The Palestinian Authority reportedly received a "very small" amount of financial aid that the UK provided to undertake various developmental activities in the region, because it is heavily reliant on the release of the funds by Israel, which has a large part of the West Bank under military control.

The UK Department for International Development (DfID) is providing the grant to the Palestinian Authority under two separate programmes that began in 2011 and will run through 2016. A review report released by the Overseas Development Institute said that the Palestinian Authority faces several political constraints in making the right use of these DfID funds in the Occupied Palestinian Territories (OPTs).

The review of the two financial aid programmes – the Statebuilding and Service Delivery Grant (SSDG) and the Palestinian Governance Facility (PGF) – also showed that the ongoing political divisions involving the Palestinian Authority and Israel have negatively impacted the former's "willingness to undertake difficult public administration reforms to deliver long-term improvements in government effectiveness".

The report, titled "Evaluative review of the Statebuilding Grant and the Palestinian Governance Facility – DFID Palestinian programme", noted that frequent interventions due to conflicts and political or fiscal crises during the period of the two programmes have hampered their proper functioning. The conflict-hit environment has also "led to the long-term suspension of democratic elections", according to the report.

A pile of sterling coins
A report found that the Palestinian Authority is facing several constraints in using UK aid for developmental works due to the ongoing conflict with Israel. REUTERS

"Taken together, these constraints mean that any DfID programme aimed at supporting the ability of the [Palestinian Authority] to deliver better governance faces structural constraints in the degree to which the [Palestinian Authority] can ever act as an effective 'state' under the current circumstances," the report noted.

The SSDG programme is aimed at supporting the overall fiscal position of the Palestinian Authority. Under the programme, the Palestinian Authority will receive £156.4m ($221m) over the five-year period, including a small results-based tranche. Under the PGF programme, which is a technical advisory programme aimed at improving public administration and public financial management in the OPTs, the authority will receive about £7.5m.

UPDATE (14 June)
An earlier version of this article had cited an article in the Daily Telegraph to which Kevin Watkins, executive director of the Overseas Development Institute, issued the following statement:

"Citing an ODI report, the Daily Telegraph article claims UK aid encouraged terrorism. This is factually inaccurate. The report does not conclude that DfID's five year project encouraged public sector employees to engage in 'active conflict'. In fact, researchers conclude that donor support is fundamental to preventing the collapse of the Palestinian economy and government, which in itself would lead to a dramatic increase in the conflict.

"As background material to the report, we reviewed data from existing studies which looked at the relationships between labour market conditions and conflict. However, the article failed to mention that this background data was not drawn from the same time period as the five-year grant that was evaluated. The article misrepresents the complex statistical analysis and main conclusions of the report."

This article, including the headline, was altered to correct inaccuracies published in the original.