Millions given to tsunami 'sitting in UN bank accounts'

By Philip Johnston, Home Affairs Editor
London Telegraph
Mar. 02, 2006

Millions of pounds of taxpayers' money given by the Government to the Asian tsunami appeal could still be sitting in the bank accounts of UN agencies and charities, spending watchdogs have found.

Although more than Ł50 million was paid out within weeks of the disaster, delays in setting up humanitarian projects have left an unknown sum unspent.

Following the disaster on Boxing Day 2004, which killed around 300,000 people, Tony Blair pledged Ł75 million in immediate aid. In the event, however, this was reduced to Ł64 million because so much money was being raised by private donations across the world. Of this sum, around Ł50 million was paid by the Department for International Development (DfID) to third parties, such as UN agencies and charities.

A report from the National Audit Office, published yesterday, commends the speed of the Government's response but questions what happened to all the money. Some of the projects handled by the third parties were delayed, but the unspent cash remained in the hands of the grant recipients.

The department is now trying to find out what happened to the unspent cash and will seek refunds "where appropriate", the report said. However, officials are simply unable to say how much has been spent and where.

Sir John Bourn, the head of the NAO, said the Government should have done more to ensure proper account was made of the cash. "It remains important to keep control over the Ł50 million paid in grants to other organisations and to know how it is spent," he said.

Edward Leigh, the chairman of the Public Accounts Committee, also praised the rapid response but was concerned about the lack of follow-through.

"One year on from the disaster, they don't know where that money went. They don't know if it was used where it was needed or if it's just sitting idly in a bank account," he said. "That is not good enough. The department must look much more closely at how these considerable sums of money are being used by the agencies involved."

A Whitehall spokesman said imposing too much red tape in the immediate aftermath of such a disaster could slow vital relief efforts. But organisations were now being asked to "fully account" for their spending and return unused cash.

"DfID only provided funds for relief work to trusted third parties - aid agencies, NGOs, many of which we work with often - and only after agreeing a detailed programme of work," the spokesman added.

"Burdening our partners with too much red tape, in the form of even more stringent reporting requirements could have constrained their ability to deliver urgent humanitarian relief.

"Now the immediate disaster phase has passed and rebuilding and reconstruction work has begun DfID has asked partners to fully account for their spending and to return any unspent funds."

Andrew Mitchell, the Tory spokesman, said: "Many British taxpayers will be angry to learn that money given by the Government in their name is sitting idle in the bank accounts of multilateral agencies and non-governmental organisations. These monies should be released as soon as possible and used to save lives in the 'forgotten emergencies' in places such as the Democratic Republic of Congo."

Related: Overheads take up to 1/3 of U.N. tsunami funds