DFID under fire from Commons Committee

October 26, 2011 5:20 PM

Last week MPs criticised the Department for International Development’s "poor understanding" of the scale and possibility of aid being lost to fraud. This is all the more troubling given DfID will see its budget increase by a third over the course of this Parliament. We’ve said before that the Government had a good opportunity to set out priorities at the Spending Review that would have eased pressure in other budgets, and enjoyed support among the British public. Instead, they decided to increase spending by nearly £4 billion.

The Public Accounts Committee said:

“We questioned whether the culture within the Department was sufficiently focussed on value for money…While the Department had increased its focus on value for money, it acknowledged that it had not yet maximised value for money in everything it was doing and could do more.”


Time after time, the British public show their generosity – best highlighted by their amazing response to natural disaster appeals. But when it comes to how the Government spends taxpayers’ money, things are less rosy. Previous TPA research has shown that 13 per cent of DfID’s budget is spent on non-front line costs. And for every pound of taxpayers’ money spent by DfID through multilateral organisations such as the UN and the EU, 5 pence of this goes to the administration of DfID. A further 15 pence (on average) then goes on the administration of the multilateral organisations. That’s a fifth of the money not directly helping the people it’s supposed to reach.

And it’s these external multilateral organisations that the Public Accounts Committee has warned against giving more funds to, as DfID had planned. If too much money is being spent on administration, it is only right that DfID must look to cut these costs. The Committee indicates that it is more transparent if DfID spends the money itself, rather than giving it to organisations such as the World Bank and the EU. It must not be forgotten that how money is being spent is important, as well as the total amount.

British aid undoubtedly saves lives across the world, and DfID’s work on crisis appeals is admirable. But it is vital that aid spending is transparent, so that taxpayers can be assured it is effective for those it is intended to help. Simply hiking DfID’s budget at a time when public spending needs to be brought under control does not guarantee greater efficiency and could mean more money lost to administration and fraud.Last week MPs criticised the Department for International Development’s "poor understanding" of the scale and possibility of aid being lost to fraud. This is all the more troubling given DfID will see its budget increase by a third over the course of this Parliament. We’ve said before that the Government had a good opportunity to set out priorities at the Spending Review that would have eased pressure in other budgets, and enjoyed support among the British public. Instead, they decided to increase spending by nearly £4 billion.

The Public Accounts Committee said:

“We questioned whether the culture within the Department was sufficiently focussed on value for money…While the Department had increased its focus on value for money, it acknowledged that it had not yet maximised value for money in everything it was doing and could do more.”


Time after time, the British public show their generosity – best highlighted by their amazing response to natural disaster appeals. But when it comes to how the Government spends taxpayers’ money, things are less rosy. Previous TPA research has shown that 13 per cent of DfID’s budget is spent on non-front line costs. And for every pound of taxpayers’ money spent by DfID through multilateral organisations such as the UN and the EU, 5 pence of this goes to the administration of DfID. A further 15 pence (on average) then goes on the administration of the multilateral organisations. That’s a fifth of the money not directly helping the people it’s supposed to reach.

And it’s these external multilateral organisations that the Public Accounts Committee has warned against giving more funds to, as DfID had planned. If too much money is being spent on administration, it is only right that DfID must look to cut these costs. The Committee indicates that it is more transparent if DfID spends the money itself, rather than giving it to organisations such as the World Bank and the EU. It must not be forgotten that how money is being spent is important, as well as the total amount.

British aid undoubtedly saves lives across the world, and DfID’s work on crisis appeals is admirable. But it is vital that aid spending is transparent, so that taxpayers can be assured it is effective for those it is intended to help. Simply hiking DfID’s budget at a time when public spending needs to be brought under control does not guarantee greater efficiency and could mean more money lost to administration and fraud.

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