Development Aid Budget

Baroness Warwick of Undercliffe Excerpts

Monday 3rd July 2017 Lords Chamber

[Baroness Warwick of Undercliffe (Lab)]

My Lords, I thank the noble Baroness, Lady D’Souza, for introducing this debate and giving us a timely opportunity to make the case for the importance of UK aid and of continuing to spend it effectively.

First, I echo what others said in recognising the tremendous work the UK has already done and continues to do on the international aid front. We do it quite simply because giving aid is the right thing to do. More than 700 million people today live in extreme poverty. The challenges they face include food shortages, disease, natural disasters and conflict. Limited access to healthcare and education compounds and continues the cycle of poverty. We can help—and we do. The UK gives aid because it makes a difference. UK aid is effective. The charity ActionAid reminds us that UK aid has helped to immunise more than 55 million children against preventable diseases and provides 60 million people with access to water, sanitation or interventions to promote hygiene.

My noble friend Lord McConnell pleaded persuasively not just for such clear, immediate outcomes—good as they are—but for longer-term commitments that deliver wider-scale outcomes. I cite one particular programme that seems to exemplify this: in humanitarian aid, the UK led the way in tackling the Ebola crisis in west Africa. I have mentioned before in this House the expertise at King’s College London, which contributed so much to the UK’s role in helping Sierra Leone conquer this terrible disease. King’s strong background in global health and the creation of the King’s Sierra Leone Partnership meant it was able to step up its work in response to the Ebola outbreak, enabling it to treat an estimated one-quarter of the Ebola cases recorded in the country. But since then King’s has contributed enormously to healthcare capacity building in the region, demonstrating the vital role that university health partnerships can have in creating sustainable healthcare systems for the long term and globally. We should be able to demonstrate sustained benefits for the longer term in all our aid programmes.

It is to this Government’s credit that they have pledged to continue to meet the UK’s target of spending 0.7% of our gross national income on official development assistance—ODA, as it is normally referred to. This is entirely in line with the promises we made at the 2005 G8 summit. Of the 15 EU countries that made the pledge in 2005, only the UK and Germany have risen to the challenge since then. The UK was the first to meet that target—in 2013, before it became a legal requirement in 2015. As others have observed, the UK was one of just eight countries to meet that target last year. Indeed, eight of the 15 have actually reduced their ODA spending as a proportion of GNI since 2005. To meet our commitment, our ODA spending nearly doubled between 2005 and 2016, from £7.4 billion to £13.6 billion in today’s terms. To continue to meet that commitment, we will need to increase our ODA spending by another £1 billion from now until 2021.

As we have heard, most of our ODA or foreign aid spending is done by the Department for International Development. Between 2010-11 and 2016-17, spending by DfID rose by 24%—at a time when budgets for departments other than health, education and defence were cut by an average of 28%. It is worth noting that bilateral aid makes up almost two-thirds of UK ODA. This means it goes to specific countries, regions or programmes, and spending is controlled almost entirely by us as a donor, unlike multilateral aid, which is channelled through organisations engaged in development work, with little condition on exactly how the funds are spent.

The recent IFS report, The Changing Landscape of UK Aid, highlights the fact that the UK—specifically, the Department for International Development—is seen internationally as,

“a leader in shaping the global development agenda”.

Importantly, the report also notes that despite being one of the smallest areas of government spending, it is one of the most scrutinised. The International Development Committee, the National Audit Office, the Public Accounts Committee and the Independent Commission for Aid Impact all have a monitoring role to ensure that overseas aid is properly spent. DfID is rated in the highest category in the international Aid Transparency Index, and the most recent peer review of the UK aid strategy by the OECD in 2014 was largely positive about the UK’s performance. No less a philanthropist than Microsoft founder Bill Gates has said that DfID is,

“one of the most effective, efficient, and innovative aid agencies in the world”.

I was filled with alarm, therefore, when I realised that the strategic focus of the UK aid commitment has shifted to support aid “in the national interest”. This approach seems to mean that when Britain is determining how it will meet its responsibility to the world’s poorest, it will make a judgment based on what,

“best serves and protects its own security and interests”.

So while we are reducing poverty, we are also looking to improve the business climate and create international business opportunities for UK companies. I suspect that there will be huge challenges in the evaluation of the impact of these two very different aims. I cannot help but also feel that in our relationships with our partners overseas, it will be counterproductive. The noble Lord, Lord Purvis, raised similar concerns, and I will listen very keenly to the Minister’s response to his questions.

Money is being diverted to other government departments which may not be subject to the same scrutiny as DfID, as we have heard already. Between 2014 and 2016, there was a 12 percentage point drop in the proportion of the ODA budget received by DfID. In 2017-18, 20% of the UK’s ODA is due to be spent by departments other than DfID or by cross-government funds. That is set to rise to 25% by 2019-20. I feel this should be a matter of real concern, particularly in relation to evaluation, because while DfID is a world leader in delivering aid, the aid spent by other departments does not meet the same high standards. Where DfID was rated very good, the highest category in the Aid Transparency Index, the Foreign Office was ranked poor and the MoD very poor. How can we be sure that the Government will live up to their promise that all departments will follow the same high standards as DfID on fighting poverty? How can we be sure that they will remain transparent and accountable?

A further concern is the recent indication that international definitions of development assistance will be changed to,

“better reflect the breadth of our assistance around the world”.

Redrawing the definition of what constitutes foreign aid to include work that the UK already does abroad but which cannot currently count towards the 0.7% target has worrying echoes of the changes to the definition of child poverty a couple of years ago. The Government have built on a great track record of generosity from the UK and a strong reputation for effective aid. Will the Minister tell the House how he will ensure that this is not put at risk by poor evaluation of the impact of spend from other government departments?