International Development Committee

Inquiry Evidence: The Philosophy and Culture of Aid

Submitted by The HALO Trust

International Development Committee
House of Commons
London
SW1A 0AA

18 March 2021

Dear Ms Champion MP

Inquiry Evidence: The Philosophy and Culture of Aid

The HALO Trust welcomes this inquiry and is pleased to provide evidence and recommendations to its first stage. We consider the topic timely, for the reasons set out in our evidence.

HALO’s evidence draws on the organisation’s expertise as a unique international NGO sitting at the confluence of the disarmament, development, environment and humanitarian sectors. We provide recommendations in four key areas:

• Overarching Issues & UK Aid Culture
• Rationale & Priorities for UK Aid
• Addressing Oversight of Conflict in UK Aid
• Innovative Development Finance and the Private Sector

We look forward to working with the Committee in developing the next stages of this inquiry, and on the Committee’s broader work.

Yours sincerely,

Chris Loughran                                                                                                  Camille Wallen

Senior Policy & Advocacy Advisor                                                        Director of Strategy

1. Overarching Issues & The UK Aid Culture

1.                 This inquiry takes place against a complex backdrop for the UK Aid sector. The following are key overlapping factors:

1. The COVID pandemic has pushed the global economy into recession, creating the worst economic crisis since the Second World War. The full impact of COVID’s secondary impact are not fully known, but are likely to cause greatest shock in sub-Saharan Africa and states or communities with lower levels of institutional resilience. This threatens significant progress made to date in poverty reduction.

2. At the time of writing, the government has just released the outcome of the ‘Integrated Review’. Global Britain in a Competitive Age is the government’s new framework for the UK’s international engagement in a post-COVID, post-Brexit world. The Global Britain strategy still lacks detail of how aid will be prioritised and programmed.

3. A new aid strategy is anticipated, but at the same time as the government has confirmed its decision to temporarily abandon its legal commitment to allocating 0.7% of Gross National income to Official Development Assistance (ODA). The government has stated its intention to reduce the aid budget to £10bn. With pre-existing multilateral commitments of £7bn, this would have a disproportionate impact on government’s bilateral aid, reducing it to £3bn.

4. The government has also announced its intention to reduce the proportion of UK aid spent in the Middle East and North Africa, at the same time as Yemen is home to the world’s largest humanitarian emergency. Meanwhile, Syria, Iraq and Libya prove that – when neglected and ignored – conflict results in endless cycles of violence. A meaningful strategy to address the current character of ‘endless conflict’ must be a cornerstone of the forthcoming aid strategy.

5. UK aid policy has been driven primarily by a focus on poverty reduction and the commitment to ‘leave no one behind’. This has achieved results in poverty reduction, but at the expense of work to address conflict. It has also created structural and cultural siloes between poverty reduction, disarmament, action to prevent biodiversity loss and climate change and an equitable trade and prosperity agenda. These siloes must be acknowledged and overcome in the development and delivery of the new aid strategy.

6. Polling on public attitudes to UK aid spending are divided between regions, nations and on different issues, especially in the context of domestic recovery from COVID. The public appears motivated by the UK acting as a ‘force for good’ overseas, but also has sympathy with aid cuts in the face of COVID’s domestic economic impact. A concerted cross-party effort is essential to restore confidence in the UK public of the value of UK international aid.

7. 2020 saw the creation of the new Foreign, Commonwealth & Development Office (FCDO). This move was opposed by most NGOs, but supported by The HALO Trust due to its potential to deliver a more comprehensive UK international strategy in the face of interrelated global challenges. It is now essential that all stakeholders in UK aid find ways to make the current structure work.

8. To deliver on the ‘Global Britain’ ambition, the UK needs to review and refresh the international UK aid brand so that it is clear what values it stands for, where comparative advantage lies and how it will complement other nations’ aid and development plans. It should do this by setting clear strategic aims and priorities and ensure alignment between policy and programming. The UK can do more to strengthen and exemplify the areas in which it is a world leader. This includes clearance of landmines and broader conflict response to create resilient and prosperous communities.

9. The relationship between the UK’s international NGO community and the current government has become characterised by mistrust, inhibiting a culture of common endeavour. The government and aid stakeholders should aspire to harness UK aid expertise and rebuild the UK as a centre of excellence, drawing on the models seen in the science and technology sectors.

10. Discussions around UK aid are at significant risk of being politicised and instrumentalised by party politics. This is a noticeable and detrimental move away from the consensus support for aid that was agreed between all parties in their 2019 manifesto commitments. This consensus must be restored.

11. Over the last five years, the UK aid community has responded to three major sector crises: security, safeguarding the Black Lives Matter (BLM) movement that followed the murder of George Floyd. The sector has significantly enhanced its responses to security management and safeguarding. But the

BLM movement threw into even starker relief the lack of diversity and colonial legacy of much of the aid sector.

12. The BLM movement underlined, again, the need to deliver and strengthen ‘Grand Bargain’ promises to promote empowerment of local structures and communities. It left in no doubt the obligation to address unconscious bias and promote diversity and inclusion in all its aspects, including overcoming social privilege barriers that have consistently characterised the UK aid sector.

2.                 This inquiry’s focus into philosophy and culture of aid is timely for five key reasons.

1. It is an opportunity to identify the strengths of the UK aid community and approach and reinforce them. It is time to develop new shared values and success metrics for the aid sector.

2. Creating a forward-looking relationship between the NGO community and the government is essential if the UK is to continue to be a centre of excellence in development and aid. Dialogue must be characterised by greater diversity in representation from the UK aid community than has been typical to date.

3. There is an urgent need reverse the current trajectory of politicisation of international development and restore public confidence in UK aid.

4. There is an opportunity to break down silos between development, humanitarian, disarmament, environment and prosperity agendas.

5. There is an opportunity to refresh the international image and brand of UK aid, setting clear strategies for what the UK will prioritise and make best use of the skills and resources of the FCDO as well as UK NGO and private sector expertise.

3.                 The next stage of the inquiry should consider the following issues:

• What are the values that will drive the UK aid strategy and how will they be developed?
• How can the UK re-establish the international image of UK aid and clarify its priorities?
• How will the UK maximise its aid effectiveness using UK skills and resources?
• How can the UK aid sector reverse the trajectory of international aid becoming a party political issue?
• What steps can be taken to harness the UK public’s general support for UK international aid?
• How must the UK aid sector work to proactively enhance diversity?
• What now needs to be done to deliver ‘Grand Bargain’ commitments and decolonisation of aid?
• What new structures and frameworks would build trust and cooperation between the government, NGOs, commercial organisations and policy makers working on development assistance?
• What approaches to engagement with UK expertise beyond government (both NGO and commercial) can best support the UK’s continued role as centre of excellence in development, disarmament and humanitarian response?
• What can be done to break down silos between development assistance, disarmament, environmental issues and an equitable prosperity agenda?

2. Rationale & Priorities for UK Aid

4.                 This is rightly highlighted as a key theme for this inquiry, particularly in the context of the Integrated Review’s outcome. It is of particular relevance when the planned reductions to the aid budget will be felt most acutely in bilateral aid. This raises important questions about when UK aid provided through multilateral channels – anticipated to comprise 70% of ODA – offers value for money.

5.                 The UK’s ODA is tied through legislation to the primary objective of alleviating poverty. The narrative of much of the UK aid sector has focussed on need and the most marginalised. This is without question the ideal. The unspoken reality, however, is that the national interest, comparative advantage and the need to prioritise have always been driving factors in the UK’s international aid strategy.

6.                 The 2015 strategy for UK aid was explicit about ‘aid in the national and international interest’. The 2021 Global Britain in a Competitive Age is even more explicit in linking UK aid to UK values, being a ‘force for good’ and achieving greater integration in the UK’s international strategy. The explicit statement of national and international interest must now be accompanied by a framework for prioritising aid in partnership with recipient countries and marginalised communities.

7.                 It is essential that the forthcoming aid strategy includes a clear framework for how decisions on aid prioritisation will be made. It should also include justification around geographic and thematic priorities, with clear indications of how the national and international interest are balanced and criteria for defining consistency with UK values and ‘force for good, which are currently lacking.

8.                 The next stage of the inquiry should consider the following issues:

• How can the government enhance scrutiny of aid challenged through multilateral mechanisms to the same level as that in place for bilateral assistance?
• How should decisions be made over when multilateral mechanisms or bilateral assistance offer best value for money to the taxpayer?
• What factors should drive prioritisation of UK aid and what is required to ensure that assessments of priorities are transparent and subject to scrutiny?
• What mechanisms are required for decisions on aid strategy to be based on meaningful partnership with aid recipient states and meaningful inclusion of marginalised communities?
• Where will decision making lie and how will decision-making be accountable to parliament, the aid sector, the public and communities where aid will be delivered?

3. Addressing Oversight of Conflict in UK Aid

9.                 According to the World Bank, violent conflict has increased after decades of relative decline.[1] Direct deaths in war, numbers of displaced populations, military spending and terrorist incidents have all surged since the beginning of the century.

10.             The current character of warfare is increasingly complex, urbanised, cross-border, linked to the involvement of non-state groups and routine violation of the human rights and international humanitarian law. It is also clear that the decade of cautious distance from conflict that character the decade of irresponsible interventionism of the 2000s has led to protracted conflict and a cycle of ‘endless wars’.

11.             The 43 countries in the world with the highest poverty rates are in countries experiencing fragility and conflict, and/or Sub-Saharan Africa. The Institute of Economics and Peace calculated the economic impact of violence on the global economy in 2019 at $14.5 trillion, equivalent to 10.5% of the world’s economic activity, or $1,895 per person.[2]

12.             The World Bank estimates that by 2030, up to two-thirds of the world’s extreme poor will live in countries characterised by fragility, conflict, and violence. Without intensified action to address conflict and fragility, the 2030 Sustainable Development Agenda’s Goal 1 to ‘End Poverty in all its forms’ will not be met.[3] To respond to the indisputable link between conflict and fragility, the World Bank has taken the right and bold move to update and reform its approach to poverty reduction.

13.             The UK was previously a policy authority in addressing fragility and conflict. It was one of the first to publish policy frameworks for response to building stability overseas and working in fragile and conflict affected states. The 2015 UK aid strategy affirmed this, stating “Global insecurity is rising and the risk of conflict in previously stable parts of the world is increasing.” It included a commitment to spend 50% of then Department for International Development’s aid budget on fragile and conflict affected regions.

14.             The 2015 aid framework was not underpinned by an informed strategy to prevent and respond to contemporary conflict. DFID’s focus on spending in fragile and conflict affected states came at the expense of coherent policy and programming on fragility and conflict. Meanwhile, programming was broadly confined to the Conflict, Stability and Security Fund (CSSF), which received only 4% of all Official Development Assistance in 2019. The government has confirmed that the CSSF will be cut further, by a quarter, in fiscal year 2021/2.

15.             While the inclusion of a section on conflict and instability in the 2021 Integrated Review Outcome is a positive step, the commitment allocate 50% of aid to fragile and conflict affected states is a notable omission. This section of the review also indicates a growing caution around comprehensive engagement with contemporary conflict, especially when it comes to the response, mitigation and recovery from conflict.

16.             The next stage of the inquiry should consider the following issues:

• How much did the UK’s aid strategy deliver on the pledge to spend 50% of aid on conflict and fragility and what lessons can be learned?
• Are planned cuts to UK aid in the Middle East and Afghanistan consistent with the aims, principles and values outlined in the outcome of the Integrated Review?
• How will the new FCDO Conflict Directorate be empowered and enabled to develop a new comprehensive strategy to address conflict?
• How can UK aid support sustainable peace and recovery from conflict, including through the reintegration of former combatants?
• What is the most effective way for the government draw on UK NGO, commercial and policy expertise on conflict to inform the strategy for UK’s response to conflict?
• What lessons can be drawn from the World Bank’s new Fragility, Conflict and Violence strategy?
• What steps are necessary to enable an integrated UK approach to conflict that includes prevention, response, mitigation, recovery and resolution?
• How can the UK’s ODA be used to address conflict beyond the limited confines and resource limitations of the CSSF?

4. Innovative Development Finance and the Private Sector

17.             Innovative finance for development began in the early 2000s. Over the following decade the sector grew in scale at 11% growth, reaching nearly $9bn in 2012. ODA provided through ‘private sector instruments’ (comprising loans, equity investments, mezzanine finance provided to private sector enterprises and guarantees extended to financers who back them), totalled $2.5bn in 2018 global bilateral aid.

18.             Innovative/alternative finance has continued to grow in scale and scope since, identified by the OECD’s Development Assistance Commission as a ‘key policy and practice issue for Official Development Assistance’.[4] The Foreign Secretary included in a letter to the Chair of this Committee in December 2020 the government’s intent to enhance its use of public private partnerships (PPP) and see innovation in bilateral aid.

19.             The HALO trust has been a consistent supporter of alternative finance to complement bilateral assistance, including in the landmine clearance sector. It has advocated the proactive exploration of outcomes finance, PPPs and frontloading models. These modes of finance provide a significant opportunity to complement traditional ODA and bridge gaps created by reductions in annual aid budgets, while linking development aid to equitable and sustainable prosperity agendas within a framework of national development plans and national ownership.

20.             The next stage of the inquiry should consider the following issues:

• How can the UK make use of innovative finance modalities to maximise the effect of UK aid programmes, bilaterally and in coordination with other states?
• Should the UK look at innovative forms of finance to bridge the funding gaps and lessen the impact of current ODA reductions?
• What can the FCDO learn and gain from involving the private sector in programme design and finance?

ENDS

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