The UK’s new aid target law and the future of development – Professor Ambreena Manji

Introduction

In March 2015, the United Kingdom passed the International Development (Official Development Assistance Target) Act (‘the Target Act’). This legislation commits the UK to spending 0.7% of gross national income (GNI) on aid each year.

The UK is a key aid donor. It takes a leading role in determining international development policy in the European Union and in the Organisation for Economic Cooperation and Development. The 0.7% target law is highly symbolic. Development aid is seen as playing an important role in UK diplomacy. It is a form of soft power. Proponents of soft power describe it as the use of economic and cultural persuasion as opposed to coercion and force.

How does Britain ensure that its aid budget is well spent? In 1994, a controversial decision to give aid to Malaysia to build the Pergau Dam was found by the High Court to be unlawful. The aid was given in order to secure a major arms deal. In addition, a civil servant involved in the affair described the economic case for the dam as ‘unambiguously bad’. The Pergau Dam case was deeply embarrassing. It led to a new law, the International Development Act 2002. This Act sets out that aid can only be given for the purpose of ‘poverty alleviation’. Some commentators have argued that the effect of this is to ‘judge proof’ decisions on development aid. Because of the very broad discretion she has been given, the Secretary of State for international development can now avoid being held to account through the courts for spending decisions.

The 0.7% target law aggravates this situation. Despite compelling spending, it provides few opportunities for robust scrutiny and accountability.

Assessing the Legal Framework for Development Assistance

Since Pergau Dam, the UK has created a detailed legislative framework for development aid. The International Development Act 2002 defines the purposes for which the money has been requested from parliament and stipulates that UK official development assistance (ODA) can only be used for the purpose of ‘poverty alleviation’ (section 1).  Alongside this, the International Development (Reporting and Transparency) Act 2006 and the new International Development (Official Development Assistance Target) Act 2015 concern the amount of money allocated to the work of development assistance.

Taken together, these three pieces of legislation govern the work of one of Whitehall’s largest and best funded departments, the Department for International Development, as well as other Departments involved in disbursing aid.

Despite this increasingly ‘thick’ legislative framework, the UK still lacks what Patrick McAuslan memorably described as ‘an effective legal backbone to the aid relationship’. The law relating to the UK’s development assistance is inadequate for two reasons. Firstly, very wide powers have been conferred on the Secretary of State in relation to spending decisions. Development spending is sheltered from judicial scrutiny. Secondly, the new Target Act 2015 makes it difficult meaningfully to challenge aid spending by non-judicial means. In fact, the new target law may compound the problem.

Section 5 of the Target Act requires arrangements to be made by the Secretary of State for  the independent scrutiny of development assistance. This must consider ‘the extent to which ODA provided by the United Kingdom represents value for money in relation to the purpose for which it was provided.’ The body responsible for this scrutiny will be the Independent Commission for Aid Impact which will report to parliament through the International Development Committee.

This very broad duty is unlikely to result in robust scrutiny. It subjects spending to ex post review. Any criticisms arising as a result of section 5 scrutiny will be operational. They will focus on how to improve the conceptualisation and supervision of programmes. The aim will be to improve and strengthen DFID’s approach rather than fundamentally to question the direction it is taking.

Development Assistance and Soft Power

During debates on the Target Bill, Andrew Mitchell MP argued that

In the Department for International Development, we have a unique institution – with the right mandate and funding – which gives the UK world-leading soft power capacity… Our international development spending is also in our long-term economic interests.

A House of Lords select committee on soft power also recently debated how to ensure that aid supports the UK’s soft power. The fiscally conservative think tank Adam Smith International cited the UK’s ‘comparative advantage in development assistance’. It pointed out that the Department for International Development ‘is widely considered within the international development community to be the leading provider of high quality advice to government in the developing world and the delivery of development programmes in those countries’.

The select committee concluded that ‘the promotion of British values through the funding of international development projects can yield significant soft power gains.’ A legislated aid target enables the UK to project itself on the international stage as ‘a helpful and generous nation’ committed to international development. A commitment to development assistance allows the UK to ‘stand tall in the world’.

The Changing Face of UK Aid

A legal target has been introduced at a time when the nature of UK aid is changing rapidly.

We can identify three recent trends in the UK’s development spending. These are firstly, an increasing reliance on multilateral partners to disburse aid; secondly, a widening of responsibility for disbursement beyond DFID, for example to the Foreign and Commonwealth Office, to the Ministry of Defence and to Treasury; and thirdly, an increasing involvement of the private sector in development relationships.

The UK has become increasingly reliant on multilateral organisations to disburse aid. This has been aggravated by the struggle to spend 0.7% GNI on aid. In the 2013-2014 financial year, the UK met the 0.7% target even before it was under a legal duty to do so. In that year, disbursement of aid to multilateral organisations such as the World Bank, the European Union and the United Nations Development Programme increased by 44%. In contrast to bilateral assistance, over which a donor such as the UK would have control because it is earmarked to go to specific countries or certain programmes, multilateral aid is more difficult to control. In multilateral aid arrangements, funds from a range of national governments are pooled together. The funds are then used as core funding to multilateral organisations. Control over the funds is with the multilateral body to use within the terms of its mandate. In 2013-2014, money was disbursed to multilateral institutions largely to ensure that the UK hit the 0.7% target. This raises questions of effectiveness, duplication, lack of transparency and waste.

The second important trend in UK aid is the widening of responsibility for the disbursement of funds. The Secretary of State for International Development, Justine Greening, has recently stressed the importance of ‘cross-government partnership’. For example, she has praised partnerships between DFID and the Ministry of Defence. DFID funded the Royal Navy’s mission to West Africa during the Ebola crisis.

The idea of ‘cross-Whitehall working’ is likely to grow. This is a strategy forged in the face of austerity and vocal objections from other Whitehall departments to DFID’s ring fenced budget. In response DFID has actively sought to develop partnerships with other Whitehall departments in order to deflect criticisms of their large budget.

Commentators have also noted an ever closer coupling of aid spending and security and foreign policy concerns. These include counter-terrorism, migration, anti-counterfeiting, and infectious disease control. Growing relations between DFID and the Foreign and Commonwealth Office, the Ministry of Defence and others will lead to aid decisions being more closely coupled with foreign policy interests. Such decisions will still satisfy the low threshold of the requirement for poverty alleviation contained in section 1 of the International Development Act 2002 but they point to an increasing ‘securitisation of aid’.

The third trend we can identify is the increasingly close relationship being forged between DFID and the private sector. Stephen Brown, writing on the securitisation of Canadian aid, has described this trend as the ‘commercialisation of aid’. There has been significant growth in UK aid disbursed to private sector partners in recent years. Whereas the figure for private spend in 2012 was £68m, it is estimated that in 2015 this will rise to £580m. DFID maintains that its development work with business is ‘delivering real results’, describing the private sector as ‘the engine of growth’. The Secretary of State for International Development has said that ‘for everyone in development, the private sector must be key partners’. There is a clear need for robust mechanisms for oversight of these partnerships in the coming years.

Conclusion

There has been a significant decline in public support for aid spending since the heyday of the Jubilee Campaign for debt relief in 2000. There is now a great deal more scepticism about, and outright criticism, of aid.

Advocates of aid must work harder than ever to explain and justify international development spending. To do this, they ought meaningfully to engage with the public about their efforts. The passing of the Target Act was a missed opportunity to do this. What was needed was a comprehensive review of the legal framework governing development assistance. Instead, the UK has had a piecemeal approach to legislating in this area. A more comprehensive approach would have considered the interplay of the International Development Act 2002 and the legal target. This would have revealed a legislative framework which is characterised by wide discretion, broad duties and few opportunities for robust scrutiny.

In return for a new legal target, the Secretary of State for International Development should have been required to surrender some of her discretion as to spending. This would have signalled a willingness by the Secretary of State, and by implication, the UK development community to be held more closely to account on aid. Without that change, it will continue to be possible for those sceptical of development to continue to cast doubt on the important work of tackling global poverty.

Professor Ambreena Manji has published widely on international development policy, including land policy. She is currently completing an academic paper on the new 0.7% legislation. Details will be available on her Cardiff Law School webpage.