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The scandal of privatised aid

Privatisation of UK AidIf you thought energy privatisation was bad for UK consumers, take a look at Nigeria. The result has been up to 45% higher prices, regular blackouts, workers made redundant and the companies involved being bailed out by the central bank. The process is part of a £100 million project being run by consultants Adam Smith International (ASI). Around half this money was put up by the UK government in the form of “aid”.

A recent report from Global Justice Now, The Privatisation of UK Aid, reveals that in 2014 alone the Department for International Development (DfID) spent £90 million through ASI. This is more than the entire amount spent on human rights and women’s equality organisations, and the latest slice of the £450 million of aid-funded contracts awarded to ASI since 2011. It’s a lucrative business – ASI directors are on six-figure salaries and made £14 million in after-tax profits in 2014.

The government’s aid strategy explicitly aims to “strengthen UK trade and investment opportunities around the world.” This is increasingly at the expense of help reaching those who need it most. “UK aid is being spent on projects to expand the private provision of basic services in poor countries, help governments write more ‘business-friendly’ laws, and support public-private partnerships in infrastructure,” says the report.

Fifteen years after UK aid was formally “untied” from its commercial interests and opened up to bids from developing countries, the wheel has turned full circle. UK companies again are devouring over 90% of DfID contracts, with the result that large amounts of “aid” money go nowhere near developing countries, but straight into the pockets of companies from rich donor countries. Besides ASI, other beneficiaries are Crown Agents, once part of the British Empire’s administrative apparatus, now privatised, PricewaterhouseCoopers and Atos, notorious for having run the government’s punitive disability benefit tests. “Despite the government’s stated commitments to transparency, it is almost impossible to fully ascertain what this money is eventually spent on,” says the report.

As in other areas of government, the close relationship between corporate work and Parliament is much in evidence. Lord Malcolm Bruce, previously the chair of the parliamentary committee that scrutinises aid spending, wrote the foreword to the ASI’s most recent promotional brochure and many of the company’s senior staff have been recruited directly from DfID. One if its non-executive directors is Sir Malcolm Rifkind, who was forced to resign as chair of a senior parliamentary committee last year after undercover reporters taped him appearing to offer favours in return for cash.

ASI is also a leading contractor in the British government’s £10 million Extractive Sector Support Programme aimed supposedly at encouraging foreign investment in Afghanistan, whose untapped mineral wealth is estimated at $1 trillion. But the arrival of mining companies, while highly profitable for some, is fuelling human rights abuses, corruption and attracting armed groups who commit horrific violence against the local population.

Here in the UK, over a third of the public-private partnerships signed by local authorities between 2000 and 2007 have now come back in-house, after they failed to produce the promised efficiencies and savings. So why is DfID now pushing this failed policy at poorer countries?

The Privatisation of UK Aid, by Global Justice Now is available here.



  1. Bazza says:

    Depressing reading as the Vile Tories channel funds to Neo-Liberal Vultures who aim to fundamentally redistribute public wealth internationally to the rich.
    A powerful report which sadly most of the public will know nothing about.
    It is the labour of the working billions that creates the wealth and makes societies work but the surplus labour is legally nicked by the rich and powerful and globally we need to get this back.
    Windfall taxes on big business, close offshore banking, more democratic public ownership where staff elect qualified boards and communities have a say, tax the rich and land, global taxes on TNCs, a substantial EC financial transaction tax, a global living wage, earlier retirement and shorter working weeks to free time poor working humanity.
    And all as a transition then consult working humanity on designing a fairer, greener, non-expoiltative global economic system.
    We beat Neo-Liberalism by left wing, grassroots, bottom up, participatory, democratic socialism and also by having some things for free like public transport and solar panels for the World’s poor to help them whilst addressing climate change.
    And we need left wing democratic socialists in every country to be fighting for the same things at the same time.
    We see from this report that Neo-Liberalism is acting internationally and we need to also.
    Yours in hope and solidarity!

  2. Jim Moores says:

    It is indeed depressing. It is made more so by the fact that we all know it is going on and we are powerless to do anything about it.

    For 30 years the immoral project to take money off the poor and simply move it to the offshore accounts of the very rich has been accelerating.

    The only way to stop this is to get actual governments of the left. Not the centre left, Tory-lite governments that we have had in the UK, USA and across Europe but actual, progressive governments.

    For Cameron to refer, in response to the Queen’s speech, to their “progressive” conservatism is obscene but the Lynton Crosby plan that “if you say it often enough it becomes truth” has worked for them so far. Not least of course in the “the global recession was all Labour’s fault” despite the fact that most western governments are right wing.

  3. Bazza says:

    Jim we are not powerless to do anything about it – by highlighting this and trying to share the information out there we are trying to inform and politicise the working class/working people more.
    “To the oppressed and those who fight on their side” – Paulo Freire.

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