Aid Reviews

Baroness Harman Excerpts

Tuesday 1st March 2011 Commons Chamber

[The Secretary of State for International Development (Mr Andrew Mitchell)]

With permission, Mr Speaker, I should like to make a statement about the Government’s bilateral and multilateral aid reviews, which are published today.

The coalition Government’s decision to increase the UK’s aid budget to 0.7% of national income from 2013 reflects the values we hold as a nation. It is also firmly in Britain’s national interest, but this decision imposes on us a double duty to spend this money well. On my first day in office, I took immediate steps to make our aid as focused and effective as possible. I commissioned reviews of the Department for International Development’s bilateral programmes in developing countries and of the UK’s aid funding to international organisations. These reviews have been thorough, rigorous, evidence-based and scrutinised by independent development experts. They will fundamentally change the way in which aid is allocated.

Recent events in north Africa and the wider middle east have demonstrated why it is critical that the UK increases its focus on helping countries to build open and responsive political systems, tackle the root causes of fragility, and empower citizens to hold their Governments to account. It is the best investment we can make to avoid violence and protect the poorest and most vulnerable. In the middle east and north Africa, we are monitoring events closely and will respond as appropriate.

The bilateral aid review considered where and how we should spend UK aid. Each DFID country team was asked to develop a “results offer” setting out what they could achieve for poor people over the next four years. Each offer was underpinned by evidence, analysis of value for money, and a focus on girls and women. The results offers were scrutinised by more than 100 internal technical reviewers and a panel of independent experts. Ministers then considered the whole picture, deciding which results should be prioritised in each country. Consultation with civil society and other Government Departments was undertaken throughout.

As a result of the bilateral aid review, we will dramatically increase our focus on tackling ill health and killer diseases in poor countries, with a particular emphasis on immunisation, malaria, maternal and newborn health, extending choice to girls and women over when and whether they have children; and polio eradication. We will do more to tackle malnutrition, which stunts children’s development and destroys their life chances, and do more to get children, particularly girls, into school. We will put wealth creation at the heart of our efforts, with far more emphasis on giving poor people property rights and encouraging investment and trade in the poorest countries. We will deal with the root causes of conflict and help to build more stable societies, as people who live amidst violence have no chance of lifting themselves out of poverty. And we will help the poorest, who will be hit first and hardest by floods, drought and extreme weather—the effects of climate change.

As a result of this review, we have decided to focus British aid more tightly on the countries where Britain is well placed to have a significant long-term impact on poverty. By 2016, DFID will have closed significant bilateral programmes in 16 countries. This will be a phased process, honouring our existing commitments and exiting responsibly. These countries are China, Russia, Vietnam, Cambodia, Moldova, Bosnia, Cameroon, Lesotho, Niger, Kosovo, Angola, Burundi, Gambia, Indonesia, Iraq and Serbia. This will allow us to focus our bilateral resources in the following 27 countries: Afghanistan, Bangladesh, Burma, Democratic Republic of the Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, the occupied Palestinian territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, Sudan, Tajikistan, Tanzania, Uganda, Yemen, Zambia and Zimbabwe. Together, those countries account for three quarters of global maternal mortality, nearly three quarters of global malaria deaths and almost two thirds of children out of school. Many of them are affected by fragility and conflict, so we will meet the commitment made through the strategic defence and security review to spend 30% of British aid on supporting fragile and conflict-affected states, and to help some of the poorest countries in the world to address the root causes of their problems.

We will have three regional programmes in Africa, Asia and the Caribbean, and an ongoing aid relationship with three aid-dependent overseas territories, namely St Helena, the Pitcairn Islands and Montserrat.

The multilateral aid review took a hard look at the value for money offered by 43 international funds and organisations through which the UK spends aid. It considered how effective each organisation was at tackling poverty. It provides a detailed evidence base on which Ministers can take decisions about where to increase funding, where to press for reforms and improvements, and in some cases where to withdraw taxpayer funding altogether. The 43 multilateral agencies fall into four broad categories.

First, I am delighted to tell the House that nine organisations have been assessed as providing very good value for the British taxpayer. They include UNICEF, the Global Alliance for Vaccines and Immunisation, or GAVI, the Private Infrastructure Development Group, and the Global Fund to Fight AIDS, Tuberculosis and Malaria. We will increase funding to those organisations, because they have a proven track record of delivering excellent results for poor people. Of course there is always room for improvement and we will still require strong commitments to continued reform and even better performance.

Funding for the next group of agencies—those rated as good or adequate value for money, such as the United Nations Development Programme and the World Health Organisation—will be accompanied by specific pressure from the UK for a series of reforms and improvements that we expect to see in the coming years.

We are placing four organisations in special measures and demanding that they improve their performance as a matter of urgency. Those organisations are UNESCO, the Food and Agriculture Organisation, the development programmes of the Commonwealth Secretariat, and the International Organisation for Migration. Those organisations offer poor value for money for UK aid, but they have a potentially critical niche development or humanitarian role that is not well covered elsewhere in the international system, or they contribute to broader UK Government objectives. We expect to see serious reforms and improvements in performance. We will take stock within two years and DFID’s core funding may be reconsidered if improvements are not made.

Finally, the review found that four agencies performed poorly or failed to demonstrate relevance to Britain’s development objectives. The review therefore concluded that it is no longer acceptable for taxpayers’ money from my Department to continue to fund them centrally. I can therefore tell the House today that the British Government will withdraw their membership of the United Nations Industrial Development Organisation, and that DFID will stop voluntary core funding to UN-Habitat, the International Labour Organisation and the UN International Strategy for Disaster Reduction. That will allow more than £50 million of taxpayers’ money to be redirected immediately to better performing agencies. We are working closely with other countries to build a coalition for ambitious reform and improvement of all multilateral agencies.

As a result of the reviews, over the next four years British aid will secure schooling for 11 million children, which is more than we educate throughout the UK, but at 2.5% of the cost; vaccinate more children against preventable diseases than there are people in England; provide access to safe drinking water and improved sanitation to more people than there are in Scotland, Wales and Northern Ireland combined; save the lives of 50,000 women in pregnancy and childbirth; stop 250,000 newborn babies dying needlessly; support 13 countries to hold freer and fairer elections; and help 10 million women to access modern family planning.

I believe that those results, which will transform the lives of millions of people across the world, will make everyone in the House and this country proud. They reflect our values as a nation—generosity, compassion and humanity. However, those results are not only delivered from the British people; they are for the British people. They contribute to building a safer, more stable and more prosperous world, which in turn helps to keep our country safe from instability, infectious disease and organised crime.

Aid can perform miracles, but it must be well spent and properly targeted. The UK’s development programme has now been reshaped and refocused so that it can meet that challenge. I commend this statement to the House.

[Ms Harriet Harman (Camberwell and Peckham) (Lab)]

I thank the Secretary of State for his statement and for giving me advance copies of it.

I welcome the Secretary of State’s declaration that our aid programme is both morally right and in our national interest. As he argues against those who decry aid, he will have our strong support. This is not just about charity; it is about justice, tackling global inequality and fulfilling our responsibilities to the world. We put development at the heart of our agenda because we believe we must struggle for a fairer and more equal world.

As things change in the world, as we are seeing in north Africa and the middle east, it is right to review our aid programme, but what should not and must not change is the commitment to spend 0.7% of our national income on aid by 2013. There must be no slipping back on that. Will the Secretary of State tell the House when he will bring forward the Bill to put that promise into law?

Will the Secretary of State campaign vigorously to show that our aid matters and saves lives? The girls and boys sitting in classrooms in Nepal, the Nigerian women who no longer have to walk miles to fetch water and the millions of children who no longer die from preventable disease are proof of that. Is not that the way to build support for aid, rather than by announcing as “new” decisions that we had already made? Will the Secretary of State admit that there is nothing new about ending significant bilateral aid to Russia? We ended it in 2007. Grand gestures of shutting down already closed programmes create a misleading picture of aid and undermine rather than support it. He should know better. As tackling poverty depends greatly on trade as well as aid, will he implement the Bribery Act 2010 now?

Will the Secretary of State acknowledge that after 13 years in which the Labour Government tripled the aid budget, reversing the cuts of the previous Tory Government, this country led the world in tackling global poverty? Is he not concerned that that leadership, which is so important during a global economic downturn, is undermined by his decision to freeze the percentage of aid as a share of national income for the next two years? Can he tell the House how many lives will be lost and how many fewer children will go to school because of the lost £2.2 billion in aid?

Will the Secretary of State assure the House that he will protect his Department from raids by other Government Departments? DFID’s budget is for the world’s poorest, and he must not let other Government Departments use his budget as a source of cash. Will he reclaim the £1.8 million that he gave to fund the Pope’s visit? That was not tackling global poverty, nor was his Department’s loan of £161 million to the Turks and Caicos Islands. He has to be strong and stop his ministerial colleagues using DFID as a hole in the wall.

In our 2009 White Paper, we recognised the need to help people who suffer the twin problems of grinding poverty and living in an area ravaged by violence. It is right that we co-ordinate our development, diplomatic and security efforts, but our aid programme must not become subsumed in our military and security objectives. Of course, in places such as Yemen it is right that our aid efforts complement our foreign and security policy objectives where they can. We are absolutely committed to upholding our security and countering terrorism, but that must be the responsibility of the Ministry of Defence and the Foreign and Commonwealth Office. Will the Secretary of State confirm that poverty reduction will remain the focus of DFID money?

I welcome the Government’s continuation of Labour’s commitment to the international co-ordination of aid through multilateral organisations, and in particular the Secretary of State’s reaffirmation of the EU’s work, but will he reconsider his decision on the ILO?

The Secretary of State’s men-only ministerial team talk a lot about how they will empower women in the developing world. Why, then, has he still not decided how much he will contribute to the new UN women’s agency? Why should the women of the world have to wait for the men in his Government to put their money where their mouth is?

On bilateral aid, we welcome the focus on setting aid objectives for each country, but did the recipient countries play a part in that? Will the Secretary of State continue the spirit of the 2005 Paris declaration, which put the developing country in the driving seat and did so much to end the problematic post-colonial relationship between donor and recipient countries? Will he confirm that the decisions to cut aid to very poor countries such as Niger and Lesotho involved co-ordination with other donor countries, to ensure that our decisions do not leave them high and dry? Will he also explain his decision to end aid to Burundi, where there is deep poverty, and which is in the great lakes region, where there is still instability?

I welcome the Secretary of State’s continuation of the previous Labour Government’s focus on results and value for money. We made progress towards the millennium development goals, such as cutting maternal mortality and increasing child survival. To say that that was wasting money is an insult to all those who worked on those programmes, and it is to deny the value of those lives that were saved. I hope we will hear no more of that.

With more than 1 billion people still living in poverty, the Secretary of State is right to recognise that there is a long way to go. As Secretary of State for International Development, he will have the Opposition’s support. We will back him in his work if he keeps faith with British generosity and our duty to the world’s poor.

[Mr Mitchell]

I think I will take that as qualified support for the Government’s position.

The right hon. and learned Lady emphasises that it is morally right and in our national interests to stand by the very strong commitments that have been made by all parties in the House, which I welcome. We made it absolutely clear when we took office that in sorting out the dreadful economic inheritance we received from the Labour Government, we would not balance the books on the backs of the poorest people in the world, and we honour that promise today. On that point, let me make it clear to her that the legislation agreed before the election in support of the 0.7% pledge from 2013 will come before the House as soon as the parliamentary business managers can find a convenient time.

Let me make it clear that I have cut back the programmes in Russia and China that we inherited. The programme in Russia will be completed by the end of April, and the programme in China will be completed by the end of March, but the coalition Government have made the decision to rein back those programmes—we inherited a continuing programme.

I should make it clear to the right hon. and learned Lady that support came in equal proportions from a number of British Government Departments involved with the Pope’s visit, but that included DFID because, as she will be aware, the Catholic Church and its organisations deliver health care and education in some of the most difficult parts of the world, and DFID has a very strong relationship with the Church on that basis. However, let me put her mind at rest: my Department’s share of the cost of the visit did not come out of the 0.7% budget or the official development assistance budget.

The right hon. and learned Lady also asks whether other Departments are raiding the DFID budget. She should know, because we have made it absolutely clear, that we will stand by the OECD development assistance committee definition of what is and is not aid. We stand by that, and it governs what can and cannot be spent by the British taxpayer under the ODA budget.

The right hon. and learned Lady referred to the guarantee that has been so skilfully negotiated in the Turks and Caicos Islands by my right hon. Friend the Minister of State. The islands are a dependent territory, and we stand by our dependent territories—she will be aware that that is one of the first commitments in the International Development Act 2002. However, thanks to my right hon. Friend’s skill, we have negotiated a guarantee while they sort themselves out, rather than funding from the British taxpayer.

The right hon. and learned Lady asked whether we would reconsider our decision about the ILO. I emphasise to the House that the decision came from a recommendation in the multilateral aid review, which I strongly encourage her to look at, and in which the professional analysis reads:

“The ILO has a wide range of organisational weaknesses including weak cost control and results reporting”

and

“limited transparency”.

It continued:

“We will consider, on a case by case basis, funding the ILO in country on specific projects—provided it represents good value for money and is consistent with UK poverty reduction goals”.

That is a fair analysis. However, I invite hon. Members who do not agree with it to have a look at the multilateral aid review and reach their own conclusions. I want to emphasise that the four elements of a decent work agenda—employment, social protection, labour standards and social dialogue—form a core part of my Department’s work in this area, and will continue to do so.