Government Report Says Bloated Foreign Aid Industry Ripping off Taxpayer

Unethical behaviour is “absolutely embedded” in the culture of the foreign aid industry, which is overcharging the taxpayer, MPs said Monday night.

Contractors employed by the government to spend the UK’s massive foreign aid budget were behaving “appallingly” the Commons International Development Committee found in a report released Tuesday.

The document demanded ministers take action to stop firms “getting rich” on public money at a time when spending at home is being cut back.

Authors of the report made the unusual move of allowing whistleblowers to give evidence anonymously.

Among other things, the MPs found that the rapid growth in the Department for International Development (Dfid) aid budget meant contracts were so big and lucrative that firms were prepared to act unethically to win them.

Some contractors are charging the department more than twice the going market rate for staffing costs, MPs said, and others were failing to deliver on promises to increase their profit margin.

Explaining why, one contractor giving evidence said “there is little incentive to keep them on and a great deal of incentive to drop them to increase profit margins”.

Another whistleblower, when asked if poor conduct by contractors was common, told the committee:

“It is absolutely embedded in the culture. There is every incentive to win that contract and there is very little punishment for not delivering on the contract. You will say everything you possibly can to win that contract.”

The authors said Dfid must take a “more robust approach” towards regulating private contractors and called on the government to use the opportunity of Brexit to strengthen controls by blacklisting firms that waste money.

According to The Times, British aid contracting industry has more than doubled in value from £540 million in 2012 to £1.34 billion last year.

At the same time, the percentage of funds making it to those in the need has fallen. The proportion of aid money spent on consultants has risen from 12 per cent in 2011 to 22 per cent now.