UK TO DOUBLE AID CASH HANDOUTS
Bill for debit card scheme could soar to £3billion
BRITAIN is to double the amount it ploughs into an emergency foreign aid scheme that hands cash and debit card payments directly to families.
It could mean that by 2025 the UK is doling out more than £300million a year this way – or £3billion over a decade – despite concerns about fraud.
The Daily Mail first revealed the existence of a similar scheme in Pakistan last year, when families were pictured queuing to withdraw money from an ATM where cards funded by British taxpayers could be used. The scheme was dogged by claims of corruption.
About 14.5 per cent of the humanitarian budget – the component of foreign aid used to help victims of wars and disasters – is handed out in cash or card schemes. In 2016, this amounted to £157million from a budget of around £1billion.
Now the Department for International Development wants to increase the proportion to 29 per cent by 2025, according to its annual report.
If the size of the humanitarian budget remains the same – it fluctuates each year depending on international circumstances – it means the amount paid out in cash could top £300million in less than a decade.
Tens of millions more are spent on these cash transfer schemes by other parts of the DfID budget, so the full amount spent this way will actually be much higher.
The plan is likely to fuel concern that the controversial target to spend 0.7 per cent of national income on foreign aid is encouraging officials to spend money without proper checks.
The department insists that making payments via cash and vouchers represents value for money. Officials say it cuts bureaucracy, provides greater dignity for aid recipients and means help can get to victims of war and disaster more quickly.
Cash transfers are also used in Bangladesh, Rwanda, Yemen, Zimbabwe and Ethiopia.
It is not believed the money for the Pakistan scheme came out of the humanitarian aid budget, but another part of DfID spending.
DfID’s annual report for 2017/18 says: ‘Where markets work, cash transfers are cheaper, safer and provide more choice to people in need than aid in kind.
‘The UK has committed to more than double the proportion of aid it delivers through cash and vouchers by 2025, from a baseline of 14.5 per cent in 2016.’
The report also revealed Britain is ploughing ever-increasing sums into booming China and oil-rich Nigeria. It said DfID has taken on 348 new civil servants, on an average salary of £57,000, to help improve value for money.
Backbenchers have criticised the commitment to spend 0.7 per cent of national income on foreign aid when public services in the UK are short of money. Last year it amounted to £13.9billion.
DfID says it uses cash transfers to support some of the world’s poorest and most vulnerable people so they can buy food, shelter, household supplies and medicine.
It insists there are rigorous checks to eliminate fraud, including the latest biometric technology such as iris scanning.
The aid watchdog, the Independent Commission for Aid Impact, recommended DfID should scale up the use of cash transfers given their effectiveness.
The department said there was no evidence that cash is more vulnerable to theft, diversion and corruption than in-kind aid.
But last year, in a village on the outskirts of Peshawar, Pakistan, the Mail found people taking out money from cash points with cards they said they had received after paying kickbacks to officials.
Safiullah Khan, 49, a cart pusher in the Khyber Bazaar area of the city, said a local councillor demanded a bribe to enrol his family in the programme. ‘I paid the money and my card was prepared,’ he added.
Some 235,000 families received payments every three months to boost their incomes, funded by UK taxpayers.
Despite judging the scheme high risk, Whitehall officials plan to expand it to 441,000 Pakistani households. Families get 4,500 rupees (£28 at today’s rates) a quarter, which they can spend however they want, under the Benazir Income Support Programme.
One in ten people get their money in envelopes at post offices, while others get cash cards that are regularly topped up.
Tory MP Nigel Evans, a member of the Commons international development committee, said last year: ‘Normally this sort of aid is only given in a crisis or emergency… but it seems like we’re exporting the dole to Pakistan.’
Last night DfID defended the scheme, saying cash and vouchers delivered in response to the 2011/12 Somalia famine delivered 2.4 times more aid to beneficiaries compared with traditional food aid, at no extra cost to the British taxpayer.
This is because of the transport, storage, handling and security costs associated with food aid.
It also pointed out that cash transfers are only part of any aid package and that their use is always based on evidence and suitability for the context.
A DfID spokesman said: ‘UK aid can be the difference between life and death for many of the world’s poorest people, and our cash transfers are helping to eliminate fraud and deliver maximum value for money for UK taxpayers.
‘We have robust checks, including biometric technology, to make sure every penny of UK aid goes to those who need our help the most and evidence shows that in some cases cash transfers can deliver double the benefits of food aid.’
Comment – Page 16
QUEUE HERE FOR UK’S £1BN FOREIGN AID CASHPOINT From the Mail, January 3, 2017 ‘Exporting the dole’