Snouts in the aid trough

First published in The Daily Mail (September 18th, 2012)

Three miles from the centre of Nairobi, the bustling capital of Kenya, is a huge, sprawling district called Kibera. For many years it was branded the world’s biggest slum — the BBC said 700,000 people lived there, aid groups alleged one million, the White House claimed 1.5 million.

As its notoriety grew, Western politicians dropped in to demonstrate their compassion, and it became a favourite port of call for celebrities flown out to front fund-raising campaigns for charities. Inevitably, it was where Lenny Henry and three others went last year to spend a week amid the dirt and desperation for Comic Relief.

Foreign visitors even go on organised tours, gawping at the sight of people living in gut-wrenching poverty, before going off to see animals on safari or soak up some sun on the beautiful beaches. But when a census was carried out, it concluded there were only about 200,000 people in Kibera — which meant, with an estimated 6,000 charities on the ground, one group was operating there for every 33 residents.

It is a stark parable for the aid boom, the consequence of Western countries ruled by the Live Aid generation of politicians pumping vast sums into the developing world. It shows the shocking ease with which false claims and fraudulent facts are bandied around by those seeking to tap into swelling aid budgets.

It also demonstrates the conspiracy of silence that pervades the aid lobby. With the huge aid monies swirling around, all those involved — politicians, consultants, charities, think-tanks, even many journalists — have a shared interest in hiding uncomfortable facts. As budgets have soared in recent years, the stakes have become higher. And the relationships between those feeding off the boom is looking increasingly tawdry.

This weekend it emerged that ‘poverty barons’ are making millions in consultancy fees, with half a billion pounds paid to consultants. Instead of alleviating poverty in the most hard-pressed corners of the world, money from British taxpayers is ending up in the pockets of fat cats paying themselves six-figure salaries and seven-figure bonuses.

Postings on blogs regularly reveal aid workers’ delight over swapping flats in Britain for big homes in hot climates, complete with maids and swimming pools. I have seen charity staff admit they are ‘doing very nicely financially while fighting poverty’; one talked of a friend ‘who had become a millionaire from the poverty industry’.

I have also seen the expensive flats they rent in emergency zones — driving up living costs for survivors of disasters — and heard gossip about the parties held beside camps where starving people are fighting for their lives.

But what has emerged so far is just the tip of the iceberg. The aid world has a saintly image. But behind this are practices driven out of other industries decades ago, the sort of dodgy relationships that would cause scandals in the City or elsewhere in Westminster.

As one veteran aid worker told  me yesterday: ‘It is very hard not to be completely cynical about the system once you have seen behind the scenes.’

As ever, at the root of the problem is money. The sums now being spent on aid are astonishing: over the past decade, the amount spent globally by donor nations rose from £50 billion to £80 billion. Despite the economic downturn in this country, with all those cuts to disability benefits and closures of libraries, few nations are throwing money around the world more enthusiastically than Britain.

Already this country gives away a higher proportion of income than any other member of the G8 group of leading nations. Yet spending by the Department for International Development (DfID) is set to rise from £8.8 billion this year to £11.5 billion by 2015, the date of the next election.

Leaving aside whether aid works or not, this creates two problems. First, DfID inevitably has a spendthrift culture; no one gets a promotion or praise by pointing out money is being wasted. It is all about doling out cash.

Second, the department employs only about 400 more people than when it was established in 1997, although its budget is four times bigger. So to spend the cash cascading into its coffers, it either hands it straight to foreign governments — ensuring huge sums end up in the hands of some of the world’s more repressive regimes — or relies on an army of charities and private consultants.

Spending on consultants is rising fast, up from £348 million three years ago to £513 million today. Thus we see the London-based consultancy Adam Smith International paid tens of millions of pounds a year to promote good governance in countries such as Afghanistan, where aid has been found to exacerbate tribal divisions and billions have been stolen from the country by local officials.

Then there are newer specialist consultancies, growing fat on fees of up to £1,000 a day and often staffed by former DfID officials. Under Labour, one firm reportedly seconded staff back to work at the ministry — before those same staff then awarded their own company lucrative contracts.

Increasingly influential are the big accountancy firms such as PricewaterhouseCoopers and KPMG, given huge contracts to manage and sub-contract aid work to smaller organisations. Incredibly, KPMG helped set up Britain’s official aid watchdog — the Independent Commission for Aid Impact — and receives a monthly management fee even while it runs lucrative aid projects for the Government.

A spokeswoman for the watchdog said they were careful to ensure there were ‘Chinese walls’ within KPMG. But it’s hard to think of another sector where a watchdog is effectively policing its own work.

DfID has frequently been accused of acting more like a charity than an arm of government, with its obsessive proselytising for aid regardless of the inconvenient facts on the ground. Certainly, it is generous to aid groups that share its aims and shower it with praise.

In the past year, the department spent £329 million through 87 separate British charities. These include the likes of Save The Children, which saw its state funding soar from £39 million to £54 million last year, and Oxfam, whose income from the Government rose from £18.8 million to £27 million last year.

Amid all this back-scratching, the leading think-tanks focusing on the developing world also receive a substantial share of their funds from the Government, raising fears over their freedom to offer independent criticism. 

For example, the Institute of Development Studies receives nearly half of its funding from DfID, ensuring its highest-paid member of staff can take home more than £130,000. The Overseas Development Institute, meanwhile, also receives multi-million-pound state  funding; British taxpayers  have even given more than  £4 million to the Washington-based Centre for Global Development.

With all this money slushing around, you might think the aid world would be fertile territory for investigative journalists, especially given its history of corruption. All these aid bodies are, after all, increasingly powerful and influential forces in the modern world, responsible for the health, wealth and  well-being of millions of people.

Instead, with their own budgets under pressure, many reporters and media organisations are only too happy to hop on a plane at a charity’s behest and push its pet causes, rather than ask tough questions over the real reasons for famine and the failures of aid to provide long-term solutions.

The aid caravan has lurched out of control under both Labour and the Coalition, resulting in packs of self-interested scavengers feeding off the body politic while pushing an anachronistic aid agenda.

The last Cabinet minister in charge of DfID, Andrew Mitchell, was an aid fanatic. But there are hopeful signs that new International Development Secretary Justine Greening, an accountant by training, may adopt a more sceptical stance and actually scrutinise all this  massive spending.

She is reported to have told the Prime Minister she did not enter politics to throw money at the third world, and has initiated an emergency audit of the millions being frittered away on consultants.

Is it too much to dare hope she might act in the shared interests of both the British electorate and the peoples of Africa and Asia by turning off the golden taps that are enriching so many British individuals, while doing so little  to lift the developing world out  of poverty?

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