India and China still receiving British aid
BRITAIN is giving hundreds of millions of pounds in aid every year to “middle-income” countries like China and India despite claiming that it has stopped doing so, an official review has found.
The Independent Commission for Aid Impact (ICAI), which audits spending by the Government, said that ministers have given a false impression that “all aid was being phased out”.
It said that despite the claims, “significant UK aid flows have continued through other channels” and that the Government had been “diffident about admitting” that spending continues.
The report found that in India, which has a space programme, aid spending would actually rise this year despite the Government’s announcement that it would come to an end in 2015-16.
Conservative MPs have repeatedly urged the Government to scrap its commitment to spending 0.7 per cent of national income on aid.
The report says: “The earlier publicity given to exit from China and India potentially created an impression that all aid was being phased out. Against that background, the reasons for con- tinuing and then scaling up assistance have not been clearly communicated to the UK public.
“This lack of clarity was noted by the international development committee, which commented that [the Department for International Development, or Dfid] was ‘diffident about admitting’ its continued spending in middle-income countries.”
Sir Gerald Howarth, a Tory MP, said: “I am sure that Priti Patel [the International Development Secretary] will want to summon those who are engaged in a cover-up to explain themselves.”
The Government formally pledged to stop giving financial aid to India by the end of 2015-16 amid growing concern that money was being given to a rapidly advancing economy.
However, the ICAI found that the Government continued to give indirect aid to India, including £30 million for “technical assistance” and £40 million for “development capital investment”.
It also highlighted the fact that the CDC group, Dfid’s investment arm, has more than a quarter of its portfolio – equivalent to £756 million – invested in India. It said that Britain’s aid expenditure in India, which has been £283 million a year since 2011, is forecast to rise.
It also said that Britain is continuing to spend £10 million a year on aid to China, with further money being committed to the country through the Prosperity Fund.
Dfid said that the expenditure is not a “hand-out”, in terms of direct financial aid, but is intended to help build and “strengthen strategic partnerships” in India. In the long-term, Dfid said, Britain will benefit from the investment.
A spokesman said: “Dfid is a world leader in helping countries leave aid dependency behind and stand on their own two feet, building a safer, more prosperous world.
“We are disappointed that ICAI has rushed the publication of this inaccurate report that simply does not tell the whole story. As countries build upon their economic development Britain is determined to strengthen strategic partnerships that facilitate trade, boost business and combat poverty.”