Official Development Assistance

Lord Faulkner of Worcester Excerpts

Thursday 24th June 2021 Grand Committee

[The Lord Bishop of Worcester]

My Lords, I echo the thanks expressed to the noble Lord, Lord Campbell, for this debate. There are many reasons for honouring the manifesto commitment to 0.7% aid, of which the Conservative Party can be proud. I will focus on just one.

Our National Health Service has done a fantastic job during the pandemic and been rightly lauded for doing so. One of the reasons for its success is its superb workforce, no fewer than 170,000 of whom are foreign, the vast majority from poorer countries which are struggling in the face of the pandemic. Figures show that Indians make up the largest number of foreign staff members at 27,000, followed by Filipinos at 23,000. Ghana provides over 3,000, Zimbabwe 4,500 and Pakistan 4,400. The fact is that we are taking more out of developing countries, when we poach their doctors, nurses and other skilled professionals, than we are putting in through aid.

I know from our close relationship in the diocese of Worcester with Morogoro in Tanzania how great is the shortage of health professionals in the developing world and how difficult it is to recruit, train them and pay for that training. Though the noble Baroness, Lady Harding, talks of reducing our reliance on foreign employees, Matt Hancock speaks of a new Windrush generation, to recruit the best from abroad. The Chancellor of the Exchequer has just been quoted as observing that it is difficult to justify the aid budget in the present circumstances. Is not the sad truth that, as we break our promise of 0.7% aid to the poorest in our world, we are taking more out of the developing world than we are putting in? Does the Minister agree that, in so doing, we are stymying the crucial effort to eradicate the pandemic worldwide, which we really should be ensuring happens?

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

The noble Baroness, Lady Young of Old Scone, has withdrawn, so I call the noble Lord, Lord Sarfraz.

[Lord Sarfraz (Con)]

My Lords, last week our permanent envoy to the UN said that the situation in Myanmar is fast becoming a humanitarian crisis and that 60% of healthcare facilities are not functioning. I have spoken to a number of NGOs on the ground, and their message is consistent. They are struggling with resources. I therefore welcome the Government’s announcement that we will reprioritise our spending towards urgent humanitarian needs in Myanmar.

I would be grateful if my noble friend the Deputy Leader could tell us what progress has been made on reducing our reliance on consultants and advisers in deploying our overseas development assistance? Looking across our portfolio, it is incredible that the same names appear over and over again. For example, take the Palladium group. It is hired by us to work on dozens of projects across the world. It operates in 90 countries and claims expertise in every aspect of development: healthcare, education, environment, infrastructure—it does it all. There are half a dozen organisations like it which are repeatedly mentioned across our country reports. We are propping up a development industry. Between them, they employ hundreds of consultants and grant writers. As a result, smaller, local, less polished but much more impactful organisations never get a chance to partner with us. They now need us more than ever before. As we reprioritise our commitments, let us also broaden who we work with; even if they do not have glossy presentations or host global development summits, they may well give us much more value for money.

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

The noble Lord, Lord Cashman, is unable to take part in the debate, so I call the noble Lord, Lord Bruce of Bennachie.

--- Later in debate ---

[Earl Howe (Con)]

My Lords, I begin by thanking the noble Lord, Lord Campbell, for tabling this Question and for the long experience that he has brought to bear on the subject before us. I add my thanks to all other speakers for delivering so many insightful contributions in such a restricted speaking time.

I say first to the noble Lord, Lord Campbell, that the move to spend 0.5% of our gross national income on official development assistance was a far from easy decision. It was taken in response to an extreme economic and fiscal situation, which last year saw the highest peacetime levels of borrowing on record—£300 billion—following the seismic impact of the pandemic. This year we are forecast to borrow a further £234 billion with another £109 billion the following year, and these unprecedented circumstances have forced the Government to take unprecedented action. Noble Lords will be aware from previous debates of the extraordinary support that we have provided to the UK economy, to jobs and business, on top of the need to balance multiple departmental priorities.

Nevertheless, in spite of the reduction to the ODA budget, it remains the case that the UK will spend £10 billion on overseas development assistance in 2021 and, in looking at how best to deploy that large sum, Ministers have been clear on two counts: first, that we should allocate our aid budget in accordance with our key strategic priorities and, secondly, that we ensure—as we always endeavour to do—that every penny of our aid brings with it maximum strategic coherence, maximum impact and maximum value for taxpayers’ money.

The FCDO is now working through what that means for individual programmes, in line with the priorities that we have identified. Those priorities are seven in number: climate and biodiversity; Covid and global health security; girls’ education; science and research; open societies and conflict; humanitarian assistances; and trade. Inevitably, for the period when we spend 0.5%, there will be reductions across all regions and sectors, compared to what we would have spent under 0.7%—but because of our priority setting, not all sectors will see the same percentage reduction.

In working through the allocations, Ministers have been mindful of the impact on four groups in particular: women and girls; the most marginalised and vulnerable; people with disabilities; and people from other protected groups. In that context—and this answers my noble friend Lady Sugg—the FCDO has carried out a central equalities impact assessment across our bilateral country spend, looking at risks and impacts, and this has been considered by Ministers as they reviewed plans. The Foreign Secretary is considering carefully whether to put the central overarching assessment into the public domain. As she said, the central assessment showed no evidence that programmes targeting those with protected characteristics were more likely to be reduced or discontinued than other programmes.

I cannot yet specify in any granular detail what our planned spend will be this year, either by project or by country. Given that we are in a one-year spending settlement, the FCDO’s planned country allocations will be published in our annual report later this year in the usual way; in addition, and as always, we will continue to give monthly updates of our spend by project on the development tracker.

Contrary to the impression gained by the noble Lord, Lord Campbell, none of these decisions on country and project allocations is being taken in a vacuum. The FCDO has engaged with NGOs and others and listened to feedback on the impact of the reduction in spend. FCDO Ministers engage with more than 80 NGOs, partners and parliamentarians, including through a round-table discussion with civil society. In the allocations process, we engage partners on the underpinning evidence, on priorities for delivery and to gather essential information. Now that the process is complete, we are working with our host countries, international partners and supply chains to deliver the budget changes set out in the Written Ministerial Statement published on 21 April.

Here it is worth my making the point that the creation of the Foreign, Commonwealth and Development Office has moved the coherence, efficiency and effectiveness of our decision-making in a very positive direction. The departmental merger has aligned our development work with our diplomatic clout and in so doing has improved development outcomes.

While I cannot yet give precise figures for the year ahead, I should like to provide the Committee with what figures I can. First, despite the budget reduction, we will be investing £400 million in girls’ education in over 25 countries this year. That is in addition to our pledge of £430 million to the Global Partnership for Education over five years. This is our largest ever pledge to GPE and an uplift of 15% from our current position as top bilateral donor.

On global health, we will donate at least 100 million surplus coronavirus vaccine doses within the next year, including 5 million beginning in the coming weeks. This donation is in addition to the Government’s work to support Oxford/AstraZeneca’s contribution to fighting Covid. I can say to the noble Baroness, Lady Hayman, that the £548 million that we have already committed to COVAX as one of the scheme’s largest donors will help it to deliver more than 1 billion vaccines to up to 92 lower-income countries this year. We also have a long-standing commitment to Gavi, as she knows, which will continue.

On climate change, we will deliver more than £1 billion of international climate finance activities this year as part of our flagship five-year £11.6 billion target. Our themes in this area include promoting clean energy, halting deforestation, preventing biodiversity loss and supporting countries damaged by the effects of climate change.

All of that means that this year, 2021, the UK will be the third largest overseas development assistance donor in the G7 as a percentage of GNI, based on data in 2020 from the Organisation for Economic Co-operation and Development. In 2021 we will also be the third highest bilateral humanitarian donor country, based on OECD 2020 data. Even at 0.5% of GNI, the UK’s 2021 spend is above the preliminary 2020 average of OECD development assistance committee member states, which was just 0.41% of GNI.

The noble Baroness, Lady Sheehan, took the Government to task for a lack of transparency, as alleged in the report from the Independent Commission for Aid Impact. The Government have provided relevant documents and information as part of the follow-up review where those have been available. The FCDO remains committed to full transparency in our aid spending; for example, throughout the pandemic we have continued to publish our spend information by project through DevTracker. However, the impact of the pandemic has been seismic around the world and we have therefore pivoted our resources to our Covid-19 response to help the most vulnerable. That resulted in some information not being available during the period in which ICAI carried out its follow-up review.

The noble Lord, Lord Campbell, referred to his connection with HALO and to its remarkable work in demining. Although there will be a reduction in financial support compared with the previous financial year, we remain a leading donor in the sector and our work will continue on the same lines affecting livelihoods across the world, supporting those most in need. We have assessed that over a four-year period we will be spending over £146 million in this area, including £21 million this year.

My noble friend Lord Sarfraz asked about consultancy. In 2020, DfID and the FCO contracted over £1.5 billion in development assistance with businesses, universities and NGOs. These contractors provide programme management, technical assistance and specialist advice to partner Governments, complementing our in-house expertise to deliver the UK’s world-beating development programmes. As the FCDO, we explore allocations to make the best use of both our in-house expertise and the services that we procure to deliver world-beating programmes.

The noble Baroness, Lady Bennett, referred to the UNFPA. The UK is fully committed to the mandate of the UNFPA, including its work on sexual and reproductive health. We remain committed to ensuring that women and girls have access to life-saving reproductive health supplies, and we highly value our partnership with the UNFPA on this important agenda.

The noble Baroness, Lady D’Souza, spoke of the situation in Afghanistan. On 14 April, as she knows, NATO announced that its forces would leave Afghanistan within a few months. Since 2002, the UK has supported the country with £3.3 billion worth of aid in various forms. We remain committed to supporting Afghanistan, including its efforts to counter terrorism, through our diplomatic and development work and support to the security sector. It is interesting to note that, alongside our NATO allies, the UK has built and equipped security institutions and has trained 5,000 cadets, including over 300 women.

The noble Baronesses, Lady Sheehan and Lady Greengross, touched on the important issue of water sanitation and hygiene. I can tell them that our support for global health, which embraces many aspects of WASH, remains a top priority for the UK aid budget. The FCDO plans to spend over £1.3 billion on global health this financial year and we will rightly focus on the international response to Covid-19. The FCDO is planning a strategic shift of our water and sanitation programmes, from supporting the direct delivery of WASH facilities at a household and community level, to instead strengthening national WASH systems that are able to deliver inclusive, sustainable and resilient WASH services at scale.

The noble Baroness, Lady Sheehan, also questioned our commitment to global health. That commitment should not be in doubt. Our aim is to help end the pandemic, strengthen global health security and end the preventable deaths of mothers, newborn babies and children. We are committed to those causes.

Regarding malaria, I say to the noble Baroness, Lady Hayman, that the UK is a long-standing donor on malaria. We remain committed to stamping out this deadly disease. We are a leading investor in malaria research. The Global Fund, as she knows, allocates 32% of its budget to malaria and we have committed £1.4 billion to the Global Fund.

The noble Baroness, Lady Bennett, referred to our aid to Yemen—I am being told I have only one minute left, so I must undertake to write to her on that. Suffice to say that we are deeply concerned at the moment by the crisis in Yemen and we are working with international partners and the UN special envoy to find a peaceful resolution to it.

The noble Baroness, Lady Suttie, referred to the importance of R&D funding and I fully agree with her. She may like to know that we will spend 4% of the whole UK ODA budget on science and technology and the FCDO will spend £253 million on R&D.

I will write to other noble Lords whose questions I have not had time to answer, particularly the noble Lord, Lord Purvis, on his question about the potential destruction of tablets and the noble Lord, Lord Collins, on the question of vaccines and additionality.

The seismic impact of the pandemic and the current unprecedented economic and financial circumstances have forced the Government, as I have said, to take difficult spending decisions. But, as my right honourable friend the Prime Minister has emphasised, this is a temporary departure. He, the Chancellor and the Foreign Secretary are as one in wanting to return to spending 0.7% of GNI on overseas development assistance as soon as fiscal circumstances allow. I wish that I could help the noble Lord, Lord Collins, with his question on when that will be, but no one can yet predict with certainty when the current financial circumstances will have sufficiently improved. We are monitoring the situation all the time and, clearly, we will make plans accordingly. However, I can assure him and the Committee that the UK remains and will remain indissolubly committed to poverty reduction and international development around the world. To that end, we shall ensure that the £10 billion allocated to our overseas aid programmes this year delivers a transformational impact consistent with our interests and values, of which all of us in this country can be proud.

[The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)]

My Lords, the Grand Committee stands adjourned until 5.45 pm. I remind Members to sanitise their desks and chairs before leaving the Room.