Ministers must do more to tackle the “appalling conduct” of some private contractors used to deliver foreign aid projects, a committee of MPs has said.
There were “fundamental flaws” in the working practices of some of the groups that handle tens of millions of pounds of taxpayers’ money, said the MPs.
The International Development Committee also criticised a “complete lack of enforcement” of procurement rules.
The government said it was already undertaking a “root and branch” review.
International Development Secretary Priti Patel has warned suppliers against “excessive profiteering or unethical practices”.
With official figures due this week showing the UK’s aid budget continuing to grow, ministers are facing more scrutiny than ever before about how value for money is achieved, the BBC’s global affairs correspondent Naomi Grimley said.
Funding and distributing foreign aid is the responsibility of the Department for International Development (DfID).
According to the International Development Committee, the department has become a “commissioning organisation rather than one of delivery”.
Private contractors can be an “effective channel for aid delivery”, it said.
But it raised concerns about the way the supply chain was being policed.
“Serious examples of sub-contractors being mistreated by lead contractors point towards an insufficient level of oversight that DfID should take concrete steps to improve,” the report said.
“We are also greatly concerned about the appalling conduct of some contractors who have behaved in a way that is entirely misaligned with the department’s purpose,” the MPs added.
“We recognise that not all contractors have behaved poorly, though we also stress that recent examples highlighted in the media should not be viewed as isolated cases.”
Earlier this year, the committee was particularly critical of one contractor, Adam Smith International.
In its latest report the committee says this was not an isolated incident, and argues there is something “inherently wrong” with the culture in some of the profit-making companies which bid for overseas aid contracts.
In an anonymous evidence session, two contractors raised concerns about the system, with one saying firms were trying to “squeeze out every last penny and ripping off” the department.
According to the MPs’ report, the way the market is set up means contractors are rewarded for winning contracts, rather than delivering them, the MPs say.
And while firms are required to agree to the department’s rules, “there is a worrying over-reliance on self-regulation and a complete lack of enforcement”, they add.
The Department for International Development said Ms Patel had already launched a review of the department’s work with suppliers with a view to achieving “root and branch” reform based on principles of accountability and transparency.
“The secretary of state has been crystal clear that she expects all suppliers to deliver results for the world’s poorest, provide value for taxpayers’ money and that she will not tolerate anything less,” a spokesman said.