MPs vote tomorrow on private equity arm taking billions more of the UK aid budget
MPs are set to vote tomorrow on a controversial bill that development campaigners say would effectively privatise huge amounts of the UK’s overseas aid budget. The Commonwealth Development Corporation Bill would enable DfID to quadruple the amount of money it channels through its private equity arm, the CDC group, from £1.5 billion to £6 billion.. The bill would also allow the limit to raise to £12 billion without the need for further primary regulation.
The CDC Group is the contentious private equity arm of the British overseas aid programme. Wholly owned by DfID, CDC has been repeatedly criticised by various independent bodies for supporting projects with questionable development impacts for poor communities, such as luxury hotels, shopping malls and expensive fee-paying schools.
A briefing released by Global Justice Now in December 2016 argued that,
“DfID is essentially asking parliament to pre-approve increased funding for its controversial investment arm before presenting a worked through strategy or plan for how this money will be spent and how taxpayers will be assured that it helps meet the official mission of this spending: ending global poverty. This raises serious concerns as this bill could clear the path to a massive diversion of public aid money towards private businesses – without sufficient transparency, accountability, or proof of impact.”
Aisha Dodwell, an aid campaigner with Global Justice Now said:
“Report after report have raised some very fundamental questions about whether the CDC Group’s efforts to build shopping malls and luxury hotels across Asia and Africa are doing anything to address conditions of poverty and inequality. So it’s seriously irresponsible for the government to be trying to quadruple the amount of tax payers money that could be channelled through this controversial private equity outfit.
“While the CDC Group might be good at returning on investments, its falling a long way short of meeting basic development goals like raising people out of poverty or providing access to basic public services like education and healthcare.
The fact that DfID is actively trying to divert so much of the aid budget to free-market forces shows just how ideologically driven the government’s approach to aid has become.”
For more information, see the briefing Inviting Scandal - DfID’s dangerous plans to expand its controversial private equity arm.