Every programme and policy is under review, to be judged on its ability to ‘get every penny from every pound' in the fight against poverty. Assuming that one shouldn't aim to get only ‘almost every penny from almost every pound', this can only be a good idea. Money better spent is more kids in school, more people with clean water, and happier taxpayers. But has this mantra been translated into the big decisions since the election?

The evidence to date is mixed, but one recent warning sign is the decision to spend what could amount to around £200 million of aid money on an airport on the British Overseas Territory of St Helena, a project supported by Lord Ashcroft and slammed by Denis MacShane as "a scandal of Pergau Dam proportions".

To put it in context, that's spending the equivalent of what the UK invests in providing access to water and sanitation to the whole of Africa every year - itself an underfunded area - on an island with a population of just over 4000 people who the secretary of state describe as British citizens.

Might this be the first big example of the new government using the aid budget as a cross-departmental subsidy, to cover things you might imagine should really come from elsewhere? Maybe it's too early too tell, but when questioned in parliament last week on whether DfID would pick up the tab for the care of refugees, overseas students and even the BBC World Service, the new secretary of state's answers were perhaps revealing in their obfuscation.

The value for money mantra may be undermined by other developments too, with some fundamental shifts afoot on where aid goes to, and for what purpose. A clear priority for the new DfID ministerial team is a much greater focus on providing aid to militarily strategic countries like Pakistan and Afghanistan - the latter to increase by 40 per cent - while also linking its delivery much more closely and explicitly to foreign policy and security goals.

The flipside of this will be a withdrawal from a number of now-deemed middle-income countries like China, Russia and possibly India too - the absence of Andrew Mitchell being widely noted during this week's visit to India.

Whether we provide aid to countries where a huge proportion of the world's poor still live despite them being able to find the money for space programmes, Olympics and nuclear arsenals, is a sensible debate to have, and goes beyond party lines. For example, there are more poor people in eight Indian states than in the poorest 26 African countries according to a new UN poverty index, yet its economy is growing at 9 per cent per year and the resources it might be able to mobilise from its own economy far outweigh those it could ever get from aid.

An interesting blog by Alison Evans at the ODI talks more about this debate, but regardless of the conclusion the overarching worry is that these tricky but crucial decisions may now be taken not on what is best value for money in eradicating poverty, but what is best value for money in serving British foreign policy.

This is where logic and mandates can become dangerously mixed. Withdrawing aid from India and putting it into Pakistan might make sense from a security perspective, but given it has a similar GDP per capita and expenditure on a nuclear arsenal, could it be justified in terms of value for money for reducing poverty alone? The same question might be asked of Afghanistan which, while undoubtedly being one of the world's poorest countries, provides an extremely uncertain return on investment. One might also crudely argue that rebuilding things we've blown up is not really what aid is intended for.

These are conjectures, and allocating aid in the most effective way is not easy. But it is not served by watering down the mission statement. Over the last decade DfID has built an impressive reputation as the world's leading aid agency, as outlined in a recent OECD report. A clear and unambiguous focus on poverty reduction above all else was key to this, and must be protected if we want to get real value for money in delivering schools, medicines and latrines for the world's poorest communities. No other criteria will do.


Steve Cockburn is a member of the Labour Campaign on International Development - for more information go to www.lcid.org.uk

Photo: DFID - UK Department for International Development 2010