Budget wheeze could be double whammy for aid and research

How do you cut public expenditure if you have ring-fenced a lot of it? One clever wheeze, developed by George Osborne when he was the UK’s chancellor of the Exchequer, was to make different ring fences overlap.

A prime example was Osborne’s announcement in his 2015 spending review that significant elements of the ring-fenced research budget would be moved into the ring-fenced overseas development budget.

Since 2015, the UK has legally committed itself to spending 0.7 per cent of its gross national income on official development assistance (ODA) each year – amounting to more than £12 billion in 2015-16. Until 2015, most of the aid budget was spent directly by the Department for International Development (DfID) on poverty reduction in specified countries, as is required for its international recognition as ODA, with only small amounts of expenditure through other departments on obviously related efforts, such as research supporting disease eradication.

In 2015, however, a new “whole of government” approach to ODA was announced, by which it would be disbursed through a much wider range of agencies. For academic research, the most significant novelty was the creation of the Global Challenges Research Fund (GCRF), amounting to more than £1 billion over five years, designed “to support cutting-edge research that addresses the challenges faced by developing countries”. Part of the GCRF is “allocated” to specific research councils and academies as part of their ring-fenced budgets, but part is “unallocated” and appears to be “new money”, for which research councils and academies can angle. Such new money is highly unusual in this age of austerity and helps to explain the bullish response of many funding bodies to the announcement of the fund.

But the “allocated” part of the GCRF is being double-counted as both ODA and as part of the research budget. And even those strongly in favour of both development assistance and academic research, as we are, might still have doubts about combining the two – particularly as quickly and as loosely as the government appears to be doing. It may not be good for development, and it may not be good for research.

On the development front, ODA funds such as the GCRF are not as tightly bound to meet development goals as one might wish. Under the terms of the International Development Act 2002, aid can be spent only on poverty reduction: a rule brought in after the Pergau Dam “aid for arms” scandal in the 1980s, in which hundreds of millions of pounds in UK aid to Malaysia were linked to an arms deal between the two countries. The legislation is meant to ensure that no commercial or other considerations influence aid spending, but it binds only DfID. New spenders of ODA – such as the Department for Business, Energy and Industrial Strategy, which funds academic research – are not so bound. The department has stated that it will “be guided by [the act’s] aims”, but there is nothing to compel it to do so.

Research Councils UK has similarly stated that “only research directly and primarily relevant to the problems of developing countries may be counted as ODA”. But this stipulation has no legal basis and dilutes the goal of poverty reduction to addressing “problems”. It is now up to UK Research and Innovation, RCUK’s successor body, to defend whatever legal definition it is proposing to adopt.

Indeed, the risks that might accompany aid spending being spread across Whitehall have been recognised by Parliament’s International Development Committee, which recently called on the government to make reducing poverty a legal obligation for the spending of all ODA. Even DfID, which is highly experienced in development work, has been warned by the National Audit Office to guard against in effect pushing money out the door to meet the 0.7 per cent spending target. A host of new departments (and academic institutions) are surely in greater danger.

In addition, funding academic research carries much higher overheads than funding direct aid. Thus, ODA funds will be used to pay full economic costs for university research grants, and there is even a GCRF allocation to the Higher Education Funding Council for England to help fund the 20 per cent that the research councils don’t cover. Is this really the best way to deliver development assistance?

Double-counting ODA and academic research may not be good for academic research, either. The Arts and Humanities Research Council is not expected suddenly to shift its funds from medieval French literature to medical humanities in Togo. Nevertheless, both the allocated GCRF and the growing unallocated GCRF funds are surely designed to induce funding bodies to develop one particular side of their work. If it were “new money”, it would be hard to complain. But if it is displacing core funds, then it raises the question of whether all the research councils can or should reprioritise their funding programmes accordingly.

They certainly shouldn’t without more public discussion than the issue has so far received. And without such scrutiny, the GCRF may be the thin end of a wedge, with larger proportions of research funding being restricted to ODA goals in future.

Ambreena Manji is professor of land law and development at Cardiff University. Peter Mandler is professor of modern cultural history at the University of Cambridge.