By Kirsty Walker
Last updated at 11:36 AM on 20th October 2011
Pirate: Somalia is the big aid winner
Millions of pounds of taxpayers’ money could be lost to corrupt regimes as a result of the Government’s ballooning aid budget, a hard-hitting report by MPs has warned.
The Public Accounts Committee added that the Department of International Development had a ‘poor understanding’ of the scale and likelihood of aid being lost to fraud.
The MPs said the department was directing increasing amounts of money towards conflict-ridden countries such as Somalia and Pakistan, creating a ‘danger’ that it will be siphoned off by corrupt officials.
The report is yet another damning assessment of DfID, which is enjoying a 34 per cent spending increase in real terms at a time when other Whitehall departments are having their budgets slashed.
Prime Minister David Cameron has pledged that foreign aid will rise from £8.4billion this year to £12.6billion in 2015 – equal to £479 for every household in Britain.
In March, International Development Secretary Andrew Mitchell said the Government will pour billions of pounds of aid money into some of the world’s most corrupt regimes in a bid to tackle poverty.
He insisted that changes had been made to safeguard taxpayers’ money, but the committee warned that ‘operating in high-risk environments means the potential for increased risk of leakage through fraud and corruption’.
The report added: ‘The department intends to focus more on fragile and conflict-affected states which pose higher risks in terms of poor security, delivery capacity, measurement of costs and outcomes, and leakage of funds through fraud and corruption.’
The report came as former prime minister Tony Blair said aid to Africa could be brought to an end within a generation.
Aid beneficiaries include many of the world’s most corrupt countries, raising fears that much of the money may never reach the people it was intended for.
The biggest winner will be the failed African state of Somalia, rated as the most corrupt nation on earth.
Aid to Somalia will rocket by 207 per cent to £250million over the next four years.
Labour MP Margaret Hodge, chairman of the PAC, said: ‘The department is going to be spending more in fragile and conflict-affected countries and the danger to the taxpayer is that there could be an increase in fraud and corruption.
‘However, the department could not even give us information as to the expected levels of fraud and corruption and the action they were taking to mitigate it.
'The department’s ability to make informed spending decisions is undermined by its poor understanding of levels of fraud and corruption.’
Mr Mitchell said the Coalition had transformed DfID’s financial management and took a ‘zero-tolerance’ approach to fraud.
He added: ‘Although accurately reflecting the position under Labour, the report appears to take little account of the huge changes the Coalition has made.’
Read more: http://www.dailymail.co.uk/news/article-2051118/Corrupt-foreign-regimes-plunder-UK-aid-millions-warn-MPs.html#ixzz1bKtZ8sDs
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