End of the foreign aid ‘cashpoint in the sky’
PM to put UK security first as he scraps international development department
BORIS JOHNSON will use the £14 billion foreign aid budget to counter “Russian meddling” and protect national security after announcing he is to scrap the Department for International Development.
The Prime Minister said Britain’s aid spending would no longer be “some giant cashpoint in the sky” following a series of cases such as a multi-millionpound grant to an Ethiopian girl band.
He decided to merge Dfid with the Foreign Office and hand control of aid to Dominic Raab, the Foreign Secretary, after losing patience with the way Dfid was allocating taxpayers’ cash.
Mr Johnson is expected to rip up rules governing aid spending, which are set by the Organisation for Economic Cooperation and Development, when a government review reports back in the autumn.
Instead of sending money to countries such as China and India, both of which are wealthy enough to have their own space programmes, the money will be used to “maximise British influence” on the world stage, Mr Johnson said.
He will not, however, end Britain’s commitment to spending 0.7 per cent of gross national income on foreign aid, which is enshrined in law.
The decision was welcomed by Tory backbenchers who have for years been calling for a fundamental review of the way aid money is spent. But it was attacked by three former prime ministers – Tony Blair, Gordon Brown and David Cameron – who said it was a “mistake”. Sir Keir Starmer, the Labour leader, described it as a “distraction” in the midst of a national crisis. Mr Blair said: “I am utterly dismayed by the decision to abolish Dfid.”
In a statement to the Commons yesterday, Mr Johnson said Dfid, created by Mr Blair in 1997, was a relic of an era when China’s economy was smaller than Italy’s and coronavirus had not changed the world.
He also made clear his frustration at the fact that the department, run by Anne-marie Trevelyan, the International
Development Secretary, has a budget four times the size of the Foreign Office but fails to use it to promote British interests. The move, which will appeal to the Tory grassroots, comes at a time when Mr Johnson is facing criticism from many of his MPS over the handling of the coronavirus crisis.
Announcing his plan, Mr Johnson said: “We give as much aid to Zambia as we do to Ukraine, though the latter is vital for European security. We give 10 times as much aid to Tanzania as we do to the six countries of the western Balkans, who are acutely vulnerable to Russian meddling.
“And, regardless of the merits of these decisions, no single department is currently empowered to judge whether they make sense or not: we tolerate an inherent risk of our left and right hands working independently.”
Mr Johnson went on: “For too long, frankly, UK overseas aid has been treated as some giant cashpoint in the sky that arrives without any reference to UK interests or to the values that the UK wishes to express or the priorities, diplomatic, political or commercial, of the Government.”
A review of aid spending, led by Prof John Bew, a member of the No10 policy unit, is expected to recommend abandoning the rules on aid spending set by the OECD, a membership group of 37 wealthy nations. They dictate the countries to which aid can be given, how it can and cannot be spent, and what proportion of money should go to countries with differing levels of poverty. Even within the current rules, the Government has leeway to spend more money on countries that are strategically important.
Mr Johnson said it was “extraordinary” that Dfid and the Foreign Office had not been merged earlier, pointing out that the majority of OECD countries had done so. The new department will be called the Foreign, Commonwealth and Development Office and will be run by Mr Raab.
CASH for the Ethiopian “Spice Girls”, funding for a South Atlantic airport where commercial planes cannot land and hundreds of millions of British pounds for Nigeria, which has its own space programme. For years the Department for International Development has been a target for Tories over its spending decisions.
Yet, while Boris Johnson’s announcement that he was merging Dfid into a new Foreign, Commonwealth and Development Office felt ground-breaking, to seasoned Whitehall watchers he was merely reverting to a pattern set by successive Conservative and Labour governments going back decades.
The Department for International Development has been a political football for decades, given independence by various Labour administrations, only for suspicious Tory governments to come in and yoke it back under the umbrella of the Foreign Office.
The department’s origins are in the Sixties, when Labour PM Harold Wilson set up the Ministry of Overseas Development, combining the functions of the Department of Technical Cooperation with the overseas aid policy sections of the Foreign Office and Colonial offices.
This was reversed with the arrival of Tory PM Ted Heath in 1970, who folded it back into the Foreign Office as the Overseas Development Administration. Then when Labour PM Jim Callaghan succeeded Mr Heath in 1974, he set it up again as the independent Ministry of Overseas Development. And in 1979, Conservative PM Margaret Thatcher swept the department back into the Foreign Office.
The department remained part of the Foreign Office until Tony Blair’s Labour landslide in 1997, when he once again set it on its own two feet, as the new Department for International Development.
Until the turn of the century, the department’s budget, which stayed below £2 billion, had attracted scant criticism. However, by the end of that decade, Labour had more than trebled it and criticism was starting to grow.
David Cameron’s arrival in 10 Downing Street only aggravated concern among traditionalist Conservaive backbenchers. He had used a commitment to spending on aid to detoxify the Tory brand and once in power he pressed ahead with a commitment – hit on in 2013 and then enshrined in law in 2015 – to spend 0.7 per cent of gross national income (GNI) on aid.
Accordingly, the aid budget ballooned from £8 billion in 2010 to £15.2billion last year – a meteoric rise, matched only by the criticism of how some of it was spent.
Civil servants also found the amount they had to spend in any given year rose and fell with economic output. One expert likened it to trying to land a helicopter on a moving ship.
To hit the 0.7 per cent target in 2013, for example, civil servants found they had to spend £1 billion in just eight weeks at the end of the financial year, prompting the National Audit Office to report that the department “may therefore have missed opportunities to get the best outcomes from this spending”.
By now, increasing numbers of critical stories were appearing in the press, with Government ministers apparently unable – or in some cases, possibly unwilling – to do much about it.
In 2016, an all-female pop group called Yegna – dubbed Ethiopia’s “Spice Girls” – received another £5.2million in British foreign aid despite previous criticism of an earlier grant of £4 million in 2013.
That same year, MPS said the aid department had “unquestionably failed” taxpayers after “staggering” errors led to nearly £300million being spent on an airport on the South Atlantic territory of St Helena that is unsuitable for commercial flights because of wind.
Critics have been asking annually why the UK sends money – £151million last year alone – to India and China despite both having space programmes. Nigeria, another country with its own space agency, also received more than £300 million in 2018.
Plenty of Tory ministers have tried to tackle concerns about the budget, but their reforms never did more than scratch the surface of the problem.
In January 2018, Penny Mordaunt, as Dfid secretary, set out plans to give more money given directly to the world’s poor via cashpoints to give refugees “dignity” and cut out waste and corruption.
Mr Johnson showed his hand about his plans when, as a backbench MP last February, he backed the amalgamation of Dfid – as well as the Department for International Trade – into the Foreign and Commonwealth office in a report published by the Henry Jackson Society. The report said “integration should take place at all levels. UK ambassadors and High Commissioners should have line management of all staff, regardless of department, and be responsible for developing integrated plans with departmental and agency stakeholders.”
Writing an introduction to the study, Mr Johnson said it should be “applauded for some radical thinking about reform of Whitehall, so as to make far better use of our overall overseas spending, and to ensure these vast sums do more to serve the political and commercial interests of the country”.
While the Conservative Party manifesto at December’s election merely said the party would “proudly maintain our commitment to spend 0.7 per cent of GNI on development”, Mr Johnson’s plans became clearer in last February’s ministerial reshuffle when he gave seven out of the eight ministers dual roles at the Foreign Office and Dfid.
Back then, The Daily Telegraph revealed Mr Johnson’s plan had been for the formal merger to take place this autumn, with Dfid secretary Anne-marie Trevelyan slotting into a minister of state role at the Foreign Office. Yet the Prime Minister surprised MPS yesterday by bringing it forward, a decision which many suspected was part of a bid by Mr Johnson to demonstrate he was back in control of the domestic agenda.
The question now is: how will Mr Johnson spend the money? The PM suggested to MPS he wanted to spend more in areas that support the UK national interest, such as the Balkans
In 2016, a pop group called Yegna – dubbed Ethiopia’s “Spice Girls” – received another £5.2million
where the UK spent just £34million in aid last year. Currently aid grants have to be weighted to poorer countries under official OECD rules on aid spending.
“We give as much aid to Zambia as we do to Ukraine, though the latter is vital for European security,” he lamented. “We give 10 times as much aid to Tanzania as we do to the six countries of the western Balkans, who are vulnerable to Russian meddling.”
In terms of the size of the budget, there is also wiggle room for Mr Johnson to cut spending on aid if “any substantial change in GNI as a result of economic circumstances” or “a change in fiscal circumstances impacting tax take” – two boxes surely now ticked by the coronavirus crisis, according to an analysis by the Taxpayers’ Alliance in April.
Mr Johnson will find that moving Dfid back into the Foreign Office was the easy part. Cutting or reshaping the aid budget so that it is more in line with the UK’S national interest could be a greater challenge altogether.