I thank the Backbench Business Committee for scheduling this debate. We can see from the number of people who want to speak just how important a topic this is.
I am here as Chair of the International Development Committee. I was elected by the House to scrutinise development, and I hope that I will be able to continue in that role in some form. The merger came as a complete surprise, especially as the integrated review was formally paused in April and is not due to start until the autumn. I fully accept that it is in the Prime Minister’s gift to change the machinery of government; however, it is unfathomable that a merger is being carried out in the midst of a pandemic, with no consultation of the sector or staff and no evidence that the move will save money or, indeed, make us more efficient at delivering the global Britain the PM so dearly wants.
I would like to start by speaking the words of my hon. Friend Mr Sharma, who is a member of the IDC. He said: “As a boy growing up in India, I saw the crushing weight that poverty exerts on people. I saw the lives blighted by ill health and by lack of education.” Fundamentally, that is what DFID does: it raises people up. Those same children, were they born today, wherever it may be—in Pakistan, Ethiopia or Nigeria—could expect a different course.
UK aid saves lives and changes lives—not the lives of those who promise to support a global Britain or buy whatever service our diplomats are hawking that week, but the lives of the most in need. That is why aid should never be linked to political pressure: the ones who lose out are never the ones in charge, but the weakest, the poorest and the sickest. Furthermore, there needs to be a system in place to scrutinise the aid that is given to eliminate poverty, to enable education and health provision for all and a better life for all, and to meet our commitments on the sustainable development goals.
I would also like to speak on behalf of another IDC member, Mrs Latham. She urges the Government to embed gender equality into the new Department. A commitment to girls’ education is meaningless unless child marriage, female genital mutilation, gender-based violence and cultural stereotypes are challenged, so we both also request that the Foreign, Commonwealth and Development Office makes sure that the Department for International Development safeguarding unit is retained, as the UK needs to deal with sexual abuse by aid workers, not just the abuses that are carried out by people in their own country.
The recent IDC report on the effectiveness of UK aid examined the impact of UK aid spending. On humanitarian assistance, from 2015 to March 2019, UK aid reached 32.6 million people; from the start of 2015 until the end of 2017, UK support immunised an estimated 56.4 million children, saving almost 1 million lives; and between 2015 and 2019, UK aid supported 14.3 million children to gain a decent education and 51.8 million people to access clean water and better sanitation.
UK aid spending amplifies our voice on the world stage. It promotes our national interests by projecting our core values and transforming the lives of the very poorest in the world. A shift away from that is counterproductive. Global poverty drives conflict and instability. I agree with the Secretary of State that, unless we use our aid now to address covid-19 in the global south, 30 years of development investment could be wiped out. That position is evidenced by the World Bank’s estimate that 49 million people will be pushed into extreme poverty this year alone.
The IDC is finalising a report on the merger, to be published next Friday, which will examine the management of the transition to the new FCDO, the principles underpinning UK aid, and future scrutiny arrangements for official development assistance spending. I hope that the Government will use the report to strengthen the new Department and avoid the pitfalls of other countries.
The UK voluntarily adheres to an internationally recognised definition of aid. That gives us great international standing, as it is seen to be doing the right thing. ODA is designated as assistance given
“with the promotion of the economic development and welfare of developing countries as the main objective”.
UK aid is also bound by four Acts of Parliament, notably the International Development Act 2002, which put poverty alleviation at the heart of the UK aid programme. I am therefore relieved that both the PM and the Foreign Secretary keep reiterating their commitment to spending 0.7% of gross national income on aid, keeping within the OECD Development Assistance Committee’s definition, and preserving the primary focus of UK aid on poverty reduction. However, we all know that the devil is in the detail.
Although DFID remains the largest distributor of UK aid, at 73%, its share of spend has been decreasing over recent years. Non-DFID aid has a very different geographical profile, with around three quarters of it going to middle-income countries, including China, India and South Africa. The shift to increasing amounts of ODA being administered outside DFID has created significant challenges for the management and oversight of spending. Not all ODA programmes administered outside DFID are adequately targeted towards poverty reduction. Seven of the 10 UK Government Departments assessed, including the Foreign Office, were failing to meet aid transparency targets. DFID, however, has been rated very good for seven consecutive years.
It is the Committee’s view that stronger accountability and oversight is needed to help to prevent future distortions in the uses of development assistance and undermining the case for aid. In the International Development (Official Development Assistance Target) Act 2015, it became a requirement for the Secretary of State to ensure that the value for money of UK ODA expenditure was subject to independent review. I commend Mr Mitchell for the creation of the Independent Commission for Aid Impact, which carries out this task. In addition, parliamentary scrutiny is currently carried out via the International Development Committee. Because of the scale of the ODA budget and the fact that this is cross-departmental, I ask the House to look favourably on the Committee’s request that its remit be extended once the merger is completed so that it can continue to scrutinise ODA spend and continue to have responsibility for receiving and considering reports from ICAI. I quote the Centre for Global Development’s Ian Mitchell:
“The Government should create a cross-cutting committee like the Public Accounts Committee to focus on questions of aid value for money. This would provide visibility and reassurance to taxpayers and Parliament alike on aid spending and enable the Foreign Affairs and Development Committee to focus on policy.”
Merging Departments may seem attractive in the short term, with the possible administrative savings and improved policy coherence, but it can be extremely disruptive and costly and impair organisational effectiveness. In the long run, the creation of the Foreign, Commonwealth and Development Office could reduce the UK’s clout on the international stage, rather than enhancing it. Australia’s merger led to the departure of significant numbers of skilled AusAID staff, taking their expertise with them. This had a clear impact on Australia’s aid effectiveness, with AusAID’s former deputy director general Richard Moore estimating that up to 2,000 years of expertise may have been lost. Canada merged its development department with foreign affairs to create Global Affairs Canada. Administration costs in the new department immediately increased and the merger was beset by poor transparency that it is still recovering from. Narrowly defined economic or foreign policy goals can create tension with UK aid’s other objectives, such as poverty reduction, with the risk that neither is done well. There is also a risk that the pursuit of mutual benefit and national interests goals might lead to the tying of aid, so the Government need swiftly to put in measures to prevent that.
In conclusion, the Government need to set out how they intend to ensure that ODA administered through the FCDO meets the necessary high standards of transparency and value for money in its programme and spend, regardless of which Department spends it. Parliamentary and independent scrutiny must continue through a dedicated ODA spend committee, as must the maintaining and resourcing of ICAI. We urge the Government to present a statement to Parliament setting out an evidence-led rationale for any change in development priorities, quantifying expected costs, setting out how the changes would be beneficial and, crucially, dealing with how ODA spend will be measured and controlled.
Finally, DFID is not perfect, but on every international rating it scores among the best in the world for transparency and value for taxpayers’ money. I strongly recommend that, rather than fully blending both Departments, which could lose the sum of its parts, the Government instead transpose DFID wholesale, allowing its good work to continue for the benefit of global Britain.