What Next for UK Aid?

The cuts to the UK aid programme are savage and indefensible  - a potential loss of over £20bn by the time of the next election in 2024. But there are other issues also at stake, to do with the overall purpose and direction of UK development policy. In that connection, the Foreign Secretary, Dominic Raab, made an important commitment when he stated, in a Written Ministerial Statement to Parliament on 26 January, that ‘I will lead a cross-departmental review on a new development strategy to ensure close alignment of UK aid with the objectives to be set out in the Integrated Review.’ The Integrated Review, to recall, is a major review of the UK’s foreign, defence, security and development policy, the publication of which is imminent. A parliamentary brief is here.

The aid debate is fast-moving, with many uncertainties still to be clarified. See for example this excellent CGD brief by Ian Mitchell and colleagues, published on 25 January.  The cuts dominated a Devex digital event on 21 January, in which Will Worley interviewed me and Harpinder Collacott, the Executive Director of Development Initiatives. The recording is unfortunately paywalled. However, I went into the discussion with a list of nine issues I wanted to raise. These can also stand as questions, almost chapter headings, for Dominic Raab’s review. Note that form needs to follow function, so the size of the aid programme is the last of the points. The merits of the DFID-FCO merger to create FCDO is No 8. Think of these notes as a quick download of my speaking points, some of which I managed to touch on.

1. Is development about altruism or self-interest? Altruism, of course, or compassion or solidarity or justice. But the pandemic and climate change are just two examples of where not acting on development issues in the rest of the world will have adverse consequences for the UK – so self-interest also. There are challenges for a narrative that covers both altruism and self-interest, as we know from work on ‘frames’ by Oxfam and others, especially that a unified narrative may appeal neither to those who prioritise altruism, nor those who prioritise self-interest. But a bigger problem for the Raab review is to explore trade-offs at the margin between altruism and self-interest. Some interventions are ‘win-win’, like tackling climate change in poor communities in the poorest countries. Some are not, or not directly, like, I don’t know, aid for trade in upper middle income countries. A proposition: the growing importance of global public goods like global health security or climate action will mean rebalancing the argument towards self-interest. Perhaps ‘mutual interest’ is the right formulation? Jonathan Glennie, in his new book, frames this as ‘Global Public Investment’, to which all contribute and from which all benefit.

2. The current fight is about aid, but it goes without saying that development is about more – and that means starting with the ‘more’ and not with the aid. Policy coherence and Beyond Aid are long-standing themes. The Select Committee in the UK House of Commons wrote a report on Beyond Aid in 2015. It said that ‘policy coherence for development (PCD) is at the heart of a new approach. This means working across Government in the UK, and with global partners in the multilateral system, to maximise the impact on development of all the UK's actions.’ Dominic Raab appeared before the House of Commons International Development Select Committee on 25 January, and listed four main priorities, qualifying a longer list in a letter he wrote to the Chair of the Select Committee in December. On 25 January, he listed (a) climate and biodiversity, (b) global health, (c) science and technology, and (d) conflict and conflict management. These are all brilliant examples of high-level issues that require a multi-pronged approach, linking aid, trade, defence, international finance policy and so on. So start with the challenge and not with the instrument.

3. Tick off the challenges, but also the opportunities. Dominic Raab’s strategy will need to be framed by an understanding of the challenges and opportunities facing the UK and the world in the 2020s. Fortunately, there is plenty of work to draw on. The Integrated Review, no doubt. The report by the Foreign Affairs Committee of the House of Commons, ‘A Brave New Britain: the Future of the UK’s international Policy’ (October 2020). The Conservative One Nation Caucus paper on ‘Global Britain and Development’ (November 2020). The magisterial review by Robin Niblett for Chatham House, ‘Global Britain, Global Broker: A Blueprint for the UK’s International Role’ (January 2021). And a raft of global publications by international agencies, for example on progress in reaching the SDGs, or the impact of the pandemic.

Perhaps one point to make is that positive opportunities need to be set alongside the frightening challenges (pandemics, climate change, inequality etc . . .). See for example, a new report from UNICEF, on ‘Prospects for Children, a Global Outlook through 2025’. Laurence Chandy introduces that, saying

‘we see the possibility of further – and even accelerated – improvements in children’s lives made possible through the proliferation of knowledge. One unambiguously positive legacy of the pandemic, inspired by the rapid development of COVID-19 vaccines, is optimism for the potential for further medical breakthroughs in tackling the global burden of disease, including those that affect children such as malaria, HIV/AIDSHuman Immuno-Deficiency Virus/Aquired Immuneo-Deficiency Syndrome and Zika. This optimism captures not just an emotional reaction to the achievements of scientists, but the demonstrable efficacy of new vaccine platforms, and new public-private-academic partnerships that have enabled these discoveries.
 
Such optimism could spread beyond health to accelerate the pace of innovation across multiple domains: energy, education, food production and beyond.  We also anticipate an expanded and more active role for the state in establishing a social floor and funding research and development. . . ’

4. Identify what the UK brings to the table. There are different ways to formulate the question: comparative advantage; dynamic comparative advantage; competitive advantage; the UK’s USP. The Foreign Affairs Committee (link above) quoted approvingly from Robert Zoellick, former President of the World Bank, who said the UK had a rare ‘full service capability’, meaning a combination of diplomatic, development, defence and security capabilities. Within development, we might cite the expertise of ex-DFID, research capacity in science and social science, a rich ecosystem of NGOs and other civil society actors, UK consultancies working in development, the financial sector and the wider private sector. Plus a large aid budget, even if less large than previously. It is not trivial to ask (but not often asked) what the UK can do best, compared to others, or what only the UK can do. And then, conversely, what can safely be left to others. Evaluation of UK activities by the likes of ICAI can help answer this question, at least for aid, but to provide a full answer needs multi-donor and comparative analysis. That is a gap in the current system. There is also a geographical dimension. Dominic Raab’s letter to the Chair of the Select Committee in December (link above) said that ‘we will focus only on countries where the UK's development, security and economic interests align, such as sub-Saharan Africa and the Indo-Pacific region.’ Discuss! Is the prior commitment to spend 50% of the aid budget in fragile states to be abandoned? That might be no bad thing, if done for the right reasons: the term 'fragile states' is ambiguous and over-loaded, and it would be better to focus on a narrower concept, like conflict-affected countries.

5. Preserve multilateral engagement. It may seem perverse to even suggest that the UK’s multilateral commitment is at risk, in this year of the Glasgow COP and the G7 in Cornwall. However, Dominic Raab’s letter to Sarah Champion (link above) said two slightly contradictory things. First, ‘our core investment in multilateral development banks will be based on (our) strategic objectives. The UK will remain the largest donor to the World Bank and a major donor to the World Health Organisation in order to help shape global development.’. And second, ‘bilateral programmes, with their advantages of effectiveness, local ownership and strategic impact will be the default, except for obvious exceptions such as global research, policy influencing, partnership with UK centres of excellence, or core multilateral activity.’ It looks like the word ‘core’ is important. Does that mean fewer Trust Funds, or less earmarked aid to e.g. WFP? It looks from press reports as though bilateral aid is bearing the brunt of immediate cuts, though details are not yet available. The table below is from British Aid Statistics and shows a slight dip in core multilateral spending in 2019, along with a rise in bilateral funding channelled through multilaterals (i.e. earmarked) and in pure bilateral aid.  Is there a plan for how these shares might change in the future?

6. Celebrate a mission-driven focus on big challenges. Dominic Raab’s letter of 2 December (link above) lists seven global challenges where the UK can make the most difference (NB which is not quite the same as where the UK has comparative advantage). These are: climate change and biodiversity; COVID and global health security; girls’ education; science, research, technology; open societies and conflict resolution; humanitarian preparedness and response; and trade and economic development. Not bad. What might be missing? Harpinder Collacott pointed out in the Devex discussion that poverty reduction was kind of hidden in this list. Linking back to the SDGs, one might have expected to see food and nutrition as one area where the UK has traditionally had a strong record.

7. But what does it mean to set these grand challenges? More than simply channelling more money into the area. With respect to climate change, I wrote about this in 2019, asking what it would mean for DFIDDepartment for International Development to take the ‘climate cataclysm’ seriously. There was a ten point programme, inevitably, including five big shifts in DFID’s work: more budget support, for example, more conditionality, more work in climate vulnerable countries, and (see above) more through multilaterals. More investment in science and technology was also on the list, especially the capacity of developing country universities and research institutes, even, controversially, at the expense of UK aid spending on primary education. In the Devex discussion, we spent some time talking about human rights and governance, relevant to the challenge on open societies and conflict resolution: a traditionally important and difficult area. 

8. FCDO can work, provided the structure is right. At present, there are some big risks, and of course the signals are viewed very unfavourably. When the merger was announced, I set 8 tests, later 9. Of those, one at least has been lost (5), and several are in play (1,2, possibly 3). ICAI has been retained (9).  A Select Committee has been retained, albeit with a formal remit only on aid (7). Presumably FCDO staff feed into the Cabinet and the NSC (4), though not exclusively on development. It has been good to hear Dominic Raab talking about joined-up thinking on development policy, and about FCDO leading across Whitehall (8). The big worry must be whether FCDO is able to hold onto and develop the technical staff capacity it has built over the years.

Nine tests for the new FCDO:

1. Commit to 0.7
2. Retain poverty focus
3. Adhere to DACDevelopment Assistance Committee (of the OECD) rules
4. DFID (= development) membership of Cabinet, NSC
5. Own Permanent Secretary
6. Own staff including 700+ professional advisers
7. Own Select Committee
8. A voice on non-aid matters
9. Retain ICAI

9. Finally, the money. What is there to say? Of course, there are many good things on which to spend the original budget. A 30% cut, from £15 bn to £10bn, carried out quickly, can only be damaging. MPs and others who criticise the cuts as morally and practically damaging are surely right. A word of caution, however. A typical argument (as in the CGD brief linked above) is to count the number of children who will not be vaccinated or will not receive an education: in the CGD brief, 5.3 million of the former and 4.5 million of the latter. That may be the case – details of the cuts are still awaited. But it is clear that some parts of the aid programme contribute directly to human development outcomes and some do not; and that some parts are more SDG compliant than others. As it happens, 12% of this year’s spend of £10bn will be channelled through the EU, much of it to middle income countries like Turkey and Serbia (the two largest recipients in 2018, and by no means all for humanitarian purposes). The UK will not be able to cut this aid, which is a prior commitment, but in other circumstances, it might be appropriate to save money here in order to vaccinate or educate children elsewhere. The test of all spending must be its contribution to the SDGs. In our Devex discussion, Harpinder Collacott emphasised the need for greater transparency on the cuts, and on future funding decisions. Quite right.

As advised, these are speaking notes only. But there are certainly discussions to have. I have been arguing for a White Paper after the Integrated Review is published. In that connection, Dominic Raab’s commitment to a new development strategy, linked to the next Government-wide spending review, is very much to be welcomed.