Shock report warns Britain to overhaul its overseas aid budget amid ‘WASTEFUL’ spending

And it warned there was a risk of squandering yet more hard-pressed taxpayers' cash after Brexit if the Government simply ploughs all the money we now send to European Union aid programmes back into our own.

The call for a radical rethink came in a report from the Centre for Policy Studies, a pro-market think-tank with a particular history of influencing Conservative Party policy.

Britain's aid budget ballooned under David Cameron's premiership to over £12billion a year, despite big austerity cuts elsewhere, after the then-Prime Minister insisted on making the UK one of a handful of countries which meets the United Nations target of devoting 0.7 per cent of national income to aid.

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Shock report warns Britain to overhaul its overseas aid budget

Without a change in the target – which the UK government has met since 2013 and is now legally obliged to meet every year under a law it passed in 2015 – Britain's aid budget could hit over £14billion a year by 2020.

Evidence suggests that the UK has little influence over how this money is spent

Centre for Policy Studies report

The CPS report said the link between overseas aid and overall longterm poverty reduction was "unclear".

Expanding free trade and private investment could largely take the credit for extreme poverty in the developing world falling from more than half of people to about one in five over the three decades from 1981 to 2010.

Britain's Department for International Development (DfID) was "one of the most effective of its kind" and could boast successes, the report conceded.

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Britain's aid budget ballooned under David Cameron's premiership to over £12billion a year

UK Foreign Aid: Where did it all go?
Mon, January 16, 2017

Public mood changes following scandals over how the money is allocated. This is where the UK Foreign Aid was being spent in 2015.

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India = £150.4m

Its running costs were low compared to multinational bodies like the EU, it focussed strongly on helping the poorest and Britain was the second biggest single donor to aid for Syrian refugees in that region, both helping those people and easing the EU's migrant crisis by reducing the incentive to try to reach Europe.

But DfID still faced "significant challenges" and many of its direct financial programmes had been "questionable".

The report highlighted alleged "wasteful" spending including on West-based aid consultants such as Adam Smith International which secured lucrative DfID contracts and reportedly paid its already well-remunerated directors six-figure dividends.

About one third of UK aid money goes direct to multinationals bodies which "there is a strong argument to suggest are even less effective than DfID", warned the report.

They include the European Commission (EC), to which the UK sent £1.4billion in 2015, and £7.4billion over the last six years, to distribute on EU aid schemes.

"Evidence suggests that the UK has little influence over how this money is spent," said the report.

Brexit gave Britain a chance to regain control of its EU aid payments – but that could bring "challenges of its own" and would "exacerbate" existing problems if it simply increased DfID's budget.

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The UK currently meets the United Nations target of devoting 0.7 per cent of national income to aid

The money could be reclaimed either as soon as we leave the EU or possibly after 2020 when the bloc's current multi-year budget ends, said authors Tim Knox and Daniel Mahoney.

"However, it is open to question whether this should all automatically be transferred to DfID's bilateral budget.

"It is hard to justify giving a department with evidence of misallocating spending an 18 per cent increase in its bilateral budget, particularly at a time when the Government will be continuing to run a substantial deficit.

"While the Government's push for more robust scrutiny of aid and for greater moves towards a more mutually beneficial overseas aid policy is welcome, it is also time for the Government to review the International Development Act that enshrines the 0.7 per cent target into law."

Spending watchdogs have voiced concern about DfID's increasing reliance on multinational partners to spend its spiralling budget and warned the huge increase in cash has led to spending decisions being "rushed" towards the end of financial years just to meet the UN target, risking poor value for money.

Britain is also not in the best financial health itself, the report stressed.

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Only five other countries met the UN 0.7 per cent target in 2015

Only five other countries met the UN 0.7 per cent target in 2015, of which Norway and Luxembourg had budget surpluses, Sweden was in balance, Denmark had a 2.1 per cent of GDP deficit and the Netherlands a 1.8 per cent deficit – compared to the UK's much bigger 4.4 per cent deficit.

The report noted: "Spending on overseas aid has increased dramatically at a time when the UK is still running a substantial – and in peacetime, historically unprecedented – budget deficit.

"It is also notable that some advanced economies such as Australia have slashed aid spending in part to address their budget deficits."

Commenting on the CPS findings, John O'Connell, chief executive of the TaxPayers' Alliance, said: "It is certainly high time we reviewed our arbitrary aid target.

"British people are generous and will always be there to support the world's most vulnerable people but this target measures the success of our aid programme by the money we spend rather than the efficacy of individual projects, doing very little to encourage efficiency.

"Money leaving these shores wasted on ineffective projects lets down hard-pressed taxpayers in this country as well as those who truly need our help abroad."

Senior Conservative MP Philip Davies, a frequent critic of the rising aid budget, said: "I very much welcome this report.

"When is common sense going to prevail and the Government change its stance on overseas aid?

"The public think the current policy is mad, as now do the thinktanks.

"I can only suggest Daily Express readers lobby their MP and ask them to demand a change."

A DfID spokesperson said: "UK aid is an investment in our security and prosperity.

"At a time when conflict, migration and disease know no borders, we need to act before these problems grow and threaten us here at home.

"The aid budget makes the UK safer and is a key part of global Britain's international leadership as we leave the EU.

"DfID is committed to ensuring results for the world's poorest and value for money for UK taxpayers.

"British people can be proud of what UK aid is achieving today and the lives it will save in the future."

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