Updated: Updated to include response to news about CDC – The Government's Development Finance Institution
CDC – The Government’s Development Finance InstitutionToday (17 February 2017) the Mail has written a story about the potential rise in business rates in the UK, in which the newspaper claims that the development budget has been given to shopping malls and retail chains across the world through CDC.
What is CDC?CDC is the UK’s and world’s oldest Development Finance Institution – making pioneering investments in the poorest and most fragile countries in order to open up the hardest to reach markets and create jobs and opportunities for the world’s poorest people.
Every penny of profit generated by CDC is reinvested – this makes every penny of UK taxpayers’ money go even further.
DFID has radically transformed CDC over the last 5 years to ensure their investments are targeted where they are needed most and have greatest impact for the world’s poorest. CDC uses its expertise to support over 1200 businesses in over 70 developing countries.
How does CDC help reduce poverty?No country can defeat poverty and leave aid dependency behind without sustainable economic growth, jobs, trade and investment and CDC has been a cornerstone of the UK’s efforts to boost economic development and global prosperity for almost 70 years.
CDC delivers significant development impact while at the same time generating a financial return, every penny of which is re-invested. In 2015, the businesses that CDC invested in helped to create over one million new jobs, and over the past three years they have generated over $7 billion worth of local tax revenue, helping support improvements to public services like health and education.
Development investments via CDC complement our other work, and allow us to fight the scourge of poverty on all fronts. And their work is fundamentally about people: improving life prospects by helping individuals find work and earn money so they can feed their families and send their children to school; empowering girls and women to determine their own future; and giving people hope so they don’t feel pressures to migrate or turn to extremism.
The facts behind the article:Today’s Mail article listed a subset of CDC investments completely out of context. It included seven that CDC has now completely or partially exited and 14 that were made more than 5 years ago.
Since 2012 all of CDC’s investments have been focused in developing countries in Africa and Asia - where 80% of the world’s poorest live - and where it can have the greatest impact for the world’s poorest and deliver value for money for UK taxpayers. This includes focusing on sectors with the potential to create the most jobs - such as infrastructure, agribusiness and financial services. This ensures CDC invest responsibly and transparently, create jobs and promote good governance.
Investments in retail and construction actually only represent around 2% of CDC’s portfolio. The retail and construction industry is a sector that creates large numbers of jobs that are typically open to the poorest people in developing countries.
A DFID spokesperson said:We have radically transformed CDC to ensure their investments are targeted where they have greatest impact for the world’s poorest. In the last year alone CDC invested in businesses that have created over one million jobs across the poorest countries in South Asia and Africa.
Every penny of profit generated by CDC is reinvested – this makes every penny of UK taxpayers’ money go even further.
General media queriesEmail mediateam@dfid.gov.uk
Telephone 020 7023 0600
Follow the DFID Media office on Twitter - @DFID_Press
UK Family Planning SummitToday’s (17 February 2017) Guardian features an article about the UK’s intention to host an international summit on family planning this year. Below are more details of the summit and what it will achieve.
Why do we need a summit?Countries will not lift themselves out of poverty until women are able to decide for themselves whether and when they have children, and how many.
Huge progress has already been made, but there are still 225 million women around the world who do not want to get pregnant and are not currently using modern methods of family planning.
Voluntary family planning enables women and girls to complete their education and take up better economic opportunities: it transforms lives, creating more prosperous, stable societies, which is in the UK’s interest.
That is why International Development Secretary Priti Patel is stepping up the UK’s global leadership through an international summit on family planning in London this summer.
What will the summit achieve?Together with the Bill and Melinda Gates Foundation and the United Nations Population Fund (UNFPA), the UK will bring together leading figures, civil society and private sector to secure commitments that increase access to family planning services for women and girls in the world’s poorest countries, fix problems with supply chains and prioritise the needs of women and girls in humanitarian crises.
What has been achieved globally on family planning already?The 2012 London Summit on Family Planning kick-started an international movement (FP2020) to increase investments in voluntary family planning. Since then, the FP2020 movement has driven considerable progress: by 2016, an unprecedented 300 million women in the world’s poorest countries were using voluntary modern contraception.
UK investments alone have resulted in nearly 7 million more women using safe, modern contraception and helped halve the price of a long-acting contraceptive implant, generating over £300 million in savings.
Clear progress has been made, but more needs to be done if we are to reach our global ambition of reaching an additional 120 million women and girls by 2020.
International Development Secretary Priti Patel said:The UK is a global leader on family planning, women’s rights and sexual and reproductive health.
Huge progress has already been made, but as there are still 225 million women around the world who do not want to get pregnant and are not currently using modern methods of family planning, I am pushing hard for more action globally.
That’s why the UK will host a major international summit to secure commitments that increase access to family planning services for women and girls in the world’s poorest countries, fix problems with supply chains and prioritise the needs of women and girls in humanitarian crises.
General media queriesEmail mediateam@dfid.gov.uk
Telephone 020 7023 0600
Follow the DFID Media office on Twitter - @DFID_Press
UKIP report on reducing foreign aid budget once the UK leaves the EUToday’s (16 February 2017) Sun and Express cover a UKIP report which claims the UK’s exit from the EU should lead us to “scrap the foreign aid target” of spending 0.7% of GDP on international development.
In fact as we prepare to leave the EU it is more important than ever that all our resources are used to ensure we remain a power on the world stage. If we reduced our investment in international development we would find it harder to have:
provided 3.3 million Syrian refugees with access to clean water saved thousands of lives by eradicating the Ebola outbreak in Sierra Leone and preventing it spreading to other countries vaccinated over 67 million children to stop them dying of preventable diseases allowed 11.3 million children across the world go to school helped create over one million jobs across 70 developing countries enabled 162 million people to vote in freer, fairer and more democratic electionsWe do not have to choose between supporting economic growth and providing humanitarian aid, the UK is already doing both.
We are securing trade agreements with developing nations, which will not only help end the need for aid in the long run, but also boost the interests of British businesses. At the same time, we are also helping the millions of people unfortunate enough to be afflicted by poverty, disease and conflict.
Tackling the root causes of global problems that affect us here. Take the example of Syria. We know that helping Syrians to stay in their home region means they are not forced to risk their lives by attempting the dangerous crossings into Europe. Or look at what happened with the terrible Ebola epidemic. By fighting the disease at source we were able to stop it spreading to our shores and taking British lives.
DFID responded to UKIP’s report with the following statement:
“The UK aid budget invests in our security and prosperity and is a key part of Global Britain’s international leadership as we leave the EU.
“All DFID programmes and partners are subject to rigorous checks and scrutiny to ensure we reach the world’s poorest and most vulnerable, while also achieving the best value for UK taxpayers.”
General media queriesEmail mediateam@dfid.gov.uk
Telephone 020 7023 0600
Follow the DFID Media office on Twitter - @DFID_Press
International Development Committee investigation into Adam Smith InternationalThis morning’s media (12 February 2017) reported on the International Development Committee’s (IDC) investigation into allegations that Adam Smith International (ASI) falsified submissions about its work to the committee. Following the allegations, the Secretary of State commissioned a fundamental review into supplier practices and wrote to DFID’s suppliers reiterating the standards we expect of them and setting out the new safeguards we have put in place.
The IDC’s inquiry concluded that ASI had ‘acted improperly’ by submitting testimonials about its work from aid beneficiaries without making clear the extent of its involvement in those submissions and without making sure the beneficiaries were aware they were submitting evidence to a parliamentary committee. The IDC found no evidence that DFID commissioned, or was involved in, the preparation of the testimonials ASI submitted to the IDC.
DFID responded to the report as follows:
Like the committee, we are very concerned about the culture and behaviour of Adam Smith International.
DFID has conducted its own forensic investigation into the allegations that ASI falsified submissions to the IDC and made use of improperly obtained DFID documents for commercial gain.
Since these allegations came to light, we have frozen awards of new contracts to ASI and we are taking detailed advice on next steps.
General media queriesEmail mediateam@dfid.gov.uk
Telephone 020 7023 0600
Follow the DFID Media office on Twitter - @DFID_Press
National Audit Office report on DFID’s approach to tackling fraudThis morning’s media (9 February 2017) reported on the National Audit Office’s (NAO) report on DFID’s approach to fraud.
The NAO rightly recognises that DFID has a zero tolerance approach to fraud, and acknowledges the comprehensive and strengthened measures DFID has in place to tackle and eliminate it.
International Development Secretary, Priti Patel, responded to the report as follows:
The UK operates in the most fragile countries because these are the places where the poorest are dying from starvation, drought and disease; these are the places where conflict and economic failure drive mass migration; and these are the countries where it is in the UK’s direct national interest to keep them stable and secure.
In the last 3 years DFID has overhauled its approach to fraud, meaning our robust systems are better at preventing and detecting fraud, and better at getting taxpayers’ money back. We expect all international agencies to have the same zero tolerance approach to fraud that we have if they are to receive taxpayers’ money.
It is time for the global aid community to be honest about the challenges it faces to increase the transparency and accountability of the international aid system.
Facts behind the headlinesYou may have seen the reporting in today’s media (9 February 2017) of the National Audit Office’s report on DFID’s approach to fraud. Some of the headlines were misleading and inaccurate, and we would like to explain the truth behind them.
Britain loses £300m in foreign aid to fraud without noticing: The TimesIt is factually wrong to say that DFID has lost £300 million to fraud. The NAO report itself stated that DFID lost £3.2 million to fraud, not £300 million. We have recovered two thirds of the £3.2 million.
The NAO report found that 0.03% of DFID’s aid spend is identified as fraudulent, which is in line with the level of reported fraud in other international development organisations. The report did not attempt to quantify the level of unreported fraud and so the £300m figure in The Times’ headline is an extrapolation based on fraud in other organisations. The article does not reflect that the NAO recognises that DFID’s counter fraud team has an established process in place for investigating the allegations of fraud that it receives.
As Secretary of State for International Development Priti Patel stated in her response to the NAO report, DFID will not provide funding to any organisations who do not meet the same high standards concerning fraud. The NAO report highlights that DFID requires all of its partners to carry out investigations to the necessary standards when potential fraud is reported, and that DFID’s dedicated Counter Fraud team will also provide support.
Revealed: huge rise in foreign aid fraud but officials still only detect £3.2m of missing funds: The TelegraphThe NAO report recognises that DFID has a zero tolerance approach to fraud, and acknowledges the comprehensive and strengthened measures we have in place to increase the reporting of fraud, tackling and eliminate it. The rise in the number of fraud cases reported is due to DFID’s improved approach to identifying and stamping out the practice.
Number of fraud cases involving Britain’s foreign aid budget quadruples in 5 years since David Cameron set spending target: Daily MailThe Daily Mail article claims that £1.1 billion has been channelled into the 20 most corrupt counties in Transparency International’s Corruption Perception Index. In fact, DFID does not provide any direct funding to the top 20 most corrupt countries.
Giving aid to a country with high levels of corruption is not the same as giving aid to that country’s government. We ensure that our aid goes directly to poor people or to organizations that are working with poor people to reduce poverty.
The UK government is directing more funding to fragile and conflict affected states, including Syria and other countries in the Middle East and North Africa region, to address current crises, the root causes of migration, and the threats posed to the UK by the ongoing conflict, but that does not mean we’re prepared to lose taxpayers’ money to fraud.
Corruption and fraud in developing countries is a major factor perpetuating poverty and conflict. Rather than bypassing the challenge of systemic corruption, DFID is helping reform and address the underlying causes of poor governance in many different countries.
What is DFID doing to protect UK tax payers money against fraud?DFID only works with organisations that have a strong track record of delivering humanitarian aid in difficult and dangerous places. We have rigorous controls to ensure that aid reaches those for whom it is intended and delivers results.
As acknowledged in the NAO report, all of our programmes are designed with a range of safeguards to mitigate the risk of fraud. We use monitoring visits, financial spot checks and forensic and strict independent audits to ensure all funding is used for the purpose it was intended.
DFID’s dedicated specialist Counter Fraud Unit investigates all allegations of fraud and always seeks to recover funds. The whistleblowing hotline and e-mail account – referenced on the DFID website, Development Tracker and in all our partner agreements, allows all allegations of fraud to be reported and investigated.
All DFID staff undertake mandatory training on fraud and on risk and control and we have fraud specialists across our country offices to advise staff and partners.
We work in partnership with a number of UK and international law enforcement agencies, such as the National Crime Agency and the Serious Fraud Office in the UK, and the Office of the Inspector General (OIG) in our multilateral partners to develop and enhance our intelligence information.
General media queriesEmail mediateam@dfid.gov.uk
Telephone 020 7023 0600
Follow the DFID Media office on Twitter - @DFID_Press
The Prosperity FundYou may have read about the Prosperity Fund in this morning’s papers (8 February 2017).
This is a cross-government fund designed to create economic growth in middle-income countries, where more than 60% of the world’s poorest live, so they can stand on their own 2 feet and become our trading partners of the future.
The Prosperity Fund will provide expertise and technical assistance to promote economic reform and remove barriers to trade, tackle corruption, strengthen policy capacity and build strong, effective and accountable institutions.
The Independent Commission for Aid Impact (ICAI) has just published a report on the Prosperity Fund. Here is the government’s response to it.
A UK government spokesman said:
Sustained economic growth is the only long term solution to poverty and the Prosperity Fund supports the vital economic development needed to help middle-income countries – where more than 60% of the world’s poorest live – to stand on their own 2 feet and become our trading partners of the future.
Overseas Development Assistance spend under the Fund is and will continue to be fully consistent with UK law under the International Development Act and OECD DAC criteria.
As ICAI acknowledge the Fund has made significant progress in a short time frame and we are already implementing the vast majority of ICAI’s early recommendations, including on transparency.
Why does the Prosperity Fund focus on countries like India and China? More than 60% of the world’s poor live in middle income countries such as China and India and it is vital that they have access to expertise and private sector investment to help the poorest people lift themselves out of poverty The UK ended its traditional bilateral aid programmes with China (March 2011) and India (Dec 2015). Instead UK relationships now focus on trade and investment, providing expertise to support economic growth and development and working on global issues in a mutually beneficial way India is a critical global economy. Supporting economic development will help global prosperity. This brings direct benefits from greater trade and investment opportunities – including for UK businesses. It is only right that UK companies should contribute to and share in that prosperity How is it being delivered?The Foreign and Commonwealth Office (FCO) embassies and high commissions play a key role identifying opportunities, developing project proposals and overseeing local delivery, working both at country and regional levels. Cross-government teams work with a wide range of UK business and civil society partners to help identify how the Fund can deliver the greatest added value
A cross government Ministerial Board, supported by a cross government Portfolio Board gives strategic direction and manages the overall portfolio. The governance of the Fund will help ensure full coherence with other cross government funds, including the Conflict, Stability and Security Fund (CSSF), Empowerment Fund and International Climate Fund.
Overseas Development Assistance spend under the Fund is and will continue to be fully consistent with UK law under the International Development Act and Organisation for Economic Cooperation and Development (OECD) Development Assistance Committee (DAC).
What is each government department’s role in the programme?The Department for International Development (DFID), Foreign and Commonwealth Office (FCO), HM Treasury (HMT), Department for Business, Energy and Industrial Strategy (BEIS) and Department for International Trade (DIT) are represented on the Portfolio Board and Ministerial Board. Each department can bid into the Fund to deliver programmes.
The Prosperity Fund has been designed through a consultative process which draws in particular on DFID experience and expertise. Many elements of the Fund including the concept note and business case process and multi-year programming are modelled on DFID processes.
The Prosperity Fund Management Office (PFMO) that administers the Fund is staffed from across government.
General media queriesEmail mediateam@dfid.gov.uk
Telephone 020 7023 0600
Follow the DFID Media office on Twitter - @DFID_Press
https://www.gov.uk/government/news/dfid-in-the-news
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