The British Government’s comprehensive spending review committed to raising UK official aid by around 37% over the next four years. DFID spending will rise to £11.5 billion by 2014-15, with total British aid flows (taking into account spending by other departments, debt relief and other forms of ‘aid’) rising from £8.4 billion this year, to £12.0 billion in 2013, and £12.6 billion in 2014. The 0.7% of national income target will be met in 2013.
At the same time as increasing aid flows, DFID administrative costs will fall by around one-third, with running costs to fall to 2% (compared to global donor average costs of 4%). How it intends to make those savings is, unsurprisingly, not spelt out, but presumably staff losses will make an important contribution.
The priority for aid funding will be on poverty-reduction programmes, with a view to promoting economic growth and wealth creation at the heart of UK development policy. Fragile states will also see an increase in funding (from 22% to 30% of oda by 2014/15). DFID programmes in China and Russia will be closed.
So far, so good. The commitment to protecting international aid as part of the spending review, and to meeting the 0.7% target (a commitment shared by all major political parties) has been widely welcomed by development agencies, activists and workers. But details on exactly what this means for British development policy and impact remain rather sketchy.
The focus on aid efficiency – ‘smart aid’ being the big idea of the moment – is inevitable, and (indeed) sensible. But asking exactly what is an efficient use of aid is a more difficult question to answer. In some cases, it is obvious: a decline in the number of maternal deaths, child mortality rates, increase in incomes, savings, etc. But not every desirable development intervention has easily measurably outcomes. How, for example, can you measure ‘empowerment’, or ‘gender equity’ (there have been efforts to quantify these impacts, but they all have their own problems). Is the stress on targeted, effective and efficient, measurable development likely to see aid channelled to areas in which gains can be quickly seen and easily measured, leaving harder-to-reach or assess areas deprived? ‘Smart-aid’ can work in some, many, even, situations, but smart can easily become dumb-ed down when inappropriately applied.
The focus on fragile states makes a lot of sense, but to what extent has the policy been configured to follow UK security interests, rather than in line with the interests of the poor? The poorest who live outside fragile states should not be sacrificed upon the alter of British national security interests.
Calling for lower administration costs in order to send more money to the poorest is a popular and oft-resorted to strategy. But with savings of almost a third to be found, the capacity of DFID to set policy, to plan and monitor interventions, to do the things that successful development requires, will be weakened. It is not impossible, but it will be tough. Efficient aid requires an effective administrative capacity. Hopefully the savings can be found without damaging the effectiveness of DFID, but it will not be easy.
In summary, the CSR (as applies to international aid) has largely scored well amongst agencies and critics of DFID and UK aid more widely. But until the implications of the shifts in policy have been spelt out in more detail, the real consequences remain unknown.