A pedestrian walks past Britain's National Audit Office in London. Photo by: REUTERS / Alessia Pierdomenico

LONDON — The United Kingdom’s cross-government aid strategy has come under fire yet again — this time in a scathing new report from the National Audit Office.

The strategy, launched in 2015, aims by 2020 to spend 30% of the aid budget through departments other than the Department for International Development — such as the Foreign & Commonwealth Office and the Department for Business, Energy & Industrial Strategy.

But the NAO report published Thursday raises major concerns about how those departments are spending the money and said the government cannot be sure the aid budget is being used effectively.

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The spending watchdog said the use of official development assistance requires stronger oversight. It called on the Treasury to do more to assess whether departments are capable of delivering ODA projects and to measure their effectiveness before deciding where to allocate the aid budget in the next spending review.

It also found that the portion of the £14.1 billion ($17.9 billion) aid budget being spent outside of DFID — which recently hit 20% — lacks transparency, although DFID’s spending is transparent.

“Government does not know whether giving responsibility for spending ODA to a larger number of departments has had the impact it intended. And its progress in improving the transparency of spending has been slow,” Gareth Davies, head of the NAO, said in a press release.

The analysis is the latest in a string of reports from watchdogs, think tanks and NGOs raising concerns about the cross-government strategy. Its findings have been welcomed by the U.K. aid community, which has long warned against the strategy, arguing that DFID is best placed to spend aid effectively and transparently.

Also on Thursday, a new review published by the Independent Commission for Aid Impact raised further concerns about the strategy, finding that more aid money is being spent in middle-income countries and that it risks making U.K. aid less poverty-focused.

Time to act

Ian Mitchell, senior policy fellow at the Center for Global Development in Europe, said the findings should push the Treasury to take funds away from departments that are not spending aid effectively.

“The NAO report provides new evidence … [that] several departments still lack sufficient focus on ensuring the effectiveness of aid spending. Treasury will need to factor this into their allocations at the coming spending review and should withdraw funding from some departments to ensure there are clear incentives to spend aid money well,” he said.

When it launched the cross-government strategy, the government claimed it would improve value for money by bringing a broader range of skills and staff to the table. However, the NAO report concludes that ODA funds have been viewed by some departments as a way of supplementing their budgets, and as such may not spend it effectively in line with development goals.

Stephen Twigg, chair of the parliamentary International Development Committee, a cross-party group that scrutinizes aid spending, said the report’s findings were “concerning” and chimed with a number of issues that were highlighted in IDC’s own report published last year.

“Spending under the ODA banner needs to be transparent in its aims and clearly demonstrate its value, in particular how it relates to the UK Aid Strategy. The Government should act on these findings and do much more to improve oversight, particularly for programmes run outside of DFID,” Twigg wrote in an email to Devex.

Fragmented governance

The NAO report also finds that responsibility for assessing the effectiveness of ODA spending is “fragmented across government” and that it is unclear which department has overall oversight over the aid strategy.

“We agree with the NAO finding about a lack of oversight of the aid programme. With DFID not resourced for this, our report observes that there is no body with a clear mandate to set principles and standards to govern the quality of U.K. development cooperation,” Tamsyn Barton, head of ICAI, told Devex.

According to CGD’s Mitchell, the government will need to decide whether DFID or the Treasury should take on this responsibility. But Claire Godfrey, head of policy and campaigns at Bond, the U.K. network of development NGOs, said DFID should have oversight.

“It is ... essential that the Secretary of State for International Development has oversight for all ODA. This is the best way of ensuring that aid is used to improve the lives of the world’s poorest people so we can continue to champion our record on poverty reduction on the international stage,” she said.

However, the government has previously rejected the idea.

A U.K. government spokesperson said in a statement that it welcomed the NAO report and said that “DFID and the Treasury are developing a system to more effectively track how aid is spent across the whole of government.”

International development secretary Rory Stewart, who was kicked out of the Conservative Party leadership race on Wednesday night, added: “This report does however raise questions about how aid is spent across government. So I will be working closely with my colleagues in other aid-spending departments to support them and ensure they benefit from DFID’s expertise.

“I am determined that together we make the changes required.”

About the author

  • Sophie Edwards

    Sophie Edwards is a Reporter for Devex based in London covering global development news including global education, water and sanitation, innovative financing, the environment along with other topics. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.