http://www.telegraph.co.uk/news/politics/9547162/Probe-over-millions-spent-on-foreign-aid-consultants.html 
Probe over millions spent on foreign aid consultants
Revelations that hundreds of millions of pounds are being spent in consultancy fees from the foreign aid budget have prompted the launch of an emergency audit.
Dfid is one of only two departments not affected by the Government's austerity drive Photo: PA
Justine Greening, the new International Development Secretary, launched the probe last night after it emerged that nearly £500 million was paid to firms working on Third World programmes.
Some of the companies were rewarding their directors with seven-figure salaries.
Miss Greening, a qualified accountant who was put in charge of the Department for International Development in David Cameron's reshuffle earlier this month, has demanded an urgent explanation.
She was said to be going through the department's spending "line by line" and has ordered a full report to be on her desk by the end of the month.
It follows the revelations yesterday that Britain's swelling overseas budget had created a new group of "poverty barons" paying themselves up to £2 million a year for their work helping the disadvantaged.
William Morrison, the managing director of London-based development consultancy Adam Smith International (ASI), which gets most of its income from DfID, paid himself a salary and dividends totalling almost £1.3 million in 2010.
The company was paid £37 million by the department last year to promote the free market in the Third World – with a total turnover of £53.6 million that year, and profits of £5 million, up 10% on 2010.
Peter Young, a director of ASI and its parent company Amphion, said: "We have got tax revenues in Afghanistan up from next to nothing to £2billion.
"If you want to get a good job done, you have to get people who know what they're doing. Our profit margins are on the low side for consultancies."
Maxwell Stamp, another development consultancy firm, was paid £16.4 million by DfID last year for projects such as community legal services in Bangladesh and opposing child marriage in Ethiopia.
Its highest paid director earned at least £326,000, doubling his salary from the year before.
Foreign organisations that have been paid by the department include Washington-based Search for Common Ground, which took nearly £4 million for providing support to the "electoral cycle" in Sierra Leone.
Meanwhile the Clinton Foundation has been given a slice of a £200 million contract to advise on forestry while consultancies in Uganda and India have also been rewarded with contracts, the Sunday Telegraph revealed.
It comes against the background of David Cameron's controversial pledge to increase the aid budget to 0.7% of national income by 2014, which would see DfID's budget swell from around £8 billion to more than £12 billion.
It is a promise that does not sit well with many on the right wing of the Conservative party amid cuts elsewhere.
Matthew Sinclair, chief executive of the Taxpayers' Alliance, said: "Ministers have insisted that they need more money to help the world's poorest, but taxpayers will be appalled that hundreds of millions of pounds is being channelled to pricey consultancy firms."
A DFID spokesman said: "Taxpayers rightly expect DFID to monitor development and humanitarian programmes.
"That can involve using expert organisations to help ensure delivery and close oversight of the effectiveness of aid projects on the ground, which can often take place in remote or rural areas.
"Those organisations have won contracts to work for DFID through a best value, competitive bid process."
Comments
Post a Comment