asked the Minister for Foreign Affairs if he will outline the cuts in grants to Hedco since his Department took over full direct funding in 1985-1986, with particular reference to the small projects fund and the administration grant; the reason he has decided to withdraw entirely from funding this agency; and the future development role he envisages for this agency.
Written Answers. - Hedco Agency Funding.
33.
Hedco received an administration grant of £117,000 in 1986, £100,000 in 1987, £55,000 in 1988 and £27,500 in 1989. There will be no administration grant in 1990. A management fee structure for projects has been replacing the administration grant since 1986. Management fees paid by the Department of Foreign Affairs to Hedco have increased from £18,000 in 1986 to £42,000 in 1987 to £89,000 in 1988 and an estimated £90,000 in 1989. In the Department's view this change is a valuable one in that it reflects more accurately the independent status of Hedco.
The total allocation to Hedco in administration grants and fees in the period 1986-89 is as follows: £135,000 in 1986, £142,000 in 1987, £144,000 in 1988 and an estimated £118,000 in 1989.
It is clear from the foregoing that Hedco received increases up to the current year, as the Department made a special effort to assist Hedco in the transition to the management fee system. The percentage reduction in Hedco's income from the Department in 1989 over 1986 is less than the reduction in the bilateral aid programme in the same period.
An allocation of £100,000 was made to the small projects scheme in 1986 and £70,000 in 1987. Owing to budgetary constraints, the scheme was suspended in 1988.
The Department of Foreign Affairs will continue to pay Hedco management fees for the projects it manages on the Department's behalf. In addition to such management fees, Hedco is well placed to continue to win international development contracts.