21 December 2017

The UK’s market in overseas aid


Despite the fact the UK spends 99.3 per cent of its national income on itself, the 0.7 per cent we deploy helping the world’s poor generates a great deal of heat and controversy. One of the bugbears of overseas aid critics is that taxpayers’ money is being spent by faceless bureaucrats, about which we know very little. That is of course true of every department in government – perhaps none more so than the Treasury, which has turned faceless bureaucracy into an art form.

However, the boffins at the Department for International Development have come up with a rather pleasing solution which gives taxpayers the opportunity to have their say in how the aid budget is spent. The Government’s Aid Match scheme sees a chunk of the aid budget spent backing different appeals, pound-for-pound. This makes British aid one of the most democratic in the world and allows the choice to be put in the hands of the public so they have a direct say over where the budget is used.

It has also effectively created a market in overseas aid and stimulated some healthy competition between charities. In order to reach the public vote, charities have to first go through a rigorous application process for aid match funding, with DfID accepting only the appeals they think are worth backing. A lot of applications never make it. For those that are accepted they then need to compete to win the financial backing of the public. People can vote with their pockets and see their favourite causes boosted by the aid budget. People can choose to help clear landmines in Iraq, equip people in Burkina Faso with tools so they can grow and sell vegetables or provide literacy classes for women in the Central African Republic.

Aid Match funds avoid nearly all of the pitfalls that get the Government into hot water around the aid budget. They are not diverted to expensive consultancies like Adam Smith International, whose founding executives stepped down over allegations of profiteering. And aid matched funds are not handed over to opaque bodies like the World Bank. Instead these funds are channelled through British charities that have a long track record and have earned the trust of the public. Unlike the faceless monoliths at the World Bank, UK charities are held accountable, not only by DfID, but more importantly by their supporters who will give their pound elsewhere if they don’t see their money being put to good use.

Launched by Justine Greening in 2013, Aid Match has seen 3.6 million Brits donate to more than 59 match-funded appeals resulting in £120 million being spent in 22 countries and benefiting 19 million people.

The UK’s aid budget is a valuable form of soft power and an important counter to the widespread perception, both at home and abroad, that Brexit is a project built on a distaste for the foreigner. But primarily Aid Match is about doing good in a world that needs it. This month the UN appealed for a record $22 billion to meet the needs of people suffering from conflicts and disasters around the world – hardly surprising after a year of hurricanes, earthquakes, and escalating violence everywhere from Myanmar to South Sudan.

The global need is stark but the UK Government’s innovative approach is harnessing the will of the public to make both the aid budget, and UK charities, work harder.

Joe Ware is a journalist and writer at Christian Aid