At last! Aid watchdog targets £1bn fat cats
...but only after our reporter told it to
FOREIGN AID fat cats exposed by The Mail on Sunday for misusing taxpayers’ money are to be investigated by a watchdog probing the £1 billion-a-year industry.
The Independent Commission for Aid Impact (ICAI) will look for evidence of ‘cartel’ activity among the hugely profitable companies that spend taxpayers’ money overseas, and see how they squeeze out small local competitors.
Its reviews will also examine the hourly fee rates for experts and the ‘higher fees’ charged by firms operating in war zones.
ICAI said the three studies were needed because the Department for International Development (DFID) is now spending £1.34billion a year of public money on contractors, with the amount doubling in recent years as its budget has ballooned.
The reviews come in the wake of a series of Mail on Sunday exposés into the growing foreign-aid industry, and after our reporter Ian Birrell told the watchdog first-hand about the corruption, waste and profiteering he has unearthed. He was the first journalist the ICAI had ever interviewed.
We revealed how one major contractor, Adam Smith International, had faked testimonials about its work, while one of its employees illegally obtained confidential Whitehall reports to help the firm win even more contracts.
Four executives were forced to quit over the scandal, which prompted MPs on the International Development Committee to say they ‘deplored the inappropriate conduct’ of the company, while DFID froze new contracts and began an urgent probe.
Now the ICAI has acknowledged the growing concerns. The watchdog had looked at DFID’s use of contractors in 2013 but said the market had exploded since then. ‘In cash terms, due to the increase in total DFID spending, spending through contractors has roughly doubled over this period,’ the ICAI said. ‘Concerns raised include the level of contractors’ costs and profits, contractors’ ethical conduct, the large share of the market taken by a small number of large suppliers, and the small proportion of contracts won by contractors based in the developing world.’
The first of ICAI’s three reports, due to be published in September, will ‘provide Parliament and the public with an assessment of DFID’s ability to attract the best suppliers with the required skills at competitive prices… and whether it ensures that its large suppliers are accountable’.
The subsequent studies will look at the tendering process, and the policy of paying firms according to their results.