After
the release of a surprising new U.K. aid strategy on Monday, the aid community
is coming to grips with a slew of new priorities and shifts in the government’s
aid budget.
U.K.
Chancellor of the Exchequer George Osborne announced Wednesday the results of
the government’s comprehensive spending review, and although the Department
for International Development’s budget is technically sealed at 0.7
percent of gross national income, the government is delivering on its promise
to use more official development assistance in other government departments.
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| Shelter kits are loaded for shipment from a warehouse in Dubai. |
Despite an
overall $6 billion increase in the aid budget by 2020 as a result of the U.K.’s
increasing gross national income, DfID will be tasked with cutting
$400 million in “efficiency measures” by 2020. Cuts will focus on
“streamlining administration and procurement,” a DfID source told Devex.
Other shifts
include scaling up the U.K.’s “cross-government” strategy, which will
see the bulk of the expected aid increase — about $6 billion, or 27 percent of
total ODA — disbursed through non-DfID ministries and departments, including
the Foreign Commonwealth Office, the Home Office, the Ministry of Defense and
the Department for Business, Innovation and Skills, among others.
The decision
raises questions in the U.K. aid community about whether these departments —
some of which consistently receive “Poor” and “Very Poor” ratings in Publish
What You Fund’s Aid Transparency Index — will be able to maintain the same aid
transparency standards as DfID, which has received a “Very Good” rating for the
last five years.
Building on
commitments outlined last week to spend half of all U.K. aid in “fragile and
failing states and regions,” the new aid strategy will also invest more in
cross-government funds, including a new $1.5 billion Prosperity Fund, run by
the National Security Council.
Another
NSC-affiliated, cross-government fund — the Conflict, Stability and Security
Fund — will also be expanded under the new strategy. The aid increase will be
used to establish a $1.5 billion cross-government “Ross Fund,” in partnership
with the Bill & Melinda Gates Foundation, to
research and develop products to fight infectious diseases and eliminate malaria.
Finally, the aid increase will fund a new $750 million “ODA Crisis Reserve.”
But not
everyone is happy with these changes. Several of DfID’s major implementers and
NGO partners raised concerns about the new strategy.
Is a ‘cross-government’ approach good for aid?
While
DfID will continue to spend approximately 72 percent of total ODA, other
government departments will be tasked with managing an increasing amount of aid
over the next four years, despite persistent questions about some departments’
ability to distribute aid effectively, and concerns among the aid community
that variation in contracting and procurement protocol could unnecessarily
complicate aid work.
At the same
time, some development organizations, like Crown Agents, have actively partnered with
non-DfID departments and ministries for many years. Ian Shapiro, chief
partnership and growth officer at Crown Agents, told Devex that for
organizations already working with these departments, not much will change in
terms of strategy.
“Who spends
the money isn’t important if those standards are met, and bringing all skills
to bear on development work is a really good thing,” he said.
Still,
Shapiro pointed out that a “cross-government” approach will present some risk,
especially when partnering with those departments that have less experience
administering aid.
“DfID has 18
years of experience of assessment, has checks and balances in place,
[effective] monitoring practices and so forth, [whereas] other parts of the
U.K. government have much less experience,” he said.
FCO was the
subject of scrutiny earlier this year when Osborne ordered a review of all
FCO aid projects after a series of media reports suggested the
office was spending aid irresponsibly.
Publish What
You Fund’s 2014 Aid Transparency Index rates the FCO
as “Poor,” and rates the MOD as “Very Poor.” The new aid strategy stipulates
that all aid-administering departments must achieve a “Good” or Very Good”
rating by 2020, but that leaves a five-year window in the interim with
potentially low or mediocre aid transparency.
While the
cross-government strategy reflects a strong sensitivity to current crises,
“there is a real risk of mission creep in government putting ODA at the heart
of national security and foreign policy,” said Leigh Daynes, executive director
of Doctors of the World. “Aid spending should
be predicated on meeting unmet need, never as an instrument of foreign policy,
national self-interest or the whims of some sections of the populist press.”
Given that
two of the four cross-government funds are either managed by or involve the
NSC, concerns that politics and national security concerns could eclipse aid
priorities hold some merit.
‘Expanding’
the definition of ODA — a slippery slope
The new aid
strategy pledges to stick to the guidelines for ODA set out by the Organization
for Economic Cooperation and Development’s Development Assistance
Committee. At the same time, the strategy also commits to working closely with
other countries to “modernize the definition of ODA at the OECD-DAC, ensuring
it reflects the breadth of the new international development agenda set by the
new U.N. Global Goals, and fully incentivizes other countries to meet these
goals,” the strategy says.
Some
officials expressed concerns that the U.K. could join a small lobby of OECD
countries like Norway and Sweden, among others, hoping to expand the definition
of ODA to include security-related costs, as well as extend the period in which
governments are allowed to use ODA to resettle refugees in-country, which is
currently capped at one year.
At the same
time, the definition of ODA hasn’t been updated in almost 40 years, an issue
that some say has allowed donors and providers to abuse the guidelines.
The new aid
strategy, for example, also sets out a funding increase to the BBC World
Service by $51 million in 2016 and $128 million in subsequent years, a
“significant portion of which will be ODA,” the strategy document says.
Updating the
definition of ODA while preventing political abuse of ODA funds could be a
challenge for the U.K., Sheard said.
We have real
concerns this will trigger a race to the bottom,” Sheard told Devex.
“Rather than
tighten the rules, emphasising that ODA's principle aim is to fight and end
poverty, it's likely that OECD member states will try to widen the definition
to cover all sorts of government spending that doesn't share this core
priority.”
Shapiro
pointed out that the U.K. would need to manage these risks, as well as those
presented by organizations or donor agencies advocating for a more security-friendly
definition of aid, or a definition that might be more “provider-focused.”
50 percent of
all U.K. aid will be spent on fragile states
The
government’s decision to spend half of aid on fragile states has been met with
largely positive responses from aid organizations, but some are some concerned
that political and foreign policy issues — namely the migration crisis and the
Syrian conflict — could eclipse the need for assistance in those fragile states
that have fallen from the headlines.
“While there
is a clear relationship between poverty and fragility, we must ensure that
resources are prioritized for the poorest fragile states such as South Sudan
and the Democratic Republic of the Congo, not just fragile but richer countries
such as Egypt and Iraq,” said Diane Sheard, director of the ONE Campaign.
If executed
well the strategy could create an opportunity and incentive for specialists and
organizations across sectors to translate their work into fragile and unstable
contexts, she added.
“Hopefully
this will create coalitions of talented, capable partners, and we’re trying to
encourage other specialist agencies to come and work with us,” said
Shapiro. “So if you’re a youth or child rights specialist, for example,
you can’t ignore conflict-affected states, because there’s a really important
constituency for you there as well.”
The U.K.
government currently spends about 42 percent of aid on fragile states, a DfID
spokeswoman told Devex, adding that the increase to the 50 percent target
is a milestone in the long-held goal to increase aid to “fragile and failing
states and regions.”
Considering
the complexity of working in fragile states, some aid experts suggest the shift
will place a degree of strain on DfID’s already limited staff. With rumors of
staff cuts swirling, one alternative is to increase ODA to multilaterals like
the United
Nations and the World Bank.
Romilly Greenhill, team leader for the development finance team at the Overseas
Development Institute, sees two advantages to this strategy.
“Multilaterals
are important, partly to save staffing costs, but [also because] working in
fragile states inevitably involves taking risks,” she told Devex in an email.
“Multilaterals tend to be better insulated from public pressure, and thus
better able to take risk, and can also pool risk — combining donor aid across a
large number of countries and projects, some of which are likely to do better
than others.”
Greenhill
pointed out that multilaterals are able to work without the political scrutiny
that national governments are typically subjected to, which is “particularly
important in fragile contexts.”
Questions
still remain about how the new strategy will be implemented, namely how funding
will be redistributed and from which sectors and to what countries. The ongoing
multilateral aid, bilateral aid, and CSO partnership reviews — all due out in
early 2016 — will offer a more specific breakdown of funding shifts.
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