Consultancy companies earning billions of pounds from overseas aid will be forced to reveal their salaries and fees after an investigation by The Times exposed overcharging across the sector.
Priti Patel, the international development secretary, is to review all foreign aid contracts after an unprecedented analysis of more than 70,000 financial transactions revealed that consultancy spending had doubled to £1 billion a year since 2012. Ten British companies received almost half of the funds.
One British think tank quoted £10,306 to write a single blog post and another received £23,000 in taxpayers’ money to write a two-page policy brief, internal review documents reveal.
Two consultants were separately handed £12,000 to produce a six-page “how-to” note on disaster resilience. Another two were paid £15,100 to write a 30-page discussion paper. The bank JP Morgan shared £1 million in aid money with a law firm to advise on Nigeria’s sovereign wealth fund. Ms Patel is understood to have said privately that she will not “tolerate the profiteering by those who have created an industry out of the suffering of the world’s poorest”. She is considering forcing aid suppliers to publish all contracts.
In 2014 the Department for International Development (Dfid) paid £26,000 to hire Krishnan Guru-Murthy, the Channel 4 News presenter, and £14,000 to hire Zeinab Badawi, the BBC broadcaster, to moderate a handful of sessions at a two-day aid conference in Mexico.
Last night Guru-Murthy promised to give his £12,750 fee, minus tax already paid, to an international development charity. The broadcaster said he was not aware that Dfid was funding the work at the time and would not have undertaken it if he had been. Badawi declined to comment.
Dfid has played down the extent of its payouts by recording “consultancy spending” as £0 over the past three years and claiming that it has “slashed spending on external consultancy and advisory services by 98.9 per cent since 2009”. However, The Times has established that fees paid to 265 consultancy companies together with payments to 273 other organisations for “technical and advisory services” increased from £501 million in 2012 to £931 million last year.
Ten contractors, including Adam Smith International (ASI) and Oxford Policy Management, have seen the value of contracts increase by £145 million in this period. Insiders warned that performance was often not properly assessed. “There isn’t a feedback mechanism,” a former senior Dfid civil servant said.
“Organisations that are doing badly are not going bust. Reviews are often done by the people responsible for designing and managing the contract. They don’t have a strong incentive to say the project is shit.”
Last year Britain spent £12.2 billion on overseas aid — equivalent to 0.7 per cent of national income. The country is only one of five to have met this target. Dfid itself spends about £8.4 billion on aid programmes each year, with the remainder flowing through other departments or expended on staff costs.
Analysis of every publicly disclosed aid payout from Dfid between 2011 and 2015 — totalling just over £38 billion — reveals the extent to which funds meant for the world’s poor increasingly go to highly paid western consultants.
Britain is giving £274 million to a climate change fund from which the United States is threatening to withdraw.
The Strategic Climate Fund is the fifth largest beneficiary among international bodies supported by the aid budget. However, the US plans to withhold all donations to the fund, which is supposed to help developing countries cope with climate change.
Britain has pledged far more than any other country to international climate funds, promising to supply nearly $3 billion of their $8 billion budgets. […]
Benny Peiser, the director of the Global Warming Policy Foundation, said: “There is a big question mark over where this money is going, what is it for, how it is allocated and who benefits.”