UK suspends its annual Commonwealth secretariat subscription until financial procedures are improved

BRITAIN has suspended its funding of the Commonwealth Secretariat deciding to withhold the annual £4.7m contribution its makes to the body until there have been significant changes in the way it improves its financial procedures.


Established in 1931 by the United Kingdom as an umbrella group of all her former colonies, the Commonwealth currently has 54 members with a combined population of 2.4bn people. Its headquarters are in London and the current secretary-general of the Commonwealth is Baroness Patricia Scotland, the former UK attorney-general.


Despite claims from the Commonwealth secretariat that it was implementing recommendations made by external auditors, the UK Foreign and Commonwealth office has decided to withhold its subvention until further improvements are made. Baroness Scotland was criticised by auditors for circumventing usual competitive tendering rules when she awarded a lucrative consultancy contract to a company run by a friend.


Auditors also discovered that procurement rules had been waived by the secretariat on no fewer than 50 occasions over three years. Both New Zealand and Australia have also suspended their discretionary funding to the Commonwealth secretariat until its financial systems are tightened up and tested by external auditors.


With this latest UK decision, the secretariat could be plunged into a financial crisis and will raise fresh questions about Lady Scotland's leadership. Commonwealth heads of government have already rejected calls to give Lady Scotland an automatic second term of office when it comes up for renewal later this year.


This funding crisis came to a head last week when Commonwealth high commissioners in London, who together form the organisation's board of governors, met to discuss the results of the investigation by the external accountancy firm KPMG. About two-thirds of the Commonwealth secretariat's funding, some £18.4m in 2018, comes from automatic subscriptions from member states.


Baroness Scotland, has, however, accused British Prime Minister Boris Johnson, of a fake news-style attempt to undermine her and has vowed to hold on to her job. One senior British diplomat wrote to Baroness Scotland on February 3 to say that continued UK funding would be suspended until the Commonwealth secretariat complied with the recommendations of the KPMG report.


These conditions included a register of occasions when procurement rules were waived, a register of real and potential conflicts of interest and an updating of the body's whistleblower policy. The official gave the secretariat a deadline of February 21 to implement all the reforms which would have to be signed off by the chairman of the Commonwealth's independent audit committee.


New Zealand has also put its £1.5m contribution on hold. Australia has gone one step further and cut its funding to the Commonwealth Secretariat by £414,000 and has made its remaining contribution of £260,000 contingent on the reforms being implemented.