Britain’s statements around severing of aid to middle-income countries including China and India created the impression that it had stopped all funding to the countries, when in fact the government is still giving both nations millions of pounds.
A review by the watchdog scrutinising taxpayer-funded UK aid said that the Department for International Development (DfID) had given the impression that “all aid was being phased out”.
“The UK may no longer have a traditional aid relationship with these countries but it is spending [official development assistance] in Brazil, India and China – and it is rather diffident about admitting this” the review by the Independent Commission for Aid Impact (Icai) found. Such “obfuscating” about “perfectly legitimate activities in these countries” had given opportunities for criticism, it said.
Critics of UK aid often point out that India and China, which receive some UK aid, have active space exploration programmes. The government maintains that developing countries still need help to combat extreme poverty and that the majority of the British public support foreign aid.
Overall, Icai, which examined relations with seven recipient countries, graded DfID’s approach to ending bilateral aid or transitioning to new development partnerships as amber-red: requiring “significant improvement”.
The curtailment of Britain’s traditional aid relationships with China, India and South Africa was weakened by poor communication and relations that, in some cases, threatened to undermine past investment, the review found.
The report (pdf), also criticises DfID for “significant shortcomings” in the way it plans for change in its aid relationships with countries.
DfID did not have a standard procedure for phasing out bilateral aid, nor for sharing lessons learned, the report said, which weakened performance overall. In several cases, the department had not specified clear objectives for its new development partnerships or any detail of how they would work, it said.
Planning for transition and effective communication is a key part of the changing landscape of DfID’s work. The UK government launched a new aid strategy last year following bitter criticism of aid spending, including money given to middle-income countries India and China, which signalled a shift towards a more results-focused direction and a renewed emphasis on Britain’s national interest.
Francesca Del Mese, the Icai commissioner who led the review, said: “Managing the transition from traditional aid to new kinds of development partnerships is increasingly important for DfID in the current aid landscape. This review stresses the importance of clear objectives, effective planning and strong communication.
“Without a robust process, there is the risk of misunderstanding and miscommunication about what remains as part of the UK’s aid relationship, both in the countries themselves, and with the UK public.
“DfID must strengthen how it plans for change in its aid relationships with countries, and ensure it communicates to UK taxpayers clearly to avoid the risk of confusion.”
The report said: “While DFID’s public statements on the subject have been accurate, the earlier publicity given to exit from China and India potentially created an impression that all aid was being phased out. Against that background, the reasons for continuing and then scaling up assistance have not been clearly communicated to the UK public.”
The government pledged, in public statements, to stop financial aid to India by the end of 2015-16. But it continued to give indirect aid to India, including £30m for technical assistance and £40m for “development capital investment”, Icai found. Britain’s aid to India has been £283m since 2011. In China, DfID has continued to spend £8m-10m a year supporting development, with further money being spent in the country through the Prosperity Fund.
Vietnam was held up as a good example of how to change an aid relationship, with DfID producing clear objectives, planning effectively and taking care to ensure the benefits of historical programmes were not lost.
But in China, South Africa, India and Indonesia, the picture was “less positive”, Icai found. In three of the four cases, with the exception of Indonesia, where the new partnership focused on climate change, DfID did not articulate what the new partnership should look like or how it would be developed, it found.
The review also highlighted where DfID gave “insufficient attention” to ensuring that country teams had the necessary skills in place to support the exit or transition process. In a series of recommendations, it said that the department should articulate clearer objectives, be transparent and accountable to UK taxpayers with regard to transition. It should also assess the likely consequences for local civil society partners, and decide whether to support them through the process, it said.
In a statement, DfID described the review as inaccurate and said that it was disappointed that Icai had rushed to publication.
A DfID spokesperson said: “DfID is a world leader in helping countries leave aid dependency behind and stand on their own two feet, building a safer, more prosperous world.
“We are disappointed that Icai has rushed the publication of this inaccurate report that simply does not tell the whole story.
“As countries build upon their economic development, Britain is determined to strengthen strategic partnerships that facilitate trade, boost business and combat poverty. DfID’s work supports these partnerships in a manner that provides value for money, always helps the world’s poorest and is open and transparent to the British public.”
Amy Dodd, of UK Aid Network, emphasised that the transition to new development partnerships should be managed more effectively. “As this review highlights, there are clearly some important lessons to be learned about how to do aid exit and transition better to make sure that we can build better post-aid relationships and secure the development impact of UK aid.
“Putting at risk development gains – potentially achieved over decades – is not good value for money nor does it live up to our commitments and responsibilities to partner countries.
“It was also concerning to see the confirmation of the impact this can have on local civil society – both in terms of limiting influence and support to maintain vibrant civic space. Civil society plays a vital role in accountability, as a watchdog, helping people to hold their governments to account, which can underpin better governance and is another way to help hold on to development wins.”
Aaron Oxley, executive director of Results UK, said: “While everyone wants transition, the Icai report highlights that this is hard to do, and to do it well takes longer than the political timeframes that sometimes guide these decisions allow. It is crucial to recognise that transition is also donor withdrawal, and with donor withdrawal we have a duty of care to ensure that hard-won gains for vulnerable people are not lost by withdrawing too quickly or without sufficient planning and coordination.”
Oxfam’s head of government relations, Tim Livesey, said: “Today’s report highlights that DfID needs to learn its lessons to ensure the world’s poor aren’t denied vital support because of decisions about how to end aid to middle income countries. Oxfam continues its work to tackle poverty in these countries where that overseas aid is still a lifeline for many.”