09 June 2010
The UK Government is to reassess its funding of international agencies such as the World Bank and United Nations in a drive to direct money at only the most effective organisations, International Development Secretary Andrew Mitchell announced today.
Mr Mitchell has written to all institutions who last year shared around £3 billion from the UK aid budget to alert them to the ‘Multilateral Aid Review’, which will begin immediately.
Each organisation will be tested to ensure the UK is getting maximum value from its aid money. This will include an assessment of the relevance of each body to the UK’s objectives on poverty reduction and their ability to deliver results on the ground.
Organisations that demonstrate value for money and the greatest impact on poverty could receive a cash boost. Those that fail to meet the tough criteria could have their funding reduced or stopped altogether.
Speaking after sending the letters, International Development Secretary Andrew Mitchell said:
“Nearly half of the UK’s aid budget is currently spent through international bodies, like the UN and World Bank, and so it is right that we assess whether this is providing maximum value for money. “Many of these organisations will be crucial to our fight against poverty and that is why I want to direct money towards those bodies that share our aims and have a proven track record of delivering results. “There are over a billion people living in extreme poverty around the world. We believe it is our duty to ensure we get as much as possible out of every pound of British aid.”
“Nearly half of the UK’s aid budget is currently spent through international bodies, like the UN and World Bank, and so it is right that we assess whether this is providing maximum value for money.
“Many of these organisations will be crucial to our fight against poverty and that is why I want to direct money towards those bodies that share our aims and have a proven track record of delivering results.
“There are over a billion people living in extreme poverty around the world. We believe it is our duty to ensure we get as much as possible out of every pound of British aid.”
The International Development Secretary underlined Britain’s commitment to working with the most effective organisations to reduce poverty. Organisations that have a proven impact on the ground and take a results-based approach to their programmes could be rewarded with increased funding.
Mr Mitchell is concerned that some organisations do not provide full value for money, whether due to high levels of bureaucracy, overlaps with other agencies, high costs or a failure to deploy enough staff into the field. There is also concern that many multilateral organisations fail to provide hard evidence to show money is being used effectively.
The findings of the review will be made public later in the year.
In 2008/09. DFID spent £2.27 billion of its £5.5 billion programme budget through multilateral institutions. This included £574m for the World Bank and £252m for the UN.
In 2009/10, DFID estimates that around £3 billion of its programme budget through multilateral institutions. Detailed figures will be published in the DFID annual report later this year.
DFID currently funds over 30 organisations to undertake a broad range of activity, such as leading the fight against HIV, malaria and TB, humanitarian response and peacekeeping.
The organisations include:
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