways can be found to reduce it which are acceptable to the taxpayers of the developed world, then reduce it we should”.
In other words, the aim of our report is to see how best donors, and in particular the British Government, can deploy aid to reduce poverty and promote sustainable development while getting value for taxpayers’ money. We set out to look beyond the total money spent to assess the impact, effectiveness and outcomes of aid programmes as well as their cost.
It is worth putting development aid in a wider economic context. Official aid from OECD member states and international organisations to developing countries has, as we all know, grown fast over the past 50 years. In 2010, official aid was about $130 billion in total, but private capital flows to developing countries were vastly greater—more than $1 trillion in total, made up largely of foreign direct investment, remittances and portfolio investment. Put another way, private capital flows to developing countries are about 10 times official aid flows. To this should be added developing countries’ export earnings, which in 2010 were more than 40 times official aid flows. In summary, official aid is about 2% of financial flows from developed to developing countries. As Professor Paul Collier wrote:
“Aid is almost a sideshow in the portfolio”.
The global picture shows that trade and capital flows, not aid, are the real external drivers of economic progress in the developing world.
It is also worth recording, particularly in the context of the 0.7% target, just how relatively well the UK does in aid spending compared with most other countries. In terms of actual amounts, as figure 3 in our report shows, we are the second largest donor, with only the US ahead of us. We compare equally well on the proportion of our gross national income spent on aid. Indeed, all of the six countries ahead of us contribute much smaller amounts of total aid, with the possible exception of the Netherlands. On this measure, the proportion of GNI, the US is well down the list.
To put aid in a broader financial context is not to dismiss its importance. The global figures mask a greater degree of aid dependency in some of the poorest developing countries, which struggle to attract private financial flows. Official aid is the direct contribution on behalf of their citizens which Governments, including our own, make to development. The sums involved are very substantial and growing fast. For example, DfID’s programme increased by more than half in four years to £7.7 billion in 2011 and will rise to £12 billion by 2013. This rate of growth is in striking contrast to the restraint imposed in current economic circumstances on most other public spending programmes. Our report is largely about the aid budget’s impact on development and how far it represents value for money.
An evaluation of the effectiveness of the aid programme needs to start from its aims and the means deployed to achieve them. The basic aim of aid, as set out in the International Development Act 2002, is to reduce poverty by promoting sustainable development. We fully support this aim. We are less clear about means. We are glad that DfID enjoys a high reputation as an aid agency, and that came out clearly in evidence to us. However, directly funded aid projects are now rare. DfID aid goes mainly on financial support for programmes devised and managed by host Governments in, say, education, health or training. The DfID contribution is increasingly made through multilateral organisations such as the European Commission or one of the UN bodies. As a result, DfID is often not in full control of its spending programmes and their effectiveness and value for money or otherwise depends largely on the efforts of others.
We welcome the review of bilateral aid carried out by the Government and the decision of the previous Secretary of State to run down bilateral aid programmes in various countries including China, and to concentrate bilateral aid on 27 countries. Indeed, at this point, let me stress that we strongly supported in many of our recommendations the new directions and policies being pushed through with such vigour by the previous Secretary of State. However, more needs to be done and many of our recommendations follow that course. Let me touch on some of them.
The Government should prepare an early exit strategy from the very substantial bilateral aid programme for India. It is true that India’s impressive economic growth and technological attainments coexist with widespread extreme poverty, but British development aid to the poorest Indian states may provide a perverse incentive to the Indian Government to use less of their own resources to relieve poverty. We recommend that the Government should make plans to run down the British bilateral programme in India.
We also welcome DfID’s recent decision to cease funding some ineffective multilateral programmes, but here again more needs to be done. We advocate reduction of DfID funding of aid programmes run by the World Bank and the UN Development Programme, at least until a revaluation of their work is carried out.
We support DfID’s commitment to reduce general budget support—that is, support that can be spent in any areas—in the coming years, but are concerned that while budget support for specified sectors is to increase, much of DfID’s funding of aid programmes by multilateral agencies goes to budget support. The trouble with budget support is that money spent in that way is difficult to monitor and account for, and therefore does not help build the British taxpayer’s confidence that aid funds are being well spent.
We fully support and endorse the high priority that the Government give to the fight against corruption, but they need to make a greater impact on this front, where the level of fraud identified by DfID in use of its aid funds—which it has assessed at a little over £1 million a year—seems paltry and implausibly low. Given the critical reports of the National Audit Office, the Independent Commission for Aid Impact and some of our expert witnesses, we believe that DfID must make much more stringent efforts to detect and deal with corruption—not least because, as we have seen recently, it is increasingly becoming the focus of some parts of the media. The spotlights that are being shone on some of these issues will increasingly undermine public confidence in an expanding aid budget. We welcome the focus that the previous Secretary of State put on this and his setting up of the independent commission. However, I have to say that the commission was not among our most impressive witnesses, and it seemed to be seriously underresourced.
There is much to commend in the Government’s new approach to running the aid programme. As well as the range of issues of which I have spoken, there is the Government’s commitment to disperse more aid via the private sector and to badge British aid more clearly, which we welcome. Time prevents me from dealing with other important recommendations in our report, which I hope other noble Lords will comment on. For example, the Government should do more to explore with other G20 countries the scope to discourage illicit capital flight from developing countries. We also have recommendations on the quality of aid through multilateral agencies, which I have briefly mentioned, including the World Bank, the UN Development Programme and the European Commission’s aid programmes—including the fact that much of the funding of those agencies may be used for general budget support. I have noted the Government’s response on this point, which I welcome. We also comment on the vital role of the private sector.
I come now to possibly the most controversial aspect of our report and our recommendation. The committee parts company decisively with the Government over their commitment rapidly to reach the UN target of spending 0.7% of gross national income, or about £12 billion a year, on aid. Whatever its merits when it was adopted in 1970, we do not accept that meeting the UN target by 2013 should be the main yardstick of British aid policy. This part of our report is so important that it is worth quoting our main reasons from the report itself. In summary, we gave four reasons. The first was that the policy,
“wrongly prioritises the amount spent rather than the result achieved”.
Secondly,
“it makes the achievement of the spending target more important than the overall effectiveness of the programme”.
Thirdly,
“the speed of the planned increase risks reducing the quality, value for money and accountability of the aid programme”,
and, fourthly,
“reaching the target increases the risk identified in [the report] that aid will have a corrosive effect on local political systems”.
I speak as a former Chief Secretary to the Treasury. For me, it is always axiomatic that all areas of government spending are rigorously examined at the appropriate times within, but also outside, the individual government departments to ensure of course the right priorities but, above all, that all taxpayers’ money is effectively spent and gives value for money. No department should be immune from Treasury scrutiny and evaluation compared with other departments’ programmes. That is particularly important when a key priority is reducing the fiscal deficit. I can think of no other department where the department itself will be the sole judge of value for money, which is effectively what the commitment implies, and where the department will feel that it is, above all, judged by whether it pushes the money out of the door, rather than whether it is properly spent. In the committee’s view, therefore, the core of aid policy should be choosing and funding the best ways of promoting international development and stability, rather than finding new ways to spend ever increasing resources.
We therefore urge the Government to drop their commitment to enact legislation to enshrine in British law an obligation on future Governments always to comply with the UN target of spending 0.7% of gross national income on aid. It would deprive future Governments of the flexibility to respond to changing circumstances at home and abroad. It seems likely that the scramble to meet the target will reduce the scope to achieve the better focus and accountability in the aid programme we advocate in our report, and ring-fencing aid spending in a uniquely privileged position where it can never be cut, irrespective of economic conditions or priorities, seems most likely to bring aid into disrepute with the British public. We are very supportive of many of the directions and policies now being pursued by DfID but we believe that there are areas where it can go further and we urge it to do so. Of course, the one exception is the commitment to an aid target of 0.7%.
In conclusion, I thank, above all, my parliamentary colleagues on the committee for the huge contribution that they made. They were stimulating, probing, thoughtful, experienced and always a pleasure to work with. I wish that I had more time to comment on other parts of our report but, given the lateness of the hour and in the interests of other speakers, I commend the report to the House.
Lord MacGregor of Pulham Market
My Lords, it is impossible to sum up this debate in a couple of minutes, but it has reinforced the point made early on by the noble Lord, Lord Hannay of Chiswick, that we need more opportunities to discuss these issues, for there have been many excellent contributions tonight and we have all been constrained by the requirement to make short speeches.
A number of them, such as those of the noble Lords, Lord Boateng, Lord Shipley, Lord Stern and Lord Crisp, and the noble Baroness, Lady Jenkin, were based on the thought that it is real outcomes on the ground that matter. The noble Lord, Lord Shipley, gave many examples of what the former Secretary of State Andrew Mitchell had done in this respect and of which he is so justly proud. I was very pleased at the many favourable comments made about the record of Andrew Mitchell in that role and I would be very happy to pass on to him all those compliments from all parts of the House.
Real outcomes on the ground were the basis of much of the evidence that we received and the thrust of many of our recommendations. I paid tribute in my opening remarks, as we did in our report, to the work of DfID and the first-class reputation that it has world wide.
I make no apology for our committee putting emphasis on the effectiveness of aid, for it is the effectiveness of aid which is crucial for those who most need our help. I am grateful to all who have contributed during this debate.
Motion agreed.