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Taxpayers foot £462 million bill from tarnished aid contractor

The Government has 21 live contracts with Adam Smith International, but has not signed any new deals with the organisation for nearly a year.

A controversial aid consultancy which faced claims it made excessive profits received more than £462 million in taxpayers’ cash over five years, according to a report.

Adam Smith International (ASI), which was widely criticised for poor practices, was paid nearly £104 million in the last financial year, figures released by an aid watchdog showed.

It pulled out of the bidding process for new contracts and four executives quit following pressure over its operations.

UK aid

The Government has made “positive progress” in improving competition among its contractors and in achieving value for money, according to the Independent Commission for Aid Impact (ICAI).

It said it was too early to judge some of the reforms that have been introduced and gave the Department for International Development (DfID) an overall green-amber assessment for its approach.

But the department has been slow to exercise new accounting methods that would make supplier fee rates and costs more transparent, ICAI said.

It warned the complex and lengthy nature of aid programmes can “lead to an imbalance of information” between the DfID and its suppliers, particularly larger organisations involved in previous contracts.

“Such firms have advantages over new entrants and the potential to use their market power to increase their profits,” it said.

Figures from the Independent Commission for Aid Impact showing how much the government spends with key aid contractors

Figures requested by ICAI from the department showed spending with ASI rose steadily from £63.4 million in 2012/13 to £112.3 million in 2015/16 before falling to £103.8 million last year.

DfID has 21 live contracts with ASI but has not signed any new deals or extended existing agreements since December last year.

The consultancy faces allegations it falsified submissions to a committee of MPs and made use of improperly obtained government documents for commercial gain.

Alison Evans, ICAI’s chief commissioner, said there was a “positive direction of travel” at DfID but said there were “some important areas where improvement is needed”.

DfID said ICAI’s report “rightly recognises” the department is “making positive progress and serious effort” to achieve value for money through its work with suppliers.

A spokeswoman said International Development Secretary Priti Patel had “recently announced tough new reforms to clamp down on the risk of profiteering, excessive charges and unethical practices”, adding ICAI’s recommendations “do not take this into account.”

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