Britain has slashed funding it pledged to the government for the 2010/11 budget by Sh2.2 billion.
The British Government announced this is due to the Education Ministry fraud as it cut foreign aid to 16 nations. (Read: Education ministry lost Sh318m in scandals)
It said on Wednesday that Kenya will now get Sh9 billion (£70 million) instead of Sh11.2 billion (£87 million) as earlier planned.
But even after reducing the funding, the government is still not out of the woods as the money will only be released upon meeting certain conditions.
Release of the funds, for instance, are pegged on police reforms and political goodwill in the implementation of the new Constitution, the head of UK’s Department for International Development in Kenya and Somalia Alistair Fernie said.
His statement was posted on British High Commissioner Rob Macaire’s blog.
“If things go well, we could see a significant uplift in the UK’s aid programme to Kenya over the next four years.
“We are spending about £70 million (Sh9 billion) in 2010/11, £17 million (Sh2.2 billion) less than planned due to the Education ministry fraud,” Mr Fernie said.
In 2011/12 the UK Government has allocated Sh12.9 billion (£100 million), in 2012/13 Sh14.2 billion (£110 million) will be available to Kenya and in the following two years Sh19.4 billion (£150 million) each, he disclosed.
“This money is available to Kenya. But to satisfy our taxpayers, many of whom are now experiencing severe economic pressure, we will only spend it all if it is clear the right environment for achieving development results is there – and that includes political stability,” Mr Fernie said.
“For the latter point in particular, responsible actions by Kenyan politicians are now more important than words. We will be reviewing all these plans carefully in the light of progress in the run-up to, and after, Kenya’s 2012 elections.”
The government will be judged on its commitment to poverty reduction, respect for human rights and other international obligations, and sound financial management.
“These factors create the environment for sustainable progress in reducing poverty,” said Mr Fernie.
The stringent measures come in the wake of reports more than Sh103 million went missing from the free primary education programme, after which the UK and US governments suspended education funds to Kenya.
The new round of funding targets the health sector, notably reducing deaths from malaria plus more choices for women in family planning, social protection and wealth creation.