Scope of the inquiry
The government is committed to spending 0.7% of UK gross national income – £14bn per year – on overseas aid. This is known as Official Development Assistance (ODA). The UK has met this target each year from 2013 to 2017. The increase in the UK’s gross national income and the UK’s commitment to the 0.7% target has led to an increase in total UK ODA expenditure.
In recent years there has been in a shift in where ODA spending has come from. The Department for International Development (DFID) has always spent the majority of the UK’s ODA expenditure; but the proportion of total ODA it spends has decreased from 89% in 2013 to 72% in 2017. ODA spending by other government departments like the Department for Business, Energy and Industrial Strategy (BEIS) and by cross-government funds has almost trebled over the same period.
A recent National Audit Office (NAO) report has concluded that the government needs to do more to demonstrate its £14bn of spending each year on ODA is a) effective and b) contributing sufficiently to the UK Aid Strategy.
The report also found that widening ODA expenditure to government departments other than DFID has created challenges in ensuring ODA spending is effective. There is a lack of sufficient monitoring across government: neither DFID nor HM Treasury has assessed whether allocating the ODA budget to other departments has had the impact intended.
There is also a concerning lack of transparency, which is a key objective of the aid strategy. While DFID publishes good quality information on expenditure, for example, how much is spent, by which department and in which country, the NAO found that very few departments make public information about their ODA expenditure, such as the amounts for which they are responsible, the programmes this budget funds, or the impacts secured for this spending.
On 8 July, the Public Accounts Committee will question the heads of DFID, the Foreign and Commonwealth Office, HM Treasury and BEIS, one of the major ODA spending departments, about the effectiveness, impact and transparency of ODA spending.