The United Kingdom’s development spending watchdog has seen a 15% cut to its budget, undermining its independence and impeding its work, according to members of Parliament.
News of the cut to the Independent Commission for Aid Impact’s budget came to MPs just four days after it published a highly critical report on how the government handled the 2020 aid cuts.
The organization had requested a £3.29 million budget for 2021-22 but received only £2.8 million, despite being entitled to £15 million between 2019-23, according to Sarah Champion, chair of the International Development Committee. IDC also runs a subcommittee, chaired by MP Theo Clarke, that examines ICAI’s work.
“Cutting the budget of ICAI, the very body that helps UK taxpayers get value for money from the aid budget, is a worrying new development that must be robustly challenged,” Champion said in a statement.
ICAI is widely viewed as a key pillar of scrutiny for U.K. aid policy and spending. The organization has access to private government documents and engages in field research and interviews to establish the effectiveness of U.K. development. Its full reports also carry recommendations for government departments to implement. Last year, Devex found unanimous agreement among experts that ICAI played a vital role in holding the government to account and helping to improve its performance.
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News of the cut was revealed in letters between Foreign Secretary Dominic Raab and International Development Committee MPs. Clarke wrote to Raab on April 30, saying: “I have been informed that ICAI will not receive the full programme budget for 2021/22 that it had bid for … this reduction may mean that ICAI will struggle to deliver its full 2021/22 work programme of evaluative reviews and information notes.”
She asked Raab to “confirm the outcome of the budget setting process.” Clarke added that ICAI also had not received its administration budget for the year, despite being “well into” the new financial year.
Raab replied on Monday that “ICAI have been given a programme budget of £2.8 million. … We have sought to protect ICAI’s budget as much as possible despite the challenging financial climate. When compared to the previous 4-year settlement of £11.1m, this amount constitutes a flat settlement and should allow ICAI to continue with the majority of its 21/22 workplan.” He added that the commission's operational budget for the year would be just over £1 million.
The issue was apparently escalated to Champion, who wrote to Raab on Friday that she was “extremely dismayed to read that the programme element of ICAI’s 2021/22 budget has been cut substantially.”
Champion added: “ICAI’s operational independence is crucially underpinned by the fact that it has a four‐year spending ceiling agreed with Government at the start of each ‘Phase’, the current phase running from 2019 to 2023.” The settlement for the current phase is £15 million, according to Champion. She added that Raab’s wording on the current phase of funding was “unclear” and did not set out the current amount.
“I am concerned that through changes to the settlement, and in particular failing to provide the programme budget that ICAI has bid for, the FCDO [Foreign, Commonwealth & Development Office] risks undermining ICAI’s independence,” Champion wrote.
IDC was also not consulted by FCDO about changes to ICAI’s budget, despite an agreement requiring engagement between the department and the MPs on the matter, according to Champion.
“Cutting the budget of ICAI, the very body that helps UK taxpayers get value for money from the aid budget, is a worrying new development that must be robustly challenged.”
— Sarah Champion, chair, International Development CommitteeChampion also said the decision and its communication were “one of a growing list of instances where the FCDO has been less than transparent and somewhat unhelpful to the Committee and to Parliament” and “presents an image of a disorganised department struggling to adapt to an ill thought through decision for a merger,” referring to the merger of the Department for International Development and the Foreign & Commonwealth Office that took place in 2020.
The commission was set up by Andrew Mitchell, former international development secretary, who told Devex via WhatsApp: “ICAI is the tax payers friend. It holds officials and the Government to account on behalf of all of us and to do so it needs to be adequately funded. When I set it up there was institutional resistance which only underlines the importance of maintaining its independence and effectiveness.”
The move was described as an “assault on ODA [official development assistance] oversight” by Abigael Baldoumas, policy and advocacy manager at Bond, the network for U.K. NGOs. Baldoumas said via email that the move was “disappointing but unsurprising,” adding that “The [aid budget] cuts we've seen to date, as result of this short-sighted decision to abandon the commitment to [spending] 0.7% [of gross national income on aid] are all set to undermine the impact of UK aid.”