Foreign aid fat cats who built £1.4billion empire… with YOUR tax money

By Ian Birrell

Caroline Pinder passionately believes in the power of aid to help the world’s poor. She has dedicated the past 25 years of her life to this cause, working on projects often supported by British taxpayers in two dozen countries from Albania to Zimbabwe.

But last month she quit – dismayed at how the Government has lost control of its bloated foreign aid budgets to the ‘poverty barons’: a small group of profit-hungry private consultancies who now dominate the aid industry.

‘This money is meant to be going on poverty reduction in the Third World,’ Pinder said. ‘It is not meant to be about all these people doing so well back here in Britain.’

Pinder told me she grew gradually more distraught at seeing foreign aid exploited by wealthy Western firms enriching themselves with ‘ineffectual’ schemes and ‘faddish’ projects that she says are often ‘off the scale of unreality’.

‘Our job was supposed to be about reducing poverty. But now you just see these people chasing bigger and bigger profits,’ she told me. ‘It is a long way from what development was ever meant to be.’

This dedicated woman is right to be alarmed by the rise of these Western foreign aid fat cats, some of whom are making millions for themselves in the quest to banish global deprivation.

I spoke to her as part of a Mail on Sunday investigation that exposes the shocking truth behind all those soft-soap promises of politicians and charity chiefs to change the world with our tax billions.

We can reveal that:

• The share of Britain’s £12billion annual foreign aid budget delivered by contractors has almost tripled in two years to £1.4billion a year according to analysis of Government data – despite pledges to review this figure two years ago.
• The biggest 11 firms – six of which are British – were handed almost half a billion pounds last year. This is more than double the sum they were given two years earlier.
• Favoured contractors are seeing profits soar and margins rise as they boast of winning multi-million-pound deals from the Department for International Development (DfID). One saw profits almost double in a year – but avoided paying any corporation tax, while a second paid less than one per cent of profits in tax.
• Six-figure pay packages are commonplace, with executives earning annual salaries of more than £250,000, massive dividends and substantial annual pay rises. Average salaries at some firms, including the most junior staff, are in excess of £50,000.
• The most successful consultancy – largely funded by taxpayers – has almost doubled spending on administrative expenses in a year to more than £10million.
• There are accusations that some firms claim from DfID for consultants costing almost £1,000 a day – then use office interns to do the work or pay outsiders significantly less than billed.
• David Cameron was so concerned these allegations might appear in public that he summoned some whistleblowers to Downing Street, but failed to allay their concerns.