We are very fortunate to be joined by Sarah Annable-Gardner. Will you introduce yourself and the work you have been doing?

Thank you for having me. It is a real pleasure to be part of this conversation at such a critical time for international development. My name is Sarah Annable-Gardner and I am the proud founder and chief executive of Action Through Enterprise. We are a small charity working in rural Ghana, which I set up after spending a year as a VSO volunteer there in 2012. We set the charity up because local people had clearly and repeatedly told me what they wanted to do to improve their lives and break the cycle of poverty. We started off by feeding a school, supporting some disabled children and setting up a handful of businesses. It went surprisingly well. I gave up my job as a primary school teacher and now I am really proud to run an ambitious small charity that is growing quickly and supporting tens of thousands of people across upper west Ghana. Just this year we have expanded to the district to the north of where we originally started working in Nandom, which is on the border with Burkina Faso. That has gone extremely well and we are ambitious to grow into the future. At this end of our link I have a wonderful long-term supporter base in our rural community in Wiltshire, which we have engaged with tangible change, proving that it is possible to excite people about international development that is happening a long way away from them.

Sarah, what do you actually do?

That is a really good question. We have a fantastic model—we call it our hub model—which works in ultra-rural communities to support children into education, disabled children to thrive and entrepreneurs to set up businesses. We run these projects together in ultra-rural communities, being managed by a local hub manager from that community. We work through community meetings from the outset, finding out what people need to access education and business, and for inclusion. We have six hubs across Lawra now, impacting 37% of the whole district, which is 50,000 people, so we are impacting 21,000 people now in Lawra, and we plan, by 2028, to be impacting 50,000 people across the upper west. We have been honing this model over the first decade of our work, and we have found that it has a tremendous ripple effect. We originally go for depth, so we impact individuals—children to get to schools, entrepreneurs to run fantastic small businesses and children to be accepted into society—but what we see quickly happens is, although we are going in for individuals, that impact ripples out and impacts whole communities.

That’s wonderful.

Absolutely. We have found that, really, our work is only successful when it is led by people on the ground, which is why we now have nearly 50 staff in upper west Ghana who are doing the work in their local language and in their local communities. We work through community meetings from the onset: we ask people what they need to succeed; we listen to them, which of course is difficult—it can be time consuming—but it is actually free; and, when we hear what they need to succeed, our local leaders there make that happen. We see our communities taking ownership of all the projects that we run, and then making those successful and sustainable in the long term. Where we have made mistakes in the past, in the early years of our development, has been where we have made decisions at this end—decided that we want to trial something actually—and it has not worked, because if local people there are not taking the lead, being accountable to themselves and their community, we have found that things do not work. I just love seeing the people in Lawra standing up, saying what they need and then making it happen for themselves and for future generations.

We have got an amazing impact manager in Lawra. He is a young man of 25, who is outstanding, and he works with all our hub managers and our specific disability workers to work with community members to gather data—quantitative and qualitative—straight from the ground, which he then analyses and reports back to us.

I can only speak from our experience, and, in the rural communities we work in, we see very little activity from big charities because it is isolated. It is far away, and it is not in conflict or famine; it is about chronic, long-term poverty. There are not many other people working there, but what I can say is that our work absolutely is successful. [Interruption.]

Order. Sarah, I am really sorry. This sitting is now suspended. Sitting suspended for Divisions in the House. On resuming— Examination of witness Witness: The Rt Hon. Mr Andrew Mitchell

We will now continue this session of the International Development Committee’s inquiry on value for money. We are very fortunate to have before us the former Deputy Foreign Secretary and a former Secretary of State for International Development, but who has always been a long-term campaigner on ODA and foreign aid—and, indeed, was instrumental in stopping this Committee from being folded at one point. You are always a friend to this Committee, Andrew. You have always been very frank with the Committee as well, so I hope that in opposition you will be able to share some of the experiences that you have had. When we launched this inquiry, we were doing value for money because that is what this Committee does. It very rapidly became the most important topic and hopefully will enable us to shape the Government’s priorities, so it feels very timely to have you in front of us. I will start by asking what your views are on the Government’s recent announcement about spending just 0.3% of GNI on overseas development assistance.

I was horrified. You and I were debating this in the House of Commons not many weeks ago, and I was horrified because it is such an error of judgment. We were all pretty horrified when it was cut from 0.7% to 0.5%, because it seems to be a misunderstanding of the huge national interest benefit of development. We had been through a period, in the Foreign Office, of coming to terms with the cut from 0.7% to 0.5%, and we had found ways of multiplying the money, ways of increasing value for money and so forth. We were just about reaching the point of some success on that, to the point where I was able to say to people that the cut in the money from 0.7% to 0.5% was quite wrong but that we had found ways. It is the abolition of DFID and the structure of doing development that is causing us the most trouble; it is a lack of expertise—the fact that so many people have left. The quality of the former DFID people who are still in the Foreign Office is very high indeed, but nevertheless an awful lot of people have gone. Then we left, having managed to find £1 billion for the Global Fund and $2 billion for the Green Climate Fund. We had pencilled in money, particularly for Gavi and the World Bank—both of absolutely critical importance. Incidentally, the work of Gavi is something that 83% of our constituents applaud. It is one of the areas of development that you do not have to argue so much for; it is actually very popular. Then to see this step being taken, particularly by a Labour Government—I am not a particularly partisan animal, as you know, Chair, particularly on this subject, but I was absolutely horrified. I can barely imagine what former Prime Ministers like Sir Tony Blair and Gordon Brown think, let alone people like David Cameron and Mrs May, who were both also strong champions. We had those four Prime Ministers in a period of time when British development policy led the world. You could say, without people demurring, that Britain was a development superpower—America a military superpower and Britain a development superpower. And we saw during the period from 1990 to 2020 the fastest decline in international poverty in human history. For a Labour Government to turn their back on all that and cut in this way I thought was completely extraordinary.

I should say that you were absolutely fundamental and foundational in stabilising the development—I cannot say “Department”, but the actions that you put in place mean that we do still have those skills. That is the thing that I am most concerned about protecting, because we have some phenomenal experience in the FCDO and I would hate for that to get eroded further.

This inquiry is focused on value for money. How do you think that the UK can ensure that its aid spending continues to offer good value for money in the context of the reduced aid spending that we are now looking at?

The skilled civil servants and diplomats to whom the Chair has referred are charged with doing that, and they will do it, but there are two particular and very important structural ways in which you do it. The first is through ICAI—obviously the Committee is extremely familiar with ICAI, which we set up when we came into government in 2010—because ICAI is the taxpayer’s friend. It is the development watchdog. Because Ministers can sweep inconvenient truths under the carpet, it does not report to Ministers; it reports to you and your Committee. It reports to the legislature, not to the Executive. It is therefore a very important check. ICAI got very strong support while I was at the Foreign Office, but there might be a tendency among Ministers and civil servants to try to emasculate it or erode its power; you would do that by cutting its budget. I urge this Committee to make sure that ICAI is a serious, strong piece on the board, because it is all about value for money. The other is an innovation that we brought in two years ago, which is the ODA Board, which was co-chaired by the Development Minister and by the Chief Secretary to the Treasury. That was done quite deliberately to drive up the standard of spending by other Departments, as well as our own, and in particular to bear down on the cost of hotel accommodation for first-year asylum seekers, where the budget was the budget of last resort, so the Home Office could just send around the bill and it had to come out of the development budget. I hope that the Government are going to do something about that now and stop the emasculated development budget being the budget of last resort for that, and make the Home Office carry that particular load. Those are two ways.

How would you address that? Would you look at some form of cap, or do you think it needs to be removed entirely from ODA?

It will be a matter for the Treasury, although I hope that that board, which other Ministers attend—the deal is that it is chaired one time by the Chief Secretary, then by the Development Minister—will come up with its own ideas. One of the things that everyone on this Committee knows but is not well understood outside is that the Foreign Office never went along with this proposal. The Foreign Office knows exactly what the impact of this cut will be. This is the Treasury and Downing Street. These proposals are not—the idea is, how does the Foreign Office mitigate this or stop it? The Foreign Office will have opposed these dreadful cuts; they will have been imposed by the Treasury and by No. 10. On getting that better value for money, the Treasury will have ideas on value for money, which should be heard loud and clear. In fact, it was the Treasury who always used to say that DFID did money and the Foreign Office did prose. There is some truth in that, but the skills of making sure that the money is well spent are very strongly DFID skills, and there are people inside the Foreign Office with that DFID background who are very good indeed at doing that.

We have talked about value for money, obviously, and we have heard from people who have worked at DFID but then at FCDO after the merger, and, as you say, I think there is a general acceptance that DFID were very good at this, but the FCDO is less so. Do you think that, in that merger, the arguments become weaker, and that that might be one of the reasons why we have seen the slow erosion of appetite to continue to invest in international development?

Well, if you have a Labour Prime Minister who is cutting development—in this, we all know that the Labour party was the backstop, in a way. We had to fight pretty hard. But the critical thing is where the Prime Minister stands. Why was it that support for international development went up in the years of so-called Tory austerity, between 2010 and 2012? Why did the number of people supporting development go up? It was because we had a very passionate Prime Minister making the case—frequently—and quite a passionate International Development Secretary making the case. You can do that, but it is very difficult to do if you do not have a Prime Minister championing it. One of the worst moments in my political career was listening to Boris Johnson announce from the Dispatch Box in the House of Commons that DFID was like an ATM in the sky, spewing out taxpayers’ money. If you have a Prime Minister who does not back it, or a Prime Minister saying something like that, it is very difficult to combat the headwinds against development. We live in a country where about half the population think that development matters in one form or another, and the other half of the population believes that the money would be better spent on schools and hospitals in Britain, rather than, as people say, “sending the money overseas”. Of course, that is not what development is, but that argument characterises what people think here. You have to have, at the top, the strongest possible leadership explaining why international development is in our national interest. I would argue that every penny of the international development budget should be spent in Britain’s national interests. If people think it is not being spent in that way, we should have a good look at it, or refer it to the independent commission, but every single penny should be spent in the national interest.

On that point, I have loads of hands. During your tenure, do you believe it was spent in the British interests, from the bit that you had control of?

Over the past 14 years, my various interventions over that period of time?

All right, do both.

We always used to say—much to the irritation of my friend and colleague Douglas Alexander, when he was Development Secretary before 2010—that this was not a Labour or Tory policy, it was a British policy, and one that Britain could be very proud of. The way I would characterise it is that we tried to build on the foundations so ably set up by Tony Blair and Gordon Brown. Under David Cameron and Mrs May, I think we did that. I would argue that the contribution that the Tories made was to get the focus very strongly on tackling conflict—stopping it starting, where it had started, stopping it, and where it was over, reconciling people. That is absolutely in our national interest. Look, for example, at what we did in Somalia, where it was very difficult. It made life more bearable, particularly for women in Somalia, but it also made us safer on the streets of London and Birmingham, too. The second thing was building prosperity. We tried to show the sector, which sometimes regarded the private sector as the enemy of development, that the private sector was the engine of development. I would argue that we did ensure that every penny was spent in the national interest. I was a bit surprised when I got back into Government to discover we were still spending money in China, something which the incoming Cameron Government agreed would stop on day one.

Staying in a hotel for more than a couple of weeks drives anyone mad. For these unfortunate asylum seekers who have come to our shores, being in that situation must be a living hell for many of them. It has been suggested that those people be allowed to work and be monitored, so that they do not disappear into the criminal economy. What are your thoughts on that? Do you think that might work?

On the specific point about working, I was one of those in favour of allowing people to work after six months and not a year. The Home Office argued that, if you lower it from a year to six months, you increase the pull factor, which is why they were very much against. Those of us who believed that it would cut the cost if they could work after six months—some of those people are talented and could make that contribution—and it would be a good thing lost that argument.

Following on from that, you managed to convince the then Chancellor, Jeremy Hunt, to get round some of the issues around refugee spending with that additional money. I appreciate you were not a Home Office or Treasury Minister, but do you have views on some of those contracts? We feel there is a lot of waste in the contracts that were handed out to those big hotel companies. What is your view of that, having been on the inside? Do you think there is work the Home Office can do to get a grip on those contracts and reduce the amount of money that is going on refugee costs? Or did you arrive at the uplift that you had with the then Chancellor because there was no way around the amount of money that was being spent on refugees at that point?

The big question was: did I try to argue that none of the money should come out of the budget? It is spent in the UK, and I could have argued, “You are spending more money from the development budget in UK postal districts than you are in Africa.” I decided that, if I tried to mount that argument, bearing in mind my comments that it is the Treasury that makes these decisions, I would be flattened in the rush. I thought it was better to do a deal with the Chancellor and say, “This money on first-year asylum seekers is eligible under the OECD DAC rules for spending development money, so I will defend it.” Indeed, I think I defended it in front of Treasury Ministers here. I said, “I will not ask for any change; I will accept that—but can I have some money?” We got £2.5 billion. I hope you won’t mind me saying that I am astonished and amazed that a Labour Chancellor will not at least do what a Tory Chancellor did to soften the blow of all that spending. That is the first point. The second point is that the ODA board I described was set up specifically because we were so worried about the fact that the money was not being well spent by other Departments—in particular, the Home Office but also the Local Government Department, although Michael Gove did a very good job of pressing down on those costs. We were certainly making progress, but we did feel that if the bill was sent around and we had to settle it, more work should be done to try to constrain that spending and get better value for money. I think we made a bit of progress on that, but the ODA board was absolutely pivotal in driving that forward.

Did you ever do an assessment of the impact of the money that was going to support refugees in the UK, rather than supporting them to be safe in their own homes?

A proper money-orientated assessment? No, but we certainly made the argument that if you want to deal with migration—this is one of the key arguments that you should make now—you need the development budget, because you have to do it upstream. By the time people get to the Mediterranean or the channel, it is too late. You have got to change the circumstances in the countries from which those people are coming. That is why I have said in the past that what we really need is a Marshall plan for north Africa. There are people there who will have skills that they can export and that we and other countries in Europe want, but equally, there is a tremendous need for training. If you look at the figures for the next few years, the population of Africa is going to rise by something like 650 million. Economists estimate that at best, we may get 150 million jobs, so that leaves 500 million. That is an awful lot of feet walking north and looking for work.

I met the president of the World Bank a couple of weeks ago and he made exactly that point—that illegal migration is going to be the biggest issue globally, unless we do something to keep people safe and prosperous in their own homes.

To follow up on that, I think that tackling downstream migration is something of a collective action problem in the same way as climate change is. Given that, as you rightly said, it is in the UK’s national interest to get a handle on it and tackle it upstream, or perhaps through a Marshall plan sort of idea, how do you actually do that in a way that it is not all borne on the shoulders of just one country—Britain? Did you take steps towards having a more international co-operation discussion about that?

You will understand that it is a pretty bleak time for the international system at the moment. Above all, it is being smashed to smithereens by President Putin, who, as one of the permanent five on the UN Security Council, has invaded his neighbour, destroyed his infrastructure and butchered his citizens. It also must be said that President Trump is not, I think, an unalloyed supporter of the international system. However, if you go back to 2010, when Britain was leading on international development, we had brilliant people such as Suma Chakrabarti, Minouche Shafik and Mark Lowcock—people throughout the international system who might do a bit of time in DFID and then would go back into the international system. You had real coherence, and people used to come to London. We set up the multilateral aid review, and we had people from Germany, France, Canada, America and Australia coming to London to ask how you make the international system work better to deliver common objectives. A lot of that has gone, and it makes life much more difficult. However, you are entirely right. The idea that Prime Minister Meloni would spend $50 million on trying to do something about people coming across the Med into Lampedusa and into Rome is for the birds. You need a massive amount of investment into north Africa so that people don’t feel that they need to emigrate. As an international system, we could do that if we had the will, but the international system is moving in a much more fragmentary way, and narrow nationalism is rampant. To deal with things such as migration, disease and climate change, you need to have an international system in which we all work together. That argument is not being won internationally at the moment.

Briefly, is that not our rallying cry and one that perhaps appeals to some of the people who are losing trust in the idea that there is an international system?

In The House magazine published today I have tried to make the point that if you are worried about migration, or pandemics, or conflict, international development is how we tackle it. If you accept that those are things which borders do not often affect, you need international development. There are lots of other reasons as well but that seems to me to be an argument which ought to resonate a lot at the moment.

On the point you made earlier about borders and the migration risk coming up from Africa, and in the context of our value for money inquiry, how would you articulate that message into the Treasury right now? There is a short-term cost pressure, which is where the economy is, and the aspiration to put more money into aid to deal with this potential future issue. How would you be articulating the value for money were you still the Minister responsible?

The first thing I would say is that chopping and changing figures, as we saw in 2020 when the first lot of cuts came in, is very bad value for taxpayers. Why? Because you do not stop and start programmes: if you break them off, you lose a lot of the benefit of the initial investment; then you restart it and you have to go out again. It is bad value for money. Development is, essentially, long term. I think that is a point the Treasury understands very well. It is worth remembering too that the Foreign Office deals with many more short-term problems. A lot of what these brilliant British diplomats do is fighting fires, dealing with issues as they come up. It is a cultural difference. They are sides of the same coin—defence, development and diplomacy all contribute to our national security. The answer to your question is that stopping and starting development spend is very bad value for taxpayers’ money and we should avoid it all costs. I do not know what the Committee thinks, but I think there would be value in persuading the Treasury that rather than dropping from 0.5% to 0.3% from 2027—it is not immediate, which is a plus—they should drop to 0.4% and then to 0.3%. If they insist on this barbaric and ridiculous policy, they should do it in steps. That will help mitigate the bad value for money for taxpayers which will result from that cliff edge from 0.5% to 0.3%.

We are pressing for clarity on exactly that point.

The Prime Minister has said he is going to go line by line through the budget. We know that 0.3% is actually 0.14%, assuming no change in in-country asylum spend. Which FDCO programmes do you think should be protected against future cuts within that 0.14%?

First of all, it is a very good thing that the Prime Minister wants to go through line by line. We should all do that. We should all accept that waste and corruption are the cancers of development spending. Our constituents quite rightly go mad at both, so have a very good look. He has also said he will try to protect the expenditure in Sudan. I saw the senior figures from MSF last week, and what is happening in Darfur is so awful it is beyond description. Britain holds the pen at the UN on Sudan. The Prime Minister is right to say that we should continue to focus very heavily on Sudan. It has been pushed aside by what is happening in Ukraine and in the middle east but it really matters that we do not neglect it any more than we have already. I therefore welcome his decision. However, as you said, the money is finite. We have stabilised the bilateral spend, doubling it this year. That will double the spend for bilateral programmes across Africa and that money will be very well spent. However, if you cut back to this extent I fear that the bilateral programmes will lose out in the end. That is because people will seek to protect the World Bank, Gavi, the Global Fund and the Green Climate Fund, which I mentioned at the beginning, as we know that those are very effective ways of spending British taxpayers’ money and getting real results. When faced with the dilemma you expressed, I very much fear that it is the bilateral programmes above all that will suffer.

To throw that back to you, the institutions and funds that you named give very good value for money, so if you are having to make those tough financial decisions, are they the ones we should be prioritising?

I agree that they give good value for money, but that will be part of the pull away from the bilateral programmes to the multilateral programmes, which, as you rightly say, do give very good value for money.

That is what our inquiry is on, so should we just be looking at value for money, or at what bilaterals can give us that the big multilaterals cannot?

I will tell you exactly what happens. If Britain withdraws these bilateral programmes, and America too, there will be a number of effects, but here are two of them. First, there will be an impact on HIV/AIDS in the Horn of Africa, where America saved millions of lives through PEPFAR. That pull back by USAID will have a very serious effect on disease prevention and HIV/AIDS in the Horn of Africa. Secondly, there will be a political effect. If we vacate the territory, who do you think will come in? It will be the Chinese and the Russians, and it will be the terrorists. There is a belt of misery across north Africa, stretching from the terrible things that have been happening in northern Nigeria, through the Central African Republic, Mali and right the way across until you come to Somalia and even Yemen, outside of Africa. In that belt of misery, where there are four or five different terrorist movements in operation, they will say, “The rich west has deserted you.” This whole thing will be a rich recruiting vein for terrorism. If you are a woman living in Mali or any of these other countries, you see the state not as your friend, as we tend to here, but as hostile, because the state is not a provider of housing, education or prenatal and perinatal healthcare—these basic things that we take for granted. The state is often corrupt police officers and so forth who are taking from them. I launched a £37 million—quite small—fund to tackle exactly that in the Sahel just over a year ago; I launched it in Niger just before the coup, alas. The aim of that fund was to bring in other countries who shared our analysis. That way, we could help these countries to understand that that is the way you serve your citizens, and then build that up. If you cut the bilateral programmes, you will, for the reasons you correctly articulated, open the space to people who are not friends of Britain and those who wish us ill.

They are easily tracked, but they were much worse, because there was an immediate cliff edge. People who were letting contracts to achieve outputs that you and I would agree are very important were unable to do so. That is where I referred to the waste of taxpayers’ money. The loss of expertise was also quite marked, because of the destruction of DFID. When I went back into Government in 2022 and saw some of these very distinguished figures from the DFID era in the Foreign Office—people who had had real influence and authority internationally—it was a bit like meeting people after a nuclear explosion. It was not just the money; it was the loss of expertise, which meant that you did not achieve those outputs you described. After 2010, we said that if you are going to go to 0.7%, you have to be able to persuade people that for every hard-earned pound that comes off their taxes, they are getting 100p of delivery—output—on the ground. That is absolutely vital. In answer to your question, my point is that this was not just about the diminution of the money. The effectiveness—the outputs—did not go down from 0.7% to 0.5%. Development is long term, but because of the abruptness, contracts had to be torn up. The officials in the Foreign Office who administered these contracts had to go to long-serving contacts of Britain in countries, and say, “I’m terribly sorry, but we’re tearing this up.” That is a terrible thing to ask officials to do, and I think many of them suffered significantly from having to enact that terrible policy, with the terrible mistake that was made at the time.

If I can try to be as positive as possible, the lesson that you do not do it immediately—because these cuts are coming in 2027—is one piece of good learning, because it means they will not have to tear up this year’s plans, and hopefully not next year’s plans either. It will mean some stability and mean that the money that is being spent will be well spent, so that is a good lesson learned. However, you cannot get away from it, Mr Reed. The lesson above all is that development is long term, and you need stability. These sorts of chops and changes are anathema to successful development—the successful outputs to which you referred—and they therefore help to undermine the support for development, for that reason, among our constituents.

Thank you so much for your time today. Moving on to frozen and dormant assets, how do you think the funds in dormant bank accounts and frozen assets could be used to support development objectives?

On frozen bank accounts and so on, I do not really know the answer, but my impression is that we are not talking about huge sums of money. On frozen assets, the Treasury is right that you have to make sure you do not undermine the international rule of law by cutting corners on frozen assets—in particular, frozen Russian assets—and thereby undermine a collective good. Equally, we should be doing everything we can to use these frozen assets to help Ukraine particularly, but also to help with development spend. However, you have to do it in a legal way. The lawyers’ insistence on going through the hoops that you go through is very frustrating, but it is absolutely essential, otherwise you will get overturned in the courts. When I went into the Foreign Office, I had huge frustration about how long it was all taking, but I learned from officials that if you try to short-cut, it can all blow up in your face. The other point is that for the significant use of frozen assets, in the way that the EU is talking about, you need international consensus. The problem is that they have been advancing, and we have been close to them on this, at the pace of the slowest ship in the convoy. Of the three options they had, they went for the slowest—the least impactful—one. However, it is an example of where you do need to do things collectively and have an agreement that the frozen assets can be unfrozen and used in a way that we all agree is correct, but also that you do not undermine the rule of law and property rights in doing that.

Can you think of any other countries that do that well and make the best use of any frozen assets to help deliver development?

The Americans always seem to be doing it quite well. I cannot really give you a proper answer to that, but I am sure that if you were to talk to Brussels, they would have quite a lot of information on that.

Do you think the FCDO should be advocating for a greater use of those types of funds?

Well, it is. The legal department and the officials in the Foreign Office work tirelessly on sanctioning and on what you can do with frozen assets. These officials are very good, and they work tirelessly on it. My learning from my time there was that it can be very frustrating, but there are no short cuts.

You have alluded to this, but would that apply specifically to Chelsea Football Club?

Chelsea Football Club is enormously frustrating. That stems from the fact that when the different interests were tied together to set it all up, they were exceedingly bureaucratic, and it has been extremely difficult to get all the parties in the same place. Also, there is a nervousness about what would happen, because the final say rests with Abramovich. I have asked some questions about this in the House and I hope that we are doing everything we can to get that money moving, because it is effectively the second biggest charity in Britain; only the Wellcome Foundation is bigger. It is an enormous amount of money. Every week, the interest racked up is an astonishing sum, and every single sinew should be bent to get that money out of the door for the purposes for which the licence is intended.

We had a meeting with officials about this issue and they are, based on what they told us, straining every sinew.

Has there been any progress, though?

I do not know, because I do not know where it was at when you were last there, so I cannot tell you what the progress was, but they did seem on it, and I am sure they will have heard your words on it today.

Turning to other sources—perhaps philanthropy, or investment—which alternative sources in your mind can be the most effective in replacing some of the efforts that will be lost through traditional ODA?

One of the things we did was to find multipliers for money, which the Committee will understand includes doing some co-financing. For example, if we and the UAE or we and the Saudis agree together to pursue a target of tackling starvation in Somalia, or whatever, and we each put in $25 million, then we get two for one for our taxpayers’ money by the fact that we have negotiated and agreed that co-financing arrangement. There is quite a lot of that sort of thing that we should do. Secondly, we have managed to use guarantees—I mean, billions of pounds of guarantees—to support lending. For example, the African Development Bank has had guarantees from Britain. Everyone is very happy about making these guarantees, which means they can significantly augment—by more than the face value of the guarantees—the development work that they are doing. I think that is very important. There is also the use of insurance. The insurance pools are now paying out in the Caribbean and indeed in east Africa. This is insurance against weather conditions and so forth. Obviously, you cannot do it on a one-country basis, for reasons the Committee will understand, but you can do it on a wider basis than that. Money is flowing. At the heart of this is thinking, above all, about ways of multiplying the funds. Of course, philanthropy has a part to play. When the original cuts were made by Prime Minister Johnson, philanthropists, particularly the Gates Foundation and the Children’s Investment Fund Foundation or CIFF, deliberately put in money to help to stop what would have been the abrupt end of a programme that was dealing with children and with disease. I thought they did a wonderful thing doing that. There are plenty of things that philanthropists can do, and they are also at the forefront of innovation, which is very important. They come up with ideas that Governments can then use and follow. But above all, the answer to your question is this. The White Paper that we published just over a year ago was effectively an all-party White Paper. It was blessed by the Labour party and it included a lot of important measures that I hope will still be driven forward. The most important of those measures was this: how do you use statist money? That is money from development finance institutions such as British International Investment, the World Bank and the multilateral banks. How do you use statist money to de-risk or help to align the billions—indeed, trillions—of dollars of pension fund money and private sector money that could be released by using the statist money in that way? I used to refer to it in the Foreign Office as the holy grail, because that is the way you deliver on the brilliant clarion call from Mia Mottley, the Prime Minister of Barbados, to turn billions into trillions for investment in climate change and so forth. In the end, it is through that use of statist money to drive up the amount of money that the private sector, which is where the real money is, will invest that you augment our effectiveness and get the results. BII, which we substantially reformed in 2010, 2011, is now without question the outstanding development finance institution in the world. It is brilliantly successful at investing because it invests pioneer money, which goes to places where the private sector is too timid to go to, but also patient finance, which does not require a full commercial return—it is required to make 2%, but I think it has made quite a lot more than that in recent years. Investing that type of money has a really big impact on poverty in the poorest parts of the world. In the White Paper to which I referred, there is a commitment to increase the amount of money being invested in the poorest places from 37% to 50%. The impact of that is, when I last looked, the creation of something like 1 million jobs in the poorest parts of the world—that is food on 1 million tables, potentially. These investments also pay billions of dollars in tax, in addition to the tax on the incomes of people who work within these investments. That is how states start to build up the capacity to provide services like education and healthcare. Not all of that money will be spent well, but it is really important in driving up effective results.

Can I pull you back to philanthropy and multipliers. Our inquiry has had evidence from the Elanor Crook Foundation, which was quite surprised that the current Government were not leaning more into the offer of philanthropy that a number of organisations have made. We have also had evidence from the APPG for aid match, on how it has not really been used as much as it could have been in recent years. Could you give your thoughts on those two specifics, and on why we seem to be stepping away from what seems to be quite obvious value for money?

First of all, on aid match, I completely agree. In fact, we invented it when we came into Government in 2010. The reason why aid match is so brilliant is because it is an augmenter, as you said—it is a multiplier. Basically, at its best, it is an offer to taxpayers of two for one, or BOGOF: buy one, get one free. Aid match should be supported, and it has done some brilliant stuff. If the Committee concludes that more should be done on aid match, I hope that it is roundly supported. On your other point, when we did the nutrition summit, also in November 2023, the philanthropists came in and underwrote the cost of the summit—Gates and CIFF. The Eleanor Crook Foundation, which does food above all else, was very involved as well. It is not just about their money but their inventiveness—Eleanor Crook has done a lot on that. These people are amazing in what they do. Look at what Sir Chris Hohn has done at CIFF and the causes he has supported—I think he is Britain’s highest paying taxpayer. But look at the work that the foundation that he set up has been able to do to help to tackle poverty and drive-up basic standards of life for people who live in the most terrible conditions, and you see the enormous value that philanthropists provide.

What do you think the hesitancy is, then?

You are mixing oil and water—you are mixing two different types—and you have to be very careful that you get it right, otherwise both parties are offended. It can be difficult. Given the position that we are now in, heading down towards 0.3%, the importance of doing that is all the clearer.

I have a few more questions about the fungibility of these different sources. In your mind, where is it that development finance can step in to fill the void left by ODA, and where can it not do so?

There are some people who say that Governments should not be involved in this and that it should be down to charities and philanthropic organisations. What that misses is the national interest point we were talking about earlier. There are some things only Governments can do. Philanthropists cannot really operate in the councils of the United Nations; it is Governments who need to make these decisions. Governments needs to pull other Governments together and other sources of taxpayer money. There is a difference. The thing to do is to try to get the best out of both sides of that equation without choking on the pith.

On this point about national interest, how does that sit against what a lot of people are calling for, which is a localisation agenda or a partnership approach? That has been increasingly prized in the sector.

My answer is this. If you look at the White Paper, we are absolutely clear about the critical importance of localisation, and the reason why localisation is absolutely in our national interest is that if you do not have two partners who are agreeing on the best way to achieve the results, which Mr Reed referred to, then it does not work. We saw that. That used to happen before. We saw that countries would fill in the right forms. They knew what they had to say to get the money, but they would not necessarily use the money in the way that was expected, and they never got the results. Localisation is about both parties agreeing on a common objective and then delivering in order to get the results that we and they want to see.

The briefest of questions from David.

Liam Byrne, among others, thinks that we should try to match what Spain is doing on special drawing rights—I think they could get another £4 billion on the table. What do you think, and why do you think the Treasury has been so resistant to doing it in the past?

When looking at this, you have to put a cold towel round your head. It is extremely complicated, but Britain is not in the same place as the European Union, particularly because of contingent liability requirements. Jeremy Hunt was very interested and very supportive in principle. He and I spent a lot of time on this, and in the end we concluded that we could not do it. But of course, he did use the SDRs in the traditional way. From memory, I think something like £6 billion went into IMF funds, which were bent on trying to reduce poverty, so we have used them well, but in the particular way to which I think you are referring, I fear that the Treasury rules, and the Bank of England rules as well, mean that we are not going to make rapid progress on that.

On that point, as ever, you have been incredibly helpful to this Committee. We deeply, deeply appreciate your contributions in here, out there and on the international stage. Thank you so much for your time today. We appreciate it.