Spending aid on India and China hits public trust, ministers told

MINISTERS are undermining trust in foreign aid by failing to ensure it is spent on the world’s poorest, MPs have warned.

Projects funded through the £14billion budget include schemes to boost China’s film industry and to improve its museums.

Britain is legally committed to spending 0.7 per cent of gross national income on foreign aid, but the Commons international development committee called for that money to be focused on poverty reduction.

MPs singled out the £600million Prosperity Fund, a cross-Whitehall pot that is still used to pay for foreign aid schemes in India and China.

They raised questions about how it was funding projects in China to reduce tobacco consumption by workers and to lower the salt intake of children.

The MPs said many of the dubious ventures were being run by Boris Johnson’s Foreign Office (FCO). ‘Among the FCOadministered Prosperity Fund projects, we found many weaker examples including projects to develop the Chinese film industry, improve the Chinese museum infrastructure and improve the credit bond rating system in China,’ they said.

The committee said it is unclear ‘how these types of interventions will benefit the very poorest people’. It called for a review of existing programmes.

‘We are concerned to have uncovered Prosperity Fund projects within middle-income countries which show inadequate, or negligible, targeting at improving the lives of the very poorest and most vulnerable communities in these countries,’ the report said. Whitehall departments were also conmigrant

There is a lack of transparency

demned for not being open about how they are doling out the £14billion budget.

Although most of the foreign aid budget is used by the Department for International Development (Dfid), other Government departments are increasingly having to help to get the money out the door.

More than a quarter (27.5per cent) of the £14billionn aid budget was spent by departments other than Dfid last year.

The report said while Dfid was ‘respected worldwide as an accountable deliverer of aid’, there was a lack of transparency elsewhere in Whitehall.

The committee warned that other Government departments were being given aid money to spend without having to explain how they would make sure it was used properly.

The MPs said: ‘Given the level of spending involved, we are concerned that departments are not publishing fuller details of their... spending as this lack of clarity clouds the public’s ability to see good and bad spending.’

They highlighted the Conflict, Stability and Security Fund (CSSF), which redacts information and refuses to publish how it uses much of its money. The MPs added: ‘This lack of clarity undermines trust in the fund.’

A Government spokesman said: ‘We have been clear, we must ensure that the aid budget is not just spent well but could not be spent better and standards are raised across Government to achieve value for taxpayers’ money.’