DFID's share of UK aid budget declines again

LONDON — The amount of aid spending in government departments other than the Department for International Development has reached its highest level ever, which members of the development community have characterized as “disappointing” and “a concern.”

The provisional figures on aid spending for 2019, released Tuesday, show that the U.K. spent more than £15 billion ($19 billion) on official development assistance last year, with 73.2% of that going through DFID, which has a strong reputation for transparency and impact.

But other government departments accounted for 22.3% of spending — the highest level since the cross-government aid spending strategy was introduced in 2015. ODA spending through other means also decreased to a record low of 4.5%.

“It's disappointing to see DFID’s share of ODA falling again. DFID is by far the most poverty-focused, effective, and transparent department across government,” said Romilly Greenhill, U.K. director at the ONE Campaign. “We would’ve liked to have seen DFID taking a greater share of the ODA budget to ensure value for money for the U.K. taxpayer and the world’s poorest people,” she added.

The sentiment was echoed by Simon Starling, director of policy, advocacy, and research at Bond, the network for U.K. development NGOs. “The amount [a total of 26.8%] of aid spending outside of DFID remains a concern, in particular given the performance of other government departments on transparency and impact have been assessed as poor,” he said.

He added: “In light of the current COVID-19 crisis, U.K. aid must be spent on the areas that will have the most impact on the health, livelihoods, and security of the world’s poorest people.”

Spending through the Prosperity Fund, which is a particularly contentious cross-government initiative because of its lack of transparency, saw one of the largest increases, with an 87% leap from £94 million in 2018 to £175 million in 2019.

Greenhill said this was “particularly disappointing given a lot of the concerns about the effectiveness of the Prosperity Fund.”

The Home Office also increased its aid spending to £452 million — a rise of 34% — “to support asylum seekers in the UK,” according to the report. Some domestic support for refugees is allowed under the international aid rules but is controversial because it means the money — intended for poverty alleviation — remains in wealthy donor countries.

While Greenhill acknowledged the need to support vulnerable migrants, she highlighted the Home Office’s inadequate record on transparency.

“We wouldn’t have liked to see such a big increase when their transparency leaves something to be desired,” she said. “Departments like Health and Social Care that have actually done quite well on issues around transparency and effectiveness have actually seen smaller increases.”

The government set a target for all aid-spending departments to achieve a high level of transparency in how that money is spent by 2020, but so far only three of them — DFID, the Department of Health and Social Care, and the Department for Business, Energy & Industrial Strategy — have met it.

Tuesday’s report also shows the largest increase in DFID’s bilateral spending since 2013, jumping to nearly £7 billion — an increase of £575 million from the previous year. This included an extra £266 million to CDC Group, the U.K.’s development finance institution, which has taken flak for poor transparency and investing in fossil fuels. The U.K.’s overall bilateral spending also jumped by 9.2%.

While the full details of bilateral spending are yet to be released, experts warned that this was an area to monitor.

“Traditionally, aid literature talks about bilateral spending being the vehicle donors can use to align to a geostrategic or commercial interest,” said Rachael Calleja, senior research associate at the Center for Global Development. “So if you want to advance relations with a specific country, you can provide aid to have that dialogue.”

Greenhill added: “In general, we think spending on multilaterals is really beneficial, as you can pool resources and they tend to be more effective than bilateral. We would be concerned about a continuing downward trend in multilateral spending.”

As the U.K. heads toward a scheduled spending review, Greenhill said the “tide could be turned” on cross-government spending.

“This is really the moment for the Treasury to look very carefully at how it's allocating ODA and what it knows about the effectiveness of ODA spending across government, because that is not showing up in these figures,” she said.