Government departments 'struggling' to spend their foreign aid budgets 

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Government departments are “struggling” to spend all of the overseas aid money they have been allocated, the spending watchdog has said, prompting fresh demands for the foreign aid target to be scrapped.

A National Audit Office (NAO) report raised concerns that money is being wasted because of the “rush” by civil servants to hit the legal requirement of spending 0.7 per cent of the nation’s income on overseas aid.

Tory MPs accused the Government of needlessly spending money to meet “artificial targets” after the report revealed five out of 11 departments spent more than half their annual aid budget in the last few weeks of the year to meet financial deadlines.

Meanwhile Oxfam said departments were “falling short” in the way they handle taxpayers’ money.

While many Government departments have faced cuts in their budgets, foreign aid spending has soared as the economy has grown because of a promise written into law by David Cameron to spend 0.7 per cent of gross national income on aid.

Theresa May has faced repeated calls to cut foreign aid spending – which hit more than £13 billion last year – in order to fund public services at home.


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Theresa May: Foreign aid commitment ‘remains and will remain’


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It follows a series of controversies over taxpayers’ money being spent on projects such as an Ethiopian pop group and “exporting the dole to Pakistan”, as one MP put it.

The NAO report said that while the Department for International Development (DfID) had improved its management of aid money, it only accounts for 74 per cent of spending, with the other 26 per cent spread across other departments and bodies.

The Departments of Health; Culture, Media and Sport; Energy and Climate Change; Environment, Food and Rural Affairs and the cross-departmental Prosperity Fund were named as the five departments that “struggled” to spend their share of the aid money within the last financial year.

Oxfam

Oxfam

Credit:
Nick Ansell/PA

They spent more than half of their 2016 allocation in the last quarter of the year. The report concluded that deadlines set by the Treasury mean there is a risk the funding “might be rushed”.

Only two of the 11 bodies – HM Revenue and Customs and the Department for Business, Energy and Industrial Strategy – were able in August 2016 to forecast “within 10 per cent accuracy” what their spending in the last quarter of 2016 would be.

The NAO also said the departments do not have the staff and systems in place to deal with the increase in the amount of taxpayers’ money they are required to dispose of.

Peter Bone MP 

Peter Bone MP 

Credit:
Ken McKay/REX

Peter Bone, the MP for Wellingborough, told The Telegraph: “This is the problem with the system and we really need to the abandon the 0.7 per cent target as soon as possible.

“We know that the Government departments are spending money to meet these artificial targets, not on the basis of need.”

Around £12.1 billion was spent on aid across 14 Government departments in 2015. This figure is expected to have hit £13.3 billion in 2016, more than any country other than the US spent on overseas aid.

Britain is one of only six wealthy nations to hit the UN’s 0.7 per cent target, together with Norway, Sweden, Denmark, Luxembourg and the Netherlands, all of which have much smaller economies.

But the NAO said it found it impossible to measure if more than £12 billion being spent on overseas aid is making any difference to the Government’s key development goals and warned of “gaps” in accountability.

The report said that the proportion of money handled by DfID has fallen as funding is being channelled more widely through Whitehall, but no department is in charge of monitoring how well the money is being used overall.

The report praised the Department for International Development (DfID) for its improved management of aid money

The report praised the Department for International Development (DfID) for its improved management of aid money

Sir Amyas Morse, head of the NAO, said: “The Government has decided that departments and cross-government funds other than DfID should have responsibility for expenditure which makes up the 0.7 per cent aid target.  

“This means that meeting the target has become a more complex undertaking and the resulting gaps in accountability and responsibility require more effort to manage.

“HM Treasury and DfID, together with other relevant bodies, should now focus on developing ways to demonstrate the overall effectiveness and coherence of ODA expenditure.”

International Development Secretary Priti Patel 

International Development Secretary Priti Patel 

Credit:
PA

Oxfam’s head of UK policy Richard Pyle said the report showed that many departments were “falling short” in their handling of aid money, while Neil Thorns, Director of Advocacy at the aid agency CAFOD, said it was “imperative” that all aid spending was “held to the same standards of transparency and effectiveness as money spent by DfID”.

A DfID spokesman said: “DfID is responsible for 74 per cent of the Government’s ODA spending. Other Government departments have direct responsibility for their share of the development budget and are accountable to Parliament and UK taxpayers for how they spend ODA.

“The International Development Secretary continuously reviews all DfID spending and stops programmes deemed not to be delivering value for money or which fail to meet international development objectives.”