Implications for development should Scotland becomes an independent country

At present, as part of the UK, Scotland contributes significantly to the UK’s aid programme: nearly half of the programme is delivered from DFID’s office in East Kilbride, central Scotland. By agreement with DFID, the Scottish Government also has a very small International Development Fund of its own. If an independent Scottish development agency were to be launched, significant administration costs would be incurred during its setup.

From 2013 onwards, the UK Government plans to spend 0.7% of Gross National Income on Official Development Assistance. If Scotland were to become independent, we would expect the UK’s GNI to be smaller, with the UK’s ODA spending falling by around £1 billion. We would therefore expect some areas of DFID’s work—either its bilateral programmes or its funding to multilateral organisations—to be subject to cuts.

In addition, it cannot be expected that DFID would retain an office in an independent Scotland in the long term: the consequent restructuring would require DFID management for a number of years to concentrate more on restructuring and less on running programmes that benefit the world’s poor.

The UK is one of the top five countries with the largest number of shares in the World Bank, which gives it the power to appoint an Executive Director. It also has a full time director of the IMF. As a permanent member of the Security Council, the UK has considerable influence on the United Nations which also receives substantial contributions to its humanitarian and development work from the UK. The UK also contributes around £1 billion in development funding to the EU. Reinforced by the UK’s extensive network of Embassies, High Commissions and Consulates, this makes DFID a highly influential organisation on the world stage, whose work is genuinely transformational. An independent Scottish development agency could not achieve the same level of transformation and influence.

DFID’s office in East Kilbride is of fundamental importance to the area not only because of the quantity of jobs it provides, but also because of the quality of those jobs: the office has developed from an administrative base to a key operational centre. We would not expect the office to close immediately on the day Scotland became independent, but we do not believe the transitional period would last any longer than five years. East Kilbride-based staff are likely to have to relocate or face redundancy. Whilst some may be offered work with an independent Scottish development agency, the number of jobs available with such an agency is likely to be relatively few. We recommend that DFID consider what impact Scottish independence would have on the jobs of its East Kilbride-based staff.

Many Scotland-based NGOs think that the Scottish Government is more effective than DFID at engaging with them. It is understandable that the Scottish Government has greater capacity to engage with Scottish NGOs. International development is not a devolved issue; the Scottish Government Minister whose portfolio includes international development only has to administer an aid budget of £10 million and can devote considerable attention to engaging with Scottish NGOs, whereas DFID Ministers were 4 involved in administering an aid budget of £8.7bn in 2012/13. Nevertheless, we recommend that DFID increase its engagement with Scottish NGOs. We are also concerned that there is surprisingly little appreciation, within Scotland, of the level of influence which DFID has on the world stage. We recommend that the Department liaise with the editorial staff of the Scottish media, with a view to improving the Scottish public’s awareness of the Department’s work.