1. The UK Development Act – An Inside View Ruth Driscoll, Centre for Aid and Public Expenditure (CAPE)

2. UK Aid – The Long View 1929 Colonial Development Act 1961 Department of Technical Co-operation 1964 Ministry of Overseas Development 1970 Ministry dissolved and responsibilities passed to Foreign Office 1974 Ministry of Overseas Development 1979 Ministry becomes Overseas Development Administration under Foreign Office

3. The Context – An Abuse of Aid 1989 – 1991 British government donates £230 million of aid to a hydroelectric dam project in Pergau, Malaysia. Includes the largest amount of aid ever awarded as a direct subsidy to a British firm, Biwater, which was also a donor to the ruling political party in the UK. Over the same period, the Malaysian government buys £1 billion worth of arms from the UK. Overseas Development Administration opposes the decision as ‘an abuse of the aid system’ but is over-ruled by Foreign Office and Department of Trade & Industry. NGO campaign leads to a judicial review that halts the use of aid on this dam, and a damning public inquiry in 1994.

4. The Response – A Separation of Aid 1997 New government elected on manifesto pledge to ‘clean up’ development aid. Separate Department for International Development (DFID) created, headed by Secretary of State with Cabinet rank. 1997 White Paper emphasises poverty elimination as purpose of aid, with emphasis on Millennium Development Goals and building state capacity. But early experience is regular ‘turf battles’ with other Government Departments!

5. The International Development Act 2002 Replaces the Overseas Development and Co-operation Act (1980) that allowed aid for broader purposes, and is the main legal authority for DFID expenditure. Poverty reduction established as the over-arching purpose of British development assistance. Aid must be –(a) given for the purpose of sustainable development, or promoting the welfare of people; and –(b) likely to contribute to poverty reduction. Aid tied to UK commercial or foreign policy goals is now challengeable in the courts.

6. The Act continued But allows for –Activities indirectly linked to poverty reduction e.g. public or security sector reform –Work in middle-income countries, though balance of portfolio must be in favour of low-income countries. Also covers overseas territories, humanitarian powers, contributions to Multilateral Development Banks, new financing instruments.

7. Early Experience - Testing the Water Act introduced with no contest from other Government Departments or the Executive. But is proving useful as defence against policy and budget encroachment by domestic agendas e.g. immigration. Yet low public awareness means much is left to individual Ministerial motivations in the policy coherence ‘game’ played out across government.