Andrew Mitchell, the International Development Secretary, will announce next week he is axing multi-million pound schemes in almost 20 countries, including some of the poorest nations in Africa.
The move follows a lengthy review of spending by the Department for International Development, that was in turn prompted by reports that huge sums of money had been wasted or simply been stolen on the ground.
In response, Mr Mitchell will unveil a new system to introduce a ‘cash on delivery’ payments scheme when giving aid to poor countries. In one pilot scheme, schools in Ethiopia will receive £95 for every 16- and 17-year-old child that passes the country’s equivalent of a GCSE.
Mr Mitchell told The Sunday Telegraph: “Britain will now be much tougher in the way it delivers aid – ensuring it reaches more people in the poorest parts of the world and provides maximum value for money. That’s why I am introducing Payment by results pilots – paying cash on delivery and only handing over the money when actual results have been achieved.”
Ethiopia will be one of the main beneficiaries of the shake-up and will see its total aid package increase to almost £300 million, overtaking India as the biggest recipient of UK aid, by 2015. In total the DfID budget, which has been ring-fenced and protected from cuts, will rise from £7 billion this year to £11 billion in 2015.
A senior source told The Sunday Telegraph that the number of DfID offices abroad will be slashed by about half, reducing the number of countries which receive bilateral aid from 43 to just over 20.
Mr Mitchell has already announced that aid programmes will be scrapped in Russia and China as well as other middle-income economies such as Vietnam, Cambodia, Serbia and Moldova.
But it is understood that other countries where aid programmes will be scrapped include much poorer nations such as Angola, Gambia and Niger. DfID will argue that the sums the UK was spending on aid in those countries were relatively small, meaning that it had little chance of making a difference.
Other nations earmarked to be axed include Bosnia and Kosovo in Europe and in Asia the former Soviet Republics of Kyrgyzstan and Tajikistan.
The Government will hope the new cash on delivery pilot schemes will stamp out corruption and misappropriation of funds which has long dogged the work DfID does. The Ethiopian schools will only get their money, claims DfID, once exam results have been independently verified. If the pilot is successful it will be rolled out in other countries.