Development Aid Budget

Baroness Sheehan Excerpts

Monday 3rd July 2017 Lords Chamber

[Baroness Sheehan (LD)]

My Lords, I add my congratulations to the noble Baroness, Lady D’Souza, on securing this important debate and I thank her for her thought-provoking opening remarks. I pay tribute to the contributions that we have heard across the Floor of the House and to the wonderful insight and experience that noble Lords present have brought to the debate.

When the aid budget is under attack in the press—as it is—it is important to ensure that hard-earned taxpayers’ money is shown to be spent effectively when delivering policy that helps the poorest in the world. Collecting data on inputs, outputs and outcomes which allow us to measure its impact is essential if we are to do that.

UK aid works, not only in helping some of the poorest people in the world to live in dignity and to begin to take charge of their own lives and livelihoods through economic development but benefiting us in the UK. The Overseas Development Institute recently published a report entitled Aid, Exports and Employment in the UK, showing how in 2014 UK direct bilateral aid generated an increase in UK exports and provided an estimated 12,000 extra UK jobs. It is a win-win relationship. I make this point because all too often DfID’s work is castigated in the press and those of us who support the fabulous work that it is doing need the ammunition to fire back.

UK aid strategy is changing. Over the past several years, more and more of the UK’s ODA is being spent by departments other than DfID through the FCO’s Prosperity Fund, the Conflict, Stability and Security Fund, the Ross Fund and few other pots in other government departments, in total amounting to a good third of the overall ODA budget. While it falls to DfID to ensure that all UK ODA complies with the OECD’s ODA rules, DfID, nevertheless, in its annual report and accounts makes it clear that aid administered by other departments is the responsibility of the Secretary of State of those individual departments. Those other departments have published precious little information about the increasingly large sums of ODA they spend. This situation must be rectified.

DfID, on the other hand, is in many ways an exemplar department when it comes to openness and transparency, which is vital if we are to collect the data we need to assess development impact. My noble friend Lord Purvis referred to the Independent Commission for Aid Impact which scrutinises DfID’s work and provides independent evaluation of all UK aid spending. The noble Earl, Lord Sandwich, gave useful information about the work in depth that ICAI carries out. As well as ICAI, DfID also commissions independent evaluations such as the DfID evaluation annual report, and bilateral and multilateral reviews give in-depth analysis of country and sector expenditure. In addition, DfID is subject to further external scrutiny by the International Development Committee, the Public Accounts Committee and the National Audit Office, as we have already heard.

The other departments do none of this and, although ICAI’s remit includes scrutiny of ODA spend by all UK government departments, this has not happened. When may we expect ICAI to undertake a review of ODA spend by other departments?

Since the last general election just a few weeks ago we have seen changes to ministerial posts such that we now have DfID Ministers with shared responsibility across other departments. Can the Minister confirm that this bodes well for future transparency? While DfID has displayed openness and transparency, there are a number of wider issues that I would like to raise where some joined-up thinking could maximise the impact of the UK aid budget.

The first is in respect of the policy on energy, an issue referred to quite extensively by the right reverend Prelate the Bishop of Truro. DfID is doing some good work on ensuring clean energy access for people in developing countries. However, at the same time the UK Government overall have spent more on fossil fuel projects in developing countries than on renewable energy projects. This needs to change as it is counterintuitive to help developing countries to mitigate against and adapt to climate change but to fund so many fossil fuel projects as well. In the same vein, DfID should use its position as a major shareholder in the World Bank to persuade it to switch to supporting more renewable energy projects. Between 2011 and 2015 the World Bank invested more in oil, gas and coal than it did in renewables.

Secondly, I want to talk about the Commonwealth Development Corporation. The CDC Act came into force earlier this year as a consequence of which, by 2020, a massive total of £6 billion will be made available to the CDC by DfID. In spite of the plethora of reports produced by DfID and its scrutineers, we still lack sufficient data on CDC’s activities. It must publish what it funds and it must do so in a timely way, given that all capital transfers to the CDC as of 2014 count immediately as ODA. Why is it that other development finance institutions such as the World Bank, the African Development Bank and the Asian Development Bank all appear and are rated in the multilateral aid review, but the CDC does not? Where in the department’s bilateral and multilateral reviews can the public see what impact the CDC is having?

I want to deviate from my speech a little and say in response to the point made by the noble Baroness, Lady D’Souza, that sound methodologies must be developed. The CDC does have at its disposal £5 million for just this purpose, but it lies unused. I think that we can put pressure on the CDC to use that money to develop some of the methodologies that are going to be necessary.

Lastly, I should like to talk about double standards. Britain was a driving force in ensuring that women and girls were front and centre in the drawing up of the UN sustainable development goals. Our commitment to this group, representing half of the world’s population, is enshrined in legislation and our then Secretary of State was a founding member of the UN High-Level Panel on Women’s Economic Empowerment. The UK has been a driving force in putting issues such as gender-based violence in conflict zones, forced marriage, teenage pregnancy and FGM at the forefront of international decision-making, so when a high-scoring project, properly assessed for impact and aimed at tackling the serious issues facing girls in developing countries, is sacrificed on the altar of the Daily Mail’s vitriol, something is seriously wrong with decision-making at the highest level. I am talking of course about Yegna, the Ethiopian Spice Girls. To make an impact, we must be consistent. There is little point in carrying out assessments and then ignoring the results, and I hope that cash transfers will not go the same way.

The Conservative Party’s manifesto stated that the party will,

“work with like-minded countries to change the rules”,

related to overseas development assistance. Will the Minister share with us what definition of aid the Secretary of State will be content with and at what point she will depart unilaterally from the OECD’s ODA definition, as she has stated she is prepared to do? Where is her red line? For my part I am concerned that this Government’s preoccupation is solely with Brexit and it is no secret that the Secretary of State herself is wedded to a hard Brexit. Will the Minister reassure the House that there will be no return to tied aid as the Government pull out all the stops to get trade deals in the limited time at their disposal? Will he further reassure your Lordships’ House that trade with developing countries will continue to support development, including through improving market access, strengthening capacity to trade and building better livelihoods?

I end on a point made by the noble Lord, Lord McConnell of Glenscorrodale. The International Development Committee produced a damning report on the Government’s implementation of the UN’s sustainable development goals. There is also precious little mention of them in the bilateral or multilateral aid reviews. This is in spite of this commitment made at the G20 summit in the middle of last year:

“The UK is intending to publish a report in due course on its contribution to the Global Goals which will cover both international and domestic implementation”.


When can we expect this report?