Watchdog criticises outcomes of UK aid fund

7 Jun 19

“Fundamental weaknesses” in a £735m UK aid fund to help the poorest countries have left it neglecting its international development goals, a watchdog has claimed.

The Independent Commission for Aid Impact (ICAI) said the Newton Fund’s work has instead mainly been driven by secondary aims of strengthening UK prosperity and global influence.

The “poorly designed” fund’s primary purpose is to assist development in the poorest countries through research and innovation partnerships but “does not ensure its spending is a good use of UK aid”, added the ICAI review, published today.

The report estimated 90% of aid spent through the Newton Fund stayed in the UK with UK institutions - “contrary, at least in spirit, to the UK government’s commitment to untying all UK aid”.

ICAI praised “excellent research” and successes in strengthening ties between researchers and innovators in the UK and middle-income countries. But building ties with countries like China, India, Brazil and South Africa has often governed the fund’s strategy, with some projects appearing “unlikely to contribute to reducing poverty”.

The watchdog accused the Department for Business, Energy and Industrial Strategy (BEIS), which manages the Newton Fund, of providing “little effective oversight or management” of the vehicle and lacking transparency, accountability or a coherent approach in maximising development impact.

Grant awards were based on “sound” criteria but compliance checks “were not adequate in all cases”, it added.

Tina Fahm, the ICAI commissioner who led the review, said: “I have no doubt the Newton Fund could be a potentially effective use of UK development aid. However, urgent improvements need to be made to ensure the fund focuses more on reducing poverty.

“We are particularly concerned about whether or not the Newton Fund honours the spirit of the UK government’s commitment to untie all its aid, and we also have serious queries about the quality of verification that projects meet aid rules.”

A BEIS spokesperson said: “We welcome this report, which recognises Newton Fund’s global reputation for strong research partnerships with developing countries to help tackle challenges they face.

“We will carefully consider the recommendations and respond fully in due course.”

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