British Aid being given to corrupt Governments
(13 November 2008)

The Conservative Party has uncovered evidence that British aid is being given directly to the Governments of some of the world’s most corrupt countries. Under the controversial policy of general budget support, Britain hands money directly to governments in developing countries, to spend however they like and according to their own expenditure and audit systems. £366 million of British aid was spent like this in 2007/08. (DFID Statistics on International Development 2008)

According to Transparency International, the UK gives some of its largest donations to countries which have real problems with corruption. For example:

• Tanzania ranks 102nd on the corruption index, yet it received £105 million as direct budget support last year. In February 2008 President Kikwete of Tanzania dissolved his entire cabinet following a financial scandal, and in January he fired the head of the Central Bank after international auditors found that more than US$120 million was missing.
• Uganda ranks 126th (down from 111th in 2007), yet it received £35 million in direct budget support from Britain. President Museveni is planning to buy a new Presidential G5 Gulfstream jet plane for £24 million. In 2006, massive corruption in the Ugandan health ministry was exposed.
• Zambia ranks 115th in the world, yet it received £28 million in direct budget support.

In a debate in the Commons today Shadow International Development Secretary Andrew Mitchell called for an investigation into whether taxpayers have got value for money out of their donations to such countries. He said: “In a time of tightened belts and economic hardship, British taxpayers need to know that their aid money is helping tackle killer diseases and educate children, not being siphoned off for private gain.

“The fact that we give money directly to governments that are not trusted by their own citizens is a serious concern. The Secretary of State must urgently review whether it is right that hard-working British families are contributing directly to the governments of these countries.

“I think it would also be appropriate for the International Development Select Committee to investigate the issue further as a matter of priority.”

NAO report raises questions about DFID’s work in Afghanistan and Iraq

In October, a National Audit Office report on DFID’s performance in insecure environments like Iraq and Afghanistan shows evidence of serious corruption in DFID projects in Iraq, and poor project design and performance in Afghanistan. It finds that only half of DFID projects in the most insecure countries achieve their aims, and that almost a quarter suffer from fraud or financial problems.

Responding to the findings, Shadow Secretary of State for International Development, Andrew Mitchell, said: “Today’s report makes clear that DFID needs urgently to improve its performance in conflict zones like Iraq and Afghanistan. It is clear that DFID needs to learn new skills and up its game. I hope Douglas Alexander will look carefully at this report. We need action to improve DFID’s performance in backing up the British military effort to win the battle for hearts and minds. As I saw in Afghanistan recently, brave DFID staff work hard in very dangerous environments to improve people’s lives. But their individual courage must be supported by radical policy and management improvements.”

The NAO report ‘DFID: Operating in insecure environments’, finds:

• Almost 25% of DFID projects in insecure environments suffer from fraud or financial problems. (p24)
• DFID-funded wells are running dry in Afghanistan because of a failure to carry out a geological survey before they were built. (p22)
• A £20 million project in Iraq suffered from serious corruption when local officials massively overbilled the amount of work days for a contract. DFID was unable to adequately monitor this because of the poor security situation. (p25)
• A £7 million project to advise the Iraqi authorities on reconstruction was marred by poor communication between DFID and consultants, significant financial and procedural errors, and various contractual irregularities. For example, one sub-contracting consultant had ‘wildly overstated their inputs’. Another doubled their daily rates mid-way through the project. (p22)
• DFID committed £20 million to an Afghan Government counter-narcotics programme between 2005 and 2008 but the Government lacked the capacity to design and implement component projects. The United Nations Development Programme also lacked the experience to manage the fund. Overall progress on reducing poppy cultivation has been disappointing and cultivation actually increased in 2007. (p17)
• In the Democratic Republic of Congo, poor monitoring by DFID due to insecurity meant that insecticide treated bed-nets had not been available free to pregnant women at a health clinic, and as a result malaria increased; that some equipment was missing or not properly accounted for; and that construction of a road had been poor, with insufficient drainage. (p24)
• In the most insecure countries, only around half of DFID spending ‘achieved all or most of its objectives’ – and the average project performance score is worsening. (p13)
• DFID sometimes fails to consider whether their work in warzones might actually exacerbate conflict. (p23)
• DFID suffers from ‘high staff turnover, limited experience and staffing gaps’ in insecure environments. (p6)
• The average cost of employing a member of DFID staff in Afghanistan, including security, training, accommodation etc is over £250,000 per person per year. (p56)