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Thursday, 23 December 2010

Where did Labour's £1bn foreign aid go?

There are no proper records, says scathing report

By Gerri Peev, Political Correspondent
Last updated at 4:04 AM on 23rd December 2010

MP Andrew Mitchell: 'There is serious evidence of failure in Labour's years of government which coalition ministers are sorting out.'

MP Andrew Mitchell: 'There is serious evidence of failure in Labour's years of government which coalition ministers are sorting out.'

Labour spent £1billion of taxpayers’ money on foreign aid to African and Asian schools without even monitoring whether it provided value, a damning report has found.

The Department for International Development failed to measure if the huge cash investment has made any difference to school attendance rates in the poorest nations.

DFID had even decided that the risk of money going astray was ‘manageable’ despite widespread fraud being detected in one educational programme in Kenya.

MPs on the influential Public Accounts Committee have now given the department a year to reform.

The committee chairman, Labour MP Margaret Hodge, said: ‘My committee strongly supports the case for UK Government aid to primary education in developing countries and welcomes the significant progress being made in enrolment, particularly for girls.

‘What surprised us was the Department’s lack of a coherent framework for assessing the impact and value for money of its spending and its willingness instead to rest claims of overall performance on selective examples and anecdotes.’

She added: ‘This becomes all the more serious as the Department’s total aid budget increases in real terms by roughly a third between now and 2014-15.’ Mrs Hodge warned that DFID’s lavish spending could also be displacing other private sector providers and discouraging other funders.

She added: ‘It should also take a tougher, clearer stance on the performance of the education systems it funds and pupil attainment.’

The committee added that it had ‘significant concerns’ about the DFID’s ability to assess whether it was getting value for money out of its spending, while its reliance on a narrow sample to prove claims that the spending was working was ‘unacceptable’.

Labour committed the massive £1billion sum to boost primary education in Africa and Asia every year from 2010-11. The aid department lavished the money on a network of primary schools in 22 countries.

David Cameron’s government has gone even further, controversially pledging to increase spending on foreign aid from £7.8billion per year to £11.5billion by 2014-15.

DFID’s newly appointed director of value for money, Liz Ditchburn, said that until new checks were in place, ‘we can have little confidence that UK taxpayers’ money is securing the fullest benefits for poor people overseas’.

The report also warned there was a ‘serious stretch’ for DFID’s network of 34 education advisers – only 20 of whom were based abroad.

Margaret Hodge: ¿DFID should also take a tougher, clearer stance on the performance of the education systems it funds and pupil attainment.¿

Margaret Hodge: ¿DFID should also take a tougher, clearer stance on the performance of the education systems it funds and pupil attainment.¿

International Development Secretary Andrew Mitchell said: ‘The Public Accounts Committee report finds serious evidence of failure in Labour’s years of government which coalition ministers are sorting out.’

He added: ‘This Government is determined to get maximum value for money from its aid and to show UK taxpayers how and where their money is being spent.’

Mr Mitchell said the Coalition had set up the Independent Commission for Aid Impact to scrutinise aid spending, and appointed the director of value for money – moves that ‘the PAC welcomes’.

Matthew Sinclair, of the TaxPayers’ Alliance, said: ‘With the Government planning massive rises in international development spending, while ordinary families here are facing tax hikes, it is extremely worrying that in so many instances taxpayers don’t seem to be getting value for money.

‘We need to see more of this kind of scrutiny and the Government needs to restrain aid spending so that British families get a better deal.’

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