Development Aid Budget

Earl of Sandwich Excerpts

Monday 3rd July 2017 Lords Chamber

[The Earl of Sandwich (CB)]

My Lords, it is a privilege to join this debate, not only because it is a fascinating subject in itself but because we are at last entering a period in which we can make a proper assessment of aid impact. I congratulate my noble friend on recognising this so soon, and I agree with her analysis and comments on the private sector. I did not agree with her about women in microcredit; we have to have a private discussion about this, because they have a high level of repayment in some countries.

We had a debate back in November 2015, during which various watchdogs involved in the aid programme were discussed. Other noble Lords have already explained the process, but it was already clear by 2010 that DfID was responding to a new international emphasis on aid effectiveness and transparency, added to which came value for money under the coalition, when Andrew Mitchell was Secretary of State and soon established the excellent ICAI. Aid dependency, people’s participation and sustainability were again under discussion. Noble Lords will know that many of these concepts are cyclical, and I can remember them back in the 1970s—I am sure that the noble Lord, Lord Judd, also does—and even earlier. But they were being drawn together under a new Administration, partly because of hostile elements in the media and the need to defend the aid budget during the 0.7% Bill campaign.

Our great advantage this afternoon is that we can draw directly on the first five years’ work of ICAI, the body created to report regularly, as we heard from the noble Lord, Lord Bruce, whom we are very lucky to have in this House, with his first-hand experience. Only last week, ICAI published an important document, the ICAI Follow-up Review of Year 5 Reports. In my experience, the most targeted aid goes not through government but through civil society, churches and faith groups, and human rights agencies. The Grenfell Tower fire is only the latest example of the way that local organisations can move faster and more effectively than government, especially in a crisis. NGOs do not always have a good press but, having worked with several of them, I am bound to say that they have been a most efficient channel of our aid money, including ODA under successive partnership schemes, started by the noble Baroness, Lady Chalker. I can think of many examples of good long-term development that I have mentioned before but will not repeat now.

Aid from all sources goes astray. There were very few examples of fraud during my time with Christian Aid: there was a land speculator disguised as a doctor, and an agent who absconded with money for an emergency in northern Iraq. But no one is surprised that the aid world is always vulnerable to criminals, cheats and liars, especially seizing their chance during emergencies, and some do get round the system. The failure to deliver aid in conflict zones such as Helmand or South Sudan are all too familiar examples. It was good to hear from the right reverend Prelate—Bishop Tim, as we remember him in Sherborne—especially hearing him talk about the importance of climate change, but we are primarily concerned with development aid.

Turning to ICAI’s reports, I was discouraged to read more criticism of the Conflict Pool, which is now reborn as the Conflict, Stability and Security Fund. Held up as a fine example of interdepartmental co-operation, the CSSF has now doubled its budget to £1 billion or more for conflict prevention and peacekeeping—here, the noble Lord, Lord Alderdice, made a vital point—but it still struggles to escape from an amber-red rating in a previous report. As it has wide implications for our foreign and defence policy, it was thoroughly examined by the Joint Committee on the National Security Strategy last February. It was not a satisfactory report, as the CSSF was still found to be wanting. In fact, some people have told me that the CSSF was simply in “a mess”. Perhaps earlier the noble Lord, Lord Bruce, was a bit too forgiving.

ICAI said bluntly two years ago that the FCO’s project managers were not equipped to handle such large sums. It said:

“The other government departments in question do not have DFID’s level of project management capacity and culture of managing for results. There is a risk that the expansion of CSSF’s budget will generate unhelpful competition between departments”.


To answer the point made by the noble Lord, Lord Judd, DfID is in the driving seat, but the Minister might like to comment on this because it has implications for all the other 14 departments now drawing on ODA, and especially for their relations with DfID. There are echoes here from our discussions of the CDC Bill. The Minister knows that there was a lot of concern about the rapid scaling up of CDC projects—many in the private sector—and whether DfID would be able to transfer skills quickly enough. Such overheating inevitably means that aid impact and delivery will be adversely affected in all these organisations.

The June 2015 report also mentioned the statistical boast common to all aid agencies in claiming the numbers of people they reach—the “Heineken factor”, or, in ICAI language, an overreliance on “reach indicators”, which specify the number of beneficiaries due to receive or to have received assistance. DfID’s new plan, which replaces its results framework, is not yet entirely satisfactory because there are no standard indicators. I am not sure that ICAI or anyone could ever reach a sensible solution because of the variability of data, but of course we must be glad that it is making the effort.

Again, I am reminded of our concerns during the CDC Bill that, although DfID was talking about so many “jobs created”, it turned out that it was counting “indirect jobs created”, and this was another important point picked up by ICAI. The NAO had concerns about this too. Why should the public be so misled on these issues? As the noble Lord, Lord McConnell, mentioned, education is a much surer measurement if we are looking at long-term impact.

A high priority for ICAI, following the theme of “no one left behind”, is the relationship between our ODA and the 17 new SDGs. This was well identified in the IDC’s recent report. It is of course to be expected that the new goals, which now have to come directly from the countries’ own priorities and, we hope, from their NGOs, will inevitably sharpen up aid impact and effectiveness. However, we are still not helping the very poorest enough and we should be doing more in African LDCs.

At this point in the debate, I feel I am something of an agnostic, because government—and indeed Parliament—may be prone to an illness described as “excessive monitoring”. We should not expect watchdogs to pretend to know everything. ICAI, thank goodness, is a relatively small, efficient operation and it cannot look at the entire aid programme. It already covers a vast number of projects and has become a vital link between the department and the IDC. I am full of admiration for ICAI, but equally I would not like overstretched DfID staff to be smothered by unnecessary double counting that may interfere with their essential work.

The cost implications of consultants coming and going have been mentioned by the noble Baroness, Lady D’Souza, and the noble Lord, Lord Bruce. They have to be taken into account. We all know that last December the Times reported that billions had been spent on consultancies while DfID’s own staff fell in proportion to the rising aid budget. I am among the first to defend the aid budget, but serious questions have been raised today, and I hope always will be, about aid effectiveness—the noble Lord, Lord Judd, was right to remind us about “impact” not being quite the right word. The Government, assisted by ICAI, are gradually addressing them, and I hope more Members of Parliament will go and see for themselves, maybe through the CPA and the IPU, the good that we are undoubtedly doing in many areas of the world.