National Audit Office report questions UK aid spending

UK aid may not have been spent as effectively as possible because of the need to hit targets, the spending watchdog has said.

The government has committed to spending 0.7% of the UK’s national income on overseas aid.

The National Audit Office (NAO) said at least £1bn more than expected was spent in the last two months of 2013 to ensure this target was met.

Its report supported an inquiry by MPs into aid spending.

The NAO said the Department for International Development (DfID) had requested further cash from the Treasury in 2014 in order to achieve the target.

The watchdog also said difficulties were caused because the target is based on the calendar year, but the department’s accounts work to the end of the financial year in March.

The NAO said: “One clear challenge for the department is that, in effect, it must work to two year ends.

“This difference is likely to represent more than an accounting difficulty because of the need to hit a target with little or no flexibility, causing significant decisions to be made late in the year and at short notice.”

The NAO said the requirement to “hit the target and not exceed it significantly, against a background of considerable uncertainty”, presented the department with challenges.

The report said the government increased DfID’s 2013-14 budget by a third to support its commitment at a time when it was reducing the budgets of most other departments.

The 0.7% target is based on what the UN urges developed countries to achieve. In 2013 the UK became the first G7 country to do so when it spent £11.5bn on overseas aid.

International Development Committee chairman Sir Malcolm Bruce is leading the inquiry into overseas aid spending.

He said it would be counter-productive if meeting the target led to “unreasonable and unrealistic demands” that resulted in taxpayers’ cash being used less effectively.

He said while governments should not be “let off the hook” when it came to aid spending, ways should be looked at to reduce sudden injections of cash.

This could be done by averaging out the 0.7% target over two years, he suggested.

The target has proved controversial at a time of deep cuts in public spending but a bill putting the commitment in law has been approved by MPs.

A DfID spokesman said the department was experienced at dealing with sudden changes in spending patterns, such as responding to humanitarian disasters.