Stockpile aid money – don’t splurge it to hit target say MPs

BRITAIN should stockpile its aid budget to use when needed rather than trying to meet spending targets, MPs have said.

Under its controversial aid target, the Government must spend 0.7 per cent of national income – more than £12.2 billion a year – on aid.

But the Commons’ international development committee said funds should be able to be carried forward, rather than spending them in a lastminute splurge each year.

The Department for International Development (Dfid) has been accused of ‘dumping’ billions in trust funds administered by the World Bank to meet its target.

Over the past five years, £9billion has been funnelled through World Bank trust funds, with £241million charged in administration fees.

In a report on allocating aid money, MPs said DFID should make its own stockpile of cash so it does not have to rush billions out the door each year into funds with high fees.

They said: ‘We think that Dfid should explore the idea of creating a mechanism for carrying funds forward which could then support its work when the need arose.’

The MPs also warned they were ‘concerned about the lack of strategic direction and management’ within the department, as they said its work was not necessarily done ‘in a consistent and coherent manner’.

Concerns were raised about whether DFID had enough staff to properly spend its budget and if it was relying too heavily on consultants to dish out the cash instead.

Stephen Twigg, chairman of the committee, said: ‘We are particularly concerned that a lack of strategic direction is holding UK aid back. This is more important than ever, with increasing amounts of aid

‘Every penny spent effectively’

being spent by government departments other than DFID.

‘The basis on which aid spending decisions across the Government are made needs to be clear. It is absolutely right that Government demonstrates that every penny is spent as effectively as possible.’

A DFID spokesman said: ‘Britain’s place in the world is enhanced by our commitment to UK aid but we should never shy away from delivering the tough messages of reform that will make a real difference on the ground.’