Montserrat aid programmes ‘not value for money’, says watchdog

15 Jul 13

The Department for International Development’s programme to support capital projects in the Caribbean island of Montserrat is performing poorly against measures of value for money and requires significant improvement, the Independent Commission for Aid Impact has found

By Richard Johnstone | 16 July 2013

The aid watchdog’s examination of the schemes, which include the development of a £8.8bn airport and purchase of a power station for the British overseas territory, concluded the department lacked an understanding of what was affordable.

DIFD has supported six projects on the island, totalling £34.1m, but they have been given an ‘amber-red’ rating by the ICAI, which warns that they do not represent best value. Also among the initiatives is a development to improve water supplies, and to upgrade local roads. A geothermal energy scheme, worth £8.6m, has also been supported.

The island has been receiving direct British taxpayer support since a number of eruptions from the Soufrière Hills volcano in 1995 devastated its infrastructure and forced nearly two-thirds of Montserrat’s population to flee. The eruptions caused the island’s capital Plymouth to be abandoned.

Since the eruptions the island has been unable to return to self-sufficiency, and DFID’s programmes have helped establish lives away from the volcano, the ICAI stated.

However, although the aid had a ‘positive impact’, the watchdog criticised the department’s lack of ‘a firm view’ on the reasonable needs of residents, and when the island could return to self-sufficiency. The programme should have a better understanding of what is affordable to UK and Montserrat taxpayers, and how to move towards self-sufficiency both ‘strategically and affordably over the long term’.

ICAI chief commissioner Graham Ward said: ‘Although we saw evidence of good and necessary assistance to fund basic investment on Montserrat, we found that DFID needs to support the government of Montserrat to develop a longer-term plan for the island to move towards economic, financially justifiable self-sufficiency.’

Responding to the report, a spokesman for the department said the watchdog recognised ‘that DFID has worked successfully with the government of Montserrat to move the island to a more stable footing following devastating natural disasters in the 1980s and 1990s’.

He added: ‘The report also finds that DFID’s programmes have made a positive impact on Montserrat’s recovery and helped avert a complete evacuation of the island, while ensuring value for UK taxpayers’ money.

‘We will continue to meet our legal obligations to Montserrat including pressing the government to accept a long-term plan for the island to become as financially self-sufficient as possible.’

Also today, the ICAI has published a review of DFID’s health programmes in Burma. These have been given a ‘green’ rating, meaning they perform well against both measures for effectiveness and value for money.

Burma, also known as Myanmar, is a fragile state and one of the poorest countries in Asia. The UK is the largest international donor to Burma, and DFID has designed and delivered ‘an appropriate health aid programme’, focusing on healthcare for people living in the Irrawaddy Delta region of the county, which was hit by a cyclone in 2008.

The report highlighted that the recent lifting of sanctions against the country, following political reforms, presented DFID with a ‘significant opportunity’ to have an even greater role in improving health.