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BRIEFING PAPER

Number 7996, 4 May 2020

UK aid: frequently asked questions

By Jon Lunn, Philip Brien and Ilze Jozepa

Contents: Q1 What is aid? Q2 What types of aid are

there? Q3 What is the UN 0.7 per cent

aid target and why has the UK adopted it?

Q4 What are the policy objectives of UK aid?

Q5 Which government bodies spend UK aid?

Q6 What cross-government funds spend UK aid?

Q7 Which sectors receive the most UK aid?

Q8 What kinds of activities are funded by UK aid?

Q9 What impact does UK aid have?

Q10 How is waste, fraud and corruption being tackled?

Q11 Why is UK aid still going to countries like India, China and South Africa?

Q12 What will be the impact of Brexit on UK aid?

Q13 Towards an independent UK trade policy: what is changing for trade and development?

Q14 What is being done to ensure that UK aid is not complicit in sexual exploitation and abuse?

Q15 What are the most useful sources on UK aid?

2 UK aid: frequently asked questions

Contents Introduction 5

Q1 What is aid? 6 The OECD’s definition of aid 6 International Development Act 2002 6 Debates about what should be counted as aid 7 Measuring aid spending 8 Global spending on aid 8

Q2 What types of aid are there? 10 Forms in which aid is given 10 Channels for delivering aid 11

Q3 What is the UN 0.7 per cent aid target and why has the UK adopted it? 12 History of the target 12 Arguments for 12 Arguments against 12 UK adoption and reaction 13

Q4 What are the policy objectives of UK aid? 15 The 2015 aid strategy 15 The Bilateral and Multilateral Development Reviews 17 Other initiatives 17

Q5 Which government bodies spend UK aid? 20 Department for International Development 20 Other government departments 20 Other bodies 22

Q6 What cross-government funds spend UK aid? 24 The Conflict, Stability and Security Fund 24 The Prosperity Fund 25

Q7 Which sectors receive the most UK aid? 27 Bilateral aid by sector 27 Social services and infrastructure 27 Humanitarian aid 28 Refugees in donor countries 29

Q8 What kinds of activities are funded by UK aid? 31 Programmes and projects 31 Development and humanitarian aid 31 Geographic and thematic activities 32 Responsibility for implementation 32

Q9 What impact does UK aid have? 33 The OECD’s evaluation 33 Other evaluations 33

Q10 How is waste, fraud and corruption being tackled? 37 Waste 37 Fraud and corruption 38

Q11 Why is UK aid still going to countries like India, China and South Africa? 40 What was announced and why people got confused 40 ICAI report on how DFID handled the transition 40

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The UK will continue to spend aid on middle-income countries 41

Q12 What will be the impact of Brexit on UK aid? 43 Current level of UK aid channelled through European development mechanisms 43 What will happen to this money after Brexit? 43 Much hinges on the negotiations on the post-Brexit future relationship 44 UK assessment of the performance of European development mechanisms 45

Q13 Towards an independent UK trade policy: what is changing for trade and development? 46 Current situation – and the future 46 Taxation (Cross-border Trade) Act 2018 47 Rolling over EU trade agreements 48

Q14 What is being done to ensure that UK aid is not complicit in sexual exploitation and abuse? 50 DFID action 50 Charity Commission action 51 International Development Committee action 51 Action by UK based aid organisations 53

Q15 What are the most useful sources on UK aid? 54 Websites 54 Reports and other documents 54

4 UK aid: frequently asked questions

Cover page image copyright: Uganda (Atari Village) by Mountain Partnership at FAO Licensed by CC BY-NC 2.0 / image cropped

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Introduction The UK’s foreign aid programme has been a source of considerable controversy in recent years. Sections of the public and the media, along with some politicians, have questioned the purpose and value of important elements of that programme.

Using a Q&A format, this briefing is an introduction to the UK’s aid programme and some of the activities flowing from it around the world. It is not comprehensive in its coverage. It does not take a position on those issues which have generated controversy. Its sole objective is to support an informed debate.

We hope that it will be useful for Members and their staff – including when it comes to answering questions from constituents.

The briefing will be periodically updated but we cannot guarantee that it will always be fully up-to-date. If in doubt, members and their staff should contact the authors to check the status of the information that they wish to use.

Other relevant Library briefings include:

Sustainable Development Goals: How is the UK performing? (July 2019)

The 2016 Bilateral and Multilateral Development Reviews (December 2016)

Commonwealth Development Corporation Bill 2016-17 (November 2016)

The 0.7 per cent aid target (June 2016)

The Sustainable Development Goals and the post-2015 development agenda (September 2015)

6 UK aid: frequently asked questions

Q1 What is aid? ‘Aid’ is used by people and the media as a short-hand term for all sorts of activities. However, the UK government voluntarily adheres to a definition of aid established by the Organisation for Economic Cooperation and Development’s (OECD) Development Assistance Committee (DAC), of which it is a member and to which it reports its aid spending. It is also bound by parameters set by the International Development Act 2002.

The OECD’s definition of aid The OECD calls aid ‘Official Development Assistance’ (ODA) and limits it to grants and relatively concessional loans by governments to developing countries.

Its full definition is as follows:

Official development assistance flows are defined as those flows to countries and territories on the DAC List of ODA Recipients and to multilateral development institutions which are:

i) provided by official agencies, including state and local governments, or by their executive agencies; and

ii) each transaction of which:

a) is administered with the promotion of the economic development and welfare of developing countries as its main objective; and

b) is concessional in character. In DAC statistics, this implies a grant element of at least

- 45 per cent in the case of bilateral loans to the official sector of Least Developed Countries and other Low Income Countries (calculated at a rate of discount of 9 per cent).

- 15 per cent in the case of bilateral loans to the official sector of Lower Middle Income Countries (calculated at a rate of discount of 7 per cent).

- 10 per cent in the case of bilateral loans to the official sector of Upper Middle Income Countries (calculated at a rate of discount of 6 per cent).

- 10 per cent in the case of loans to multilateral institutions (calculated at a rate of discount of 5 per cent for global institutions and multilateral development banks, and 6 per cent for other organisations, including sub-regional organisations)

The OECD also provides an even more detailed explanation of its definition in What is ODA ?

International Development Act 2002 The OECD framework is not legally binding upon the UK government. It has decided voluntarily to adhere to it. But the Department for International Development (DFID) is legally bound to implement the provisions of the International Development Act 2002, which in its first clause enshrines poverty reduction as the main purpose of the UK aid which it spends. Other government departments are not legally bound by this requirement.

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A later amendment to the Act requires DFID also to give proper consideration to gender equality.

Debates about what should be counted as aid These are general definitions of aid. To clarify things further, the DAC has also tried to create more detailed parameters about what spending can or cannot be counted as ODA. It says:

Over the years the DAC has continuously refined the detailed ODA reporting rules to ensure fidelity to the definition and the greatest possible consistency among donors. The boundary of ODA has been carefully delineated in many fields, including:

Military aid: No military equipment or services are reportable as ODA. Anti-terrorism activities are also excluded. However, the cost of using donors’ armed forces to deliver humanitarian aid is eligible.

Peacekeeping: Most peacekeeping expenditures are excluded in line with the exclusion of military costs. However, some closely-defined developmentally relevant activities within peacekeeping operations are included.

Nuclear energy: Reportable as ODA, provided it is for civilian purposes.

Cultural programmes: Eligible as ODA if they build the cultural capacities of recipient countries, but one-off tours by donor country artists or sportsmen, and activities to promote the donors’ image, are excluded.

Even such efforts at clarification leave plenty of room for debate about what should or should not be counted as ODA. For example, some observers have expressed concern that money that should be going towards combating poverty in poor countries around the world has instead been diverted by European Union (EU) governments towards meeting costs arising from taking in refugees (the UK counts first-year costs as ODA) and strengthening their own border security.

In February 2016 members of the OECD DAC agreed to look again at the issue of “in-donor refugee costs” with a view to improving the “consistency, comparability and transparency” of ODA reporting. The DAC approved clarifications to the reporting rules in October 2017.

In February 2016 the DAC also made what it called “small adjustments” regarding “when expenditures for peace and security may be reported as ODA” – for example, allowing “the use of military aircraft for the delivery of medical help in health emergencies such as the recent Ebola crisis.” Critics were unimpressed, claiming that this was another example of rich countries putting “national interests ahead of the world’s poorest.”

The Conservative Party pledged in its 2017 election manifesto to work with like-minded countries to update the OECD’s rules to “better reflect the breadth of our assistance around the world.” If these efforts failed, it would instead change UK law (see also Q3).

In the aftermath of the destruction wrought in several British Overseas Territories by Hurricane Irma in September 2017, the UK government sought to secure DAC agreement on lifting its prohibition on ODA

8 UK aid: frequently asked questions

being spent in ‘high-income’ countries and territories severely economically affected by disasters. DAC approval for what is known technically as ‘reverse graduation’ was secured in October 2018.

In late-2018 there was a controversy about whether DFID might start counting profits made by the UK’s development finance institution, the CDC Group, as ODA. It said that it had no immediate plans to do so.

On the question of wider reform of the OECD’s rules, then Secretary of State for International Development Penny Mordaunt did not rule out that the UK might one day develop its own definition of ODA through legislation but acknowledged that there were “massive benefits to us” being part of the DAC system.

The Conservative Party’s 2019 election manifesto did not refer to updating the OECD’s rules on defining aid, or changing UK law. But doing so remains a ‘live issue’ within its ranks.

Measuring aid spending There is another important dimension to bear in mind here. This is how best to measure aid spending.

There are internationally-agreed statistical standards which must be adhered to. But these standards are subject to change. The most recent major changes in the UK came into effect in 2014, when the Office of National Statistics revised the way in which the UK’s Gross National Income (GNI) is measured. Overall, this shift has had the effect of increasing the size of the economy – meaning that a bit more money is having to be spent each year if the UK is to meet its target of spending 0.7 per cent of Gross National Income (GNI) on ODA (see Q3).

It is important to note that a host of wider economic factors can also affect the measurement of aid spending. For example, a lot of aid money is spent in other currencies whose value against the Pound changes over time. The significant downward devaluation of the Pound following the decision to leave the EU in the June 2016 referendum caused the UK aid budget to lose some of its real purchasing-power.

The OECD has been revising its statistical systems for measuring ODA, and introduced a new standard in 2019.

Global spending on aid Global spending on aid has tended to increase over the past few decades, with growth accelerating since around 2000. In real terms, ODA spending in 2019 was over twice as high as it was in 2000, and nearly five times as high as in 1960.

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020406080

100120140160180200

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015Source: OECD.Stat, database DAC1, 1 May 2020

Global spending on ODA, 1960-2019US$, billions, constant prices (2018)

10 UK aid: frequently asked questions

Q2 What types of aid are there?

There are two ways to answer this question. Firstly, in terms of the forms in which donors give aid. Secondly, in terms of the channels through which aid is provided.

Forms in which aid is given Donors give aid and recipients receive it in three forms: grants, concessional loans and equities.

As we saw in Q1, traditionally most aid has been given by governments as a grant, for which there is no expectation of a financial return. However, some aid has always been given by governments as a concessional loan, on which a financial return is expected.

The overall level of grant aid being provided by governments is in decline. The proportion of aid being provided on a loan basis is on the way up.

The private sector is becoming an increasingly important source of funding for development. Financial flows from this source do not count as aid, although the costs arising from official support to boost these efforts do. The trend is viewed by some stakeholders as a necessary move “beyond aid” in order to bridge a growing gap between the funds needed to bring about development and what is available via official aid. For a variety of reasons, some are sceptical about this agenda.

Donor government-backed investments in private sector equities, on which a financial return is also expected, is also increasing. The capital limit of the CDC Group, the UK’s development finance institution, was increased significantly in early 2017 through legislation. The government reports the capital flows from it to the CDC as Official Development Assistance (ODA), but not any profits which arise from CDC investments. Other governments approach their reporting duties in this area differently.

The proportion of total aid from the public sector varies over time, but private flows (investment rather than private charitable donations) often make up a greater proportion of the total aid than ODA. Between 1970 and 2013 UK private flows and grants were together higher than ODA in 32 out of 43 years.

11 Commons Library Briefing, 4 May 2020

Channels for delivering aid There are two main channels for donor spending: bilateral and multilateral.

Bilateral refers to aid that is provided by a donor government to a recipient country. It is spent on specific projects or programmes by a range of implementing partners, including the public sector, the private sector, non-profit groups and multilateral agencies (known as ‘bilateral through multilateral’). In 2015 DFID’s bilateral aid was concentrated in 32 priority countries – a major reduction compared with the pre-2010 period. The number has not changed much since then.

Multilateral refers to aid that is provided by a donor government to a multilateral institution which then allocates it in accordance with its priorities. The aid is not earmarked by donor governments for particular projects or programmes. This means that tracking how and where multilateral aid is being used is more complicated than for bilateral aid.

Source: DFID, Statistics on International Development: Provisional UK Aid Spend 2019, 7 April

2020, and earlier editions

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1970 1975 1980 1985 1990 1995 2000 2005 2010

Official Development AssistanceOther Official FlowsOfficially supported export creditsPrivate flows at market termsNet private grants

UK public and private aidUS$, billions, 2018 prices

Source: OECD.Stat, database DAC1, 1 May 2020

0% 20% 40% 60% 80% 100%

20092010201120122013201420152016201720182019

Bilateral Multilateral

UK aid by channel

12 UK aid: frequently asked questions

Q3 What is the UN 0.7 per cent aid target and why has the UK adopted it?

History of the target In 1969 a World Bank Commission chaired by former Canadian Prime Minister Lester Pearson proposed that ODA “be raised to 0.70 per cent of donor Gross National Product (GNP) by 1975, and in no case later than 1980”. The target was formally recognised on 24 October 1970 when the UN General Assembly adopted a Resolution which included the goal that:

Each economically advanced country will progressively increase its official development assistance to the developing countries and will exert its best efforts to reach a minimum net amount of 0.7% of its gross national product at market prices by the middle of the Decade.

The target was later modified from GNP to Gross National Income (GNI).

The Pearson Commission argued that if this target was met by all rich countries and accompanied by appropriate policies, aid would be unnecessary by the end of the 20th Century.

This is not what has happened. Only nine OECD DAC member countries have ever met the target – Belgium, Denmark, Finland, France, Luxembourg, Netherlands, Norway, Sweden and the UK. The US, the world’s biggest aid donor, does not accept the target and has never met it. Although there were decreases in 2017 and 2018, overall aid spending by OECD DAC countries has gone up overall in recent decades. But the 0.7 per cent target is still a long way from being achieved by all member countries.

Arguments for Supporters of the target argue that the persistent failure to hit the target has prolonged the life-span of foreign aid into the 21st century, so extending the ‘aid dependency’ that critics often complain about.

Some also argue that aid levels would have been even lower and the overall performance of developing countries even weaker had advocates not had the leverage that the existence of such a target gives them.

Others would say that this level of spending is morally justified by the scale of the challenges being faced by developing countries. Some claim that it helps to protect the national security of donor countries.

Arguments against Opponents of the aid target do not buy the arguments of its supporters. Some argue that setting an artificial target distorts aid spending because it creates incentives to get funds ‘out of the door’ at the expense of impact and efficiency.

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Others focus more widely on the downsides of aid, citing examples of spending that has been wasted or contributed towards fraud and corruption.

Some also assert that too much aid spending is immoral when funds for domestic public services are stretched.

UK adoption and reaction The UK first endorsed the 0.7 per cent target in February 1974 under a Labour government. But Conservative governments under Prime Minister Margaret Thatcher also supported it in principle. However, neither set a date for achieving it and it was only from the mid-2000s onward that levels of UK aid spending began to approach the target.

Following pledges in the 2010 Conservative and Liberal Democrat manifestos, the coalition government committed to meet the 0.7 per cent target by 2013 – which it did – and to enshrine it in law. A Private Member’s Bill was passed in 2015.

In each year from 2013 onwards, the UK’s total aid expenditure has been 0.7 per cent of national income.

The chart below shows the UK’s performance against the target over the last 40 years or so.

Source: DFID, Statistics on International Development: Provisional UK Aid Spend 2019, Table C1, 7

April 2020

In its 2017 election manifesto, the Conservative Party also included a pledge to change the way that aid is defined, either by working with “like-minded countries” to ensure that the OECD’s rules “better reflect the breadth of our assistance around the world” or, if that does not work, by changing UK law (see also Q1).

This pledge was in part a response to campaigns against the target during the 2015-17 Parliament. In March 2016 the Mail on Sunday sponsored a petition calling on the government to “stop spending a fixed 0.7 per cent of our national wealth on Foreign Aid”. The petition was considered in a Westminster Hall Debate on 13 June 2016.

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

1970 1975 1980 1985 1990 1995 2000 2005 2010 2015

0.7% target

UK aid, 1970-2019% of gross national income

14 UK aid: frequently asked questions

The Conservative government of the time emphasised the importance of meeting the target because it was in the ‘national interest’ to do so. Sir Desmond Swayne, the Minister who wrapped up the June 2016 debate, said:

The UK aid strategy sits firmly in our security and defence strategy. The 0.7% spent on international aid and the 2% commitment to NATO are the 2.7% that we spend, in our international interests, on securing a safer, more stable and more prosperous world.

Some supporters of the target are not entirely comfortable with such justifications, preferring a stronger focus on the development and humanitarian benefits of meeting the target. However, successive governments since 2010 have denied that there is any contradiction between the two.

In the 2019 General Election, despite continuing calls from opponents within its ranks to abandon the target, the Conservative Party renewed its commitment to spending 0.7 per cent of GNI on development. However, debate continues within the party about what spending can or should be classified as aid. For example, some MPs want spending on UK peacekeeping operations and the operating costs of the BBC World Service to be included.

15 Commons Library Briefing, 4 May 2020

Q4 What are the policy objectives of UK aid?

The Department for International Development (DFID) is legally bound to implement the provisions of the International Development Act 2002, which in its first clause enshrines poverty reduction as the main purpose of the UK aid which it spends. Other government departments are not legally bound by this requirement. A later amendment to the Act requires DFID also to give proper consideration to gender equality.

In addition to these general legal obligations, successive governments have set out more detailed policy objectives for UK aid. These objectives have remained largely the same since the 2015 general election, when the Conservative Party won a majority.

The objectives were set out in the November 2015 aid strategy, UK aid: tackling global challenges in the national interest. The December 2016 Bilateral and Multilateral Development Reviews, along with other initiatives, were intended to make significant contributions to meeting these objectives.

The 2017-19 Conservative minority government did not significantly amend this framework.

The Conservative majority government elected in December 2019 has indicated that it will undertake a review of UK aid priorities as part of its wider “integrated defence, security and foreign policy review”. Dominic Raab, the Foreign Secretary, said on 13 January:

As we enter this decade of renewal, the Government will engage in a thorough and careful review of the United Kingdom’s place in the world, including through the integrated security, defence and foreign policy review. It is an opportunity for us to reassess the ways in which we engage on the global stage, including in defence, diplomacy and our approach to development, to ensure that we have a fully integrated strategy.

These reviews will be strongly shaped by the fact that the UK has left the EU. But the new framework will take time to emerge. Until it does this section focuses predominantly on the framework that has been in place since 2015.

The 2015 aid strategy Jointly published by the Department for International Development (DFID) and HM Treasury, the November 2015 aid strategy was published on the same day as the National Security Strategy and Strategic Defence and Security Review 2015. This confirmed that the government viewed UK aid policy as an important element in a wider security agenda.

The 2015 aid strategy is based on “four strategic objectives” – to each of which more resources are to be devoted:

• Strengthening global peace, security and governance

• Strengthening resilience and response to crises

16 UK aid: frequently asked questions

• Promoting global prosperity

• Tackling extreme poverty and helping the world’s most vulnerable

The following actions were announced in the strategy:

[…] as a result of our new approach, we will:

- allocate 50% of all DFID’s spending to fragile states and regions;

- increase aid spending for the Syrian crisis and the related region;

- end all traditional general budget support – so we can better target spending;

- use an expanded cross-government Conflict, Stability and Security Fund (CSSF) to underpin our security objectives by supporting the international work of the National Security Council (NSC);

- create a £500 million ODA crisis reserve to allow still greater flexibility to respond to emerging crises such as the displacement of Syrian refugees;

- fund a new £1 billion commitment to global public health (the “Ross Fund”) which will fund work to tackle the most dangerous infectious diseases, including malaria. The fund will also support work to fight diseases of epidemic potential, such as Ebola, neglected tropical diseases, and drug resistant infections; and

- use a new cross-government Prosperity Fund, led by the NSC, to drive forward our aim of promoting global prosperity.

We believe this fundamental shift in how we use 0.7% of our national income will show there is no distinction between reducing poverty, tackling global challenges and serving our national interest – all are inextricably linked.

We will ensure that every penny of money spent delivers value for taxpayers, and projects that do not will be cancelled.

The new aid strategy confirmed that DFID would invest £735 million in CDC Group. In 2017 Parliament passed legislation to increase the total amount that could be invested in CDC to £6 billion.

The strategy also confirmed that UK would increase its climate funding by at least 50 per cent over 2016-21 as compared with 2011-16. £5.8 billion will go into to the UK’s International Climate Fund from the ODA budget during that period, including at least £1.76 billion in 2020.

In recent years DFID has said that tackling climate change will be increasingly central to its work. In August 2019, the government announced that it will double its contribution to the UN’s Green Climate Fund through to 2023 to assist adaptation to the effects of climate change in the developing world.

There has been controversy over whether too much UK aid still goes into projects that promote fossil fuel use. In January 2020, the UK government announced at a UK-Africa Investment Summit in London that it will no longer give any public money (including ODA) for thermal coal mining or coal power plants overseas. Concerns have been raised that this pledge could be undermined by the activities of the Private Investment Development Group, an investment firm that receives

17 Commons Library Briefing, 4 May 2020

substantial funds from DFID. Nearly £2 billion worth of commercial investment deals in fossil fuels were agreed at the summit.

The 2015 aid strategy also said that the UK would be “stepping up” its efforts in Syria, the Middle East and North Africa through to 2020.

In February 2016 DFID published a ‘Single Departmental Plan’ for 2015-20, which was to be used to “track the department’s progress towards achieving its priority objectives.” This plan was last updated in June 2019.

The Bilateral and Multilateral Development Reviews The Bilateral Development Review (BDR) and Multilateral Development Review (MDR) were published simultaneously in December 2016. It was widely expected that they would translate the main objectives of the UK aid strategy into specific country programmes and decisions on whether or not to support particular multilateral organisations over the following five years. Their publication was delayed on several occasions and when they were released, neither really did so.

There was little new in the BDR. The MDR provided an evidence base for future decisions about funding multilateral organisations. It judged the strongest performers to be the World Bank, the Global Fund to fight Aids, Tuberculosis and Malaria and GAVI, the Vaccine Alliance. Among the good performers was the European Commission. One of the poorest performers was the Commonwealth Secretariat.

Other initiatives Another document was published in January 2017 that strongly reflected the 2015 aid strategy. This was DFID’s first Economic Development Strategy. In the Strategy, the government committed itself to working

[…] in the world’s poorest countries to help create economic growth that will sustain rapidly growing populations, provide a long term solution to poverty and deal with the root causes of problems that affect Britain.

When she was Secretary of State for International Development, Penny Mordaunt placed great stress on the importance of trade and investment in promoting development, while insisting that this would not involve using ODA to facilitate deals for British companies (known as ‘tied aid’). In April 2018 she said she was looking to work more closely with the City of London, the Treasury and HMRC on economic development and anti-corruption efforts. She also announced that DFID will establish programmes to combat illicit financial flows from Africa and Asia.

These priorities, part of the UK’s post-Brexit goal of promoting a “Global Britain”, have continued under her successors. In January 2020, the government hosted a major UK-Africa Investment Summit in London (see also above).

The government has also undertaken to increase its efforts to support human rights – in particular, freedom of conscience and religion. In late-2018 it published its first ever Disability Inclusion Strategy.

18 UK aid: frequently asked questions

The 2015 aid strategy referred to ensuring “value for taxpayers”. Value for money has been an overarching objective of successive UK governments. Since 2010 this has led to a number of initiatives, including the introduction of ‘payment by results’, which today covers 80 per cent of DFID’s new centrally-procured contracts. DFID has a set of ‘Smart Rules’ for programme delivery. The extent to which such measures have made a positive difference remains a matter for debate.

In May 2018, then Secretary of State Penny Mordaunt introduced the idea of a “higher spending bar”, under which proposed programmes and projects in future must pass a tougher test than in the past – “not just ‘spent well’, but ‘could not be better spent’”. Planning processes were changed to implement this approach.

Further details of how DFID will achieve its objectives are set out in 35 country and regional profiles for 2017/18 and 2018/19 (last updated July 2018).

The 2015 aid strategy did not refer to the Sustainable Development Goals (SDGs – also known as the Global Goals), which were approved at the UN in September 2015. The 17 goals, with 169 associated targets for human development, are to be achieved by 2030. The rallying cry throughout the negotiations was ‘leave no one behind’.

The SDGs are the successors to the Millennium Development Goals (MDGs) – eight goals with 18 associated targets for human development, which were agreed in 2001, most of which were to be achieved by 2015. A key difference between them is that the SDGs involves UK action at home as well as abroad.

The Goals were briefly mentioned in the December 2016 Bilateral and Multilateral Development Reviews, where the UK said it would “drive forward the implementation of the Sustainable Development Goals.”

For a while, there was criticism that details about how the UK was going to do this remained sparse. However, in March 2017 the UK government published Agenda 2030: Delivering the Global Goals, outlining the government’s approach to implementing the SDGs in the UK and internationally.

This report did not go into much detail about implementation measures, but in December 2017, the UK government published Implementing the Sustainable Development Goals. This report set out some of the ways that the government is supporting the delivery of the SDGs, showing how this was now reflected in updated Single Departmental Plans for all relevant government departments.

In June 2019 the UK government published a report on its implementation of the SDGs so far. The government highlighted policy areas where, in its view, there has been progress. But it acknowledged that there was more to do, including improving leadership and coordination across departments.

Critics responded that the UK’s performance has been inadequate in important policy areas, such as combating hunger and food insecurity at home.

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Public awareness of the SDGs appears still to be low. Only 9 per cent of respondents to a 2018 ‘Aid Attitudes’ survey knew what the SDGs were.

20 UK aid: frequently asked questions

Q5 Which government bodies spend UK aid?

Department for International Development Set up in 1997, DFID has the main responsibility within government for spending UK aid. Its share of aid spending has decreased in recent years, but it continues to spend significantly more aid than all other government departments put together.

Source: DFID, Statistics on International Development: Provisional UK Aid Spend 2019, Table 3, 7

April 2020 (and earlier editions)

In the past, the Conservatives opposed the creation of a separate government department to oversee international development policy. Labour supported the idea. Since 2010 the official Conservative position has been in favour of retaining DFID as a stand-alone department.

DFID’s future was reportedly under review under the new Conservative government elected in December 2019, with some calling for it to be merged with the Foreign and Commonwealth Office (FCO). Others said this would be a mistake. The UK aid sector was largely opposed to the idea.

In the end, DFID was not merged with the FCO as part of the February 2020 cabinet reshuffle. But some believe that this may still happen in future. While DFID has retained its own Secretary of State, all of its Ministers are now also FCO Ministers.

Other government departments The volume of UK aid that other government departments distribute varies across years, but the Department for Business, Energy and Industrial Strategy (£951 million in 2019), the Foreign and Commonwealth Office (£675 million) and the Home Office (£452 million) currently have significant aid budgets.

The overall trend in recent years has been towards other government departments (OGD) spending a higher proportion of ODA relative to

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DFID. There has been criticism of this trend. The ratio today is 27 per cent OGD to 73 per cent DFID. In 2018 it briefly reversed itself, after reaching a high-point of 28:72 in 2017.

Source: DFID, Statistics on International Development: Provisional UK Aid Spend 2019, Table 3, 7

April 2020 (and earlier editions)

Many OGDs distribute smaller amounts, including the Department of Health, the Department of Education, and the Ministry of Defence; some departmental spending also includes spending by agencies and other public bodies that are directly funded by these departments, for example the National Crime Agency.

The relative lack of detail in the aid reporting of OGDs, along with the fact that they are not bound by the obligations of the International Development Act 2002 (and therefore do not necessarily have poverty reduction as their main focus), has led some to express concern about a lack of transparency and effectiveness in their spending.

The International Development Committee made comments to this effect in its March 2017 report on UK aid: allocation of resources, and in June 2018 it concluded an inquiry into the definition and administration of UK ODA.

DFID has taken on the role of assisting OGDs to improve their aid performance. Expert observers claim that there is still a long way to go. In June 2019 the National Audit Office published a critical report on this issue.

DFID has acknowledged that there has been a lack of coherence in approach across government departments. A “cross-ministerial ODA group” was established in 2018 to improve the “coherence, effectiveness and quality” of UK aid, with a senior officials group created to support its work. The cross-ministerial group is supposed to meet every few months.

Project-level data

A project-level breakdown of aid spending by government departments is provided as ‘underlying data’ in an annual publication called

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2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Note: BEIS figures include figures for DECC before it was subsumed into BEIS in July 2016.

FCO

Home Office

BEIS

Health & Social Care

Aid by Government department (excluding DFID)£ millions, not adjusted for inflation

CSSF

22 UK aid: frequently asked questions

“Statistics on International Development”. However, it is on an Excel spreadsheet that some may not find particularly easy to use.

DFID operates a “Development Tracker” website which provides a lot of detailed information about specific UK aid projects. OGDs provide information of this kind, although the level of detail and quality of information varies. For example, the FCO provides periodically updated information in an “ODA collection”.

Other bodies Several organisations other than government departments also contribute to aid spending, providing a total of £681 million in 2019. Their contributions are listed below.

Source: DFID, Statistics on International Development: Provisional UK Aid Spend 2019, Table 3, 7

April 2020

Two of the non-departmental contributors in recent years are major international institutions. The IMF’s Poverty Reduction and Growth Trust (which provided £26 million in 2018) is an organisation that provides loans at low interest rates (sometimes even zero interest) to low-income countries, and which is financed by IMF members; in February 2017 the UK agreed to provide loan resources of up to about US$2.7 billion. Part of the UK’s contribution to the EU budget has been given by the EU as aid, and this has been counted as UK aid spending (see Q12 for more on this, and the potential impact of Brexit).

Three more contributors are not departments but are connected with central government in some way. First, Gift Aid is the government’s tax relief scheme that is used to reclaim income tax for charitable donations, and acts as a government boost to private donations. Secondly, although it operates with a large degree of independence, the BBC World Service receives funding and direction from the government and is therefore official enough for many of its activities to count as aid. Some costs associated with looking after refugees within donor countries are also listed as a separate contribution. Finally, many former administrators from the days of the British Empire are still alive and drawing colonial pensions; a small element of these pension payments counts as aid.

Lastly, the devolved administrations in Scotland and Wales have their own relatively small-scale aid budgets. The activities supported are required to be consistent with the legal obligations and policy objectives

Aid from non-departmental sources, 2019£ millions

EU Attribution (non-DFID) 470Gift Aid 159BBC World Service 30Scottish Government 14Other In-Donor Refugee Costs 6Welsh Government 2Colonial Pensions administered by DFID 1

23 Commons Library Briefing, 4 May 2020

of UK aid as a whole. The Scottish government focuses on Malawi, Rwanda, Zambia and Pakistan, as well as providing emergency humanitarian aid elsewhere. In September 2019 it published its second “contribution to international development” report, setting it within the context of the SDGs. The Welsh government uses its Wales for Africa programme to “support learning, the exchange of skills, joint working and tackling climate change”.

24 UK aid: frequently asked questions

Q6 What cross-government funds spend UK aid?

The 2015 aid strategy, “UK aid: tackling global challenges in the national interest“, identified two such funds:

• The Conflict, Stability and Security Fund (CSSF), which began operating in April 2015, replacing the former Conflict Pool. Its objective is to prevent conflict, respond to crises and build stability overseas.

• The Prosperity Fund (PF), which began operating in April 2016. The objective of the PF is to promote economic growth in developing countries.

Both of these funds are overseen by the National Security Council (NSC), which was first established in 2010. The National Security Advisor and the National Security Secretariat are responsible for the ongoing running of both funds.

Money spent through these funds is not automatically ‘aid’. Spending has to meet the definitions of aid described in Q1 to be counted as such. If it does not do so, it follows that spending cannot be counted towards the UK’s legally binding 0.7 per cent aid target. The amount spent through these funds that can be considered aid will very likely fluctuate in the years ahead.

The 2015 aid strategy also mentioned the Ross Fund, which supports efforts to combat the world’s most serious diseases in developing countries. It began operation in April 2016. However, it is jointly managed by DFID and the Department of Health and so is not a cross-government fund in the same way. The same is true of the International Climate Fund, which is jointly managed by DFID, the Department for Environment, Food and Rural Affairs and the Department for Business, Energy and Industrial Strategy.

The Conflict, Stability and Security Fund The CSSF has an annual budget of around £1.3 billion. During 2015/16, its first full year of operation, just under half of CSSF spending was counted as ODA; its target is to spend 85 per cent of its budget as aid, and in 2018/19 it achieved 78 per cent.

25 Commons Library Briefing, 4 May 2020

Source: DFID, Statistics on International Development: Provisional UK Aid Spend 2019, Table 3, 7

April 2020 (and earlier editions)

This chart shows that spending via the CSSF has been significantly higher than spending through its predecessor fund, the Conflict Pool.

There are a series of cross-departmental boards in Whitehall and at Embassies and Consulates that are tasked with delivering the NSC’s vision for the CSSF. All government departments represented on the NSC are entitled to apply to the fund. However, the Foreign and Commonwealth Office (FCO) has so far been the main beneficiary by a big margin.

The Joint Committee on the National Security Strategy’s (JCNSS) published a report about the fund in February 2017. The Committee made some forthright criticisms of it in its report, including:

• The objectives, operation and achievements of the CSSF are opaque.

• The CSSF lacks political leadership and accountability.

• Parliament does not have sufficient access to the information that we need effectively to scrutinise the CSSF.

The government responded to the JCNSS report in April 2017.

In March 2018 the Independent Commission for Aid Impact (ICAI) published a report on the CSSF’s aid spending, giving it an ‘amber-red’ rating overall – meaning that it is not performing well. The government responded in May 2018, recognising that the fund’s performance needed to improve and describing steps being taken to this end. ICAI published a follow-up report in July 2019, which found that some progress towards addressing deficiencies was being made.

The financial settlement for the CSSF in 2019/20 was set out in a July 2019 written statement. The latest CSSF annual report, covering activities during 2018/19, was published in the same month. The CSSF also periodically updates a collection of “programme summaries”.

The Prosperity Fund The PF began operating on a relatively small scale in 2016. It has scaled up spending considerably from 2017/18 onwards and is set to reach

188 198 180

324

601555

605661

0

100

200

300

400

500

600

700

2012 2013 2014 2015 2016 2017 2018 2019

Conflict Pool CSSF

CSSF/Conflict Pool spending£ millions, not adjusted for inflation

26 UK aid: frequently asked questions

£330 million in 2020/21. A high proportion of spending through the fund has so far been counted as ODA (92 per cent in 2018/19, according to the Fund’s latest annual report).

The PF is governed by a Ministerial Board. It is supported by a Portfolio Board, with a management hub housed in the FCO doing the day-to-day work.

All government departments represented on the NSC are entitled to apply to the fund. However, the FCO is likely to be the largest single beneficiary in the years ahead.

The Independent Commission on Aid Impact (ICAI) published a ‘rapid review’ of the new fund in February 2017. Its recommendations are summarised below:

• The government should reconsider the Prosperity Fund’s rate of expenditure, including spending resources over a longer period if necessary.

• The Prosperity Fund should refine its strategic objectives, and develop Fund-level results indicators to maximise overall impact, and avoid fragmentation.

• The Prosperity Fund should ensure its processes for adhering to international rules on aid are explicit and challenging.

• The Prosperity Fund should be more open about its engagement with UK and international companies, ensuring it avoids potential conflict of interests and secures value for money.

• The Prosperity Fund should ensure it is fully transparent about its procedures and progress in line with the government’s stance on this issue.

Underlying some of ICAI’s concerns was uncertainty over whether the FCO has the programme management capacity to lead on PF projects.

The government responded to ICAI’s report in March 2017.

The latest annual report of the Prosperity Fund was published in September 2019.

The FCO periodically updates “programme summaries” which describe its work under the auspices of the Fund.

The performance of the Fund continues to be criticised by parts of the UK aid sector. In 2018 the International Development Committee expressed concern about UK ODA being spent through the Prosperity Fund on “front-line diplomatic activity” in China and support to the Chinese film industry.

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Q7 Which sectors receive the most UK aid?

Aid spending is frequently classified under different sectors to help with reporting. There are several ways of doing this, but one of the most widespread is the OECD DAC’s Purpose Codes system. This splits all aid spending into eight major categories, each of which can then be split into further subsectors (for example, 72040 is “Emergency food aid”, which is a subsector of 720 “Emergency Response”, itself a subsector of 700 “Humanitarian aid”).

Bilateral aid by sector The proportions of UK aid going to each sector have remained largely constant over the past few years. There have been some notable variations, however – spending on cancelling debt has dropped almost to zero, while humanitarian aid and spending on refugees have both increased markedly since 2015.

Some of these sectors cover a wide range of activities or involve things people might not usually think of as aid, so it’s worth taking a closer look at a few of them.

Social services and infrastructure This is consistently the largest sector for UK aid spending, and covers areas such as education, health, the water supply, and government and civil society.

0 1 2 3 4 5 6 7 8 9 10

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Social Services and Infrastructure Economic Infrastructure & ServicesProduction Sectors Multisector/Cross-CuttingCommodity and General Programme Assistance Action relating to debtHumanitarian aid Administrative Costs of DonorsRefugees in Donor Countries Unallocated/Unspecified

Source: DFID, Statistics on International Development: Final UK Aid Spend 2018, Table A7, 19 September 2019

Bilateral aid by sector£ billions

28 UK aid: frequently asked questions

Health was the subsector that saw the most UK spending in 2018, with UK spending heavily weighted towards basic and general healthcare. There is generally also an emphasis on population policies and reproductive health – this area saw £370 million of bilateral spending in 2018.

The second largest subsector is government and civil society; the OECD lists eighteen further subdivisions of this subsector, ranging from public finance management to removal of landmines.

Humanitarian aid UK spending on humanitarian aid reached its highest ever level as a proportion of its total bilateral aid spending in 2017. At 17 per cent it was three times higher than in 2009. It dropped back a little in 2018, when it reached 14 per cent. The largest change came in 2013, a 94 per cent increase on the previous year.

This partly reflects the fact that a number of emergencies came in quick succession, as noted by the Global Humanitarian Assistance Report 2014:

Millions of people were affected by three very different major crises – in Central African Republic (CAR), the Philippines and Syria – each designated as the highest level of emergency (Level 3) by the UN. Individually and combined, these placed unique demands on humanitarian responders and donors. Elsewhere, both on and off the international radar, many more people were caught in lower profile crises including in the Sahel, South Sudan and Yemen. Globally, the number of internally displaced people reached an unprecedented 33.3 million, while the number of refugees increased to 16.7 million

0% 20% 40% 60% 80% 100%

2009201020112012201320142015201620172018

Education HealthWater Supply & Sanitation Government and Civil SocietyOther social infrastructure & services

Bilateral spending on social services and infrastructure

Source: DFID, Statistics on International Development: Final UK Aid Spend 2018, Table A7, 19 September 2019

29 Commons Library Briefing, 4 May 2020

Humanitarian aid spending includes food, water, shelter, medicines and similar items for people in emergency situations, as well as the spending required to get it to them. Although emergency response makes up a large proportion of humanitarian aid spending, there have been suggestions that this can be reduced with better disaster preparedness. DFID’s 2011 Humanitarian Emergency Response Review said:

Investing in resilience will save lives and money in the future. Mozambique asked the international community for £2 million in 2006 to help prepare for the floods, an amount it could not secure. After the floods the international system spent £60 million responding.

Refugees in donor countries As humanitarian crises have increased in recent years, so have the numbers of refugees fleeing to other countries – the number of asylum applications in the UK in the year to June 2019 was 74 per cent higher than it was in the year to June 2011, although much lower than the peaks seen in the early 2000s. Spending on hosting and processing these refugees by OECD DAC member states more than doubled between 2014 and 2015.

Much of this spending counts as aid; the OECD says that spending on temporary assistance to refugees (food, shelter and training) is reportable for the refugees’ first year in the country, and all costs associated with voluntarily repatriating them to their country of origin also count. This is not without controversy, with several charities suggesting that this is an inappropriate use of aid budgets and reduces the amount that can be spent in poor countries.

The UK spends less on refugees within its own borders compared with several other OECD members and other EU countries. Its spending makes up 6.6 per cent of all DAC members’ spending on refugees.

0 200 400 600 800 1,000 1,200 1,400 1,600

2009201020112012201320142015201620172018

Emergency Response Reconstruction relief and rehabilitationDisaster prevention and preparedness

Bilateral spending on humanitarian aid£ millions

Source: DFID, Statistics on International Development: Final UK Aid Spend 2018, Table A7, 19 September 2019

30 UK aid: frequently asked questions

0 1 2 3 4

Germany

United States

France

United Kingdom

Netherlands

Canada

Spain

Switzerland

All others

Note: Figures are not available for Australia or Luxembourg.Source: OECD.Stat, database DAC1, retrieved 1 May 2020

OECD DAC member in-donor refugee costs, 2019US$, billions

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Q8 What kinds of activities are funded by UK aid?

It is impossible to do justice to the full range and variety of activities that are funded by UK aid. This is true whether we look across the sectors described in Q7, or within each of them.

But some observations can be made, along with a few illustrative case-studies drawn from the UK government’s Development Tracker website.

All the activities funded by UK aid are supposed to be consistent with the objectives set out in the 2015 aid strategy and other supporting strategies. These were described in Q4, so we will not repeat them here.

Programmes and projects Activities funded by UK aid mainly take place in the context of programmes and/or projects. These are overseen in different ways by one or more government departments, or by cross-government mechanisms. Programmes are usually larger in scale, projects smaller. Projects may be important components of a programme, but they can be free-standing too. Overall, successive UK governments have shifted towards a more programmatic approach to aid, believing that this will increase coherence and impact. DFID takes this approach. Other government departments – particularly those which spend aid in smaller quantities – may take a more mixed approach.

Box 1: Example of a programme

Impact Programme - Investment to fund innovative solutions for development and help develop sustainable investment markets that work for the poor [GB-1-202939]

Backed by DFID and costing £757 million between 2012 and 2035, this programme is intended “to catalyse the market for impact investment in Sub-Saharan Africa and South Asia.”

Box 2: Example of a project

Building antimicrobial resistance National Action Plans in middle and low income countries [GB-GOV-3-WP1477]

Backed by the FCO and costing £94,000 in 2016/17, this time-limited, one-year, project brought together “specialists from key middle- and low-income countries to encourage and support sharing of good practice and identifying barriers to slow the development and spread of antimicrobial resistance”.

Development and humanitarian aid Many UK aid activities flow from programmes that are medium (up to five years) to long-term (five years and beyond) in character. But some activities are more short-term and reactive. One important distinction here is between ‘development aid’ and ‘humanitarian aid’. But it is not a hard-and-fast distinction. Humanitarian activities can often have longer time-horizons if acute needs persist.

32 UK aid: frequently asked questions

Box 3: Example of development aid

SHARE - Sanitation and Hygiene Research Programme. [GB-1-114396]

Backed by DFID and costing just under £17 million between 2009 and 2020, SHARE was “designed to generate, synthesize, and translate applied research related to sanitation and hygiene in low-income settings.”

Box 4: Example of humanitarian aid

South Sudan Humanitarian Programme (HARISS) 2015 - 2020 [GB-1-204019]

Backed by DFID and costing £687 million over seven years, this programme is intended to “help approximately three million South Sudanese by providing critical life-saving support and helping people to better cope with shocks from conflict, drought and flooding.”

Geographic and thematic activities Another important distinction is that between aid-funded activities that are geographically-based (by country or region) and those which are thematic in character.

According to DFID’s ‘Development Tracker’ website in January 2020, the “top five” countries where UK aid is currently being spent are: Pakistan, Nigeria, Bangladesh, Ethiopia and Syria.

Box 5: Example of a country-based programme

'Pakistan National Cash Transfers Programme' [GB-1-203029]

Backed by DFID and costing £300 million between 2012 and 2021, this programme aims to “reduce poverty and improve living standards and educational attainment in the poorest families by providing regular payments to the female head of household.”

Box 6: Example of a thematic programme

Forest Governance, Markets and Climate [GB-1-201724]

Backed by DFID and costing £278 million between 2011 and 2023, this global programme supports “governance and market reforms aimed at reducing the illegal use of forest resources, benefitting poor forest-dependent people and promoting sustainable growth in developing countries.”

Responsibility for implementation Ongoing implementation of aid-funded activities is rarely the direct responsibility of UK civil servants today. It is largely left to external stakeholders such as recipient governments and multilateral organisations.

Other important external stakeholders are non-governmental organisations (NGOs), think-tanks, universities, consultancies or businesses. Collectively, these are often called ‘civil society’. DFID launched a civil society partnership strategy in November 2016.

In May 2019, DFID said that it had awarded more than 80 per cent of its contracts to UK-registered companies in each of the last five years.

33 Commons Library Briefing, 4 May 2020

Q9 What impact does UK aid have?

This is a question over which there has long been fierce debate. For some, official aid is crucial to international development; others are less convinced.

In practice, most argument is about when, where and why UK aid has a positive impact – and when, where and why it does not. One challenge in making meaningful assessments is that it is difficult to know what would have happened if no aid had been given.

The OECD’s evaluation The OECD carries out periodic ‘peer reviews’ of the aid performance of DAC members. The most recent review of the UK was published in December 2014. In the accompanying press release, the OECD said:

The United Kingdom has done well to increase its development spending to 0.72% of gross national income despite a challenging budget climate and should strive to maintain that level of aid for the years ahead, according to a new OECD Review.

[…] The scaling-up of the UK’s aid budget was planned in a way that should ensure the extra money was well spent and had the greatest possible impact, according to the Review.

The Review also praised the UK for its focus on the neediest countries, including fragile and conflict-affected states such as Afghanistan, Bangladesh and Ethiopia. In 2012 the UK allocated 0.19% of its GNI to the least-developed countries, above a UN goal of 0.15%, and with more than half of its bilateral ODA that year going to sub-Saharan Africa.

There was also a ‘mid-term review’ of the UK in 2017. Once again, its verdict was positive. The next full peer review is due in 2020.

Some critics might question the independence and credibility of the OECD’s evaluation, arguing that the organisation is very much in the ‘pro aid’ camp. This response can also be made about other positive evaluations of the UK’s aid performance, including some of those published by international non-governmental organisations.

Other evaluations The 2014 OECD report had relatively little to say about the impact of specific UK aid-funded activities.

This can only be generated through ongoing evaluation of those activities, which is mainly undertaken by the UK government – usually, DFID – by the House of Commons’ International Development Select Committee or by the Independent Commission for Aid Impact.

DFID

Many of the individual programmes and projects funds by UK aid are subject to ‘Annual Reviews’, some of which are subsequently published. DFID also undertakes broader ‘thematic evaluations’. DFID has an evaluation strategy (covering the period 2014-19) and has developed

34 UK aid: frequently asked questions

approaches which those carrying out evaluations must broadly adhere to. The strategy says that there should be “independent quality assurance” of such evaluations whenever DFID is the main funder.

DFID used to publish an annual list of its own evaluations. It has not been updated since April 2018.

A 2017/18 annual evaluation report was published in January 2019.

In January 2017 DFID published an Annual Review on one of the programmes featured in Q8, South Sudan Humanitarian Programme (HARISS) 2014 - 2020.

Conducted in February 2016, the Review evaluated performance in 2015, awarding it an A+.

The Review looked at overall performance, whether numerical targets for beneficiaries had been reached or exceeded, and assessed value for money and financial performance, as well as how risk was being managed. It was based on a document review and interviews, none of which were with intended beneficiaries.

International Development Committee

The International Development Committee (IDC) is a parliamentary select committee made up of MPs of different political parties in the House of Commons. The party (or parties) that comprise the UK government have the largest representation on the Committee, but its chair is not usually from that party (or parties).

The IDC exists to scrutinise the work of its counterpart government department – in this case, DFID – but the IDC can look at the work of any department insofar as it spends UK aid.

The IDC conducts a rolling programme of inquiries into different aspects of UK aid policy at any one time. For example, during the 2015-17 parliament, the IDC looked at (amongst other subjects) DFID’s programme in Nigeria and DFID’s use of private sector contractors. In the 2017-19 Parliament, it responded to growing controversy over sexual exploitation and abuse in the aid sector by launching an inquiry.

The nature of and requirements for each inquiry differs but all involve collecting evidence (sometimes from members of the public, who are free to send in submissions) and many involve travel to developing countries by MPs and committee staff. Unlike DFID evaluations, performance and impact are not given ratings, but every final report includes specific conclusions and recommendations for action. Many of the reports are debated in the House of Commons. The UK government is required to respond to each IDC report.

The IDC report on DFID’s programme in Nigeria

This in-depth report endorsed DFID’s decision to increase UK aid spending in Nigeria, saying: “We view DFID’s spending in Nigeria as tackling some of the most important development challenges of the 21st Century.”

It called on DFID to act as a “catalyst” for improved health and education services in Nigeria. However, the committee expressed reservations about its support for private education and

35 Commons Library Briefing, 4 May 2020

about the way in which it was seeking to deliver power sector reforms. A delegation of the committee had briefly visited Nigeria, meeting with government officials, aid workers, civil society groups and beneficiaries. The UK government published its response in October 2016.

Independent Commission for Aid Impact

The Independent Commission for Aid Impact (ICAI) was established by the coalition government in 2010. It is independent of government and reports to the IDC. According to its website:

The Independent Commission for Aid Impact scrutinises UK aid spending. We operate independently of government and report to Parliament through the House of Commons International Development Committee or their ICAI Sub-Committee.

We work to ensure UK aid is spent effectively for those who need it most, and delivers value for UK taxpayers. ICAI’s formal remit is to provide independent evaluation and scrutiny of the impact and value for money of all UK Government ODA. This involves:

• carrying out a small number of well-prioritised, well-evidenced, credible, thematic reviews on strategic issues faced by the UK Government’s aid spending

• informing and supporting Parliament in its role of holding the UK Government to account

• ensuring our work is made available to the public.

ICAI’s mandate covers all ODA, whichever department it is spent by. In addition to the Department for International Development, aid-spending departments include the Department for Business, Energy and Industrial Strategy, the Foreign and Commonwealth Office, the Department of Health, the Department for Environment, Food and Rural Affairs and cross-government funds such as the Conflict, Stability and Security Fund and the Prosperity Fund. Our mandate does not cover aid spent by the devolved Scottish and Welsh governments.

Most of ICAI’s reports include an overall ‘colour rating’ for the performance of the programmes or issues that it is investigating. The ratings range from green (strong performance), green-amber (satisfactory), amber-red (unsatisfactory) or red (poor).

Since 2010 it has carried out many reviews. For example, during the 2015-17 parliament it looked at how DFID manages changing aid relationships, the cross-government Prosperity Fund and UK support for efforts to provide basic education to marginalised girls.

In March 2019 ICAI published a report on the CDC’s investments in low-income and fragile states, assessing the CDC’s performance as amber-red. In May 2019, the government and CDC jointly responded with proposals to improve performance.

ICAI’s November 2016 review of how DFID manages changing aid relationships

This 48-page review looked at how DFID had managed the process of “ending bilateral aid, or transitioning to new forms of development partnerships, in seven countries.” It gave DFID an

36 UK aid: frequently asked questions

overall amber-red rating (and, within that, a red rating for how the department was applying learning about this issue).

It concluded that “in several cases the department had not specified clear objectives for its new development partnership or any detail on how that partnership would work, and that the process was not well communicated – within recipient countries or with the UK public.” It also found examples of poor planning.

ICAI interviewed 247 stakeholders across six main groups: DFID, other UK government departments, partner country officials, other development partners, civil society and the private sector. It made in-depth visits to China and India (see also Q11); the rest of the case studies were “desk-based”.

37 Commons Library Briefing, 4 May 2020

Q10 How is waste, fraud and corruption being tackled?

Sceptics have long argued that too much aid is wasted and that it involves unacceptable levels of fraud and corruption.

Successive UK governments have said that they have ‘zero tolerance’ towards waste, fraud and corruption. A concrete manifestation of this approach is found in the UK’s “Partnership Principles”, which were first introduced in 2005.

These Principles describe UK policy on conditionality in its aid partnerships with priority countries where DFID provides direct bilateral aid. For example, Principle Three requires partner governments to show commitment to strengthening the management of public finances and fight corruption. Failure to do so has on occasions led to a decision to cut or suspend UK aid, or provide it in a different form – for example, bypassing government channels. But critics have sometimes accused UK governments of being too reluctant to take such action.

The other Partnership Principles address the commitment of partner governments to poverty-reduction, respect for human rights and strengthening domestic accountability. In practice, the Principles overlap extensively.

Waste Recent UK governments have sought to combat wasteful aid spending by taking steps to ensure value for money, including through the introduction of payment by results.

Successive Secretaries of State for International Development have promised to root out waste. The Multilateral Development Review said that wasteful spending by multilateral organisations receiving UK aid would be tackled through the widespread use of performance agreements, with future funding dependent on meeting mutually-agreed results.

In the context of continuing controversies over waste, including by some private sector contractors which spend UK aid money, a previous Secretary of State, Priti Patel, provided an update to the House of Commons about what DFID was doing in April 2017:

[…] my ministerial team and I have conducted a detailed line-by-line review of every programme in DFID’s portfolio, either already approved or in design phase. Each of these programmes has been scrutinised on the basis of their value for money and their strategic fit with the Government’s priorities for Global Britain. The savings from programmes which will not continue will be recycled to fund better value programmes aligned to our priorities, whilst still delivering our planned results and commitments.

In the 2015 Spending Review the Government announced plans to make over £400 million of efficiency savings by 2019/20. DFID will save closer to £500 million in this period, through reform of

38 UK aid: frequently asked questions

procurement and commercial practices, estates, IT and departmental pay.

These changes are included in the Department’s ambitious new value for money ‘Agenda for Action’.

In addition, a comprehensive review of DFID’s management and relationship with suppliers is underway. This review will drive greater transparency and efficiencies from DFID’s suppliers through new Codes of Practice and contractual obligations; more competition, innovation and choice in our supplier market; and increased transparency of fees and costs throughout our supply chain.

These bold measures will drive value for money without compromising our commitment to being a global leader in international development.

In April 2018, then Secretary of State Penny Mordaunt introduced the idea of a “higher spending bar”, under which proposed programmes and projects in future must pass a tougher test than in the past – “not just ‘spent well’, but ‘could not be better spent’”. DFID says that planning processes are being changed to implement this approach.

In February 2018, ICAI published a report on DFID’s approach to value for money, in which it recommended measures for further improving performance.

Fraud and corruption DFID said in its 2018/19 Annual Report and Accounts:

All DFID staff, as well as programme delivery partners and contractors, are required to report any fraud – suspected or detected – to the Counter Fraud Section without delay. When fraud and aid diversion occur, DFID has a robust fraud response. The Counter Fraud Section ensures the appropriate investigatory response to all suspicions and allegations of fraud, corruption and abuse of DFID resources. DFID takes a robust approach once fraud is identified, with recovery of funds being sought in all instances, and has a good record on recovery. Details of our fraud loss statistics are published on the GOV.UK website […]

The department has whistleblowing arrangements in place and a policy that meets the UK’s legislative framework, as set out in the Public Interest Disclosure Act (PIDA). The policy is reviewed regularly by DFID’s Internal Audit department, and the Audit and Risk Assurance Committee, to ensure continued compliance with PIDA and was promoted across the department as part of a UK Government 2018 fraud awareness campaign. All complaints have been handled independently by the department’s Counter Fraud Section.

Fraud

Figures for 2018-19 show that DFID lost £5.2 million (down from £5.9 million in 2017/18) in “diverted aid” – a 12 per cent reduction on the previous year and less than 1 per cent of its annual spend.

There has been scepticism in some quarters about DFID’s figures. In April 2017, the Public Accounts Committee (PAC) published a report in which it remarked upon the “remarkably low levels of fraud”, adding

39 Commons Library Briefing, 4 May 2020

that more work was needed by DFID to tackle fraud in overseas development spending.

The PAC published a report in response to a National Audit Office report on the subject.

Corruption

Successive UK governments have committed themselves to combating corruption in its both its own operations and overseas. DFID gave this overview of its position in 2016:

Corruption threatens our national security, economic prosperity and international reputation. It is often the root cause of international instability and conflict […] The Government recognises that corruption is multi-faceted and requires coordinated and targeted work in the UK, internationally and in developing countries to tackle it.

The Government therefore works to ensure that action takes place:

a) domestically, in the UK to get our house in order to ensure that our financial systems are not used to facilitate the movement or holding of illicitly-acquired funds, and to assist in their tracing, recovery and return when they are found in the UK;

b) internationally, to strengthen the global anti-corruption ‘architecture’ including contributing to the development of global standards and support for new agencies;

c) within DFID’s partner developing countries, to assist in the strengthening of their national systems and the prevention of corrupt practices and asset flight.

The 2015-17 UK government hosted an international anti-corruption summit in 2016. A ‘whole of government’ anti-corruption strategy for 2017-22 was published in December 2017, superseding a 2014 plan.

In 2013, DFID published a series of ‘anti-corruption country strategies’. Although the government said in late-2016 that it planned to publish new ones, this has not happened.

The IDC published a wide-ranging report on tackling corruption overseas in October 2016. A major focus of the report was on the role of the UK’s Overseas Territories and Crown Dependencies, which have often been accused by campaigners of facilitating global corruption by functioning as ‘tax havens’. The IDC said that there was more for the UK government to do on transparency and accountability if it wanted to “get its own house in order”. The government published its response in December 2016. The provisions of the Sanctions and Anti-Money Laundering Act 2018, which includes measures on tax havens, are set to come into force now that the UK has left the EU.

UK aid is being spent on combating corruption through many country-based and thematic programmes. One example is the £32 million International Action Against Corruption programme. Running from 2017 to 2021, the programme follows through on “anti-corruption summit actions aimed at preventing corruption, ending impunity, and empowering those who have suffered from it.”

40 UK aid: frequently asked questions

Q11 Why is UK aid still going to countries like India, China and South Africa?

Members of the public have complained in recent years that, despite official statements that UK aid would no longer be spent in middle-income countries like India, China and South Africa, this promise was being broken.

It is true that UK aid continues to be spent in these (and other) middle-income countries, although it has decreased. But a closer look at the statements made by 2010-15 UK coalition government shows that it did not actually say that spending would end completely.

What was announced and why people got confused The announcements made were not as clear as they could have been (see below). What the government promised was that most bilateral aid to these countries would be stopped as the UK moved away from a traditional aid relationship towards a “development partnership”. As we saw in Q2, there are other ways of providing UK aid to countries.

Another point which people sometimes missed when the policy changes were announced was that activities being funded by UK bilateral aid in these countries would be allowed to finish. A lot of these activities were taking place in the course of multi-year programmes and projects.

This, allied with the fact that many official statistics tend to lag up to a year behind the present time, meant that significant levels of UK bilateral aid spending continued to be reported in such countries for several years after the policy changes were announced.

ICAI report on how DFID handled the transition ICAI discussed all this in greater depth in its 2016 report on how DFID manages changing aid relationships. It argued that, in the cases of India,

-100

0

100

200

300

400

500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Note: Net ODA includes loan repayments and investments, and can therefore be negative.Source: DFID, Statistics on International Development: Final UK Aid Spend 2018, Table A4a & A4b, 19 September 2019

India

China South Africa

Net bilateral ODA to India, China and South Africa£ millions, not adjusted for inflation

41 Commons Library Briefing, 4 May 2020

China and South Africa, DFID handled the transition to a new relationship poorly (although it did better in its handling of the case of Indonesia):

In three of the four transition cases (China, India and South Africa), DFID did not articulate clearly what this new partnership might look like or how it would be developed. While its high-level objectives were shared with partner governments at a senior level, DFID did not communicate its intentions clearly to important national stakeholders. This resulted in misunderstanding and miscommunication, at some cost to its relationships. The lack of clarity in these transition processes may have reflected a wider uncertainty in DFID at the time as to its role in middle-income countries. Indonesia was the exception, as DFID and the Indonesian government readily agreed to focus the new partnership on climate change.

Members of the International Development Committee have recently expressed concern about UK ODA, through the Prosperity Fund, being spent on “front-line diplomatic activity” in China and support to the Chinese film industry.

The UK will continue to spend aid on middle-income countries It is important to note that since 2016 levels of UK bilateral aid have been increasing in several conflict-affected middle-income countries: Syria, Iraq, Jordan and Lebanon. This has been in the context of Syria’s civil war and its regional ramifications. This indicates that the overall shift in UK aid spending towards poor countries which has occurred in recent years is not an absolute or rigid one.

What has been the rationale for continuing to spend significant amounts of UK aid in some middle-income countries? ICAI suggested in its 2016 report that the 2015-17 government had sent mixed messages. Sometimes the line was that several were major ‘emerging powers’ with which it was vital to strengthen ties. At other times it argued that such countries were often still characterised by significant poverty and high-levels of inequality. Another justification used was that they could be sources of international terrorism and mass migration.

The promotion of a “mutual prosperity agenda” by the government creates considerable scope for spending UK aid in middle-income countries. In an October 2019 report on the use of UK aid to promote this agenda, ICAI said:

The government is increasingly spending foreign aid in areas where it can deliver benefits to both the UK economy and countries eligible for aid – but care must be taken to ensure the primary aim of poverty reduction isn’t diluted or lost […]

Departments are currently proceeding with caution in their use of aid to promote mutual prosperity; we did not find any examples of UK aid being used exclusively to pursue short-term commercial opportunities or to help individual UK businesses at the expense of their competitors.

42 UK aid: frequently asked questions

The main vehicle for this agenda currently is the Prosperity Fund (Q6). Its annual funding settlement has been growing progressively since its inception in 2016.

In April 2018, then Secretary of State for International Development Penny Mordaunt said that the UK needed to develop a “new offer for countries transitioning out of extreme poverty.” One manifestation of this shift is the Prosperity Fund’s proposed Global Trade Programme, which will provide “technical help towards free trade and open markets in Overseas Development Assistance eligible Middle-Income Countries.”

Prosperity Fund budget, 2016-17 to 2020-21£ millions

Initial budget Non-ODA component

2016-17 55 52017-18 202 82018-19 300 102019-20 350 102020-21 350 tbcTotal 1,257 ≥33

Source: ICAI, Rapid Review of the Prosperity Fund, Table 2, February 2017

43 Commons Library Briefing, 4 May 2020

Q12 What will be the impact of Brexit on UK aid?

Current level of UK aid channelled through European development mechanisms The EU has been one of the UK’s largest multilateral aid partners.

The UK’s total aid budget was £15.2 billion in 2019. Of this, £945 million went into the development part of the EU budget. Some money also goes via the European Commission into the European Development Fund (EDF) – we do not yet have the full figures for 2019, but in 2018 £439 million went via this route.

The development part of the EU budget

It funds programmes in Asia, Latin America, Eastern Europe, the Middle East and North Africa. It also funds some thematic programmes and the EU’s humanitarian assistance, through ECHO (the Directorate-General for Humanitarian Aid and Civil Protection – the humanitarian arm of the Commission).

The European Development Fund

It is the main funding instrument for European Commission (EC) development spending in 78 African, Caribbean and Pacific countries (ACPs) and 25 EU overseas countries and territories.

What will happen to this money after Brexit? Based on these figures, it is reasonable to estimate that leaving the EU will mean – once all spending through European mechanisms to which the UK already committed has been completed – that about 10 per cent of the UK’s aid budget is potentially available for reallocation.

Some will want some, if not all, of these funds to be reallocated away from foreign aid and into domestic expenditure. But this will be difficult while the UK remains legally committed to the 0.7 per cent aid target. As things stand, these funds will have to be reallocated to other foreign-aid related activities.

Others have asked whether some or all of the funds currently allocated through European development mechanisms could still be spent through them after Brexit, if the UK government viewed this as a good use of the money.

The early indications were that, while there was a desire on both sides to explore what might be possible, this was unlikely to happen. There was near-consensus that the UK would cease to make contributions to the development part of the EU budget after Brexit.

However, there were more optimistic signals during 2018. At a security conference in February, the then UK prime minister, Theresa May, said:

[…] if a UK contribution to EU development programmes and instruments can best deliver our mutual interests, we should be open to that. But if we are to choose to work together in these ways, the UK must be able to play an appropriate role in shaping our collective actions in these areas.

44 UK aid: frequently asked questions

Around the same time, with negotiations within the EU about its 2021-27 budget getting under way, the UK government also circulated a paper called “The EU beyond 2020 – future development instruments: a UK perspective”, in which it said:

The EU has the opportunity now to design a set of future instruments which builds on the positive examples of the last few years, and creates an open and flexible enabling framework, within which the EU and its partners can work together to tackle these global challenges and help to build a secure, stable and prosperous world.

The EU will remain one of the largest development actors in the world, and the UK wants to retain a close partnership with the EU in the future […]

We suggest that the new instruments are designed so that they are open to external partners that share these values and commitments, to enable this free-flow of ideas, pooling of technical expertise and resources, and joint approaches. Partners should be invited to participate at a strategic level, with a seat at the table, where they are able to contribute expertise or resources (funding or in kind). Partners should be able to earmark funding within the geographical funds for Africa, the Caribbean and the Overseas Countries and Territories, and the Pacific, as well as to the neighbourhood.

The UK-based NGO coalition BOND said that the UK paper sent “promising signals”. But the European Centre for Development Policy Management observed that “some would say that there is a lot of wishful thinking in the UK’s paper.”

By mid-2019, with the Withdrawal Agreement negotiated by Theresa May’s government having been rejected by the UK parliament, there was a return to pessimism. There was growing concern that the European Commission might decide that UK-based NGOs would be immediately ineligible to continue to receive EU funding in the event of a ‘no-deal’ Brexit. In response, the UK government pledged to cover any loss of EU funds in such circumstances (see also the government’s guidance on Delivering overseas aid programmes if there's no Brexit deal).

In May 2019, a previous Secretary of State for International Development, Penny Mordaunt, described the European Commission as a “block” to future cooperation on international development, calling on it to “see sense”.

Much hinges on the negotiations on the post-Brexit future relationship In October 2019 events took a more hopeful turn. Under a new prime minister, Boris Johnson, the UK agreed a new Withdrawal Agreement with the EU. Alongside it was a non-binding Political Declaration Setting out the Framework for the Future Relationship between the UK and the EU.

The Political Declaration creates the possibility of UK participation in future “Union programmes” across a range of policy areas, including “overseas development”. This could involve financial contributions.

45 Commons Library Briefing, 4 May 2020

The new Withdrawal Agreement, followed by the Conservative victory in the December 2019 general election, paved the way for the UK to leave the EU on 31 January 2020.

Formal negotiations on the future UK-EU relationship began in March 2020. UK participation in future Union programmes on overseas development will be just one of many items on the agenda in those negotiations. There are fears that it may get squeezed out by other more pressing issues.

The Lords EU External Affairs Sub-Committee is currently conducting an inquiry into UK-EU development cooperation post-Brexit.

UK assessment of the performance of European development mechanisms If the UK did continue to pay funds into European development mechanisms after Brexit, how might this be justified? Aside from playing a part in building the positive relationship with the EU that the UK government says it wants to see, advocates might point to the broadly positive evaluation of these mechanisms in the 2016 Multilateral Development Review (also see Q4).

The review gave the mechanisms a ‘very good’ rating (the highest achievable rating) for their alignment with UK development objectives and scored them as ‘good’ in terms of their organisational strengths. Overall, they were relatively strong performers.

46 UK aid: frequently asked questions

Q13 Towards an independent UK trade policy: what is changing for trade and development?

In recent years UK policy on international development has been moving “beyond aid” (see also Q2). UK aid is being spent to encourage this shift. An important aspect of this agenda is an increased focus on the role of trade in promoting development.

The UK left the EU on 31 January 2020 and entered a transition period, during which the UK is continuing to follow EU trade and development policies. The transition period is expected to end on 31 December 2020. At the end of this period, the UK will be able to have its own independent trade policy.

There has been much debate about the implications of Brexit for the UK’s trade and development policies.

Richard Baldwin, Paul Collier and Anthony Venables have described Brexit as an opportunity to improve on inadequate EU policies. Academics at the Overseas Development Institute have taken a similar approach, arguing that

the UK's trade and development policies should be carefully aligned and mutually reinforcing. There is an opportunity to adopt a 'win-win' approach that will benefit both developing countries and the British economy […]

In evidence to the International Trade Committee, which was looking into these issues as part of its inquiry on Trade and the Commonwealth: developing countries, a range of experts emphasised how important the EU’s reduced trade tariffs are for certain developing countries and sectors, for example

Current situation – and the future Many developing countries are eligible for tariff-free or low tariff exports to the EU under current rules. The value of the current arrangements for developing countries which export to the UK is substantial.

Once outside the EU customs union, the UK can decide what tariff regime it wants to put in place for developing countries, subject to WTO rules, and agree any of its own trade deals. A UK approach could be more favourable to developing countries than the current EU schemes or it could be less favourable.

Under the EU’s “Everything But Arms” initiative, the “Least Developed Countries” have duty-free and quota-free access to all products, except for arms and ammunitions. The UK government has pledged to continue this arrangement under its independent trade policy.

Low and lower-middle income countries other than Least Developed Countries, are currently eligible for the EU’s standard “Generalised Scheme of Preferences” (GSP) or “GSP Plus” schemes. Under these

47 Commons Library Briefing, 4 May 2020

schemes, tariffs are partially or entirely removed on two thirds of all product categories. Of the two schemes, the GSP Plus offers greater advantages in exchange for a country taking certain actions to support sustainable development and good governance. Some developing countries also have individual trade agreements with the EU, or are part of regional agreements.

International development is a priority for the UK’s independent trade policy. Answering a question on improving bilateral UK trade with developing countries, FCO Minister of State Dr Andrew Murrison said on 23 January 2020:

The Department for International Development and the Department for International Trade are working together to ensure development and global prosperity are at the heart of UK trade and investment policy.

Once we leave the EU, the UK will be able to offer an integrated trade and development package, encompassing preferential trade arrangements for developing countries and aid that facilitates trade and promotes investment.

At the UK-Africa Investment Summit, we announced plans to establish an import promotion service, Trade Connect, to help developing countries make the most of preferential trade access to the UK, and increase their presence in international markets. We also announced an extension to our SheTrades Commonwealth programme so that it can continue to help female entrepreneurs to access trading opportunities.

Taxation (Cross-border Trade) Act 2018 The Taxation (Cross-border Trade) Act 2018, passed in September 2018, provides the legislative basis for the UK to put in place its own system of trade preferences for developing countries, replacing the EU system, which remains in force until the end of 2020.

The Act requires that the scheme must include a zero rate of duty for imports from the Least Developed Countries. The Act also allows lower tariffs to be put in place in line with trade agreements between the UK and other countries, including those with developing countries. This will maintain tariff free access for Least Developed Countries and continue to offer tariff reductions to around 25 other developing countries. Section 4 of the Library briefing on the Act, The Taxation (Cross-border Trade) Bill, discussed these issues further.

The government said in January 2020 that its own GSP will continue to provide trade preferences to the same countries as the EU’s GSP. There will be 3 frameworks:

• least developed countries framework (LDCF)

• general framework

• enhanced framework

These frameworks will replicate the same market access as the EU GSP.

From 6 February till 5 March 2020, the government is holding a consultation on the UK Global Tariff (UKGT) – a future independent tariff that the UK will apply from 1 January 2021, once the current

48 UK aid: frequently asked questions

transition period is over. It will replace the EU’s Common External Tariff which is currently applied on imports into the UK.

Under this regime, new UK Most Favoured Nation tariffs will apply to all goods entering the UK, unless covered by an exemption such as a preferential trade arrangement. The tariff will not apply to goods coming from developing countries covered by the UK GSP, or to goods from countries with which the UK has a free trade agreement (FTA).

The core of the proposed UKGT is to simplify UK tariffs, remove tariffs on key inputs to production and remove tariffs on products where the UK has no or limited domestic production. The government is seeking to align the Global Tariff policy with its strategic objectives, including its plans to conclude free trade agreements and the “commitment to developing countries to reduce poverty through trade.”

The previous Temporary Tariff Regime which the government designed in 2019 to apply in case the UK leaves the EU without an agreement, has been set aside.

Commenting on the previous government proposal which would have reduced most tariffs to zero, the International Economic Development Group has said that current benefactors of zero tariffs for the UK could see the value of their tariff preferences halved. They would still have to directly compete with every other country in the world on a large share of their imports to the UK. The UKGT proposal indicates, that abandoning most import tariffs is no longer considered a priority objective.

Questions have been raised – including by the International Trade Committee – about the move from current EU trade deals with third countries (including developing countries) to the UK’s own future deals with those countries. The UK’s policy is to “provide a technical replication of the conditions” that exist under current trade agreements in order to prevent “disruption” when the UK leaves the EU’s trade and development arrangements at the end of 2020.

Rolling over EU trade agreements By February 2020, the UK had made progress in rolling over EU trade agreements. The following agreements include countries which are recipients of ODA:

• Andean countries trade agreement (Colombia, Ecuador and Peru)

• Economic Partnership Agreement (EPA) with the Eastern and Southern African States (Madagascar, Mauritius, Seychelles and Zimbabwe)

• UK-Central America association agreement (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama)

• CARIFORUM-UK economic partnership agreement (Antigua and Barbuda, Bahamas, Barbados, Belize, Dominican Republic, Grenada, Guyana, Jamaica, Saint Christopher and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago)

49 Commons Library Briefing, 4 May 2020

• UK-Georgia strategic partnership and cooperation agreement

• UK-Jordan association agreement

• UK-Kosovo partnership, trade and cooperation agreement

• UK-Lebanon association agreement

• UK-Morocco association agreement

• UK-Pacific EPA (Fiji and Papua New Guinea)

• Southern Africa Customs Union and Mozambique (SACUM) - UK EPA (Botswana, Eswatini, Lesotho, Namibia, South Africa, Mozambique)

• UK-Tunisia association agreement

The above agreements largely mirror EU-third country trade relationships in a bilateral context and will be implemented after the end of the transition period. These agreements give goods from partner countries continued preferential access to the UK market with reduced or zero tariffs and preferential quotas. The government is still negotiating the rolling over of agreements with a number of other countries. ODA-eligible countries not covered by a preferential trade agreement or the UK GSP would see the UK Global Tariff applied to imports of their goods in the UK from 2021.

The Library briefing UK progress in rolling over EU trade agreements and the government website UK trade agreements with non-EU countries provide more detail on the transitioning of EU trade deals.

50 UK aid: frequently asked questions

Q14 What is being done to ensure that UK aid is not complicit in sexual exploitation and abuse?

Since the beginning of 2018 there has been heightened concern about the sexual exploitation and abuse (known for short as SEA) of aid recipients by aid providers, as well as sexual harassment and abuse within aid sector organisations. This concern was initially triggered by reports that Oxfam GB staff had paid three local women for sex in Haiti during the humanitarian response to the 2010 earthquake there and that the group had covered up these offences, failing to report them to the Charity Commission.

Soon afterwards, there were allegations of sexual misconduct and harassment by senior male figures at Save the Children. After these incidents became public, a significant number of similar allegations involving a range of other organisations emerged, some of them stretching back nearly 20 years. Previous controversies about SEA by UN peacekeepers were revisited. These developments are seen as partly responsible for a drop in the value of charitable donations in the UK.

DFID, the Charity Commission and the International Development Committee (IDC) quickly became involved in efforts to address these scandals. UK-based aid organisations have also taken steps of their own.

DFID action The Secretary of State at the time, Penny Mordaunt, froze funding to Oxfam GB (both it and Save the Children later withdrew from bidding for UK aid while they put their houses in order) and established a DFID unit to review safeguarding across all parts of the aid sector. DFID also convened a safeguarding summit with the UK aid sector in March 2018 to agree steps to improve safeguarding processes and mechanisms. A range of measures were agreed at this summit.

In addition, DFID took a leading role at the global level, announcing that there would be an international safeguarding conference in London in October 2018. This summit resulted in 22 donors (including DFID) committing themselves to adhering “to one or both sets of international minimum standards related to preventing sexual exploitation and abuse (PSEA), namely the Inter-Agency Standing Committee Minimum Operating Standards on PSEA, and/or the PSEA elements of the Core Humanitarian Standard on Quality and Accountability".

The 22 donors also said:

In the longer term […] we will look to review and strengthen measures for verification of that adherence, and how the standards could also cover sexual harassment.

They also agreed to support a new OECD DAC instrument to set standards on preventing and managing the risks of sexual exploitation and abuse in development cooperation and on donor accountability.

51 Commons Library Briefing, 4 May 2020

This instrument was adopted by OECD DAC member states in July 2019.

In terms of specific initiatives, donors agreed, on a pilot basis, to:

• create a “passport” for aid workers that provides relevant information about an individual, including their previous record;

• establish a new “Disclosure of Misconduct Scheme” across the NGO sector;

• create a new background-check system led by Interpol;

• create a “resource and support hub” to assist smaller organisations meet common global safeguarding standards.

In October 2018, DFID also published “enhanced safeguarding due diligence guidance”.

In February 2019, Penny Mordaunt updated Parliament on DFID’s work on safeguarding. In the following month she made a keynote speech at BONDs Annual Conference, congratulating the aid sector on its efforts towards “cleaning up its act” on safeguarding.

In October, another Secretary of State, Alok Sharma, provided Parliament with another update. Amongst other things, he said that DFID had just awarded a £10 million contract to set up and run its resource and support hub. He also announced that it was publishing three detailed reports setting out “some of the progress made and some of the challenges remaining.”

Charity Commission action The Charity Commission opened statutory inquiries into Oxfam GB, which had failed to meet its obligation to report the allegations about the conduct of its staff in Haiti in 2010/11 to it, and Save the Children.

In October 2018, the Commission published new reporting advice for UK charities on criminal reporting. It also published a report by a safeguarding taskforce which assessed the nature and scale of the problem.

The Charity Commission report on Oxfam GB in June 2019 found that “aspects of the charity’s past record on safeguarding amount to mismanagement”. It issued an official warning and directed that Oxfam GB take remedial steps. The Commission has not yet published its report on Save the Children. There has been criticism of the delay.

Oxfam GB and Save the Children also commissioned their own independent investigations into their performance. The final report on Oxfam GB was published in June 2019. The final report on Save the Children was published in October 2018. Both organisations again apologised for past failures and undertook to implement the recommendations made in these reports.

International Development Committee action The IDC quickly launched an inquiry in 2018, holding evidence sessions and publishing a draft Bill intended to promote debate about how best to plug any gaps in the UK’s legal framework for addressing these

52 UK aid: frequently asked questions

issues. At the end of July 2018, the Committee published its report, containing 18 recommendations for action.

In its report, the IDC expressed concern that momentum for tackling sexual exploitation and abuse would not be sustained in the long-term, as had happened following previous reports and scandals. Key recommendations for action included:

• Victims and survivors should be at the centre of all efforts to improve safeguarding in the aid sector.

• Aid organisations must improve reporting mechanisms so that beneficiaries of aid are able to safely report incidents of exploitation and abuse, receiving appropriate care and support in response.

• Aid organisations must be transparent with DFID and the Charity Commission about any allegations of SEA.

• DFID should lead on developing a global register of aid workers to prevent perpetrators from moving round the sector undetected.

• The international aid community must establish an international aid ombudsman to provide an avenue of appeal to victims and survivors who do not feel that internal processes provided them with redress.

• Aid organisations should aim to achieve gender parity on boards, at senior management level, and throughout the workforce, and should commit to recruiting and promoting into leadership positions only those who can display a clear commitment to the rights of women and minorities.

DFID responded to this report in December, fully agreeing with some of the IDC’s recommendations, but only partially agreeing with the majority of them.

The main reason why DFID only partially agreed with many of the IDC’s recommendations was that, in its view, they asked the department to accept roles and responsibilities which rested primarily with other bodies and to ensure outcomes that were “not in DFID’s gift”. It also said that the proposed global register of aid workers was not feasible at present but that other measures flowing from the October 2018 international conference may have a similar effect. On the idea for an international aid ombudsman, it noted that the Dutch government had published a report about this, which would be the basis for considering next steps.

In its July 2018 report, the IDC committed to playing its part in “ensuring that momentum on SEA is maintained”. To this end, on 7 May 2019 it launched a follow-up inquiry, which included an evidence session with the new Secretary of State for International Development, Rory Stewart, and other stakeholders.

At this session, Rory Stewart said:

“To understand the role we are trying to play here, it is not to be an international policeman or pretend that DFID can micromanage and control what other people are doing.”

53 Commons Library Briefing, 4 May 2020

But he added that DFID would energetically seek to shape and influence the policies of other actors. Rory Stewart also expressed “some scepticism” about the idea of an international aid ombudsman. Several members of the IDC – Chair Stephen Twigg included – expressed concerns that the momentum on tackling SEA was already slowing. Pauline Latham claimed that the aid sector was “failing miserably”.

The IDC published a follow-up report in October 2019. It found that the aid sector had made slow progress in addressing SEA in key areas, including not doing enough to protect whistleblowers.

Action by UK based aid organisations UK-based aid organisations have taken steps, both individually and collectively, to address the SEA issue. In terms of collective action, BOND, the UK network for organisations working in international development, has played a prominent role.

Four working groups were set up by BOND members to consider the following issues: accountability; organisational culture; the employment cycle; and reporting and complaints mechanisms.

DFID and the Charity Commission are represented on each working group. All are supported by academic and specialist experts. These working groups have developed guidance and tools to improve safeguarding practice.

A representative of BOND’s working groups gave evidence to the IDC in May 2019 IDC, as did a representative for UK private sector suppliers. Both were subjected to considerable criticism.

UK-based aid groups defended the performance of the sector following the IDC’s critical report in October 2019. BOND convened a conference on “safeguarding for development in December at which strengthening protection for whistleblowers was again discussed.

54 UK aid: frequently asked questions

Q15 What are the most useful sources on UK aid?

Members and their staff should contact the Library if they cannot find what they are looking for using the sources below.

Websites DFID (home website)

DFID’s Single Departmental Plan (2015-20)

DFID’s Regional and Country Profiles for 2017/18 and 2018/19

DFID’s Annual Reports and Accounts

Development Tracker (DFID-run website that allows you to follow how the UK invests in developing countries)

Statistics on International Development (published annually by DFID)

Foreign and Commonwealth Office ODA collection (UK government website which brings together all documents relating to Official Development Assistance [ODA]).

CDC Group (the UK’s Development Finance Institution (DFI) and wholly owned by the UK government)

International Development Committee (Commons select committee which scrutinises the work of DFID)

Independent Commission for Aid Impact (scrutinizes official UK aid spending on international development and reports to International Development Committee)

OECD Development Assistance Committee (UK is a member – it is the main international forum for official aid providers and sets out definitions of aid)

OECD Statistics (international data on aid spending)

Overseas Development Institute (UK think-tank)

BOND (UK membership body for development organizations)

Taxpayers Alliance (regularly comments on UK aid policy)

Reports and other documents International Development Act 2002

OECD’s Peer Review of the UK’s aid performance, December 2014

UK aid: tackling global challenges in the national interest, DFID and HM Treasury, November 2015

DFID’s Bilateral and Multilateral Development Reviews, December 2016

DFID’s Economic Development Strategy, January 2017

Agenda 2030: Delivering the Global Goals, UK government, March 2017

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Conflict Security and Stability Fund, Annual Report 2016/17, July 2017

Implementing the Sustainable Development Goals, UK government, December 2017

Prosperity Fund, Annual Report 2016/17, December 2017

UK Anti-Corruption Strategy 2017-22, UK government, December 2017

The EU beyond 2020 – future development instruments: a UK perspective, UK government, February 2018

Lords EU External Affairs Sub-Committee inquiry into international development cooperation after Brexit (ongoing)

National Audit Office (2019 departmental overview of DFID)

“A world for the many not the few: The Labour Party’s vision on international development”, Labour Party policy paper, March 2018

BRIEFING PAPER Number 7996 4 May 2020

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