How can UK aid pursue development and British National Interest at the same time?

October 9, 2015

     By Duncan Green     

The British aid programme is in an interesting place right now. The British chancellor (finance minister) George Osborne is overseeing a

Should that be 'from' or 'for'?

Should that be ‘from’ or ‘for’?

tense spending review in which aid is protected thanks to the government’s commitment to spending 0.7% of national income on aid, but most other departmental budgets are being slashed. On the Andrew Marr TV show last month Osborne said: ‘The question is not just how does our aid budget help the rest of the world, but how does it help Britain’s national interest?’ And development minister Justine Greening echoed that sentiment in her speech to this week’s Conservative party conference.

It’s hard to know what to read into this. It may just be a storm in a teacup, but everyone is on tenterhooks because money is so tight in Whitehall, prompting fears that talk of national interest could be the start of a slippery slope that ends with raids on the UK aid budget. Those fears were heightened when David Cameron, visiting Jamaica on his way back from the SDGs summit in New York, announced £25m in aid to build a prison in Jamaica so that foreign criminals in the UK can be sent home to serve sentences in the Caribbean. Officials told reporters the deal could save UK taxpayers £10m a year.

So what do we know? Some 12% of Britain’s £12bn annual aid spending currently goes through other Whitehall departments, while DFID manages the remaining 88%. That ratio isn’t expected to change much, but as one senior civil servant told me ‘we will be expected to work the Overseas Development Aid (ODA) definition hard’. The job of civil servants will be to broaden the range of spending on the British national interest that qualifies as aid in order to cross-subsidise other government priorities (security, refugees etc). And holding the line against this kind of slippage will be the independent aid watchdog, ICAI, the International Development Select Committee and assorted aid organizations, wielding some rather fuzzy OECD definitions of what can/can’t be counted as aid (eg you can count spending on the first year of resettling refugees, but not thereafter).

david cameron in jamaicaSo how does Britain’s national interest (let’s call it BNI for short) overlap with its aid? There is clearly a powerful case for enlightened self interest, where a greater focus on longer term impact and sustainability – ending poverty, tackling inequality and building resilience worldwide – should benefit Britain by creating a more prosperous, stable world in which we can trade, travel and peacefully coexist. But that’s the extremely idealistic viewpoint, all motherhood and apple pie. Where are the real trade offs and crunch points in this debate?

The simplest trade off is that when you insist that aid recipients use the money to buy goods and services from British companies, you may boost British industry, but the aid recipient gets less value for money. That’s tied aid, which the Conservative Party at the last election promised to avoid, and which Britain has largely abandoned (at least on goods, although the proportion of British researchers, consultancies and technical advisers benefiting from the aid programme is rather striking).

But there are other, more subtle trade-offs. Politics is often dominated by short term concerns, at the expense of long term problems, and the pursuit of BNI could easily push aid further in that direction. For example an exclusive focus on today’s crises (eg Syria) could come at the expense of building strong societies/economies that will help prevent future crises (including much of what DFID does in places that most people would struggle to place on a map, until they blow up).

What if buying a bit of short term BNI, for example by using aid to get contracts for British companies to build airports or win oil contracts comes back to bite s in 20 years time in the shape of climate change, which hits developing countries the hardest?

What we don’t want is to end up with a two tier aid programme – separate tiers for BNI and development. Perhaps

The political pressures on the aid budget are real

The political pressures on the aid budget are real

more likely than a completely two tier system is the creation of a chilling effect on funding activities that aren’t demonstrably in the BNI, as civil servants will prefer things they can present as win wins.

How the government interprets BNI in its aid programme has wider ramifications beyond parochial UK arguments. As I’ve argued before, at the moment the UK is an outlier (in a good way) – a cluster where aid and development are still a buzzing, dynamic sector in a world where government after government is cutting aid budgets. In that sense, the UK is acting as a keeper of the flame, so that if/when governments return to their senses (whether of self interest or good global citizenship) and recommit to aid, they can get up to speed with what works by asking DFID, among others. That makes it doubly important to keep a gold standard aid programme that is not diluted by domestic policy considerations.

This may seem like scaremongering, particularly given David Cameron’s undoubted personal commitment to aid. But someone else will be in charge of his party by the next election, and the 0.7 commitment is now enshrined in law. So if the next PM is less convinced on aid, but unwilling to scrap the law, the battleground is likely to be over how British National Interest is interpreted within the UK aid programme. Watch this space.

October 9, 2015
Duncan Green