Two weeks ago Justine Greening was demoted for the offence of sticking to the Conservative manifesto on which she was elected and refusing to back down over the proposal for a third runway at Heathrow. This week she has shown that she is far from being demoralised by the experience; in fact, it might turn out to be the making of her. She has grasped in a fortnight what seemed to evade Andrew Mitchell, her predecessor at the Department for International Development (DfID), for two-and-a-half years. She has taken the trouble to examine her department’s swollen budget and ask herself: is all this money really being wisely spent?
The revelation that DfID paid out £500 million in consultants’ fees last year should come as no surprise: when a government decides to define public spending as a good in itself, fat salaries tend to result. It is as if Whitehall were doing a remake of the film Brewster’s Millions, whose protagonist is on a mission to spend $30 million in a week. DfID’s mission is to spend £30 million a day. It is a tough task, especially given that David Cameron wants to pass a law making it illegal for officials to spend less. Greening has stepped out of the world of cuts and entered a parallel universe, where panicked officials worry about where to bury the cash.
This March the government proudly announced it was well on the way to achieving its target: aid spending has reached 0.56 per cent of national income, far higher than France (0.4 per cent) or the US (0.2). There was just one question unanswered in the progress report: what good, if any, has the increase in aid spending achieved? No other Whitehall department would get away with boasting about how much it is spending, without showing what it is delivering. The rumour in Whitehall is that George Osborne may simply write a cheque to the World Bank if he fails to meet the spending target on time.
It is similar to what happened when Gordon Brown announced as chancellor that he planned to increase spending on public healthcare to make it closer to the average in other developed countries. He achieved that target handsomely: the NHS budget trebled under Labour. What Brown failed to do was improve the health service by the same amount.
It is odd that Cameron, cheerleader of the Big Society, should take such a statist approach to foreign aid. Those who have asked him how much the British public donate to overseas causes say he doesn’t have a clue. His target, to give 0.7 per cent of the national income to aid, does not factor in the fact that Britain hit this target ages ago because the public donates more voluntarily than anyone else in Europe. But as taxes rise to fund DfID’s expansion, private donations may well fall. By spending in defiance of public opinion, Cameron risks giving aid a bad name and inhibiting donations to British charities which have been doing extraordinary work for decades.
The developed world can be proud of international efforts to eradicate infectious diseases, and to help bring clean water to communities which do not have it. Ten years ago, Gordon Brown boasted about the Millennium Development Goal of halving the proportion of people living below a dollar a day by 2015. Remarkably, this goal was hit in 2008, seven years early. But the humanitarian triumph has been covered up as if it were a dirty secret. The miracle was achieved by global trade: western consumers have been extending the invisible hand to millions in India and China and, as a result, we are living in a golden age of poverty reduction.
Government aid, by contrast, is dominated by too many hare-brained schemes dreamt up by officials who have little idea of how businesses work. British taxpayers are now funding the development of crab fisheries in Zanzibar. When the government has tried to pick winners in the British economy and shower them with development cash the result has often proved miserable (take Nick Clegg’s regional growth fund, which spent £1.4 billion and created just 2,440 jobs). Why should anyone expect a different result when the money is being splurged 5,000 miles away?
British taxpayers, for example, are funding a scheme to help Kenyan tribal rain-makers arrive at a ‘consensus weather forecast’ with that country’s government meteorologists. It is as if government cash were being spent helping the Office of Budgetary Responsibility to come up with a consensus economic forecast with the aid of New Age mystics.
Justine Greening, thankfully, seems to have a more hard-headed and less romantic attitude towards running an aid budget than did her predecessor. She appears to grasp that helping the poorest does not mean a neocolonial urge to run India — and to understand the perversity of sacking Gurkhas while doubling aid to their native Nepal. She also seems to appreciate public resentment at what is, in effect, a bureaucratic failure to realise that the British have long ranked among the most compassionate and generous people on earth.
The international aid department is long overdue for reform. At last it has a Secretary of State who is up to the job.
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