Ambreena Manji

The Global Challenges Research Fund (GCRF) was a £1.5bn fund announced by the UK Government in November 2015 to support research that addressed the challenges faced by developing countries. Available over five years, the fund constituted a significant investment of Official Development Assistance (ODA) money in research. Aid-funded research on this scale was entirely new for the United Kingdom. We recognised that this was likely to have an important impact on research: we were encouraged to explore this possibility by our colleagues in the Arts and Humanities Alliance (AHA), which Peter Mandler was chairing around this time (October 2016) and which I attended on behalf of the African Studies Association. The AHA is an association of learned societies working to promote the interests of the arts and humanities, with a particular focus on higher education and research policies. Although the availability of GCRF funding had generated considerable interest among university researchers, we could not find any work that reflected critically on this substantial new programme for aid-funded research. We resolved to write on this topic, drawing on our respective interests in the legal framework for UK aid and in higher education and research policy, areas of our expertise which had converged with the advent of ODA-funded research.¹

Although it was presented as a joint Treasury–Department for International Development document, the UK’s new Aid Strategy announced in 2015 was widely known to have been driven by the Treasury. The then Chancellor of the Exchequer, George Osborne, had taken an active interest in departments beyond the Treasury, and he had played a leading role in the development of the Aid Strategy. In the 2015 Spending Review and Settlement, it was announced that the new GCRF would be disbursed to the UK research councils through their sponsoring ministry, then the Department for Business Innovation and Skills (BIS). In March 2016, BIS published its Allocation of Science and Research Funding 2016–17 to 2019–20, in which it described the GCRF as a new funding stream that would provide an additional £1.5bn to ensure that UK research would take a leading role in addressing the problems faced by developing countries. The fund would use the UK’s research base to pioneer new ways of tackling global challenges.

This signalled a significant departure for UK aid. For the first time since its creation in 1997, the Department for International Development (DfID) would not be the sole government department responsible for disbursing aid. Neither would it be the only government department commissioning and supporting research on development issues. Instead, aid funds would be spread throughout Whitehall, including to the then Foreign and Commonwealth Office, the Ministry of Defence and BIS. The GCRF was thus part of a new crop of cross-government aid instruments. There had already been some attempts to foster non-DfID research capacity and to make ODA money available to Research Councils. An important precursor to the GCRF was the Newton Fund, launched in 2014 and also funded through ODA.

These innovations added considerable complexity to the workings of UK aid. Departments not traditionally associated with disbursing aid suddenly found themselves in charge of substantial ODA funds. We became interested in the implications for higher education policy and for accountability of this new, more expansive approach to aid disbursement. Our work showed that its roots lay in the government’s commitments to ring-fence both aid spending and science and research funding while also making overall spending reductions. Transferring some ODA funds for use by other departments was a useful device for plugging a substantial funding gap. Applying portions of two ring-fenced funds to a single purpose would enable the government to reduce overall spend without explicitly breaking promises.

This was made possible by the scale and significance of the ODA commitment. In 2015, after a long campaign by advocates of aid, the UK passed the International Development (Official Development Target) Act. This legislation compelled the UK to spend 0.7 per cent of gross national income (GNI) on ODA each year. The UK was the first OECD country to enshrine an obligation to reach an aid target in law.

There has long been considerable flexibility and room for manoeuvre in relation to defining what counts as aid spending. For example, French aid has included expenses for students from developing countries coming to study in French higher education. Aid spending can also be inflated by including other amounts in its calculation. The contents of the ‘aid envelope’ can be altered over time, as donors choose what is to be counted as aid. We had a hunch that in the face of spending targets and with weak mechanisms for scrutiny, it would be possible to stretch the definition of ODA or to take advantage of ambiguities in order to meet the 0.7 per cent target.

The creation of the GCRF raised interesting questions about counting UK aid. BIS described GCRF as protected science spend that was also part of the government’s pledge to allocate 0.7 per cent GNI to ODA. Thus, the GCRF made up the science budget and was also part of the government’s efforts to meet its 0.7 per cent target. Was ODA money being used to plug a hole in the UK’s science and research budget? We found that ODA funds were indeed being double counted, both as part of the UK’s commitment to spend 0.7 per cent GNI on aid and also as its funding of science and research. A lack of transparency in the precise science allocation meant we could not be sure of the exact extent of this double counting, but we estimated that half or more of the ODA funds allocated to research were being double counted. Although it is considered bad practice for aid funds to be counted against more than one commitment, it was clear that UK aid funds were now being reported against two separate promises: an aid target and a research allocation.

In the 2016 BIS allocation, GCRF was counted as part of the ring-fenced budget of funding councils. Over half the GCRF was to be found in this pot. It was clear that ODA funds in the form of GCRF had therefore substituted for core funding. Only ‘unallocated’ GCRF, to be dedicated to interdisciplinary projects following the recommendations of the Nurse Review, was ‘new’ money that was subject to competitive bidding beginning in 2017. This approach was designed to obscure the double counting of core funding.

We also pointed out that there were important questions about the uses to which ODA was being put by Higher Education Institutions in relation to overheads. First, consistent with the research councils’ policy of granting eighty per cent of ‘full economic costing’ for sponsored research, something like half of the research-council spend on research grants went to cover overhead costs rather than directly to the sponsored research. While this was a reasonable policy to fund the actual cost of research, it did mean, in the case of research counting towards the ODA target, a large proportion of ODA spend was actually supporting university infrastructure rather than directly contributing to the development goals. It was already the case that a larger percentage of research costs was permissible to universities to cover ‘delivery’ than had been the custom in DfID-sponsored research, something like 4 per cent vs. 1.5 per cent. GCRF also made an additional allocation to the funding councils (Higher Education Funding Council for England and its partners) of £130m – this was in fact the largest single item in the GCRF budget – which was then distributed to universities as infrastructure funding (or ‘QR’), apportioned on the basis of assessment under the Research Excellence Framework (REF). As far as we could see, there was no direct accountability from the universities receiving this £130m to ensure that it was actually supporting development goals. It may be that universities spent their additional allocation to make up for the twenty per cent of full economic costing not covered by research-council grants. But there was no connection between the sums universities received in research-council grants (allocated by competition) and the sums they received as QR (allocated by the REF). So there was no obvious way to connect the expenditure of this £130m from GCRF to ODA research, although it was still being counted towards the target.

The questions we raised suggested there was a need for disbursement of the science and research budget in the form of the GCRF to be subject to closer scrutiny. Among OECD donors, the UK was considered a leader in the ODA field, especially since it passed the new target law. And the government has shown itself able to influence the rules of the OECD’s Development Assistance Committee (DAC). It had lobbied successfully for a decision by DAC to include some military and defence spending as ODA. Given the cosy relationship the UK enjoyed with the DAC committee, we thought it unlikely that meaningful scrutiny of its GCRF would come from the OECD.

The GCRF was created at a time of considerable regulatory and political uncertainty, as the UK’s aid landscape was changing and in the face of political turmoil following the decision to exit the European Union. We believed that the implications of a significant chunk of the UK’s research activity being funded by its foreign aid budget did not receive the attention it merited, and that a failure to confront this difficult question risked aid-funded research activity being ineffective and wasteful, or worse.