MPs call for review into cost-effectiveness of UK overseas aid spending



MPs have said that the UK government must make more informed decisions about how taxpayers’ money is spent on international development programmes, in a new report by the Commons International Development Committee, published this week.

The call follows the announcement in last month’s Spending Review that aid will rise significantly in the next few years as the UK finally meets the long-standing UN target to spend 0.7% of gross national income on such programmes.

Last year, the Department for International Development (DFID) spent 42% of its budget via third-party aid organisations.

The government said it had scrupulously assessed the aid groups distributing taxpayers’ money and remained “determined” to get the most out of them.

But MPs in the Commons International Development Committee said DFID should do more to look at whether it was better value to fund more projects directly.

They asked for more concrete “assurance” that money was being well spent.

When the government this year committed itself to reaching the 0.7% target, it decided to hold two reviews of its aid budget, one into bilateral aid, or direct aid donated for specific projects, and the other into multilateral aid which is given to support the work of organisations, such as multilateral development banks, UN agencies and humanitarian groups.

But the Committee said not enough was being done to compare the two, i.e. looking at the cost-effectiveness of giving aid directly to a country through a bilateral arrangement, alongside that of sending aid via a third-party organisation.

The Committee’s chairman, Liberal Democrat MP Sir Malcolm Bruce, said in 35 of 39 cases monitored by the government a value-for-money study had not been completed.

“It is in everybody’s interests for the Government to make informed decisions about aid spending,” he said. “When the UK provides funding to an international organisation, we need to have some assurance that this is better value for money than the alternative.

“Comparing international organisations’ work with our own, bilateral aid programmes is imperative.”

The committee also said more visits should be carried out in countries receiving aid.

Said Sir Malcolm: “In countries where the UK has no bilateral aid programmes of its own, monitoring multilateral organisations is a key challenge for the Government. This is an extremely important issue, and we will return to it in our ongoing inquiry into the Future of UK Development Cooperation.

“With regard to the Government’s first Multilateral Aid Review [MAR], the review team visited just two countries in which the UK had no bilateral aid programmes.

“We accept that country visits are not the only way of gathering evidence. For a number of multilateral organisations, the UK has a seat on the Board, which obviously provides us with some oversight. Nevertheless, we feel strongly that for the next Multilateral Aid Review, the team should undertake more visits to countries in which the UK has no bilateral programmes.”

The MPs also claimed that the Government’s methodology for assessing international organisations “leaves room for improvement.” The report argues that the first MAR failed to adequately distinguish between the different mandates of the international organisations being assessed.

In addition, the report recommends that the next MAR specifically assess multilaterals’ commitment to tackling violence against women and girls.

“It is impossible to achieve effective development without tackling violence against women and girls,” said Sir Malcolm.

“We recently conducted an inquiry on the subject, and we feel strongly that the next MAR should assess multilaterals’ commitment to the issue.

“As for the question of comparing organisations with different mandates, we accept that DFID didn’t intend the first MAR to be a ‘one-size-fits-all’ approach, but the fact remains that it was perceived as such in some quarters. For the next MAR, DFID needs to address this.”

A DFID spokeswoman was quick to defend the current situation, saying: “The multilateral aid review process, introduced by this government, provides a rigorous assessment of the value for money of multilateral agencies and is a model that has been adopted internationally.

“We remain determined to get better value for money and more effective aid from multilateral agencies.”

The government has said it will consider the report and respond in full in due course.