Brown’s immunisation charity is an expensive piece of political spin, says richard brooks |
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It was launched this week at a ceremony with the Archbishop of Canterbury, the Chief Rabbi and a Papal envoy. It promises to save millions of children's lives. It delivers a bumper pay-day for investment bankers and is strictly 'off balance sheet'. It could only be the latest wheeze from Gordon Brown - and it comes at a heavy price.
The Chancellor's brainchild, the $4bn International Finance Facility for Immunisation (IFFIm), aims to protect up to 500m children from polio, measles and other diseases by vaccinating them sooner rather than later.
The IFFIm, a UK-registered charity, raises money by issuing bonds. The first $1bn slice was snaffled up by eager banks and fund managers this week. Interest and repayments on the bonds will be met mainly by the Treasury over the next 20 years, with the British taxpayer committed to spending
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| Other countries will pay in but their combined contributions are far less than Britain’s |
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£1.4bn – or around £70m a year.
Other countries, including Sweden and Brazil, will pay in but their combined contributions are far less than Britain's.
But this intricate arrangement costs far more than the usual government borrowing that could easily accelerate the programme - 0.3 per cent a year more in fact. That's $12m a year on a $4bn fund. Or, at the Treasury's rates, around 1.5m immunisations a year.
So why deploy an army of lawyers and bankers to set up a scheme that imposes extra costs and slows down the immunisation process? The attractions of the IFFIm are two-fold. Brown's £1.4bn commitment stays out of government debt figures and the outlay is spread over two decades, each year's cost going towards the target of spending 0.7 per cent of national income on aid by 2013.
Brown can thus take the plaudits twice: now for launching a multi-billion pound facility without registering a penny of debt in his precarious finances - and again when the cash is actually spent. That's Making Poverty History, Gordonomics-style. 
FIRST POSTED NOVEMBER 9, 2006
 The Iron Chancellor melts
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