The corporatization of aid enables greedy consultants and high executive salaries

As much as I understand the Sisyphusian dimension of the task, I feel that I need to respond to recent Times and Daily Mail reporting on overpaid development consultants and excessive executive pay packages for UK charity executives:

Britain's foreign aid budget pays out billions of pounds to consultants (Brendan Cole, International Business Times, 8 December)

Priti Patel and Dfid must crack down on the foreign-aid fatcats
(Ian Birrell, inews, 18 December)
This time it is a bit more complicated me than simply wringing hands about post-factual news reporting, because aid budget spending on consultants and for-profit consultancy firms or pay packages in excess of 500,000 GBP/year for David Miliband at International Rescue Committee should be criticized publicly.

But very often the conservative/right-leaning press conveniently focuses on the symptoms rather than looking at the underlying root causes: The neoliberal age’s power of corporatization which has affected most, if not all, parts of (British) society. Ironically, the conservative political establishment, often aided by the aforementioned news publications, has created a very fertile ground for many of the excesses: Keeping the big, bad, lazy public sector small and outsource many services to for-profit entities-often followed by the same mantra that the private sector delivers more efficient and better results. To put it simply, rather than relying on an aid administration with public servants, the lean management structures of government need to purchase external services which, surprisingly, cost money. And as the tightly knit elite circles of ‘the City’ collaborate, high bills and expensive consultants usually follow. International development is not much different from any other public policy domain and it is not surprising that a former MP like Miliband, well-connected families such as the Kinnocks or a former management consultant feature in Birrells reporting-these are exactly the personalities that occupy leadership positions across the UK.

But what about charities and their high executive remuneration packages? First of all, most of us will probably agree that charities are professional organizations that should pay staff decent salaries before moving into misleading
99 pence of every pound of donations are spent on the children in Africa’ claims. So as Jamie Wylie pointed out on Twitter, 173,000 GBP/year for the CEO of the British Red Cross with its more than 3000 staff members and more than 30,000 volunteers does not necessarily seem excessive. Many other examples, though, do raise concerns, but we should nonetheless look beyond mere numbers.

It is exactly the managerial culture, introduced to the public domain since the 1980s and commonly referred to as
neoliberalism that has enabled very high, sometimes excessive pay packages in what used to be (quasi-) public sector organizations.
The argument is usually the same: The organization needs ‘the best’ leader and since all great managers would otherwise be offered positions in the private sector, charities (or universities, health providers,...) need to offer matching pay packages. And, voila, the usually white, male, middle-aged elites can now effortlessly move across institutions and are always guaranteed a ‘competitive’ salary.

So as much as I think we need to have discussions about the topics that The Times and Daily Mail reporting highlighted we need to be careful about short-sighted, polemical short cuts or isolating the aid and charity sectors from other parts of society that have all experienced neoliberal dynamics of smaller core administrative functions and costly expansions into ‘the market’ that places profit and benefit of a small elite over bigger societal challenges and possible efficient delivery of services that benefit all stakeholders, including tax payers and partners in international development.


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