§ Miss LestorTo ask the Secretary of State for Foreign and Commonwealth Affairs if he will place in the Library the three reports prepared in 1995 by the Overseas Development Administration, the Department of Trade and Industry and the Treasury on tied aid. [36652]
§ Mr. HanleyThe ODA will publish in the next few weeks a version of the reports containing a full account of the studies, their findings and ODA conclusions, but excluding commercially sensitive information.
§ Miss LestorTo ask the Secretary of State for Foreign and Commonwealth Affairs what is the Government's policy on reducing the proportion of tied aid; and if he will make a statement. [36592]
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§ Mr. HanleyIn the interests of both the British taxpayer and aid recipients, we have to obtain value for money when buying goods and services with public funds. Subject to this criterion, it is also established policy that, as far as possible, the goods and services financed under the aid programme should be British. In practice the proportion of the aid programme that is tied is falling because of the increase in multilateral aid, the increased use of local goods and services, and reciprocal untying of programme aid under the Special Programme for Africa.
Three recent studies examined the effects and impact of ODA's tying policies. The findings, which will be published shortly in a summary report by ODA, show that: there would be marginal benefits to the UK economy from unilateral untying and somewhat larger benefits from multilateral untying, but that the costs of tying are relatively low because UK goods and services are for the most part internationally competitive and because a significant part even of the bilateral aid programme is effectively untied. The studies point to a few areas where there is scope for ODA to seek cost-effective procurement more rigorously, but indicate that unilateral untying would yield few efficiency gains for the aid programme, would bring little commercial benefit, and would be unpopular with individual firms and businesses competing for aid-funded contracts.
The Government remain convinced that multilateral untying would be in the best interests of donors and developing countries. They will continue their efforts to encourage other donors to agree jointly to untie aid.
§ Miss LestorTo ask the Secretary of State for Foreign and Commonwealth Affairs, pursuant to his answer of 14 December,Official Report, column 751, what factors underlie the percentage fall in bilateral tied aid between 1993 and 1994. [36649]
§ Mr. HanleyThe downward trend reflects recent changes in ODA's procurement system, driven by value for money and efficiency incentives, and continuing efforts to untie aid where this is appropriate for example, jointly with other donors under the special programme of assistance for Africa.