Exclusive: DFID seeks cuts of up to 30% on aid projects

LONDON — Aid programs focused on poverty reduction and COVID-19 are among those under threat as the U.K. government is asking its partners to make cuts of up to 30% or more on some programs, Devex has learned.

The U.K. aid budget is set to decline as the economy shrinks. Government ministers maintain that no decisions have yet been made on the reductions, but sources in the development community told Devex that the process of reducing funds has already begun, affecting existing programs. The cuts are to this year's budget but in several cases not to the overall program budget, sources say.

There are also fears that funding cuts are being made uniformly across the government’s broad range of aid spending, rather than being targeted to protect programs supporting the most vulnerable.

The cuts come as the U.K. Department for International Development heads toward a merger with the Foreign & Commonwealth Office. Some in the development community have linked the cuts to the merger, which was announced earlier this month, despite government pledges to maintain a focus on poverty reduction and continue work in the least developed and most conflict-affected countries.

In Malawi, a poverty reduction program run by U.K. charity United Purpose, focused on nutrition and livelihoods with the “most marginalized” people, was asked by DFID’s country office to cut its budget for the year, said Peter Sargent, the organization’s chief operations officer, who spoke to Devex in a personal capacity. The charity later clarified that the “overall budget” for the program remains the same, with CEO Kathryn Llewelyn saying, “The changes to the budget submitted to DFID were only a movement of funding between years, not a budget cut.”

The charity is part of a consortium with other members that were asked to do the same, Sargent said. United Purpose has submitted a revised budget that still needs to be approved by DFID.

As it comes 18 months into a four-year program, Sargent said he is concerned about the impact on the people helped by United Purpose’s work.

“We've cultivated that relationship with these communities. There was a promise ... on the basis of a grant agreement with the British government, and they are now pulling that ... which means the things that we talked about with those communities cannot be delivered within our current contracts,” he said. “It’s one thing to do it to new contracts; it’s another thing to do it on current. That’s the thing we are hopping [mad] about.”

Elsewhere, the prospect of cuts hangs over DFID-funded humanitarian programs in emergencies. Devex understands that some programs in Syria, Yemen, and the Democratic Republic of the Congo have been threatened with cuts this year. That is despite a funding commitment from the U.K. at this week’s “Supporting the Future of Syria and the Region” pledging conference.

And in the Central African Republic, Concern Worldwide has paused a maternal health program that had been adapted to respond to the coronavirus pandemic, said Gavin Crowden, director of policy and campaigns at the humanitarian NGO.

The project is “subject to DFID review,” he said. “That program had already pivoted to support coronavirus response and was ready to go, but we’ve had to wait to get the go-ahead.”

News of the cuts has “created a lot of uncertainty, which doesn’t help our teams in-country, many of whom have already pivoted programs to deal with coronavirus,” Crowden added. “So any sense of pausing or uncertainties about programming really is a double blow when we want to be 100% focused on the delivery.”

He added: “DFID is a global leader in all this stuff, and what happens with DFID really does reverberate around the world. Therefore, that destabilization and uncertainty really does [have an] impact.”

There was some confusion in the development sector about the way the government is going about the reductions, with the official line being that no decisions have been made.

“What’s odd … is why are they telling us cuts haven’t been made when they clearly are being implemented,” said Tim Boyes-Watson, global director of alliances and advocacy at Humentum, a membership association for NGOs. Numerous agencies have already signed or been asked to sign amendments to contracts that would reduce the cost of programs by between 10% and 30%, Boyes-Watson said.

He described a “strange” disconnect in messaging from the department and said that “the very top [DFID ministers and executive officials] are saying that no decisions have been made, whereas agencies are hearing directly from relevant SROs [senior responsible officers], much more at country level, that ‘we want you to cut this now.’”

While its share of official development assistance has been declining in recent years, DFID still spends nearly three-quarters of U.K. aid and has won consistent praise for its spending effectiveness, transparency, and strong focus on poverty reduction. But the handling of the upcoming merger has raised concerns about a change in direction.

Boyes-Watson said the confused process of cuts could obscure transparency. “It could be a way of hiding some of the cuts from public scrutiny,” he suggested.

A DFID spokesperson said in a statement: “As the PM [Prime Minister] said, reducing poverty will remain central to the work of UK aid. The government remains committed to the target of spending 0.7 per cent of our national income on aid, which is enshrined in law.

“Given the expected fall in GNI [gross national income] this year, new commitments of aid spending are being reviewed across all departments. No decision has been taken, but we are considering the full range of our work.”

Update, July 1 and July 3: This story was amended to clarify that Peter Sargent spoke to Devex in a personal capacity, to add in a comment from United Purpose’s CEO, and to clarify the size and duration of some budget cuts.