British overseas aid is mainly dispensed through the Department for International Development (DfID pronounced “difid”) whose political head is the Secretary of State Andrew Mitchell MP.  In his interviews with the Sunday Times on February 27 and subsequently with Emily Maitlis on BBC2’s Newsnight, Mr Mitchell attempted to wring the heart strings of Aid-sceptics, especially those who want to tighten his department’s purse strings, by declaring that, “even at this time of dreadful economic inheritance (from Labour) we won’t balance the books at the expense of the poorest people in the world because it is morally right not to do so”.  And, “it’s part of the British DNA to be there for those in desperate straits”.  However, lacking in these ringing declarations was any sense of relation between the money being spent by his department, the achievement of its declared objectives, and the broad categories of other government expenditures.

Certainly in Mr Mitchell’s declarations there is the impression that his department is manfully exerting itself to avert or palliate catastrophe and extreme hardship abroad.  Equally clearly the kindly British people are personally very sensitive to disasters in other countries as their contributions to the Indonesian tsunami and Haiti earthquake relief funds have demonstrated (about 6 times per head of those in France for instance).  In essence though Mr Mitchell’s declarations use the normal, one might even say Christian reactions to others’ misfortune as cover for the truly gigantic sums which DfID currently spend (£7.5 billion in 2010) on foreign agencies, consultants, research institutes and on unspecified development.  Alone of all government departments DfID’s budget is planned to rise by around 30% to at least £11 billion in 2014/15 – 0.7% of our putative Gross Domestic Product in that year).  For this largesse, the UK receives the praise of the United Nations as being the only major country to “achieve” the UN’s target for foreign aid.  This in itself is not surprising because the UN (in New York and Geneva) is a major beneficiary of DfID’s largesse.

Realism versus Moralism: DfID Expenditure Examined

DfID’s expenditure of £7.5 billion this year is about the cost of maintaining 75,000 armed forces personnel with their existing equipment, or about 6 times the number of those about to be axed under the absurdly named Strategic Defence and Security Review (SDSR).  So just 20% of the DfID budget would enable the government to do something substantial besides Afghanistan – rescuing people in one of the several disasters which occur each year somewhere in the world for instance.  One billion pounds sterling per annum would allow the MOD to keep both Ark Royal and the 61 Harrier GR9 and 9As and their pilots.  If David Cameron actually wanted to contribute to a no-fly-zone in Libya, instead of just talking about it, he would need some or all of these assets.  All he has to do is reduce the DfID budget by a modest 14% – much less than is being applied to Local Authorities.

A recent Populus poll showed that 68% of British people approved of rescue type missions and on-the-ground aid to people in desperate straits, but it is very doubtful that they would approve of the way DfID actually spends its money.

What does DfID actually spend the taxpayers’ money on

The Secretary of State Andrew Mitchell has made great play of openness (transparency) such that the DfID website now records each payment it makes of £25,000 or more month by month.  A typical month, say September 2010, shows that of the 665 items of over £25,000 listed averaging just under £1 million, most turn out to be grants to other agencies, whose websites do not generally disclose what they spend these grants on.  These included: the Foreign and Commonwealth Office (FCO), British university research institutes, centres with non-specific names, consultancies like Oxford Policy Management, Third Party Monies (sic), Adam Smith International, One world, United Nations agencies like UN Habitat, the World Health Organisation (WHO), the International Medical Corps (UK), the International Bank for Reconstruction and Development (The World Bank), the Caribbean Bank, Coffey International Development, the Swiss Agency for Development and Cooperation, the United Nations Development Programme (GBP and USD), IBRD-IFF and UNDES, Cambridge Education Ltd, the Oxford Department of International Development, the International Development Centre, the Danish Embassy (Tanzania), Solidarities, the International Education Partners Ltd, the Met Office, Maxwell Stamp plc (mainly management and financial consultants), Panos London, RSM Tenon Ltd, the Refugees Studies Centre, ROK Construction (HR and accommodation costs division), Options Consultancy Services Ltd, USAID Washington, DELTA partnership Solutions, Case International, DAI Europe Ltd (management consultants), Robson Associates (property management), and the Crown Agents who received over £100 million in September.  Some bodies, including the Overseas Development Institute, seem to derive most, if not all, their income from DfID.

It is doubtful if the British people who said they approved of foreign aid would identify most of these recipients with humanitarian help, which is what most mean by foreign aid.  Still less are they likely to approve of tens of millions of pounds being passed to various banks for unspecified purposes.

The Actual Needs of Third World poor people

The list of recipients in just this one month smacks of payments to talking shops whose contributions to actual development on the ground is at best vague and indirect and probably for the most part non-existent.  With the partial exception of the Crown Agents who procure actual materials for anti-malarial programmes for instance, most of the others listed above (who between them account for over £500 million (!) in one month, or 20 times the cost of keeping the Harriers) are one or more steps back from the actual business of providing the poor of the Third World with pumps and pipes for clean water systems, sanitation, electric light, roadways, easily erected (e.g. flat-pack) schools and houses, contraceptive supplies and medical centres, and instruction in how to use and maintain all of these.  There should also be deployment of skilled people, who can help them get commercial enterprises going, including some basic manufacturing.

And there is a simple reason for this remoteness. The consultancies, institutes, think-tanks, etc. are almost entirely led by humanities graduates who for the most part recruit people like themselves: accountants, economists and sociologists, whereas the things poor people really need are usually designed, made, and installed by engineers and agricultural scientists.  “Development Studies” has been one of the great growth industries in the humanities faculties of the universities in recent years.  Many people will have wondered where their graduates get jobs.  Ultimately as the list above indicates (more at : www.dfid.gov.uk/documents/datasets/spend/september-2010.xls and all the other months of 2010), many graduates in Development Studies, if not most, will get jobs ultimately supported by the DfID.

Charities

Most British people believe that charities are organisations which collect money from the public to spend on good works directly.  They will be surprised to realise how many charities receive substantial grants from the taxpayer via the DfID.  They included in September alone £1.75 million to Comic Relief, a round £4 million to the International AIDs Initiative, $1.2 million to the Clinton Foundation, £9 million to UNICEF, £5.6 million to USAID, and these are only a few of the biggest donations in one month.  If Third World peoples’ progress were measured by the volumes of research reports, appraisals, and deliberations about sociological matters such as the gender balance, for example, they would be out of poverty in no time.

The Overseas Development Institute

One of the prime research institutes which receive DfID grants and rank as charities for taxation purposes, is the Overseas Development Institute of London.  Besides its executive managers, it has a council of 38 to set the Institute’s objectives and monitor progress, which is arguably a good guide to DfID’s own priorities.  It is instructive to see how the experience of the 38 is distributed over various fields.  Twelve are in “policy”, 8 in economic development studies, 5 are from charities, 4 have some form of commercial experience generously interpreted, 3 are in sociology, one has veterinary and one agricultural experience.  There is not a single engineer – whether civil, water, mechanical or electrical – or even a doctor, among them.

The conclusion is irresistible.  The Department for International Development exists primarily to funnel taxpayers’ money to almost any organisation with the words “development” and “international” in their title.  The main outputs of the recipients are reports; the main activities besides writing these reports are meetings.  Excluding the medical programmes which absorb only a small fraction of the £7.5 billion, very little  is actually manifested by things which people in the aided territories can use and take advantage from. Virtually all of the money DfID spends outside Britain goes to other organisations like the UN, the EU and various consultant companies set up for the purpose of receiving taxpayers’ money.

What should be done?

First make it clear that the only thing which matters is physical change and kit on the ground and this requires not “development professionals”, but professional engineers, doctors and qualified agricultural specialists.  Some money, on an experimental basis could be used to kick-start a number of local micro-banks on the Grameen pattern, which have been pioneered in Bangladesh. Of course money spent needs to be properly accounted for, but this should be done prudently by staff in the DfID itself.

With this change of focus it would be found that it is very difficult to spend £7 billion in one year on properly designed equipment, systems and secondments of staff, let alone the projected £10 billion.  The proper way to do this is to engage international contractors like AMEC, who have the requisite staff, expertise and know where to buy the necessary equipment and set up appropriate maintenance systems and who are used to working within cost and time budgets.

But it is of course very easy to spend £7 billion on UN agencies, consultancies and educational programmes, on which the DfID spends most of its money.  Probably £3 billion a year would be about the limit of that which could be effectively spent under this new approach.  The beneficiaries in the rural and urban slums of Africa and Asia would however be very well aware of the changes which this equipment and infrastructure would have brought to their lives.

All the Aid paid for by the British taxpayer should be labelled as such instead of disappearing into the general pool of funds passed to the international agencies and commercial consultancies referred to above.

A Specific British Disaster Relief Task Force

The £4 billion balance of the DfID budget should go to the Ministry of Defence to reinstate Ark Royal, the four to-be-scrapped frigates, the Harrier fleet and air-sea surveillance capacity, which the wrecked Nimrods were going to provide.  With these and other assets the MOD should put together a formal disaster relief task force, ready to project British power and British humanitarian help.

If this is too realist a prescription for our wimpish government, could they not require all DfID’s sundry beneficiary research institutes, UN agencies, consultancies, accountants, banks, innumerable non-government organisations, to make do on 20% less and pass the saved £1.5 billion to the MOD to save the Harriers, Ark Royal, the air and maritime surveillance planes and the 12,000 servicemen and women before they are finally axed.

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