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Daily Mail on doubling the use of cash transfers in developing countries

Posted by: , Posted on: - Categories: Humanitarian aid, Official Development Assistance, Value for money

The Daily Mail today (Saturday 4 August) reports that the UK is to double its funding of a scheme that gives cash and debit card payments directly to needy families in developing countries.

This is based on a commitment The Department For International Development made at the World Humanitarian Summit in May 2016 to increase our use of cash payouts in crises by 2025. This will see at least 29% of our humanitarian budget spent through cash and vouchers programmes.

Our cash transfer and voucher programmes support some of the world’s poorest and most vulnerable people directly, so that they can buy essential food, shelter, household supplies and medical assistance. This includes people in worn-torn Yemen, and Syrian refugees sheltering in Lebanon, for whom our support can be the difference between life and death.

The Daily Mail story includes criticism of cash transfers. But it is widely accepted that cash transfers are significantly underused in humanitarian situations and the Independent Commission for Aid Impact (ICAI) has recommended that we should scale up our use of cash transfers.

One of the big benefits of giving cash and vouchers rather than food parcels is the incredible value for money that can be achieved. For example, cash and vouchers delivered in response to the 2011/12 Somalia famine delivered 2.4 times more aid to beneficiaries compared to traditional food aid because of the savings on transport, storage, handling and security costs.

We know some people are concerned that cash transfers could be subject to fraud. But there is actually no evidence that cash is more prone to theft, diversion and corruption than other types of aid, such as food parcels. We have rigorous checks to eliminate fraud, including the latest biometric technology such as iris and fingerprint scanning and regular home visits to recipients.

Cash transfers deliver better value for money for UK taxpayers and better support the world’s poorest people who often rely on our help to stay alive. Our programmes have already cut excessive bureaucracy, avoided duplication by different aid agencies, which delivers value for money, and given dignity to the refugees that rely on our support.

The exact amount that we will spend on cash transfers in crises in future depends on the size of our humanitarian aid budget, which will reflect the scale of humanitarian need around the world.

In the 2015/16 financial year, we spent around 14.5% or £157 million of our humanitarian budget through cash and vouchers programmes.

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