The inquiry will examine whether contractors provide value for money
By Emma Batha
LONDON, Dec 20 (Thomson Reuters Foundation) - Britain launched an inquiry on Tuesday into the use of contractors in its overseas humanitarian programmes after facing criticism for paying rising amounts to for-profit private companies to deliver aid.
The announcement comes a day after International Development Secretary Priti Patel reportedly said she wanted to see an end to "extensive profiteering" by contractors and suppliers of Britain's Department for International Development (DFID).
DFID spent 12.1 billion pounds ($15 billion) last year, with Pakistan and Ethiopia receiving the largest share of the money followed by Afghanistan, Nigeria and Syria.
Britain has pledged to spend 0.7 percent of its national income on international aid to tackle poverty around the world.
But campaign group Global Justice Now said earlier this year that consultancy firms were "taking an ever increasing share of the aid budget and enjoying generous profit margins".
It said DFID spent around 1.4 billion pounds ($1.7 billion) through private contractors annually, with most of it going to just 11 suppliers.
The inquiry by the International Development Committee will examine whether contractors provide value for money and whether salaries, profits and dividends in the sector are appropriate.
It will also look at transparency and whether DFID's procurement processes prejudice against smaller contractors and how well DFID and its partners learn from its contractors.
The UK aid watchdog, the Independent Commission on Aid Impact (ICAI), said in 2013 contractors were an effective option for delivering aid and that DFID had "selected contractors that have delivered positive results at competitive fee rates".
But it criticised DFID for poor programme management and said lessons were not being taken from contractors to inform future programmes.
ICAI said contractors were likely to remain an important option for DFID given its increasing budget and focus on weak states and countries experiencing conflict.
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