Britain's aid payouts 'are open to corruption abroad', says NAO

Britain's £461m overseas aid budget for tackling poverty could be open to fraud because of the lack of controls over the way it is spent in some of the poorest countries in the world, the public spending watchdog has warned. The National Audit Office said the Government's switch from project-linked funding to wider "budget support" for countries in an attempt to reduce poverty had led to "significant risks" that that the funds would be "misapplied for political reasons or through corruption".

Calling for more controls to be imposed by the Department for International Development, the report highlighted internationally recognised data showing that the worst countries for corruption included some of the biggest recipients of budget support, including Pakistan (£52.5m), Vietnam (£34.5m), Zambia (£23.3m) and Nepal (£5.4m). "Donors cannot track their own contributions individually once paid to partner governments and instead monitor the government's overall expenditure and progress against its agreed strategy," said the watchdog.

"Evidence on the extent to which budget support has yielded better value for money than other ways of delivering aid, or has had an impact on income poverty, is not conclusive."

Edward Leigh, the Tory MP and chairman of the Committee of Public Accounts, said: "Although the department pays attention to issues of corruption when it risk-assesses countries, it does not know how much UK money is lost through political misuse or corruption. Until this is improved, public confidence in these programmes will not be as good as it should be."

But Max Lawson, the senior policy adviser at Oxfam, defended the system of budget support as "a vital and effective use of UK aid". Douglas Alexander, the International Development Secretary, said: "I welcome the NAO's detailed report, and its recognition of the many benefits that budget support provides.

"Budget support helps governments provide more health and education services for their people, and have more ambitious plans and programmes to reduce poverty... Many of the points made by the NAO, and other evaluations, have been taken on board."

Mr Alexander added: "We assess the risks carefully and have safeguards to prevent the misuse of funds. If things go off track we take action. If necessary we reduce or suspend support or deliver it in a different way."

The shadow International Development secretary, Andrew Mitchell, called for immediate and decisive action to bolster the scrutiny of British aid. "Whenever Britain gives budget support to a poor country, 5 per cent of the total amount should be earmarked for helping parliament, civil society and audit institutions track where the money is going," said the Tory MP.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Office / Sales Manager

£22000 - £32000 per annum: Recruitment Genius: Established and expanding South...

Recruitment Genius: Administrative Assistant / Order Fulfilment

£14000 per annum: Recruitment Genius: An exciting opportunity to join a thrivi...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones