Millions of pounds 'wasted' in ring-fenced aid budget

MILLIONS OF pounds are being spent on overseas aid projects which are failing to achieve their objectives, Whitehall's own figures suggest. A study carried out by the Department for International Development (DFID) found that a quarter of its projects do not "achieve" or even "largely achieve" their aims - even by the assessment of staff involved in the schemes.

The result will put further pressure on ministers to find savings from the ministry, which is one of two in Whitehall to have its budget "ring fenced" - protected from cuts of up to 40 per cent.

At present £7.6 billion goes to fund the DFID every year.

Aid spending is to increase to meet the United Nations target of 0.7 per cent of national output by 2013.

Julian Harris, of the International Policy Network, a think tank that scrutinises aid, said: "It is extremely irresponsible to increase the aid budget while at least a quarter of projects are failing. Bad aid isn't just wasteful, it can actually harm development." Last year, the department spent £463million on projects of the kind looked at by the study. The department has also admitted inaccuracies in many of the self-assessments of its initiatives, suggesting that the true proportion of failing projects could be higher than a quarter.

Although the DFID compiles an evaluation report on every project, these are not published. Among the failed schemes, details of which have been disclosed in other government documents, were:

Fraud in the Kenyan education sector, which saw money meant for text books and improved classrooms stolen by people who organised workshops that never happened.

• The DFID has spent £55million on the programme since 2005.
• An audit in Malawi found 700 "ghost teachers" that the DFID helped to fund.

In addition to such failing projects, there has been criticism of some DFID projects, which went according to plan but which critics claim were not worthwhile. These include:

• £1.49million spent since 2006 on a wind turbine scheme on Pitcairn, an island in the Pacific Ocean, which has a population of about 50 and where a diesel generator has provided electricity.
• £138,820 to prepare for the eradication of mice and an invasive plant on Gough Island in the South Atlantic, where the only inhabitants are workers at a weather station.
• £190,991 on "strengthening the voices of older people" in Ukraine. The project aimed to help the elderly to better understand their rights.

Douglas Carswell, the Tory MP, who has raised questions about the DFID spending in the Commons, called for greater scrutiny of projects. He also demanded an end to the system of "budget support", in which money is given but not linked to specific projects.

Mr Carswell said: "I am in favour of foreign aid. But I am in favour of the foreign aid that helps the people who need it, rather than the quangocrats who are supposed to be delivering it, or the fraudsters that can siphon it off.

"We need to make a number of changes and the first is to stop budget support. A lot of our aid goes in budget support, so it is not project specific, so we are pouring money into the coffers of regimes that are not known for good governance."

Andrew Mitchell, the International Development Secretary, promised a review of the DFID's spending. He said at least £100million in "low priority projects" would be dropped.

He said: "We are conducting a full review of all British aid and introducing an aid transparency guarantee, with details of all spending published on the web.

"The privilege of a ringfenced budget demands more not less scrutiny so that we can look the hard-pressed taxpayer in the eye, so that we can reassure them they are getting 100p of value for every pound spent on development."

The Sunday Telegraph has previously disclosed how the DFID spent almost £50 million in five years on projects in Britain, much of it to raise awareness of climate change and poverty.