Yesterday the government released the details of their Comprehensive Spending Review, which was designed to fix the budgets of all government departments until 2014-15, identifying extensive spending cuts to fulfil the government’s aim of reducing the UK’s deficit. In this post we assess the implications of the review for the UK’s role in international development.
While the cuts across many departments were savage, as expected, the international development budget has been protected as promised in the Coalition agreement published in May. The overall percentage of GDP given to Official Development Aid (ODA) will stay at 0.56% until 2013, when it will increase to the UN target of 0.7% which was agreed back in the 1970s. This will translate into small increases in the amount of ODA, and in the budget of the Department for International Development, each year until 2013.
Overall, this is a very positive outcome for international development. Although the flatlining of ODA at 0.56% until 2013 will mean that the UK will in the long term give less aid than if ODA had increased in a straight line until 2013 – which will be a major disappointment to developing countries that rely on the UK to support their own efforts to tackle poverty – in the current environment with so many other departments experiencing savage cuts it is commendable that the Coalition has stuck to their promise of increasing aid to 0.7% by 2013.
We are already starting to see a backlash in certain sections of the media and public opinion, so it is more crucial than ever that supporters of international development spending make the case for aid now. For an excellent example of the arguments that can be used, take a look at Jonathan Glennie’s recent article on the Guardian’s ‘Poverty Matters’ blog. Before explaining why aid is morally right and why it is also in our interests, Glennie argues:
The biggest mistake is to suggest that rich countries cannot afford aid. On the contrary, aid is a pittance and we should (as I say in my book) “ramp up our spending on development in Africa, far surpassing the 0.7% target”.
Glennie writes that now is the time for us to make the case for aid, and at RESULTS we are completely in agreement – we need to speak out to support the government’s moves on international development and explain why it is needed to a sceptical public. Our partners the Global Poverty Project have put together an online action that you can take to write a letter to the editor for national and some local newspapers. We would very much encourage you to do so, making sure that you edit the text provided by the GPP to personalise it and increase the chances it will be published. If your local paper is not included in the list provided by the GPP, do consider writing to them independently.
Beyond the headline news, other details of the settlement that DFID have made with the Treasury have also emerged, including some areas that are concerning and we will be monitoring closely over the coming years.
Key among these is that, while the increase in spending that is going to occur will go through DFID rather than other government departments, which is excellent news, the figures given for DFID’s ‘Departmental Expenditure Limit’ (how much the department is allowed to spend each year) include the funding of a ‘tri-departmental conflict pool’ which will include work by DFID, the Foreign and Commonwealth Office (FCO) and the Ministry of Defence (MOD). It is not clear from the information released how much funding will go towards the conflict pool or whether this spending will be included in calculations of UK ODA, so this is an area in which more clarity is needed. It is potentially very concerning – and against UK legislation in the form of the International Development Act 2002 which governs the Department’s spending – if DFID funding is to be used for military purposes.
On the other hand, we broadly welcome the announcement that DFID’s funding for conflict-affected fragile states will increase from 22% to 30% by 2014-15. These countries have been neglected by donors for many years, and yet they contain some of the most severe pockets of poverty. It will be crucial to maintain a separation between work on poverty-reduction and military operations, and we will push DFID to ensure that spending decisions from the Department’s budget are made on the basis of what is needed for long-term poverty reduction and not the UK’s short-term interests.
Finally, the Review reveals that DFID’s ‘back-office’ running costs will be reduced to 2% of spending, compared to a global donor average of 4%. Whilst we agree that it is crucial to keep administration costs down and to ensure as much funding as possible is used actually in the developing world, it is important to remember that DFID staff play a vital role in overseeing the spending of aid and ensuring that due diligence and proper monitoring and evaluation are carried out.
DFID already has a very low overhead spend compared with most other donors, and there are concerns that these further cuts will leave the Department without the manpower to properly deliver on the Coalition’s admirable pledges to increase the transparency and effectiveness of UK aid. It is likely that the reduction will lead to more UK aid being spent through multilateral institutions, such as the World Bank and the Global Fund to Fight AIDS, TB and Malaria. If this is the case, we strongly urge DFID to concentrate their resources in the international institutions that have strong monitoring and evaluation and oversight systems of their own, chief among them being the Global Fund. Other institutions such as the World Bank, which has long been criticised for not learning the lessons of evaluations and continuing with ineffective and sometimes harmful policies, need much stronger oversight and input into reform from DFID, which could be jeopardised with a reduced staff.
So while the overall news from the review for international development is largely positive and we should commend the government for sticking to their pledges, there are some areas that remain concerning. We hope you will join us in helping to monitor developments over the next few years!