Carl Mortished: Before we hand out £13billion in aid, what is it for?

It is hard not to feel just a bit sorry for Penny Mordaunt, our new International Development Secretary, who finds herself managing the UK’s £13 billion foreign aid budget just as the charity aid worker sex scandal erupts. Just to recap, Oxfam, one of the charities whose staff are accused of exploiting Haitian sex workers, received £32 million in grants from the Department for International Development.

Mordaunt quickly pulled the plug on Oxfam’s generous stipend but the Development Secretary needs to box clever if her department is to survive the next funding round.

Britain is one of a very few countries to meet the UN’s 0.7% of national income target for aid spending, (the US spends a lot more but it is only 0.17% of GNI.)

All the main political parties kowtow — “it is a good thing” — and even some right-wing Brexiteers reckon aid is good for Britain’s “brand”.

But Oxfam’s pile of ordure begs the question: why do we give away every year the price of 20 new hospitals to uncontrollable contractors in corrupt and chaotic countries? Are we really lifting Africa out of poverty? Or is it a backhander that will deliver great trade deals? or is it just to make us all feel a little bit better about ourselves?

The question — what is aid for? — is moot, not least because the government is quietly changing the agenda. You might think aid is about two things; firstly, rescuing desperate people from disasters: droughts, hurricanes, wars. It is also and, you could argue, more importantly about helping poor countries to get richer and therefore more self-sufficient. The idea is to move away from handouts and encourage entrepreneurship.

DFID is the main investor in the Commonwealth Development Corporation, a sort of government-owned private-equity firm that critics accuse of investing in safe, high-return investments rather than the seed capital projects that help the very poor. Aid agencies and charities are very good at doing the rescue thing but they still fail in the long-term struggle to lift countries out of grinding poverty and thus end the cycle of disaster/aid/dependency.

Evidence of the failure of the charitable principle is all too apparent in the queue of migrants in Libya waiting for a place in a leaky boat to cross the Mediterranean.

We forget that these desperate people are among the more fortunate, those who could amass $1000 or more to make the perilous journey. Many come from Nigeria, a major recipient of UK aid; despite its huge oil wealth, it still fails to deliver even basic needs to its own people.

The biggest recipients of UK aid (Pakistan, Syria, Afghanistan) are among the most chaotic, corrupt and ungoverned societies on earth, places where the opportunity to build sustainable, legitimate economic growth is slim. The government may be leaning towards the view that it cannot deliver prosperity on a plate. DFID simply cannot find enough viable projects in which to invest 0.7% of our national income. Multilateral agencies, such as the UN are uncontrollable, while charities may now be seen as unreliable.