U.K. lawmakers have given a stern warning to the country’s aid agency: Don’t rush into spending money just to meet annual spending targets, or else you may fail at your pledge to improve value for money.
It’s one of several recommendations made by the House of Commons’s International Development Committee in its annual report, which reviews the Department for International Development’s spending and policy decisions in 2012. To meet its aid target in 2011, DfID spent money scheduled for 2012, according to the committee.
Government agencies — including those providing foreign aid — often delay procurement and then suddenly accelerate it. The U.S. Agency for International Development, for instance, tends to rush out funding agreements near the end of the fiscal year to get rid of leftover funds.
The U.K. panel is suggesting that a development bank be created that will house remaining money by year’s end, taking some of the pressure off DfID.
Another concern raised in the report is DfID’s “growing multilateral expenditure.” In the past year, nearly 40 percent of the department’s bilateral aid went to the World Bank and other multilateral organizations, which often have high administrative costs, the lawmakers argue. DfID should consider channeling more aid through local nongovernmental organizations and sector budget support, they suggest, because multilaterals usually have “high costs” but “often limited effectiveness.” The committee also asked DfID to better engage with NGOs and civil society, with an emphasis on smaller organizations — an indirect challenge, perhaps, to many of the large U.K. NGOs that DfID likes to partner with.
Aid groups that depend on their business with donors tend to not take such suggestions lightly. In the United States, for instance, USAID’s plan to funnel 30 percent of its aid through local institutions has met criticism from U.S. companies.
Other concerns discussed in the report include DfID’s partnership with middle-income countries, research spending and whether the department is making “good use” of its commissioned studies, as well as staffing numbers, skills and costs.
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