The Secretary of State
RESTRICTED
AID FRAMEWORK
When we met yesterday at the House of Commons, I mentioned the problem which has arisen on the Aid Framework. This has made it necessary to withdraw the paper which you put last December to the Defence and Overseas Policy
Committee.
It now seems clear that the draft Framework for 1972/73, which had been agreed at official level, contains too great a provision for expenditure under the programme to slip. The practice has been to over-commit the programe by the amount we expect it to slip, in order to make sure that the eventual outturn is as near as possible to the aid ceiling for the year. The size of the provision for slippage this year was worked out on this basis and by reference to past experience; but the expenditure forecasts which were compiled last month, appear to show that our efforts over past years to improve our spending ability are being more quickly successful than we expected. The result is that the anticipated slippage will clearly not be achieved.
One immediate result of this is that we shall not be able to maintain our offer to accommodate, within the Aid Framework, £20 millions of relief aid for Bangladesh. It will also bo necessary to impose about £25 millions of cuts on parts of the agreed Framework. This matter is now being discussed between Departments.
C I myself shall be writing to the Chief Secretary about this later this week. I shall send you a copy of my letter, and I hope early next month to put before you a revised Aid Framework paper for the Defence and Overseas Policy Committee.
23 February 1972