What is the future of UK development policy?

May 26, 2010

     By Duncan Green     

Consensus on size
But tensions on coherence
And definition

This run of posts on aid is starting to seem endless (you probably agree….). But this one, on the outlook for UK aid, is the last of the series, at least for now. From tomorrow, I’ll be getting back to the usual random scattergun stuff, but do let me know if you have any other candidate topics for similar overkill treatment.

So, where does the British aid system stand under the new government? First up, let’s just celebrate what was achieved under Labour. An excellent briefing by Save the Children Fund sums it up:

“Since 1997, UK aid has been transformed. Absolute spending has grown in real terms by about two-and-a-half times, to reach almost US$13 billion a year. As a share of gross national income (GNI), it has more than doubled from 0.26%, to 0.56% today – making it equivalent to roughly 1% of public spending. This year, the UK is projected to be the second largest bilateral donor in the world, after the United States, and is broadly on track towards its pledge to meet the long-standing UN target of giving 0.7% of GNI in aid by 2013.

During this period, there have been far-reaching changes to how aid is given. In 1997, a new Department for International Development dfid logo(DFID) was established, with responsibility for leading Britain’s efforts to tackle global poverty. In 2001, DFID aid was officially untied, ending the highly inefficient practice of requiring aid to be spent on goods and services from UK companies. In 2002, an International Development Act was passed, requiring aid money under DFID’s control to be spent on activities that promoted poverty reduction. Now, 90% of the UK’s aid goes to low-income countries, mostly in Africa and South Asia.

On the back of this track record, the UK has been able to play a strong role in convening and mobilising the wider donor community. It was instrumental in securing the collective G8 pledge to increase aid to Africa by $25 billion by 2010, and helped to drive agreement on the OECD aid effectiveness targets in 2005. It has played a leading role in the multilateral system, promoting the MDGs, and championing debt relief for the poorest countries.”

But the thing that really surprised Oxfam America staff when I was talking to them last week, was the extent of the consensus on aid in UK

British democracy - it's special

British democracy - it's special

politics. Yesterday’s ‘Queen’s Speech’ setting out the new coalition government’s plans for this session of Parliament, repeated the Tories and Liberal Democrats’ commitments to match the previous government’s promise to increase aid to the 0.7% target (it also made it into the detailed coalition agreement). The new government has made development and health the only two departments to be shielded from the deep cuts that are likely to affect the rest of government.

The pressure on the new government, from inside and out, to break these promises will be intense. In particular, watch out for the 2011 Comprehensive Spending Review as a high risk moment.  At a time when many government departments could face cuts of 15% and above, the CSR will have to give DFID roughly a 13% increase each year to reach 0.7%.   That is going to test the resolve of the new government, to put it mildly. 

Another likely battleground is over the definition of aid. Civil servants are paid to stick with the letter of the law, while bending its meaning. Redefining what is counted as aid is an obvious way to meet ambitious spending targets without actually spending any more money. The Tories have pledged to stick to OECD definitions of aid, but that still allows considerable wiggle room – e.g. refugees and student scholarships can be included (and constitute 17% of French aid), but are not currently counted as such by DFID. The Tories also have yet to pronounce on whether climate change funding will be additional to aid, leaving the door open to raiding the development budget to fund climate change work in poor countries.

But development policy is about much more than aid – trade, defence, foreign and environmental policies are arguably more important in determining how the UK helps/hinders developing countries. For a good discussion of coherence, go to the paper published by the IPPR thinktank in March, written by two of the brighter and more critical minds on the UK development scene, Matthew Lockwood and Sarah Mulley. ‘Policy Coherence and the Future of the UK’s International Development Agenda’ (bright, yes; snappy, not so much) has made serious waves with Tory policy wonks, so it’s worth taking a look. Here are some highlights:

“The Government has made real steps towards greater coherence, especially in some areas such as trade, climate change and conflict resolution. However, more remains to be done. DFID still appears to have a core focus on conventional aid programmes and in-country reform processes, and is criticised by some for its largely technocratic (rather than political) approach to putting the development case in government.

In the current economic and political climate, a public and political defence of aid spending, and of the UK’s successful international development policies, must recognise the interdependency of different objectives. The development debate in the UK will increasingly be linked to debates on issues including conflict and security, climate change, and migration and trade. Similarly, when considering the circumstances of the poorest countries, it seems impossible not to recognise the links between development and issues such as conflict and climate change.  So, there are both pragmatic and principled reasons to consider policy coherence. It seems likely that the UK’s international development ‘community’ may need to make these interdependency arguments more strongly in the future than it has in the past, in order to protect the aid budget and DFID’s independence.

DFID needs to continue building closer relationships with other government departments, which brings risks for the ‘purity’ of DFID’s poverty reduction mission. However, DFID cannot afford to keep being seen as ‘the NGO down the road’, as it has been caricatured within other parts of government – perceptions can matter as much as reality. Instead, in the words of one interviewee, the department must become more of a ‘Whitehall warrior’.

The key risk to be mitigated is that, in seeking coherence, the development agenda gets lost or downgraded relative to other issues (for example, security), and that the UK’s core development policies become less effective as a result.” 

That last point is the key one – the new government has rapidly introduced a new National Security Council, modeled on the US version, with representation from DFID. The question here, as with the US aid reform process, is which D out of the 3Ds (defence, diplomacy, development) prevails when they enter into conflict?

In an effort to demonstrate the new 3D approach, the Secretaries of State for Foreign Affairs (William Hague), Defence (Liam Fox) and Development (Andrew Mitchell) headed off to Afghanistan together within days of the election, but promptly got into a PR tangle, when Fox told the press that British troops were not there “for the sake of the education policy in a broken 13th-century country. We are there so the people of Britain and our global interests are not threatened.” Mitchell, on the other hand insisted that it was “absolutely crucial” to create a stable society where education was a priority, and Fox later changed his tone in an apparent climbdown. Whoever ‘won’, the confusion highlighted the fact that making the 3D approach work in practice is not going to be easy.