Chair of the Committee, the Rt. Hon Malcolm Bruce MP, said:
"British taxpayer's want the aid they give to go to the places where it can make the most difference - to countries where millions of people are getting by on less than a pound a day.
Giving aid to relatively rich countries like Turkey could devalue the concept of aid."
The UK spends approximately £1.23 billion each year on aid through the European Union, approximately 16% of the UK's total aid budget. Only 46% of this aid, however, goes to low income countries - a figure that MPs say is 'unacceptable'. Instead middle income countries bordering Europe are benefiting. Turkey has consistently been in the top five recipients of European Commission aid (€223 million in 2010) as has Serbia (€218 million in 2010).
The Committee is calling on the UK Government to press for funding to be diverted, away from higher middle income countries bordering Europe, to give greater help to the poorest people in the world. In order to make this happen, the MPs say Ministers must challenge and change the definition of Official Development Assistance (ODA).
"Minister's must be bolder in challenging the definition of what qualifies as Official Development Assistance.
It appears to be being used as a way of fudging the figures to help other European countries meet the target for 0.7% of GDP to be given as aid."
The Committee recognises that there are a number of advantages to giving aid through the EU:
- it acts as a channel for Member States which have not previously provided development aid
- some Member States would spend even less on aid were it not for the European Commission;
- it is able to operate large-scale regional programmes and fund large infrastructure projects
- it has a presence in countries where the UK does not have a bilateral programme, enabling the UK to play a part, for example to development in Niger and Haiti
Despite these benefits the report identifies a number of problems with the way EU Development Assistance works. The European Commission's administrative costs are twice those of the UK Department for International Development (DFID) , although not higher than other multilateral aid bodies, such as the World Bank. The report also raises concerns about the EU's policy capacity on development, its staffing arrangements on the ground and the slow and bureaucratic procurement procedures.
Overall, the European Commission has improved its performance over the last decade and has recently proposed further improvements to development policy in An Agenda for Change. The proposals include increased emphasis on governance conditionality, especially for budget support; a greater focus on results; and increasing the role of the private sector in development. The Committee supports a number of these proposed changes, but it does have concerns that conditionality should not hurt the poor for the sins of their governments. The MPs are urging DFID to press the Commission to reform its procurement procedures, focus more on value-for-money results, and to learn from successes and failures by commissioning independent evaluations of its programmes.
The EU is the UK's largest multilateral partner. In 2009/10, the UK contributed £1.19 billion to the EU aid budget, double the next largest contribution, which we made to the World Bank group (£560 million, 23%) and five times more than we give to the United Nations system (£216 million, 9%).
Funding for certain EU programmes (for example, the European Neighbourhood Partnership Instrument) administered by the Commission to middle income countries such as Turkey, is reported as ODA which means that it counts towards the Official Development Assistance (ODA) target of 0.7% of Gross National Income. The Organisation for Economic Co-operation and Development (OECD) produces a list of official development assistance recipients which shows all countries and territories eligible to receive ODA. These consist of all low and middle income countries based on gross national income per capita as published by the World Bank, with the exception of G8 members, European Union members and countries with a firm accession date for entry into the EU. The list also includes all of the least developed countries as defined by the United Nations. This list is designed for statistical reporting purposes. Only flows to or for the benefit of the countries and territories on the list may be reported as ODA.