Friday March 3, 2017
A woman holds a Union flag umbrella in front of the Big Ben clock tower (R) and the Houses of Parliament in London in this archive photo. REUTERS/Luke MacGregor
LONDON, March 2 (Thomson Reuters Foundation) - One of Britain's leading aid contractors said on Thursday four senior executives would step down after the government froze future contracts with the company following revelations it pressured beneficiaries to write positive reviews of its work.
Adam Smith International, which is contracted by the government's Department of International Development (DFID) to run aid programmes, said three founding executives and its executive chairman would step down as part of major reforms.
The move comes less than three weeks after a parliamentary committee report found the contractor had threatened to withdraw funds from some recipients unless they submitted favourable testimonies to a government inquiry into aid effectiveness.
Britain launched the investigation into the use of contractors in its overseas humanitarian programmes in December, after facing criticism for paying rising amounts to for-profit private companies to deliver aid.
"We regret that certain deficiencies of policy and procedure resulted in our failure to meet the highest standards of corporate governance, such that we did not meet the expectations of DFID and the public," said William Morrison, Adam Smith's executive chairman who will step down after restructuring takes place.
"The changes we are making will address the requirement to now meet and exceed these expectations," he said in a statement.
Although DFID welcomed the contractor's announcement, it said in a statement that "the problems identified by DFID through our own forensic investigation were fundamental and will not be solved with quick fixes".
DFID has come under increasing scrutiny over how it spends its budget, which rose by 4 percent to 12 billion pounds ($15 billion) last year, as the government grapples with public debt at its highest level in nearly 50 years.
The inquiry by the International Development Committee will examine whether contractors provide value for money and whether salaries, profits and dividends in the sector are appropriate.
Britain lost 3.2 million pounds through fraud in its overseas aid programmes in 2015-16, with the most serious cases in Afghanistan, Somalia, Syria and the Democratic Republic of Congo, according to a parliamentary watchdog.
The UK government has stuck to a pledge to spend 0.7 percent of its national income on foreign aid, although some politicians say the budget would be better spent at home.
(Reporting by Anna Pujol-Mazzini @annapmzn, Editing by Katie Nguyen. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)