‘Colonial pensions’: a development activity?

If spending as part of the Conflict Pool to help resolve and prevent conflict, financial support to help countries meet environmental targets, and the other spending streams described yesterday are perhaps more within the scope of what might be considered legitimate aid spending, there are (as with the support for UK police salaries, blogged about earlier this week) areas where eyebrows might be raised. £3 million spent on pensions to former colonial officials for example? DFID has an Overseas Pensions Department which has responsibility for paying pensions to former Overseas Civil Service members who were employed by developing countries. Most of the pensions budget under this strand is not considered aid spending, but that £3 million is.

This is a small amount, and the responsibility of DFID for this is based on historical quirks and the negotiations surrounding decolonisation. And, of course, pensions for these individuals are absolutely legitimate spending. But how can it be considered ‘development’ spending, and thereby incorporated into the official statistics? Salaries for officials seconded to developing country governments might legitimately count as development, but pensions are more questionable (pensions for civil servants in DFID are not included, for example).

I’m not suggesting this is a scam, and the rules and regulations that determine what should be included have, I’m sure, been followed to the letter. Nonetheless, that £3 million contributes (albeit in a very minor way) to the government’s claims to be dramatically increasing aid and meeting its 0.7% commitment. But the extent to which it is having any benefit at all in meeting DFID’s own stated objectives is non-existent.

In 2010, £45 million of UK oda was accounted for by gift-aid for development NGOs. In other words, the NGO can reclaim the 20% tax that the donor has paid on the money, and boost revenue at no extra cost to the donor. Charitable donations should, of course, be untaxed, and gift-aid both reflects this and seeks to encourage charitable giving. But should it be considered oda? Given that the treasury in effect ‘loses’ that amount of money from its overall tax income, and that (for the aid statistics) this money is going towards development activity undertaken by NGOs, there is a sensible case to be made. And it is not the initial donation that is being counted, rather the money that is reclaimed from the Treasury. But on the other hand, if higher-rate taxpayers can claim relief on their voluntary donations, this makes the issue much more muddy. Is it official (i.e. public) aid, or a way to support private giving? Can it be both? Conflating the generosity of private donations with official oda, whilst legitimate in an accounting sense, seems to lack a certain integrity.

More problematic, perhaps, is the £7 million allocated in the past financial year from the UK Border Agency’s (UKBA) budget to support refugees in their first year of living in the UK. Again, the financial support itself is not being questioned, but rather whether this should be considered as official oda spending and count towards overall UK aid totals, or whether this should really be classed as domestic spending. As with the support for police salaries under the EIAAC programme, there is a link to development objectives. But a case could very well be made for why this should be considered domestic spending, meeting UK’s legal commitments to protecting and supporting refugees. Once refugees have been accepted by the UK government (and there is a whole other argument about whether the government is living up to these commitments), surely they become the responsibility of domestic departmental budgets, not those geared towards international development.

Individually, these spending items are small, negligible even compared to DFID’s total budget. Nor is it a problem that total UK ‘development’ spending does not all come from a single department. But these individual idiosyncrasies all add up, both financially and in the broader question of what should be considered a legitimate use of ‘aid’ when calculating the totals. If the government is to seek credit for increasing overall international development budgets (which it deserves), it must also be scrupulous in ensuring that all monies devoted for this fall comfortably within what one might reasonably expect of aid spending. The international development budget must not become a resource that stretched domestic budgets (such as the UKBA, or the police) can turn to in order to meet their own obligations.

The question as to what is aid is not just a semantic game. Official statistics are not just neat accounting tricks. Definitions matter, as do jurisdictions. At a time of increased pressure on international development budgets, maintaining a strong firewall between domestic and international development, between competing demands, is ever more essential.


About Mike Jennings

I am Reader in International Development and Head of the Department of Development Studies at the SOAS, University of London. I research, teach and write on Africa, and the history and politics of international development in sub-Saharan Africa. Research areas include: - The history of development in Africa, from the late nineteenth century to the current day - Politics of East Africa (Kenya, Tanzania and Uganda) - the role of non-state providers (NGOs, FBOs and self-help groups) in welfare service provision - Social aspects of health, including HIV and AIDS, and malaria
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