Greening is right about aid transparency

By Paul Goodman
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Oxfam is undoubtedly right to say that Dame Barbara Stocking, who was paid £119,560 as it Chief Executive, "could expect to earn at least £75,000 more for a comparable job in the private sector".  One might question why that that salary increased by 19 per cent in two years - she was paid £100,008 in 2009/10 - when inflation hasn't risen as fast, but the main point holds: by comparison with business, charity chief executives are not well paid.  Oxfam claims that "median pay of other large charity chief executives was £135,700". It was responding to a Daily Telegraph investigation which found that "the number of executives receiving six-figure salaries at Britain’s 14 leading foreign aid charities has risen by nearly 60 per cent, from 19 to 30, over the past three years".

Then again, the comparison with the private sector is misleading: charities, after all, aren't businesses, and it is precisely because the money they raise is given for those in need that they should strive to keep costs to a minimum.  (The charities would doubtless argue back that to attract the best staff they must pay the "market rate".)  But whatever way you look at it, charities cannot escape a consequence of austerity - namely, that the same harsh searchlight which has picked out MPs' expenses, bankers' bonuses, civil service spending, "aggressive" tax avoidance and the pay of local authority chief executives is coming to them, too.  We live in an age of what I have called "aid in a cold climate", and the aid organisations are vulnerable to a backlash from donors who compare the salaries paid to chief executives not to private sector ones, but their own.  Average earnings last year were £26,500.

Justine Greening is therefore correct to argue in response to the Telegraph's story that it is time for "the charities to grasp the nettle on transparency and value for money".  My sense is that the sector rather misses her precedecessor, Andrew Mitchell, who was and remains a eloquent and resourceful advocate of aid.  But in my view, the International Development Secretary is showing a shrewd grasp of the public mood, of which her moves to end aid to India and direct (though not all) aid to South Africa are a part: by pushing for more transparency and better value, she is helping rather than harming the cause of aid.  ConservativeHome has always been and remains a pro-aid site - though I am agnostic about fixing spending to a particular percentage and against writing any figure into law.

This is also the position of our readers, to judge by ConservativeHome survey results (which will, as ever, be more representative of them than the comments below this piece).  Asked whether the £2.2 billion of taxpayers' money spent protecting children from polio is well spent, an overwhelming 79 per cent said that it is, and only 19 per cent said that it isn't.  But it's worth noting that support falls sharply when the same readers are asked whether "aid can stop failing states becoming tomorrow's rogue states": 47 per cent agreed, and 46 per cent disagreed.  This is a sign of "the wisdom of crowds".  It is doubtless impossible to prove that non-medical aid is the decisive factor in any particular state, and its provision raises complex questions about sustainability and dependency.  It is certainly true that some poorer countries flourish without very much aid at all, and would flourish even more were western states to open their markets.

These considerations, plus the waste and corruption that plague aid provision, doubtless help to explain why almost 70 per cent of our respondents wanted to move money from the aid budget to defence.  The conclusion is not very surprising.  People support using public money to provide vaccines that will protect children and adults from polio or pneumonia or malaria: they are not Godfrey Blooms. (I see Bloom has been busy adding more material to Lynton Crosby's colourful file.)  But they are not convinced by all the claims of the aid charities, and are doubtless suspicious that they, like other organisations, have a vested interest to defend.  All in all, voters want greater transparency, redirection of aid to poorer countries, more market-driven help and the streamlining of DFID - in other words, more or less what Greening is striving to achieve.