DEVELOPMENT Secretary Penny Mordaunt will today reveal a ground-breaking plan to slash billions in taxpayers’ contributions from the bloated aid budget.

In a radical shake up of DFID spending, the new Cabinet minister wants private investors such as pension funds to prop up Britain’s generous overseas programmes instead.

3 Development Secretary Penny Mordaunt will announce radical new plans for the country's aid budget Credit: Getty - Contributor

The nation will still meet the controversial target of 0.7% of its annual income on foreign aid.

But the Government wants to enforce a major change to international rules to allow non-government cash also to be used to meet the target, under Ms Mordaunt’s blueprint.

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In a major speech today, she will argue that the shake up is the only way to make Britain’s massive £13bn aid budget sustainable for the long-term with pressure increasing on Treasury coffers.

A source close to the Development Secretary said: “How we do aid is changing. It’s now much more about projects that help a country’s economy, which means there is an opportunity there for private money to make a return.

3 Chancellor Philip Hammond is supporting Ms Mordaunt's shake-up plans Credit: Getty Images - Getty

“Penny believes that means when investors step in, the taxpayer can step back, freeing up billions to spend elsewhere in government.”

The key to the plan’s success is persuading the Organisation for Economic Co-operation and Development international watchdog to reform tight rules about what currently constitutes aid spending – officially known as Official Development Assistance (ODA).

Ms Mordaunt – seen as a potential Tory leader of the future - is also expected to make clear today that the government will work with the OECD for reform.

3 Ms Mordaunt has been tipped as a future leader of the Conservative Party Credit: Getty Images - Getty

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But she will also reserve the nation’s right to act unilaterally if the watchdog refuses the changes, as other countries such as the Netherlands already have.

Ms Mordaunt’s plans have already won the backing of Chancellor Philip Hammond, The Sun has also learned.

But they won’t come into effect for four years, as the government will stand by the current aid projects that it has already committed to.

The Sun Says EVEN in a boom, it would be impossible to justify throwing billions in taxpayers’ money at foreign aid as recklessly as we do. It’s even harder with the country ­crying out for new funding. So Aid ­Secretary Penny Mordaunt is right to back a rule change allowing private investment to count in the 0.7 per cent of GDP commitment enshrined in law. But we should also repeal that foolish legislation and dish out sums case-by-case, only to verifiably worthwhile causes. Brits are famously generous over aid.



But not if it funds absurd vanity projects or corrupt regimes.

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