The Great Aid Robbery...

Andrew Gilligan had a fine piece in the DT about the foreign aid racket (and we now reveal that both Haymakers are Development Consultants).

 

He reveals that last year, DfID paid almost £500 million to ‘consultants, many of whom get 7-figure incomes, putting them in the same bracket as bankers without the risk. Worse, much of this money went to foreign firms.

 

The boss of one firm got £1.3 million. Another went home with £2.1 million. Salaries over £250,000 are commonplace.

 

An outrageous aspect is that these ‘consultants’ don’t actually do any work. They sit in offices waiting for the invitation to tender. They then write a Technical Proposal and a Financial Proposal. If they get the contract, they then employ a freelance consultant to do the work in Nigeria or India or wherever.

 

So do the guys in the field share in this largesse?

 

Nope!

 

They get a daily fee of around £400 (about the same as the hourly fee of your lawyer). They might also get a daily subsistence allowance that will just about pay for a middling hotel and meals. If the job is in a pleasant place, such as Cape Town or Jamaica the boss will make ‘liaison’ visits which will involve a lot of lunches and dinners with Government.

 

I once had one whose name was Tull. We called him ‘Gull’ – flies over, squawks, sh..ts on you from a height, and flies away.

 

A while back, I was in the enviable position of being on direct contract to the Office of the Prime Minister where a large part of the job was to draft Terms of Reference for consultancy contracts and then evaluate the bids. It was commonplace for the Financial Proposal to specify a rate per head of $2000 a day and pay the guy actually doing the work about $400. Not a bad margin!

 

I priced one such contract at $600,000. The tender price was over $3 million! In the accounts of another there was a sum for ’reimbursables’, expenses incurred in the field reimbursed to the person actually doing the job. In one case that I vetted I knew that not one penny was reimbursed; it was all trousered by the firm.

 

The aid budget is set to rise by£ billion a year – that’s right, billion! DfID is shovelling money out of the door to meet its spending targets, so evidently it is not too fussy about where it goes. Take it from me, DfID has always been concerned with inputs, not outcomes. I once suggested that it should conduct performance audits in later years to see whether a project had actually done any good. The response could have come straight from ‘Yes, Minister’

 

The greatest scandal is that it doesn’t meet its own objectives; it doesn’t do any good, consultancy firms apart.