IDC recommends no new money for Newton Fund until it reforms

Photo by: Cristiano Betta / CC BY

LONDON — The U.K.’s controversial Newton Fund should receive no further aid money unless it is reformed, according to Parliament’s development watchdog.

The International Development Committee — a cross-party group of politicians tasked with scrutinizing U.K. aid — accused the government of delaying recommended reforms to the fund, which develops science and innovation partnerships with a stated goal of promoting “the economic development and welfare of collaborating countries.”

Run by the Department for Business, Energy and Industrial Strategy, it is funded with £735 million ($923 million) of official development assistance for 2014-2021.

However, it has been subject to heavy criticism from watchdogs. In 2019, it received a rare — and scathing — amber/red rating from the Independent Commission for Aid Impact.

ICAI said the fund was “poorly designed to deliver its primary purpose of addressing development challenges” and many of the fund’s projects were not focused on poverty reduction. For example, it highlighted how a battery research program with China would also bring jobs to the U.K., and criticized the lack of research capacity-building in many of the academic programs it funded.

“We recommend that the Government undertake a formal review of the extent to which the matched funding model which is used for the Newton Fund ... is compatible with the spirit of the Government’s commitment to untie all UK aid.”

— “The Newton Fund Review: Report from the Sub-Committee on the work of ICAI”

IDC declared its agreement with this assessment on Monday. “All UK official development assistance should seek to achieve one thing above all: poverty reduction,” said the chair of its ICAI sub-committee, Theo Clarke.

Clarke continued: “It is commendable that the Newton Fund seeks to utilise the UK’s world-leading science and research expertise to make real lasting change for impoverished communities, but it must be showing real impact and demonstrate value for money for the taxpayer.

“Despite ICAI’s calls for the Government to reform the governance and design of the Fund in these areas, it is yet to be fully seen.”

IDC also flagged “serious issues” in terms of tied aid — where aid contracts are reserved for organizations based in the donor country — which is against official U.K. government policy.

The Newton Fund develops research partnerships between institutions in the U.K. and in partner countries — including Brazil, Turkey, and Thailand — and requires those countries to contribute their own resources to match the U.K. funding. As a result of this matched funding model, 90% of ODA from the fund is spent on U.K. institutions.

ICAI raised the issue with the Department for Business, Energy and Industrial Strategy in 2019 but “It appears that the Department may have misinterpreted ICAI’s findings on whether Newton Fund grants amounted to inappropriately ‘tied aid’,” according to the IDC report.

“We recommend that the Government undertake a formal review of the extent to which the matched funding model which is used for the Newton Fund ... is compatible with the spirit of the Government’s commitment to untie all UK aid,” it added.

Clarke said: “It is particularly concerning that some evidence suggests that the Newton Fund does not wholly abide by the spirit of the Government’s own commitment on tied aid. It is imperative that, before any more funding is potentially given to the Fund, value for money and governance concerns are dealt with.”

Simon Starling, policy, advocacy, and research director for Bond, the U.K. network for NGOs, added that, "It's concerning that the Newton Fund has made such little progress against ICAI's recommendations one year after its initial report.”

“Any government department spending UK aid must meet the same standards and work to the same objectives as DFID — to alleviate poverty, promote sustainable development, and reach the world’s poorest people. UK aid should only be managed by departments and funds with the experience and capacity to ensure its effectiveness," he said.

The Department for Business, Energy and Industrial Strategy had not responded to a request for comment at the time of publication.

About the author

  • William Worley

    William Worley is the U.K. Correspondent for Devex, covering DFID and British aid. Previously, he reported on international affairs, policy, and development. He also worked as a reporter for the U.K. national press, including the Times, Guardian, Independent, and i Paper. His reportage has included work on the Rohingya refugee crisis in Bangladesh, drought in Madagascar, the "migrant caravan" in Mexico, and Colombia’s peace process.