Foreign aid soars by £1.2 BILLION: UK's payouts surge to £13bn... and now farcical EU rules even add prostitution and drug-dealing to official economic figures

 

  • Spending on overseas aid went up £1.2bn in 2016 after EU accounting revisions and growth in economy
  • £685million was due to accounting changes which now give weight to activities including illegal 'black economy' 
  • Ministers are committed to sending 0.7% of national income overseas every year
  • Tory Andrew Rosindell: ‘The 0.7 per cent target must go’
  • Pressure on Government to scrap aid promise at time when vital services at home such as social care, NHS and schools are squeezed 

The foreign aid budget soared by £1.2billion last year – in part because EU rules have added prostitution and drugs to national statistics.

Under targets brought in by David Cameron, ministers are committed to sending 0.7 per cent of our national income overseas every year.

With the Brussels-led accounting change raising estimates of the size of the UK economy, the foreign aid bill has gone up. Figures out yesterday showed spending jumped by 10 per cent to a record £13.3billion last year.

The surge will raise pressure on the Government to scrap the aid promise at a time when vital services at home such as social care, the NHS and schools are so squeezed.

Department for International Development figures yesterday showed that in 2016 we handed over £13.3billion in Overseas Development Assistance (ODA), up from £12.1billion in 2015

Department for International Development figures yesterday showed that in 2016 we handed over £13.3billion in Overseas Development Assistance (ODA), up from £12.1billion in 2015

‘The 0.7 per cent target must go,’ Tory Andrew Rosindell said. ‘The UK should play its part in global development when there is a genuine need, but we should not be tied to this arbitrary figure, which increases year by year –while at the same time we reduce funding for essential services in Britain.

‘There is little public support for this policy now and it’s time to ditch it.’

Fellow MP Andrew Bridgen criticised the way officials had included illegal activity such as prostitution when working out the size of the economy, meaning the aid spending also had to rise, saying: ‘Unfortunately the black economy does not pay tax.’

He added: ‘As a Conservative we judge the effectiveness of Government policy on outcomes, not how much we spend. 

Why it's going up

The Government is committed to spend 0.7 per cent of its gross national income on aid each year.

As the estimated size of the economy rose sharply last year, the amount spent on aid has also increased.

The rise is partly due to economic growth but also to a change in the way GNI is calculated following new standards agreed among EU states which have already been adopted by the US and other countries.

The updated calculations give more weight to financial services and activities like research and development. They also include the value of the black economy.

Because of the increase in GNI, the amount we spent on aid rose from £12.14billion in 2015 to £13.35billion in 2016.

Around £525million of the rise was due to growth, and £685million from the change. Without it, spending for last year would have been £12.66billion.

The Department for International Development is the only Government department that is judged by how much money it shovels out the door.

‘From history we know that does not really work. We should be judging the success of our aid packages on what they achieve and who they help.

‘We should not just have targets for spending money.’

Mr Rosindell added: ‘The ultimate irony is that this giant leap in aid spending is partly due to illegal activities such as drug dealing. Such a huge jump in the already bloated budget will cause outrage amongst hard-working taxpayers.’

Britain was last year one of only six major donors that met or exceeded the UN’s target for international aid spending. Our aid budget has more than doubled from the £6.4billion spent in 2008.

Foreign aid is calculated according to gross national income (GNI), which reached £1.9trillion last year after the economy grew and officials tweaked the way it was estimated, to follow EU accounting rules. 

The new calculations gave more weight to financial services and activities such as research and development – which the UK does well in. They also include the value of the black economy such as drugs and prostitution.

Under targets brought in by David Cameron, ministers are committed to sending 0.7 per cent of our national income overseas every year

Under targets brought in by David Cameron, ministers are committed to sending 0.7 per cent of our national income overseas every year

Around £525million of the rise was because of economic growth and about £685million was because of the change in the accounting method.

The £1.2billion boost to the aid budget is the biggest annual increase since 2013, when ministers raised spending by £2.6billion to meet the 0.7 per cent target.

As the GNI figure rose by 10 per cent compared with 2015, spending on aid had to rise by the same proportion.

Although most of the foreign aid budget is used by the Department for International Development, other Government departments are increasingly having to help to get the money out the door.

While Dfid spending on aid went up by £107million, £1.1billion of the extra money was handed out by the rest of Whitehall or through international partners such as the EU. 

The Department for Business, Energy and Industrial Strategy increased its aid spending by £160million, the Home Office by £140million and the Foreign Office by £121million. 

Aid cash dished out through the EU rose from £935million in 2015 to £976million last year. More than £326million of the extra cash was ‘dumped’ in a trust fund administered by the IMF.

More than 32,000 nursing home places could have been funded if the £1.21billion increase in aid money last year was spent on social care in instead. The cash could have also paid for 318million hot meals for the elderly at a cost of £3.80 each.

Nearly half of councils have reduced the meals on wheels scheme for the elderly since 2010 due to budget cuts.

A Government spokesman said: ‘Our international development budget only increases when the UK economy grows, a sign of our economic success. This money is an investment in Britain’s own security – ensuring the world is more prosperous, developed and stable.

‘Whether it’s stepping up our support for desperate Syrian refugees, tackling the lethal legacy of landmines or giving life-saving aid to stop people dying of hunger in East Africa, UK aid is keeping Britain safe while helping the world’s poorest.’

  • The headline to an earlier version of this article said that the foreign aid budget had surged to £13bn because prostitution and drug dealing have been added to the official figures. As the article makes clear, this is just one of the contributory factors.  

How they've lined up for the UK's overseas cash handouts

By DAILY MAIL REPORTER 

Britain gave £4million to Ethiopia’s version of the Spice Girls in a wider programme aimed at empowering women in the East African country.

A further £5.2million was granted to the all-girl pop group Yegna in 2015 for an initiative expected to run until at least 2018, but this was halted after damaging stories in the Daily Mail.

Cash handouts to families in Pakistan have hit over £420million despite being dogged by claims of corruption. Around 235,000 families pocket payments worth £34.50 every three months – given in either cash or cards loaded with money – which they can spend however they want.

Controversial: Queue at a Pakistan ATM to use cards loaded with UK funds

Controversial: Queue at a Pakistan ATM to use cards loaded with UK funds

Ministers wasted £285million of foreign aid on a ‘white elephant’ airport in St Helena in the South Atlantic that commercial planes cannot even use.

In a blistering report last December, the Commons public accounts committee said officials ‘unquestionably’ failed the taxpayer over the project and that nobody has been held to account for the incompetence.

Last month MPs from the same committee said Britain should stockpile its aid budget so it can be used when most needed – rather than in last minute splurges worth billions to meet annual spending targets.

They also said they were ‘concerned about the lack of strategic direction and management’ within the Department for International Development.

In another report published yesterday, MPs said that ministers must do more to tackle the ‘appalling conduct’ of some international aid contractors used to deliver UK aid.

They ruled that there were ‘fundamental flaws’ in the practices of some of the organisations responsible for handling public money.

  •  An earlier version of this article stated that the foreign aid budget had soared to £13 bn because EU rules have added prostitution and drug-dealing to economic figures. As the article later stated, the inclusion of the black economy is only one of a number of reasons for the increase - and the change in accounting rules had, in fact, already been adopted by the US and other countries.

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