DFID considers exceptional payments to charities, but warns it can't cover all losses

01 May 2020 News

The government has pledged “last resort” measures to help aid charities cope with the financial impact of the coronavirus, but warns that it won't cover all losses.

In a letter sent today to all suppliers working with the Department for International Development, seen by Civil Society News, international development minister Anne-Marie Trevelyan says that DFID will consider stepping in with exceptional financial support for some organisations in response to the “unprecedented” crisis. 

Contracts and programmes

DFID will consider making advance payments on existing contracts as well as making ongoing payments for programmes which have been paused because of the pandemic, the letter says.

Any advance payments would be capped at 25% of the value of the contract. Both measures would be used as a last resort, only when there is a clear value for money case, and where “all other options have been exhausted”, Trevelyan writes.

The changes are intended to ease cash flow and help charities to meet ongoing costs, the minister says, at a time when many DFID suppliers face significant financial pressures. Aid umbrella body Bond has estimated that the coronavirus crisis has placed £1.8bn in income at risk. 

No guarantee to charities

However, the letter also warns that the government will not step in and save all charities. Referencing her “responsibility to the British taxpayer”, Trevelyan writes that she “cannot give a guarantee to any partner that DFID can or should make good all the financial impacts of the pandemic on your organisations”.

Ministers will sign-off any decisions on a case-by-case basis. The measures will remain in place until June, and will then be reviewed.

The provisions have been announced in the same week that DFID starts its plans for distributing £20m in emergency funding. That process has been criticised by some experts for freezing out smaller aid charities, which are not on the list of “pre-approved” organisations eligible to apply for the money.

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