Mitchell announces cost saving measures to boost help for world's poor

01 July 2010

International Development Secretary Andrew Mitchell today announced further cash-saving measures as part of an ongoing drive to get value for money out of the Government’s aid budget.

The savings include:

Scrapping the £6.5m Global Development Engagement Fund, a scheme aimed at community groups – ranging from gardening clubs and adventure camps to toddler groups and amateur performing artists – for projects on ‘development awareness-raising’ in the UK;
Calling time on 15 schemes judged to have been failing for up to two years, with the savings redirected to work that will have a far greater impact on poverty reduction;
Renting out two floors of DFID’s Palace Street office, providing a total income of over £2m, and reductions in corporate services, such as HR and IT, will also save the department £5m per year; and,
Reductions in business class flights saving £1.2m.

Speaking in the House of Commons today, Mr Mitchell said that DFID had a double duty to British taxpayers to ensure that every pound spent contributed to reducing global poverty.

Money saved from these projects would be redirected into priority areas such as improving the health of mothers and children and the fight against diseases such as malaria and polio.

The International Development Secretary said that projects such as Global Development Engagement Funding risked the credibility of international aid by not showing a clear link between funding and poverty reduction.

Mr Mitchell said:

“It is vital that people know that money from the British aid budget is being spent where it makes the maximum impact.

“Today, I am putting a stop to projects that have been assessed to be failing to provide that impact and will redirect this aid to where it will make the most difference.

“I want to be clear with taxpayers – British money makes an enormous difference to the world’s poorest people and I will be stubbornly focused on getting value for money from every penny.”

Notes to editors

Today, Andrew Mitchell announced:

Reallocating £100m from low priority or not performing activities: DFID will reallocate £100m from projects which are low priority or not performing to activities which have a greater impact on poverty reduction. This process began in May, with the announcement that five development awareness projects worth over £500,000 have been cancelled. The £6.5m Global Development Engagement Fund has been cancelled. To identify the resources to be reallocated DFID will:

review all projects and programmes which are performing poorly to decide whether they should be stopped.
review all expenditure approved since January 2010 to ensure it is consistent with current priorities. Any projects or programmes which are found to not deliver value for money will be stopped.

Renegotiate contracts with suppliers: DFID will work with other government departments to reduce our procurement costs, renegotiating contracts where possible. DFID will also apply the principles of cross-Government renegotiations to its own contracts. The full value of these savings will become clear over the coming year.

Reduce back office spending: DFID will reduce the size and cost of corporate services, such as HR and IT, saving £5 million by 2012/13.

Mr Mitchell has previously announced:

Communications and Marketing: DFID will urgently review the print and distribution of the internally-funded Developments magazine. DFID has already ceased overseas distribution of the magazine, saving £186,000 on distribution and £18,000 on printing in 2010/11.

Travel and allowances: DFID has overhauled its allowances system. These changes are presently being implemented forthwith and will over time save £2m over a year. All staff plane or train journeys will be economy class unless business class is absolutely necessary. We will reduce the travel budget by £1.2m (11%) in 2010/11.

Property Costs: We will rent out two floors of DFID’s Palace Street office, providing a total income of over £2 million.

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