Corruption risk from foreign aid target, say Lords

City A.M. Reporter
DRIVING up the government’s foreign aid budget risks stoking corruption in poor countries, an influential House of Lords committee has found.

The department for international development (DfID) must “do more to tackle corruption” that stems from British aid, the Lords’ economic affairs committee will argue today.

“DfID detected only £1.2m of fraud in its £7.7bn budget in the year to March 2011,” the report says, slamming the figure as “paltry and implausibly low”.

The report added that the UK’s “arbitrary” target of committing 0.7 per cent of GDP to aid – which it plans to embed in law – would “wrongly prioritise the amount spent rather than results achieved”.

Just last week the Independent Commission for Aid Impact gave DfID’s programme in Afghanistan an “amber-red” mark, signalling that it is “not performing well” and needs “significant improvements”.

The US government has cut aid payments to Afghanistan after allegations that western funds are being smuggled out of the country in suitcases stuffed with cash.

The Lords committee argued that humanitarian aid, which receives under 10 per cent of the aid budget, should be maintained.