Rt Hon Anne-Marie Trevelyan MP
Secretary of State
In a letter to supply partners dated 1 May 2020, UK Secretary of State Anne-Marie Trevelyan has announced new measures intended to ease the financial impact of COVID-19 on companies delivering DFID’s aid programmes.
“My objective in offering this support is to maintain critical aid programmes, ensuring that the maximum amount of funding reaches the people who need it, and protect DFID’s capacity to respond to the impacts that COVID-19 will have over months and years in our partner countries,” Trevelyan writes.
The measures are intended to bring DFID’s support in line with that offered to supply partners working domestically in the UK. It’s also a stopgap for many of DFID’s partners who are not eligible for other UK business schemes and grants, but whose aid programmes must be allowed to continue.
Potential measures include payments in advance and cash flow support, but all are to be considered “a last resort and on a case-by-case basis” given Trevelyan’s “overriding responsibility to the British taxpayer to ensure best value for public money.”
According to Palladium Managing Partner Sinead Magill, DFID’s willingness to support their supply partners through this uniquely challenging time will be welcomed by some international NGOs, but Palladium does not expect to avail itself of any financial support.
“Our primary role is to support the response and deliver impact,” says Magill. “Parts of our business have of course slowed down due to the crisis, but many have been able to step up rapidly to support the fight against COVID-19. Our teams have recalibrated budgets to pull back where appropriate and quickly start new activities where needed.”
Palladium will not be requesting cash flow support or pre-financing unless the business is significantly impacted by COVID-19 (which Magill does not currently anticipate), or a sub-contractor requires support that Palladium cannot pre-fund.
“One of the biggest risks”
According to a recent press release from UK Aid, health experts have identified the weakness of developing countries’ healthcare systems as one of the biggest risks to the global spread of the virus. They have also warned that if coronavirus is left to spread in developing countries, this could lead to the virus re-emerging in the UK later in the year and put further pressure on the country's National Health Service (NHS).
Trevelyan echoes this sentiment in her letter to suppliers.
“Diseases do not respect borders, and our ability to protect the UK and developing countries from coronavirus will only be effective if we strengthen health systems globally,” she says. “By preventing the virus from spreading in the poorest countries we will save millions of lives around the world and reduce the risk of future waves of infection, that could also come to the UK and overwhelm our NHS.”
Magill agrees. “We know that DFID staff are having to make very difficult decisions about what to prioritise, what to pause, and what to cut. But the work we’re doing with aid from the British people is what builds resilience for the future, whatever that future brings.”
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