NGOs censure EU countries for spending foreign aid on asylum costs

European NGOs have rounded on EU governments over the growing use of foreign aid budgets to meet refugee costs at home, claiming that the strategy artificially inflates official figures for development assistance despite money never reaching the poor countries for which it was intended.

Germany was among the states criticised by Concord, a confederation of European NGOs, for including refugee costs as part of official development assistance (ODA), a “trick” that the organisation’s Aidwatch report said increased the country’s aid spending to 0.56% of gross national income.

The survey found that Denmark will be the biggest recipient of Danish aid in 2016, spending almost 30% of its ODA on receiving refugees, compared with 15% last year.

Austria, Sweden and Italy have become the biggest beneficiaries of their own foreign aid budgets, according to the report. In 2015, Sweden spent 22% of ODA on “in-house” refugee costs – the highest percentage among the world’s richest states – and had planned to take as much as 50% in 2016, until domestic opposition forced a climbdown.

Concord said the EU is backsliding on its aid spending commitments, having again failed to meet its pledge to spend 0.7% of gross national income on development aid last year. Only five countries were found to have met their 2015 targets: Denmark, Luxembourg, Netherlands, Sweden and UK.

Seamus Jeffreson, Concord’s director, called on EU states to stopping inflating aid with spending that, he said, had dubious development impacts. “This is particularly true when it comes to refugee costs – an area where EU member states have a moral duty to do their part, but without diverting aid budgets,” he said.

The shape of EU aid last year was heavily influenced by the refugee crisis, said the report. More than a million refugees claimed asylum in Europe in 2015, prompting many EU states to apply an Organisation for Economic Co-operation and Development (OECD) rule allowing member countries to count certain refugee-related expenses as ODA for a year after their arrival.

The study anticipated that the looming EU departure of the UK, one of the union’s biggest and best-performing donors, would affect British and EU aid budgets, diminishing their effectiveness.

Concord added that the political shifts behind Brexit may also empower domestic anti-aid critics, putting greater pressure on the UK’s aid budget and the pledge to spend 0.7% of national income on aid.

The report welcomed political recommitments on the latter, but said the British government’s stance was challenged by “lacklustre aid effectiveness implementation and shrinking engagement with UK civil society”.

It added that the UK’s new ODA strategy, launched at the end of 2015 with a renewed emphasis on national interest, called into question how effectively UK aid could deliver on its core purpose of poverty reduction and sustainable development.

“Increasing amounts of UK aid will be spent by government departments and cross-government funds other than the development ministry, the Department for International Development (generally considered a good performer on aid effectiveness), and this may undermine the quality of UK aid,” said Concord.