As the UK cuts at home, it splashes cash abroad

The Chancellor must know that it’s impossible to find value for money in the great British aid giveaway

The message from George Osborne is clear: Whitehall must slash spending again to find another £20 billion in savings. Most government departments have been ordered to find ways to cut budgets by 40 per cent, providing a serious challenge for services such as the police, local authorities and transport systems from an ambitious Chancellor revelling in his renewed mandate.

There are exceptions to the latest spending restrictions. The health service, schools and now defence are rightly protected. Bizarrely, however, overseas aid also remains sacrosanct, the needs of policing in the Congo given higher priority than policing in Cardiff, Carlisle and Coventry. Amid rising concern that so much of this cash is misspent, Mr Osborne has launched a review, briefing that he wants to prove the current £12 billion aid bill provides value for money. Rather unfortunately for him, this precisely matches the sum he wants to remove from welfare spending.

The amount this nation dispenses on dodgy and dubious projects abroad is now mandated at 0.7 per cent of its income. Mr Osborne’s mantra is that “with careful management of public money we can get more for less” – yet he excludes the most bloated and wasteful budget in Whitehall from this sensible stance.

I will not rehearse again well-aired arguments against aid, since it so obviously corrodes democracy, fosters corruption and fuels conflict. This is why there is growing hostility in the developing world to these patronising policies, alongside a soaring chorus of criticism from experts to the flawed concept that a flood of well-meaning Western money will lift people from poverty regardless of circumstances. But just as Britain hits the United Nations aid target, several other key Western nations are backing away from it.

Look at Holland, governed by a coalition led by one of David Cameron’s closest European allies, which includes the Dutch Labour Party. This small nation prides itself on its free-thinking, its generosity and its internationalism, so 40 years ago became the first country on earth, alongside Sweden, to hit the sacred UN target. Just five years ago it was spending significantly higher levels. Little wonder it was ranked by an influential think tank as the rich nation most committed to development.

Yet under pressure of austerity at home, the Netherlands had a rethink about whether this target-led approach represented the best value for taxpayers. Ultimately it preferred to protect the poor at home, while ministers from both ruling parties examined polling that found only about one third of people were really sold on the policy. The result was that the ruling Left-Right coalition took the axe to aid, abandoning its policy of focusing on spending over results, and cutting back budgets so donations will fall to about 5.5 per cent of national income.

There was predictable outcry from the self-serving aid industry. Its leaders shrieked that this would be devastating for the global poor, ignoring their historic failures and the fact that it is capitalism, consumerism and technology that really raise living standards and life expectancy around the planet. The fuss soon died down. “I expected more polarised and prolonged debate,” said one government insider. “We were surprised it was so easily dealt with.”

This source also pointed to another positive impact: reduced budgets led to renewed focus on spending money wisely. So in Nigeria, for instance, they focused on psychological help for people traumatised by conflict. What a contrast with Britain, where Department for International Development officials admit privately that they are under pressure simply to shovel cash out of the door. We doubled aid spending to Nigeria under the Coalition, blowing vast sums on daft schemes in a nation with traditionally dysfunctional government, corrupt politicians and its own space project.

Holland is far from unique: Australia, Canada, France, Ireland, Japan, Poland and Spain are among other nations that also reduced assistance in 2014. Last month a new centre-Right Finnish government followed suit, hacking aid budgets by almost half as it abandoned the target and warned 300 development bodies to brace themselves for big funding cuts. Compare again with Britain, which already gives away more than any other European nation, even handing £361 million in unrestricted funding to a group of favoured charities – plus more than £2 billion for the European Union, which spends aid on trapeze lessons in Tanzania and helps prosperous Turkey prepare to join the EU club.

Mr Osborne must know it is impossible to find genuine value for money in the great British aid giveaway; the concept is flawed, the projects profligate and our approach absurd. This issue will become a running sore for the Conservative Government as it continues to cut spending at home. Far better to show the courage of some European friends by ending this foolish splurge abroad.