At last! Foreign aid fat cats feel the squeeze
FOREIGN aid fat cats will have strict limits placed on their earnings in a Government crackdown prompted by a Mail on Sunday investigation.
‘Poverty baron’ consultants will have to come clean about how much money they are making from work meant to help the world’s poorest.
The sums handed to advisers will also be ‘ driven down’, with less given to junior researchers than to experienced managers.
It comes after this newspaper exposed how some multinational firms have been creaming off millions of pounds of taxpayers’ cash from contracts intended to relieve poverty in developing nations.
We told how one company, Adam Smith International, tried to win new work with faked glowing testimonials and illegally used confidential Whitehall reports. Many of its executives have quit in the wake of the scandal and the firm is no longer bidding for Department For International Development deals.
Last night, a spokesman for International Development Secretary Priti Patel said: ‘The Secretary of State has been crystal clear that she expects all suppliers to deliver results for the world’s poorest and provide value for taxpayers’ money – she will not tolerate anything less.’
A submission by the DFID to the International Development Committee provides the first details of what the stricter and more transparent regime will look like, after MPs urged it to look into contractors’ fees and establish what profits they are making.
The department said that it is carrying out an ‘extensive benchmarking exercise on contractors’ fee rates’. ‘The data will be used strategically across DFID to under- stand and drive down fees wherever possible,’ the report added.
It said details of the fees could be published for the first time, adding: ‘ We have also brought in Cabinet Office expertise to assess options for greater transparency around contractors’ fees, overheads and profits… and measures to identify and challenge above-expected profit.’
Until now, the DFID has published only the overall amounts paid to
‘Suppliers must deliver results for the poorest’
each private firm for large contracts, making it impossible for the public to know how much of the cash goes to the needy and how much is kept by the company’s chiefs. MPs also recommended that the DFID consider introducing strict guidelines for consultants’ fees, such as those that already exist in Australia. The Australian scheme, introduced in 2011 in response to concerns about profiteering, ensures ‘that all advisers are paid in accordance with the prescribed set of rates, allowances and support costs’.
Pay scales are partly determined by the type of work being carried out, ranging from admin, travel and PR advice at the bottom of the scale, to banking and investment at the top. Consultants’ experience and skills are also t aken i nto account, with different amounts payable to ‘entry level’ researchers, ‘senior’ scientists or engineers and ‘ senior executives’ who are responsible for entire projects.
Based on these categories, and how many years’ work the adviser has done in the field, there is then a rigid scale of daily pay rates from AUD$ 308 (£ 182) to AUD$ 1,270 (£ 750). It has been claimed that consultants have been charging the UK more than £1,000 a day for their services.
The DFID said: ‘As part of the Supplier Review, DFID is examining a range of remuneration mechanisms from across the development sector, including those used by donors such as the Australian Department of Foreign Affairs and Trade and international suppliers.
‘ We will bring forward final recommendations on conclusion of the review.’