Britain’s coalition government will soon announce the results of its Comprehensive Spending Review, which is short-hand for a massive swathe of cuts in public spending. Though the axe will be swung with vigour, it is believed that David Cameron’s government will stick to an election pledge not only to protect the international aid budget but to continue ratcheting it upwards, ultimately to 0.7% of national income, from around 0.5% now. This may be a mistake.
Many development policy wonks admit that the 0.7% target is a weak measure of commitment to development – but it is the only one we’ve got, they argue, and Britain’s Conservatives, in particular, do not have a great track record on aid. Indeed, the new government’s 0.7% pledge has surprised many who remember how the aid budget was slashed under the Conservative rule of Margaret Thatcher and John Major.
Leaving aside the explanantion that perhaps at least some in the Conservative Party care about the poor, the 0.7% pledge appears to serve a dual political purpose: for the Conservatives to show that they are not the ‘nasty party’ of old; and, for their Liberal Democrat coalition partners to signal to their supporters that they are exerting a kindly influence on government spending priorities. But this leaves a problem – how to spend all this money?
The International Development Secretary, Andrew Mitchell, has talked the tough talk about getting results but, given that DFID, his department (and Michael’s former employer), is already struggling to get results with the money it is already spending, what will he do with the extra cash? Worse, how can he do better with fewer staff? For, while DFID’s programmatic spending budget has been protected, it is having to endure the same pain as everyone else in government by cutting spending on administration.
Meanwhile, sceptics about the Conservative commitment to aid think that the government will square the circle by reclassifying certain expenditure by other parts of government as aid, such as Foreign Office and Ministry of Defence programmes in conflict zones like Afghanistan, or the Foreign Office’s block grant to the cultural quango, the British Council, or climate change initiatives. That may all be true, but it is unlikely to solve the spending problem, especially since Mr Mitchell seems keen to reverse DFID’s past enthusiasm for writing big cheques to multilateral aid agencies like the World Bank and the UN, and to developing country governments, through what is known in the trade as ‘budget support’.
Maybe Mr Mitchell should have the courage of his government’s convictions about the Big Society, which is all about engaging private citizens in creating social value, and replace the 0.7% target with a new goal that Britain, government and people together, will contribute 1% of national income to fighting poverty around the world. That was the original target set by the UN 40 years ago, before the size of the government share grabbed all the attention.
The first benefit of using this measure would be that, if achieved, it would mean more aid for the developing world. According to the Index of Global Philanthropy, if you add Britain’s public and private aid together it comes to nearly 0.7% of national income. Setting a 1% goal for all aid would therefore deliver more help to the world’s poor than just targeting an increase in government aid.
A 1% target would also provide a powerful incentive for Mr Mitchell and his staff to think in terms of partnerships with private-sector actors like philanthropists, social entrepreneurs, social investors, companies and so on. While, like government aid, such partnerships do not guarantee results, the chances of having an impact will surely be greater if DFID draws on this wider pool of expertise instead of relying on an ever-decreasing pool of civil servants.