Following Chancellor Rishi Sunak’s announcement in his Spending Review that foreign aid would be cut from 0.7 to 0.5%, a reduction of some £4 billion, the debate surrounding this issue has reignited. One junior minister, Baroness Sugg, resigned following the decision, calling the cut “fundamentally wrong” in such a time of global crisis, with Sunak defending the decision as a response to the economic fallout of the pandemic.
Although this cut would remove the UK from the top of the G7 with regards to overseas aid spending as a percentage of national income, with Germany taking the lead with its 0.6%, Sunak argues that the UK would remain the second-highest donor. However, this would not be the case for long, as France may soon overtake the UK, following President Macron’s announcement that he plans to raise France’s official development assistance (ODA) from 0.44 to 0.55% by 2022. This would undeniably reduce the UK’s international reputation as the leader in overseas aid and development.
So, if the UK were to lose global reputation as a result of this reduction in overseas aid spending, that reputation would have to be recovered by other means, not necessarily outside the realm of foreign policy. Perhaps the solution lies in what the UK can achieve in dealing with the vast amounts of corruption prevalent within the sphere of foreign aid. The level of corruption was made utterly undeniable with the release of a shocking report by the World Bank, which revealed that as much as a sixth of foreign aid funds intended for some of the world’s poorest countries had been lost to corruption.
In the Elite Capture of Foreign Aid study (released in February), it was discovered that there was a leakage of aid funds at around 7.5% for countries that received more than 2% of their GDP in aid, with this money seemingly turning up in ‘offshore financial centres known for bank secrecy and private wealth management’. This percentage was seen to increase to 15% for countries receiving more than 3% of their GDP in aid, highlighting how the countries which are most dependent on our help are the ones which are suffering the most from these corrupt practices.
This report clearly points to serious corruption within the aid process, which is emphasised by the fact that attempted fraud against the Department for International Development (DFID) has almost doubled in three years, becoming bolder and more expansive. Despite this drastic increase in scale however, the official numbers of fraud losses by DFID have dropped in the past few years, causing some to raise questions concerning oversight and governance. The fact that fraud and corruption appear to be on the rise in the aid process truly highlights the need for proper investigation and perhaps reform in order to prevent such a scale of misconduct from continuing or getting worse.
This is the battle in which the UK must be on the frontline, especially in light of the recently announced cuts. If there is to be less funding for foreign aid as a result of the current economic crisis, then it is all the more important that the money actually goes to those who need it most, rather than lining the pockets of corrupt elites. Furthermore, a portion of the foreign aid budget could be set aside specifically for ensuring that aid funds for a certain country do not fall victim to corruption, although perhaps not until the temporary cuts are lifted. The removal of such wasted spending within the overseas aid budget would certainly seem advisable given the current economic situation. In fact, the Institute for Fiscal Studies predicts that a fiscal tightening of £40 billion in tax revenue a year by the time of the next election will be needed to balance the books.
Therefore, it seems that the rooting out of corruption concerning foreign aid funds would not only benefit those who are in need of the economic relief provided by those funds, but also the UK, with taxpayer money being more effectively and efficiently spent. The arguably necessary cut in funding must not be seen as the beginning of the end of British aid, but rather as the beginning of a new era for the foreign policy of the UK: one based on compassion and honesty, rather than corruption and misconduct.
Oli is currently undertaking work experience at Bright Blue. Views expressed in this article are those of the author, not necessarily those of Bright Blue. [Image: Number 10]
