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Fraud risk management in government foreign aid examined

2 July 2021

The Sub-Committee on the Independent Commission for Aid Impact (ICAI) will pursue their scrutiny of government spending on foreign aid at an evidence session focusing on the management of the risk of fraud in the aid sector.  

Wednesday 7 July 2021 (Virtual meeting)

  • Session will be conducted with remote participation by witnesses and Committee members

At 9.30 am

  • Tarek Rouchdy, Commissioner, Independent Commissioner for Aid Impact
  • Stephen Blakely, Team Leader, ICAI Tackling fraud in UK aid Review

At 10.15 am

  • Lord Ahmad of Wimbledon, Minister for South Asia and the Commonwealth, Foreign, Commonwealth and Development Office
  • Juliet Chua, Director-General for Finance and Corporate, Foreign, Commonwealth and Development Office
  • Mark Cheeseman, Director, Government Counter Fraud Function, Cabinet Office

Purpose of the Session

The known net loss to fraud from the foreign aid budget – that is, money stolen minus money recovered – is, according to ICAI, less than 1p in every £100 spent. However, the UK government has a policy of ‘zero tolerance’ to fraud, so any loss is significant. It should also be noted that the Cabinet Office, one of the central offices of state, has said ‘fraud is a hidden crime’ and has estimated that up to 5% of UK public spending may be lost to fraud and error.

The ICAI review, the results of which will be scrutinised by the Sub-Committee, was aimed at assessing the effectiveness of fraud risk management across aid-spending government departments – principally the Foreign, Commonwealth and Development Office, where most foreign aid is spent, but also other departments. The review did not seek to identify or investigate specific instances of fraud. The MPs on the Sub-Committee will be looking at the recommendations of the review and the government’s responses to them.

The broad objectives of the evidence session are to:

  • consider the extent and impact of fraud on UK aid;
  • assess government effectiveness in detecting, preventing and managing fraud;
  • consider management failures identified in the ICAI review; and
  • consider lessons learned to ensure fraud risk is effectively managed in the future.

The expert witnesses answering MP’s questions are Tarek Rouchdy, one of ICAI’s Commissioners, and Stephen Blakely, the Team Leader of ICAI’s review on tackling fraud in UK aid. Mr Rouchdy is a former Chief Financial Officer of the Central Bank of Egypt who has also held very senior positions in international development banks in Africa and Europe. Mr Blakely, as well as undertaking work for ICAI, is the founder of ‘3B Impact’, a consultancy that seeks to maximise economic sustainability.

Answering MPs’ questions for the government will be Lord Ahmad of Wimbledon, the Minister for South Asia and the Commonwealth. Lord Ahmad has a very broad range of responsibilities within the Foreign, Commonwealth and Development Office, including leading on the Department’s work on open societies and anti-corruption.

Further information

Image: Crown Copyright