Both Labour and the Conservatives have committed to continuing the current target of spending 0.7 per cent of national income on Overseas Development Assistance (ODA). This is an arbitrary figure that the UN has recommended since 1970.
The UK first hit the target in 2013 and is one of only a handful of countries around the world that does. Deciding budgets based on how much you want to spend is a poor way of budgeting and should be avoided. This is because it shifts the focus from what good can be done with the money, to making sure that the money has been spent by the end of the fiscal year (especially as the commitment has now been enshrined in law).
The first casualty of this approach is accountability and scrutiny. Numerous investigations have found examples of huge waste, because due diligence and oversight on the ground were lacking. These projects are either massively inefficient because of the lack of funding pressure, encourage corruption in the recipient country because of the lack of oversight, or indeed show no benefits whatsoever. Worse still, by pegging our desire to ‘do good’ to the impulse of blindly throwing money at a problem, we incorrectly absolve ourselves of the responsibility to actually solve overseas problems.
Bill Gates recently entered the debate on the foreign aid target in Britain, saying that the ring-fenced figure was a symbol of ‘goodwill’ and ‘humanity’. George Osborne, the editor of the Evening Standard, said that it was ‘key to creating modern compassionate Conservatives’. But foreign aid, which is of course taxpayers’ money, should be spent based on need, not to make politicians look good and feel better about themselves.
To be sure, Bill Gates is an exceptionally generous philanthropist and plans to give away almost all of his fortune over his life, like many other billionaires. This is a remarkable act of generosity and he should be praised for it. The mechanism he has chosen for this giveaway is through (his own) charity, not through the international development department of his or any other country. This is because he wanted the ‘private-sector’ rigour that helped make him so wealthy to accompany the aid spending and ensure its effectiveness.
The British public are also incredibly generous with their charitable contributions, despite the high levels of taxation they are under. There is every likelihood that they would give even more if the government let them keep more of their own money.
Scrapping the 0.7 per cent spending requirement would be a good start towards reforming the way the UK interacts with the developing world. But in the long-run, the Department for International Development should be scrapped and its responsibilities should be shared out between the Foreign Office, the Ministry of Defence and the Department for International Trade. Humanitarian relief, disease eradication and deep trade links should be supported, and helping African farmers sell goods into the UK would benefit both them and the UK consumer much more than hand-outs. But we should move on from sacrificing taxpayers’ money on the altar of an arbitrary and damaging ring-fence.
At the very least, the £1.3 billion British citizens voluntarily give to overseas charities should be counted towards the 0.7 per cent target.