A senior Government minister has accused the European Union of squandering Britain’s international aid budget on schemes that often have nothing to do with alleviating world poverty.
Alan Duncan, the minister of state for aid, said the Department for International Development (DfID) was “forced to give” British taxpayers’ money to the EU and was powerless over how it was spent.
The charge will raise tensions within the Conservative party because it touches on two of the areas where the Tory Right is most concerned about David Cameron’s policies - foreign aid and Europe.
Brussels insists it does not “impose” its choice of aid projects on Britain but - in an escalation of hostilities - a senior Conservative separately accused the EU of lying. “If you want an EU lie, this is a classic one,” said the senior Tory. “It is a 100 per cent lie. We have been arguing with the EU whenever we can that the money should have a poverty focus.”
At next week’s party conference in Birmingham, Justine Greening, the new International Development Secretary, will face calls from the party grassroots to clamp down on wasteful spending and projects which are not squarely aimed at tackling poverty.
An investigation into overseas aid by The Sunday Telegraph has revealed how £1.4 billion, one-sixth of DfID’s budget, is diverted to the EU for its own schemes - many of them in relatively wealthy countries that the UK no longer believes should receive aid.
Among the findings are:
* £800,000 out of the EU aid budget is being spent on a water park being built in Morocco by the French owners of Center Parcs
* Iceland has received £20 million from an EU fund subsidised by British aid. The funding is to prepare Iceland for EU membership - even though two-thirds of the country no longer wish to join
* a former Lancashire detective turned DfID consultant was given £223,683 for fighting corruption in Jamaica, one of eight consultants paid more than £100,000 for their work
* DfID said a review had now been ordered into spending on 'independent experts’ whose contracts had been agreed with the previous, Labour government
Mr Duncan told The Sunday Telegraph that the moment had now been reached to review the EU’s aid programme. He said: “We share the people’s anger on this. We are forced to give money to the European Union.
“We ask them to focus aid on poverty but they don’t, and we have no choice in the matter.”
Mr Duncan said he hoped the process would be considered as part of the Government’s wider review of EU competencies and conduct, which will see a cross-Whitehall audit and the publication of around 20 reports to determine what powers Britain can repatriate from Brussels.
Since the coalition came to power in 2010 it has stuck to the pledge, made by Mr Cameron in opposition, that spending on foreign aid should increase until it reaches the UN-recommended level of 0.7 per cent of gross national income - amounting to £10.8 billion in the next financial year.
DfID’s budget has been ringfenced and protected from public spending cuts - the only department apart from Health to be spared austerity measures in this way. Some Conservative MPs have called for aid spending to lose its protection, while others have criticised particular aid projects as wasteful.
A review of DfID spending concluded last year that its money should be refocused on the poorest nations. Following its findings, the department reduced the number of countries receiving bilateral aid from 43 to 27.
The Sunday Telegraph last week investigated two projects that are receiving money via the EU and which are listed on the website of EuropeAid, the organisation that manages a large part of the EU’s aid budget.
A £60 million tourist complex - called L’Oasis de Noria - on the outskirts of Marrakech in Morocco is being given more than €1 million, about £800,000, by EuropeAid for energy efficiency schemes being deployed in its construction. The project, which includes a water lagoon, 480 apartments, tennis courts, spa, restaurants and shops for foreign tourists, is owned in a joint venture by Compagnie Generale Immobiliere, Morocco’s largest construction company, and Pierre & Vacances Center Parcs, the French company that runs Center Parcs on the Continent.
When it opens in 2014, the resort will boast solar water heaters, waste heat recovery systems, insulated walls and roofs and double glazed windows.
A hotel in Larache in northern Morocco is receiving a further £650,000 for a similar energy efficiency scheme. The EU, despite being asked four days ago, has been unable to confirm to The Sunday Telegraph the name of the hotel.
In all, Morocco, which Britain considers too wealthy to receive bilateral aid, is given about £120 million a year out of the EuropeAid budget - with about £18 million of that contributed through DfID.
The EU spokesman insisted yesterday that it was wrong to claim the UK government had no say in EU aid spending - which has a wider remit than DfID’s - but also pointed out that from next year there will be a greater focus on the poorest countries.
A spokesman said it was “simply untrue” to suggest that “Brussels is taking decisions on where funding goes and then imposing them on the UK”.
The spokesman explained that Morocco comes under its European Neighbourhood Policy (ENP), which is funded from within the EU’s aid budget, so that “cooperation with this country is much wider than just fighting poverty”.
The money paid to L’Oasis de Noria, said the spokesman, was not funding the tourism industry but reducing the environmental impact of a large resort, which will “benefit the local public, visitors, and, indirectly, the EU economy and environment”.
Without the money from EuropeAid, the energy saving measures would not have been introduced, added the spokesman.
But Douglas Carswell, the Conservative MP, said: “It seems perverse for the EU to be using its aid budget to be subsidising a resort for Europeans in Morocco. It seems that poor and low-income Britons are paying higher taxes to subsidise the holidays of middle-class Europeans to holiday in the sun. That is bizarre.”
In Iceland, EU money has gone towards promoting tourism and development in the Katla geopark, around the volcano Eyjafjallajökull , which erupted in 2010 causing widespread disruption to worldwide air travel.
Steingerdur Hreinsdottir, who administers the geopark grant on behalf of the Development Centre of South Iceland, said: “If it’s available anyway, I don’t see why we shouldn’t take it to help a region that’s in decline.” Iceland is officially wealthier than the UK.
A DfID spokesman said a series of contracts were now under review after The Sunday Telegraph revealed the large sums being earned by so-called 'poverty barons’ working as aid consultants.
The biggest single payee was Justin Felice, a former detective superintendent with Lancashire police, who now works as an anti-corruption co-ordinator for the Jamaican police. He was given £223,683 in 2009/10, the last year for which figures are available. The sum is £20,000 more than the salary earned by DfID’s own permanent secretary, its top civil servant.
