The suggestion from the parliamentary committee comes after its Independent Commission for Aid Impact (ICAI), responsible for scrutinising foreign aid of the United Kingdom, showed concerns over corruption in the projects supported by Local Governance and Community Development Programme in November last year.

The UK is also one of the key development partners of LGCDP, the multi-donor project that receives funding also from the British aid agency, DFID. Donors have offered around $160 million for the four-year project starting in 2008 while the aid for the second phase programme is estimated at $151 million.

“DFID’s large budget in Nepal can only be justified if there are such improvements, and should be reduced if effective action to combat corruption is not pursued vigorously by the government of Nepal,” Malcolm Bruce, the head of the International Develop-ment Committee (IDC) of the UK parliament, was reported as saying.

Additionally, Thomas Bell, a British journalist living in Nepal, had submitted evidences to the IDC, demanding enquiry into the corruption reported in the DFID-funded projects in Nepal. IDC, which monitors the performance of the DFID, has set certain conditions on continuing aid to Nepal which requires the country to become less corrupt, and show improvements in governance. Another IDC reservation was that Nepal’s government had provided funds to NGOs in the absence of elected representatives at the local bodies.

DFID’s aid budget for Nepal, according to the report, has increased significantly in recent years. In 2012/13 the aid to Nepal was £55.93 million that jumped to £104.7 million in 2013/14. The aid for 2014/2015, however, stands at £86 million.

The IDC report prepared under the House of Commons states: “It does not see the use of local NGOs in place of the state as a panacea; in corrupt societies NGOs can also be corrupt. DFID’s large budget in Nepal can only be justified if there are such improvements, and should be reduced if effective action to combat corruption is not perused vigorously”.

The report, however, has lauded Nepal’s “huge progress” in health, thanks in part to DFID’s provision of sector budget support.

“Given the threats to Nepal from climate change and earthquakes, DFID’s focus on these issues is welcome, but DFID’s work on disaster reduction is on too small a scale,” the report states.

The report has suggested that DFID should engage with the Nepal government in urban planning, including transport improvement, where the UK has considerable expertise. Stating that DFID’s decision to drop support for national elections was the right one, the report says other donors could fund them.

IDC has, however, recommended support to conduct local elections, saying that the absence of elected people’s representatives had promoted corruption. It has also commended DFID for providing technical support to the Investment Board of Nepal, which mediated in the construction of two major hydropower projects with the aim of addressing the country’s chronic power outages.

A spokesperson at the DFID headquarters, UK, said the department would welcome the IDC’s recognition. “DFID has a zero tolerance approach towards corruption and we address the risks in all our programme activities. We welcome the IDC’s recognition that it’s important to work with governments if corruption is going to be addressed, and that DFID’s programming takes a well-considered approach to doing this,” Kathryn Dorrian wrote

to the Post when asked about the implication of the IDC’s suggestion.

Despite having more than a dozen anti-graft bodies, Nepal is struggling to control corruption. Transparency International has ranked Nepal in the 126th position among 175 countries surveyed in 2014.