Britain refines aid fund for India
The fund was set up last year to reduce poverty and create overseas business opportunities in developing countries. (Reuters)
The UK government has refined the systems behind a new aid fund aimed at reducing poverty and creating overseas business opportunities in middle income countries like to India after it came under some scrutiny for lack of transparency. In a written statement to the House of Commons yesterday, David Gauke – chief secretary to the UK Treasury, said that the government had taken the criticism on board and improved processes for the 1.3-million-pound cross-party Prosperity Fund.
“Year one of the Prosperity Fund was designed as a transition year. The Ministerial Board allocated 55 million pounds of ODA [Official Development Assistance] to projects in a range of ODA eligible countries including China, India, Brazil, Mexico, Colombia, Indonesia, Nigeria and South Africa and in areas such as financial services, infrastructure, business environment, energy, and trade and regulation,” he said.
“The Prosperity Fund has continued to refine its systems and processes throughout the first year in order to ensure that it succeeds. It has acted on positive feedback and helpful advice from the Infrastructure and Projects Authority, the National Audit Office, and, most recently the Independent Commission for Aid Impact (ICAI),” he noted.
The fund was set up last year to reduce poverty and create overseas business opportunities in developing countries. In a review earlier this year, ICAI had called on the UK government to look again at the planned rate of expenditure, including considering extending the 2016-2021 time period over which the 1.3 billion pounds is due to be spent.
It also called on the fund to improve its transparency, saying there was too little public information available about its work. “We welcome this external scrutiny as an opportunity to test the portfolio and management systems with independent experts. As stated in our formal management response to the ICAI review, the Prosperity Fund accepts and is implementing their recommendations, many of which it had already identified through its own internal reviews,” Gauke said.
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The majority of the Prosperity Fund will be allocated to “large, high impact, multi-year” programmes in countries like India.
Already 18 such programmes in the eligible countries have been endorsed by the Ministerial Board in charge of managing the fund and are now being developed by UK government departments, including the Treasury, Department for International Development and Foreign and Commonwealth Office. The first of many programmes is set for launch this year, when more details will be unveiled.
The UK had concluded its conventional aid programme for India at the end of 2015, instead focusing on a project-led approach aimed at strengthening India-UK ties.