New DFID chief shows tougher side

LONDON — The United Kingdom’s new secretary of state for international development has offered a glimpse of her plan for the country’s aid budget, emphasizing an “aid in the national interest” agenda and calling on developing countries to increase their own tax contributions or risk being cut off.

In an op-ed published by The Telegraph newspaper and also speaking on BBC Radio’s the Today programme on Monday, Penny Mordaunt, who took over as head of the Department for International Development in November, appeared to call for greater DFID control over aid money being spent by other government departments and delivered a stark warning to contractors who fail to meet DFID targets.

The op-ed is the third published by Mordaunt since she came into office after the sudden departure of Priti Patel and appears to take a harder line than her previous offerings, which were welcomed as a “breath of fresh air” within the aid industry for their pro-aid tone, seen as a contrast to her predecessor’s stance.

The pronouncements come at a time of political flux within the British government after a recent Cabinet reshuffle and several ministerial departures. Aid insiders also told Devex that tensions are high between DFID and the Foreign & Commonwealth Office, which is responsible for spending a growing portion of the aid budget, after FCO head Boris Johnson was quoted in a British newspaper stating that the money would be reoriented to prioritize British foreign policy rather than only on helping the world’s poor.

“The cash will be more sensibly distributed with a view to supporting British foreign policy. You are going to see a lot of progress there on ODA funding supporting diplomatic activity in Africa, which is entirely sensible,” Johnson said. In the op-ed, Mordaunt signals her intention to strengthen DFID oversight of ODA spending by other departments.

Aid experts told Devex they also see the op-ed as an attempt to address the concerns of the country’s aid skeptics, including many members of Mordaunt’s own political party — a move they mostly applauded. However, they also questioned some of the language used, which could, they said, lead DFID away from its core objectives of poverty alleviation.

Alex Thier, executive director of the London-based think tank the Overseas Development Institute, said that Mordaunt’s piece appears “overall positive.”

“I think it’s helpful to name [the problem of aid skepticism] and take it on in a positive way,” he said. But he questioned the minister’s tough stance on getting countries to invest more of their own tax money in social issues.

Domestic resource mobilization is not the whole story

In previous musings published since her appointment in November, Mordaunt had written that “I believe in aid” and that the U.K.’s humanitarian efforts were not done “for short-term political advantage or economic gain” but because “that’s how a great nation behaves.”

In her latest op-ed, she appears to take a firmer stance, clarifying that: “I want the governments of developing countries to take responsibility for investing in health care or education. If it chooses not to, that will inform our decisions” — an apparent threat to countries that are seen as failing to step up to the mark.

She added that DFID would work with governments to “help them manage their public finances better and reform their tax systems in order to fund public services.”

Thier said that even if government’s improve revenue collection, huge funding gaps will persist for public services such as education and health.

“The truth is that no amount of improved taxation is going to make up the financing gap alone,” he said, adding that DFID’s message needs to be more about “shared partnership” in terms of meeting that gap. He also called on DFID to look beyond reforming tax systems and instead focus on “systems strengthening” and “ways [health and education] systems are financed more broadly,” including the role of donors, citizens, and the private sector, since “that is what creates sustainability,” he said.

Romilly Greenhill, U.K. director of the ONE Campaign, pointed out that developing countries already raise approximately 80 percent of their national education budgets.

“A lot of health and education spending is already funded by developing country governments,” she said, adding that “there will still be an enormous need for aid even if countries are doing all of the things Penny Mordaunt is asking for.”

Extending the national interest agenda?

The secretary of state also fleshed out her thinking on using the aid budget to promote the national interest — something that was prioritized under Patel and has caused controversy among aid experts.

“I will ensure that our aid spend directly contributes to tackling the issues that matter most to the British people,” Mordaunt wrote in the op-ed. Speaking to the BBC, she confirmed that ensuring aid spending was in the national interest would be a “guiding principle” for her aid strategy.

While national interest agendas have been around for a long time, some are deemed more acceptable by aid experts than others. For example, ODI’s Thier said that while trade facilitation and promotion has been shown to benefit both the British economy and developing countries, other efforts are less effective.

“The government needs to be investing in things which ultimately have those longer term benefits,” he said. “It can’t be a pay to play scenario where aid is given for specific narrow objectives; that’s not what aid is for, nor does it work.”

Greenhill said she was concerned that some of the examples Mordaunt outlined in the op-ed and during her BBC interview were too “narrow” and “short term” in focus.  

“It’s always worth making the case for aid being in the national interest but [make] it in the broader perspective,” Greenhill said. “I get concerned about narrow national interest arguments,” such as using aid to support U.K. universities or businesses. Furthermore, public polls show “people support aid because of moral reasons” and so narrow and short-term benefits are unlikely to increase support for aid in the long run, she explained.

Others also questioned some of Mordaunt’s examples, especially the plan to use DFID funding to turn the U.K.’s global volunteering scheme — the International Citizen Service — into a way of employing British young people.

According to Jessica Toale, executive director of the Centre for Development Results, a support network for UK companies delivering aid, this sounds like “a rather one-sided arrangement that could be in contravention of aid rules.”

She also added: “More generally we should be sending experienced technical experts to help with what are often complex and challenging problems that developing countries face." The International Citizen Service is open to 18-35 year olds.

A stronger role for DFID in cross-government spending

Mordaunt’s op-ed also appeared to signal her intention to beef up DFID’s role when it comes to overseeing ODA spending by other departments.

“As more government departments make investments in overseas development, I will find new ways to help other departments make their spend more effective,” she wrote.

In 2016, 26 percent of the 13.4 billion pound ($17.8 billion) aid budget was spent by non-DFID departments, as Devex reported. That represents a 50 percent increase year-on-year and is in line with the U.K.’s November 2015 Aid Strategy to allocate 28 percent of aid outside DFID by 2020.

Some aid experts say they are concerned much of this money is not being managed as well or as transparently as funding that goes through DFID. While aid insiders said they would “prefer more aid to go through DFID” as opposed to other departments, they welcomed Mordaunt’s talk about wanting to be “more engaged” and to try and bring other departments up to DFID’s high standards” when it comes to managing ODA-funded projects, according to Greenhill.

The point was echoed by Kate Osamor, the shadow secretary of state for international development, who said: “After Priti Patel, it is refreshing to see an International Development Secretary stand up for the UK’s record on aid. But spending even more of the UK’s aid budget on short-term national interest or propping up the budgets of other ineffective departments frankly sounds like more of the same.”

Getting tough on DFID contractors

Mordaunt also said she planned to crack down on organizations receiving DFID funding that “do not deliver on targets we set.” She went on to praise the work of Gavi, the Vaccine Alliance, which “generates incredible returns” — in contrast to “some others [that] do not and they are on notice.”

Toale believes Mordaunt is referring to multilateral partners here as opposed to individual contractors, and said it is “good to hear her talk in terms of the department's partners and the drive for results and value for money,” especially as Goal 17 of the Sustainable Development Agenda calls for greater partnership between governments, private sector, and civil society.

“It would be great to see DFID acting as a catalyst for this type of collaboration and leveraging of each type of organisation's strengths to ensure that we are reaching all of our ambitions to deliver results and value for money,” Toale said.

The comments appear to continue Patel’s work to shake up DFID’s relationship with the international organizations it funds through the Multilateral Development Review.

For more U.K. news, views and analysis visit the Future of DFID series page, follow @devex on Twitter and tweet using the hashtag #FutureofDFID.