[Dehai-WN] (Reuters): Watchdog warns of fraud risk to UK aid spending

[Dehai-WN] (Reuters): Watchdog warns of fraud risk to UK aid spending

From: Berhane Habtemariam <Berhane.Habtemariam_at_gmx.de_at_dehai.org>
Date: Thu, 20 Oct 2011 15:08:52 +0200

Watchdog warns of fraud risk to UK aid spending

Thu Oct 20, 2011 12:57pm GMT

* UK to focus more aid in conflict-hit countries

* Watchdog says that raises risk of corruption

By Mohammed Abbas

LONDON, Oct 20 (Reuters) - Britain must better manage its overseas aid and
be wary of corruption as it spends more money in conflict-affected states
and through multilateral institutions, a parliamentary spending watchdog
said on Thursday.

Overseas aid is one of the few areas that has been ring-fenced by Britain's
coalition government, which took office in May 2010 and has slashed spending
elsewhere to tackle a big budget deficit.

Earlier this year following a nine-month review of aid policy, Britain said
it would focus its spending on poor, conflict-ridden or "fragile" states.
Countries including Somalia, Afghanistan, Ethiopia, Pakistan, Bangladesh and
Yemen were likely to be the biggest recipients.

"The department (for international development) is going to be spending more
in fragile and conflict-affected countries and the danger to the taxpayer is
that there could be an increase in fraud and corruption," Margaret Hodge,
head of parliament's Committee of Public Accounts said in a statement.

"The department's current plan is to spend more via multilateral
organisations and less through bilateral programmes. This poses a risk to
value for money because the department will have less oversight than it does
over country-to-country programmes," she added.

Polls show many Britons disagree with protecting foreign aid when many
domestic services are being cut. That has made the government determined to
show it is getting value for money.

Hodge's comments mark the publication of the parliamentary spending
watchdog's report on the government's Department for International
Development, whose aid budget this year is 8.7 billion pounds ($13.7
billion), and is set to rise by 35 percent by 2013.

She said the department's ability to make informed spending decisions was
undermined by its poor understanding of levels of fraud and corruption, and
that it needs to develop a framework to better ensure money is well spent.

International Development Secretary Andrew Mitchell said his department took
a "zero tolerance" approach to fraud.

"The report appears to take little account of the huge changes the coalition
has made since taking office," he said.

"We have transformed the way the department manages its finances, so
spending is attached to tangible results on the ground, which are rigorously
scrutinised by the new Independent Aid Watchdog," he added.

(Editing by Keith Weir)

C Thomson Reuters 2011 All rights reserved


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