Uncorrected oral evidence: United Nations Industrial Development Organization (UNIDO)
Oral evidence, 12 October 2026.
Sir Andrew Mitchell
First, about whether UNIDO has rectified the weakness, as Evelyn Waugh said in Scoop in 1938, “Up to a point, Lord Copper”. There have been three important developments since my first iteration in development in government. The first of those is that there is undoubtedly a more focused industrial and climate agenda. There is much greater emphasis on industrial decarbonisation, clean energy, green industrialisation and sustainable supply chains. In all those things, you will find that UNIDO is taking a much greater interest and the UK Government, as I think may be evident to you, my Lord, have noted that international co-ordinational technical standards and investment are very important and are better. Secondly, there is clearly better oversight and transparency. I am advised that the Government think UNIDO is smaller and more efficient than when we looked at it before, has a proper independent evaluation unit and has much greater openness on the effectiveness of their programmes. I am giving a précis, but I think that was the burden of the evidence on 15 September this year. Thirdly, we have developed programmes within UNIDO rather than pay a membership subscription. Those programmes, looking back over what Britain has sought to influence, are on clean technology, industrial decarbonisation and work on clean industrial markets. That has clearly increased the Government’s happiness with what UNIDO is doing. In terms of the problems, I think I mentioned that if you look at the MAR report you can see that we were very worried about its impact on global poverty and about the spread of UNIDO’s assets around the world. I think I made the point about Lord Malloch-Brown and UNDP—if you look at the work of UNDP and the work of UNIDO in those days, you can see that there were others who were much better at doing UNIDO’s core job than UNIDO. At the time, my officials noted the weak financial management and lack of transparency. That is why we took the decision that we could spend our £7 million better elsewhere, and we withdrew over two years.
Baroness Lawlor
Andrew, you have spoken about your own thoughts on the Government’s decision to rejoin UNIDO. I got the sense during our evidence sessions that many people were very sceptical of joining a big organisation involving all the money, particularly given that there were parts of the world that did not have clean running water and had clear needs to be met that would be better met by private sector investment and focused project management such as you promoted, as you have outlined. Coupled with your other aims, these were aims that you pursued. They have not happened everywhere. We heard from a couple of Peers about their experiences in Africa and India, where these things are lacking. What is to guarantee that joining UNIDO, another big organisation where the members—I think there are 53—meet every two years, and which is run by a secretariat, would be any better, despite the reforms, at achieving the three aims you had: efficiency, private sector investment and tackling corruption? Are we not better to do that on our own, with specific focus and keeping an eye on our prime aim in the UK of tackling the problem of migration? I think in your view it would be through development at home.
Sir Andrew Mitchell
That is an extremely interesting question, your Ladyship. First of all, in order to do a number of those things, you need a bilateral programme on the ground in the countries where people are working, which of course gives the Government direct eyes on what is happening. You will have seen that although I, in the last year of the Conservative Government, doubled the bilateral programme across the countries in Africa that we worked in, because of the inexplicable decision by Keir Starmer to cut development even further from 0.5% to 0.3%, that sort of involvement does not exist and the bilateral programme in Africa has been cut to ribbons. But the real question is: how should the Government keep an eye on what is happening now that it is rejoining, to see whether it meets British requirements? The questions I would bear in mind when looking at UNIDO’s work, and I hope there will be proper evaluation of it, are fourfold. First, is membership necessary? If we are already funding projects for and with UNIDO, what are the additional benefits for the UK taxpayer? Secondly, what is the opportunity cost of spending this extra money through having a seat at the table at UNIDO? I have already spoken of the very stressed budget that we now have, and it needs to be measured against the myriad of very good calls on that budget. Is this one of them? Are we missing an opportunity here to do something else? Thirdly, we need to make sure that UNIDO is kept up to the mark. We do that by the very British results agenda and holding their feet to the fire on the promised improvements; something you always have to do with these agencies, because when they want the money they are quick to say that they will make these improvements, but when they have the money they sometimes get distracted. It is very important that Britain does all that, particularly if we are going to be on the board of UNIDO, as it were. Fourthly and finally, go back to the multilateral aid review criteria, of which development impact, value for money, additionality, governance and sustainability are explicit criteria that could lead to us leaving once again. The Government are proposing a 2029 review. The original MAR provides the enduring guidelines to that.
Baroness Lawlor
I will just play devil’s advocate. You talked about feet on the ground and bilateral arrangements, so that we have people who will conduct the projects. You had various projects on the ground. Some of them may have lasted, some may not. I do not know what happened to your own projects in Sierra Leone and Rwanda. Those were focused programmes and you had feet on the ground. I presume there are agencies with which you work and you wanted to bring in investment from your background as an investment person. Why can that not continue to be done, including by agreements or funding to specific agencies, if you need them, that you are confident are on the ground, or other bodies? Then the task is not to find the boots on the ground but rather, having identified the projects, to fund those, rather than just joining yet another UN commitment to have a seat on a table of 52 members and a secretariat that will, in the end, decide the agenda.
Sir Andrew Mitchell
That is a most interesting point. We currently work with UNIDO on projects and in areas where we think it is presumably value for money and in the British taxpayers’ and British national interest. The question is whether or not by being on the board, as it were, we are able to help fashion which areas UNIDO goes to, rather than just having to say, “That looks a rather good project, I think we will support that”. I do not know whether you are going to ask me whether I support the decision or not, my Lord—
The Chair
I think we are.
Sir Andrew Mitchell
I have obviously thought about it. All those decisions are much more difficult now because the funding is so constrained. Also, never forget that the cutting of the funds is one thing, but then there is the vaporising of the expertise which was respected around the world. Indeed, I would go so far as to say, my Lord, that the only area of British international leadership which has been accepted in the past without qualification has been on international development. You saw this respect on all sides of the United Nations, and today I am afraid we are in a very difficult and different circumstance when it comes to British interests and British effectiveness in the way I have described.
The Chair
Are you saying that, because of these cuts and this change, we now need to work more through organisations like UNIDO, and one of the reasons why you withdrew was because you felt we could do it better ourselves?
Sir Andrew Mitchell
I felt we could use taxpayers’ money better ourselves. The very limited taxpayers’ money that is available today—much of which of course is going to fund the first year of an asylum seeker’s time in Britain; that is in accordance with the rules governing the overseas aid budget—leaves very little indeed. Therefore we have to approach being careful with the way we spend this money in a very different way from when, with all-party agreement, the money was far greater and our reach and effectiveness were far greater. We must always remember, of course, that the first call that the British public expect us to make on this budget is on humanitarian expenditure. The committee will be well aware of the disaster that is going on in Darfur at the moment. Quite apart from being an area of previous British historical interest, that is obviously also an area that cries to the heart of a generous British public in supporting these people there who have been, and are, in desperate peril.
The Chair
Thank you very much. I just ask for a small clarification. When you talk about £7 million cost, that is not money that goes into development; that is the administrative—
Sir Andrew Mitchell
Sorry, the 0.7% or the £7 million I mentioned in respect of UNIDO?
The Chair
Yes, the £7 million.
Sir Andrew Mitchell
The £7 million I mentioned in respect of UNIDO was the annual cost of being a member of the board.
The Chair
It is a fee to manage—
Sir Andrew Mitchell
Yes, it is the fee for joining, which is at the heart of your inquiry, because the Government have decided to change what we agreed and go back to doing that.
The Chair
Sorry, I have asked this question, so I am repeating myself slightly, but that is a very small amount in relation to the money that we were channelling through UNIDO, which would be hundreds of millions of pounds.
Sir Andrew Mitchell
You mentioned £200 million, my Lord, which is more than I remember it, but I would have to go back and consult the papers.
The Chair
I think that is the current contribution that we are working through UNIDO. Have I got that right? Am I way off? Oh, it is £125 million, but I think it is going up to £200 million.
Sir Andrew Mitchell
That money is not being spent by the Foreign Office. It is doubtless from the ODA budget—the development budget—but I think it is being spent mainly by DESNZ, because, of course, within the Government, they have the lead on many of these climate issues. I gave an example where £15 million of British taxpayers’ money was being spent in Brazil, but if—if—it brings in not only the development finance money from multilateral organisations but also the additional private sector money, it would look to be very good value indeed. But you have to wait and see what the evaluation says.
Lord Hannay of Chiswick
We will have to wait and see what happens in the Brazilian election too. Thank you very much for coming along; it is hugely valuable to the committee to have a former Secretary of State of your effectiveness—which I would certainly bear testimony to—coming here to tell us why it was you withdrew and to answer our questions. That is very good. I would like to pick up one point that you made at the beginning. You instanced UNICEF, where you had greatly increased our contribution, because it was a very good organisation which was spending the money in an effective way. That is a very important point. When I was responsible in New York for these matters, one of the weaknesses then was the position we are in now, which is that whenever we went to subject a UN organisation to a rigorous inquiry, they would say to us, “And if we can satisfy you, will we get more money?” The answer in the early 1990s, when Baroness Chalker was the Minister, was, “Sorry, it won’t make any difference to the amount of money you can get”. That is a hopeless position to be in because there is no leverage for improvement there. Thank you for reminding us that, when you were in charge, you were able to increase that sum. Could I ask you a double question, really? It is entirely about the desirability, and the nature, of subjecting the decision which the Government has now reached to rejoin UNIDO to a review of some sort or another, probably in a specified period of time, to make sure that the UN is not—as I think you yourself suggested; sometimes UN organisations do this—slipping back again into funding largely its own running costs and not the objects that the organisation is set up to do. The double question is this. First of all, do you think that the decision that is being taken should be subjected to some form of review to ensure that there has not been backsliding on the elements that the Government considers have demonstrated that UNIDO is doing better in recent years? I am sorry, I am just jumping to the assumption that it will be taken, that it has been taken, and that it will be sustained. Do you think that there should be a review? The second part of the question is: if there is going to be a review of the decision to rejoin after, let us say, three or five years, do you think that should be subject to any kind of parliamentary process in either House of Parliament, of the sort that we are having at the moment here on this decision?
Sir Andrew Mitchell
That is a very interesting question. On UNICEF, I completely agree with your Lordship, because it was something important to show. As I said, the UN were aghast that we were doing this. They did not believe we would do it—and that speaks to the complacency of an organisation which you know far better than any of us do. With UNICEF, we were showing that it was not an exercise in cutting. Often people immediately would cynically think, “They are only doing this to cut away”, but we only cut away four of the organisations, and UNICEF are an example of one where we looked at the results they were achieving. We saw what they were doing for children in impossibly awful situations around the world and how they were ameliorating that. Following a very stringent analysis, we were able—with some pleasure—to double the core grant, which I think was £10 million a year at that point. We were very pleased to do that. On the subject of a proper assessment of this decision and the nature of whether it should be a parliamentary inquiry or not, I think your committee, my Lord, has shown the right way to do this. I note that the Government has, I think, promised that there will be an evaluation in 2029, and I hope very much that this committee will hold the Government’s feet to the fire on that. Certainly, the International Development Select Committee in the House of Commons should look at that report and establish whether it is both helpful and justified and that it agrees with its conclusions. If it does not agree with its conclusions, I hope that both it and you will set about the Government to hold them accountable for the decisions that they have made. I think your Lordship is also asking me whether I think it is a good idea to go back, so would it be helpful if I—
The Chair
Yes, please. Your direction on that would be very useful.
Sir Andrew Mitchell
I start by saying that the ODA budget is under unprecedented stress, and therefore you have to be clear that this is not just a “nice to have”. Because of the stress on the budget, it needs to be something that will really do good. I have mentioned a number of ways in which it could really do good—in particular, helping with the very important climate change agenda. But there are issues that remain. There are two that I will mention to the committee. One is UNIDO’s own review and independent evaluation of its results-based management, which looked at the performance of UNIDO between 2018 and 2025. That was some time after we had given UNIDO the shock of leaving and, and as you said, my Lord, other countries had copied our lead. The formal systems and frameworks, according to the 2018 to 2025 review, are much improved. But it made clear that results management was not well implemented across the whole of UNIDO. That is incredibly important because, if you cannot show the results, you cannot justify to taxpayers the money that you are spending. Secondly, the report identified weak accountability and controls below senior management levels. This included fragmented data systems, incomplete baselines and shortcomings in measuring outcomes across their activities—the results agenda that I have repeatedly mentioned. This really matters because better systems and a more attractive strategy are not the same thing as demonstrating those results. My conclusion is that UNIDO has changed in ways that are important since we reviewed them in the multilateral aid review after 2010, but they have not fully overcome the original MAR concerns. When I was in the Foreign Office, my department was not spending money on UNIDO, and it has not done so for at least five years. So, in a way, the question of justifying rejoining, where I think the jury could be argued to be out, needs to be put to DESNZ, and a lot of attention paid to 2029 when the next review takes place.
Lord Hannay of Chiswick
Thank you very much. I am delighted that, when you read the transcript of the evidence that we took from officials, you got the impression that they committed themselves to a parliamentary procedure with this committee when they reviewed. I have to say that, having sat in the room and watched them doing so, I was left feeling a little way short of certainty that that was actually going to happen. Of course, they will have another opportunity to do so if we decide to raise this matter in our report, because it will come up in the debate that the House has. I would hope that we would get a more full-throated commitment to that. One of the reasons for that is because—and I would like you to comment on this last part of my question—a parliamentary dimension to this is of benefit to our negotiators when they are talking to UNIDO, because they are able to say, “Look, you understand that we’re going to have to go before a parliamentary committee and tell them that the money that you, UNIDO, is spending is good money for our taxpayers, and to do that we’re going to need some very convincing arguments. Here are three, four or five of them”. This is a weapon in our hands rather than something we should be flinching from. Is that your view?
Sir Andrew Mitchell
Yes, your Lordship is entirely correct. My observation would be that the International Development Select Committee in the other place is highly respected. Certainly, officials both in my second time in government, between 2010 and 2013, and my third and final time, between 2022 and 2024, were very wary of Select Committees, because their job in representing the taxpayer and our constituents is to get to the bottom of all these matters. It is a very good system for holding Government to account, and the International Development Select Committee is extremely good at doing it. I hope I said, because my notes here say, that the Government are proposing a 2029 review. Perhaps in your future discussions you might wish to turn that proposition into a commitment.
The Chair
We definitely need to do that. I do not think it was a firm commitment; it was more that we always have a check after however many years. Lord Stevenson, do you have any supplementary questions before we come to a conclusion?
Lord Stevenson of Balmacara
Yes, could I ask one question? We are very grateful to you for the comments you have made, Andrew. You have broadened the debate and enlightened us on a number of issues that we were concerned about. I was just reflecting on what you said about the MA review, which was obviously groundbreaking and you should take credit for attacking something that most people within the system would have thought impossible. But if we are going to have a review in 2029, which I hope we will and I think we should say so in our report, is the MA review as you originally described it relevant? “Relevant” is perhaps too strong; of course it is relevant. But would it be the right model to use in the sense that we are comparing the time when you launched it, when, as you say, our development work was world-class and top of the league, and now we are way down near the bottom? We might be seen to be trying to do something rather ridiculous—straining at a gnat—because we are no longer experts. Do you agree with that?
Sir Andrew Mitchell
The truth is that the agglomeration of skills that rested in DfID, when it was a department of state for international development, was quite extraordinary. If I, as Secretary of State, wanted to know how research was going in developing a climate-resistant seed to grow in very arid soil in the poorest parts of the world where there was huge food constraint and I raised the question, I would probably have six PhDs outside my door in the department to answer that question by lunchtime. That skill has been greatly mitigated, although there are still some quite extraordinary people in the Foreign Office, led by Nick Dyer, the Permanent Secretary responsible for international development, but they are now few and far between. On the other hand, we were able to engage externally with a number of experts in think tanks and universities. I would hope that some of that would be able to be brought into play again. The six points I gave about the MAR, which will be in your records, are the six key questions, and I would hope that they would be asked in any review undertaken by this committee or the International Development Select Committee. Although the bilateral aid review, which is of course not relevant today, was not about saving money at all, it led to us reducing from, I think, 42 or 43 to 26 the number of countries we worked in, because we did not feel that spending British taxpayers’ money on continuing bilateral programmes in those countries could be justified.
Baroness Lawlor
Thank you very much for coming. Everybody has found this very helpful. Looking at the review, which Lord Hannay and others have mentioned, and with us all perhaps looking forward to a commitment, what kind of people should be doing the review? How would you ensure that you have truly independent people doing a review, rather than it being something to rubber-stamp membership post-2029?
Sir Andrew Mitchell
Of course, he who pays the piper calls the tune. We have to be wary of that. But the department—the Foreign Office—which has not been spending this money, would commission the experts from the areas I described to make that assessment. Although there would undoubtedly be official involvement in that, one would hope that external independent resources would be involved in drawing up the details and judgments from which officials would be able to make a proper decision.
Baroness Lawlor
And the terms of reference?
Sir Andrew Mitchell
Well, again, I think they could do worse than look back at the multilateral aid review of 2010.
The Chair
A classic approach, which I am sure will be used as a template for the future too. Do any of my colleagues have any further questions? No? Sir Andrew, thank you so much for being with us. I do not know whether you gave us an equivocal answer in a binary—join or not rejoin—sense, but your caveats are extremely relevant. I am very grateful to you for drawing our attention to the 2029 review point and the fact that the world has changed since we left and, it would seem, we will have to rely more on third-party agencies than perhaps we did, even though the principles you outlined in your original MA review still have to be coherent and adhered to, otherwise we will end up wasting money. Do you have any final comments you wish to make?
Sir Andrew Mitchell
No. Thank you very much for giving me the opportunity to answer your questions.
The Chair
It was greatly appreciated. Thank you very much indeed.