International aid is a priority for the new government, but spending must be effectively scrutinised. Improving public financial management is a vital part of this process
Every day 25,000 children worldwide die from easily preventable diseases. Seventy-two million children are missing out on primary education and there are more than 14 million Aids orphans in sub-Saharan Africa, more than all the children in Britain.
Global poverty is an affront to our moral conscience. We must act now to right such wrongs and end this terrible waste of human potential. Promoting global prosperity is also in our national interest. We’re all in this together. If we don’t tackle the root causes of the problems, we will spend much more in future trying to deal with the symptoms.
Despite our financial difficulties, this is a time to reaffirm our promises to the world’s poorest people and not to abandon them. We are resolved to honour our commitment to increase the overseas aid budget to 0.7% of gross national income from 2013. We are right to do this because of the scale of the problems and the contribution aid can make to solving them.
To really make a difference, our aid has to be well spent. We are taking a strategic look at our programmes so that we can better allocate funds.
This involves reviews of multilateral aid (spent through organisations such as the World Bank and UN bodies); bilateral aid (the aid we give directly); and humanitarian aid. In all cases, the focus is on results – what we get for what we spend.
We are committed to increasing transparency and accountability, so UK taxpayers and citizens in our partner countries can see what we are doing with the money allocated to us. A major plank in our strategy is the UK Aid Transparency Guarantee, launched last summer.We have also established the Independent Commission for Aid Impact.
How we perform is only part of the story. Much depends on how our partner governments perform. We will help them to improve the way they manage spending, focusing on results and value for money and promoting greater transparency and accountability.
We will also help them in raising revenue. Tax revenue is very low in many developing countries, so getting the tax base right, in ways that encourage economic growth and promote political accountability, is important – and part of an eventual exit strategy from aid.
Sophisticated systems are unlikely to be feasible in many of our partner countries, except in the long term. We need to work with and build on what’s there, seeking ‘good enough’, rather than ‘best practice’ solutions.
Improving accountability will require strengthening formal institutions, such as audit offices and public accounts committees.
It will also involve increasing transparency and interaction between government and civil society, through means such as user committees, which can play an important role in monitoring service delivery at the local level. It might involve developing the capacity of institutions, such as local accountancy bodies, to scrutinise government budgets.
Helping to improve public financial management will continue to be a priority. Doing this is our stock in trade and an essential part of the development agenda. Better public financial management in our partner countries should lead to better use of all their resources, not just those they receive as aid.
Alan Duncan is the international development minister. He will be speaking at CIPFA’s international conference on March 15–17
