Department rapped on security costs

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DFID insisted that the benefits of the project justified the high security costs.

But the report from House of Commons spending watchdog the Public Accounts Committee said it was an example of the difficulties of delivering value for money in highly insecure countries.

Since 2002, DFID has more than doubled its annual spending in insecure countries - such as Iraq, Afghanistan, Somalia, Sudan and the Democratic Republic of the Congo - from £378 million to more than £1 billion.

But the report found that the department "lacks adequate information" about the additional costs imposed by issues like security, weak local government capacity and poor communications. And it warned that DFID should pay special attention to the danger of fraud in risky environments.

Although the department says it has lost less than 1% of its funds to corruption, the report said that "actual levels of fraud could be considerably higher" as detection is particularly difficult in insecure states.

The report noted that DFID was often ahead of other international donors in devoting funds and deploying staff to states experiencing conflict and insecurity.

And it said: "There are good reasons for DFID to be in many of these countries, where it is responding to great need. DFID's spending has improved the lives of many poor people in insecure countries."

But it warned that such work posed extra risks to staff and to the achievement of value for taxpayers' money.

Committee chairman Edward Leigh said: "There are good reasons for DFID to provide aid to poor people in insecure countries, for it is responding to great need. But there is also a multitude of risks to the successful implementation of over £1 billion a year of aid in such countries."