Department For International Development Annual Report Resource Accounts 2009 10

Government response to HC 605, session 2010-11 (ISBN 9780215556240)

In the 2010 Comprehensive Spending Review the Coalition Government announced its decision to achieve the internationally agreed target of providing 0.7 percent of Gross National Income as ODA from 2013. This will involve spending an additional 2.5 billion pounds in 2013-14 to make the total DFID budget 11.3 billion pounds in that year. There will be a large increase in spending on fragile and conflict affected states and it will be difficult to ensure that every pound is well spent in such war-torn environments. When scrutinising DFID's accounts the MPs were also surprised to discover that the Pope's visit was paid for in part by money supposed to be for overseas development aid (ODA). The Committee expects a response from the Government as to what the £1.85 million, transferred to the Foreign Office for the papal visit, was spent on and an explanation as to how this was ODA compliant. The Comprehensive Spending Review (CSR) announced reductions in DFID's running costs to 2% of the total budget. If achieved, this would make DFID the most cost-efficient development organisation in the world.This is to be achieved by a large reduction in back office administration costs (which excludes front-line staff) of £34 million over the CSR period. The International Development Committee supports the proposals to make savings in back office staff, but the MPs are warning that Ministers must ensure that reduced administration budgets do not affect the ability to deliver aid programmes on the ground. While declining as a share of total costs, running costs will increase in real terms over the next four years because the total budget will rise so much.

While DFID's total budget is increasing, the Department will both restrict operating costs to 2% by 2014-15 and reduce its administrative costs by a third in real terms, from £128 million in 2010-11 to £94 million by 2014-15. This report warns that capping operational costs and staff numbers may not reduce overall costs or improve effective delivery of development assistance. The International Development Committee also raises concerns that cost pressures are driving DFID to use consultants to deliver its programmes, rather than in-house expertise. The Department spends £450 million on technical cooperation per year. Much of this is good work, yet it was unclear exactly what this money was spent on, or how effective it was and the extent to which external providers were used. DFID needs to improve its assessment of which projects and services it should use consultants for; and assess more carefully the use of consultants to manage the Department's own delivery programmes. In its efforts to reduce administrative spending DFID might be 'exporting' these costs to other organisations, including NGOs and multilateral aid organisations, with higher real administration costs. The Department should assess the best and most effective way to deliver development assistance as it may be able to do it more cheaply and effectively than external organisations. The report recommends that the Department improves its tracking of and reporting on the total cost of administering its aid programme with the aim of quantifying how much aid actually ends up reaching recipients.

This report is the International Development Committee's annual review of UK aid programmes and the administration of the Department for International Development (DFID). The Committee finds that field work overseas should be given greater priority and Ministers must explain UK spending on humanitarian projects more clearly. DFID should not provide funds to support disasters in middle income countries by raiding bilateral development programmes in low income countries. Other wealthy OECD countries must play their part in providing humanitarian assistance. DFID should set out annually its provisional budget for humanitarian relief, what is held as contingencies for unpredictable events and how it will be deployed if not called upon. There has also been a decline in DFID's spending on budget support, the consequences of which should be assessed. £1,075 million of DFID's bilateral expenditure is spent through multilaterals and private contractors. DFID has put in place a number of changes to improve the value for money provided by spending through and should report on their effectiveness. The Committee is also worried that the Department actually spends 40% of its budget in the last two months of the year, which raises questions about the smooth running of management and planning processes. DFID staff should have longer postings overseas (normally a minimum of four years) so that they can develop a deeper understanding of the culture and politics of the country they are working in and engage more effectively with the country's politicians.

Government response to HC 693, 2013-14 (ISBN 9780215071750). DFID's annual report for 2012-13 published as HC 12, session 2013-14 (ISBN 9780102983241)

As the end of the 2010-2015 Parliament approaches, the Committee has taken the opportunity to look back on their work. This Report outlines some of the Committee's work, progress and effectiveness during this Parliament and sets out areas that may be of interest to their successor committee. It has also provided the opportunity to scrutinise what actions the Government has taken with regard to issues and recommendations raised in our reports.

The Independent Commission on Aid Impact (ICAI) is an independent commission which reports to the House of Commons International Development Committee, not to the Department for International Development (DFID). The Committee ensures its accountability to Parliament in two main ways: through a sub-Committee, which takes evidence on the reports published by ICAI; and through an inquiry each year carried out by the full Committee into ICAI's Annual Report. 2013-14 has been a busy year for ICAI, with 12 reports published on a wide range of DFID's activities. ICAI's Annual Report contained three headline findings for DFID this year. Firstly, tighter management of multilateral partners is needed. Secondly, DFID needs to continue to improve its aid programme management capacity, especially where contractors are implementing programmes. Thirdly, DFID's corporate results agenda - and in particular its use of 'reach indicators' - is distorting programming choices. The Committee shares ICAI's concerns on these issues and intend to follow up its recommendations in two forthcoming inquiries this autumn: Beyond Aid; and DFID's Departmental Annual Report 2013-14. DFID spends a large amount of money - at least £200 million - on self-evaluation. However, it cannot provide an exact total. The Committee question this large expenditure, especially given that an ICAI evaluation recently found that DFID staff struggle to use self-evaluation material in their work. The contracts of the current ICAI commissioners, contractor consortium and staff all end in May 2015. While staff contracts may be renewed, new commissioners and contractors must be recruited. Planning is underway for the transition to the next phase of ICAI: all possible efforts must be made to ensure this goes as smoothly as possible.

In 2010 the Department for International Development (DFID) undertook reviews of both its support for multilateral organisations in its Multilateral Aid Review (the MAR) and of its bilateral aid programmes in a Bilateral Aid Review (the BAR). As a result of the BAR, DFID decided to close a number of country programmes following criteria set out in the review. The Department published, in March 2011, the priorities and expected results for the countries where bilateral programmes were to continue. Yet 18 months and two years after that publication, the Department announced that bilateral programmes with India and South Africa would come to an end in 2015. The Secretary of State has not convinced the Committee that the announcement to end the programmes in India and South Africa were in accordance with the principles and process established by the BAR. Such decisions to end a bilateral programme or to start a new one should be made only following a Bilateral Aid Review, except in exceptional cases. Concerns remain about the timing of the decisions and, in particular, that they are neither methodical nor transparent, but related to short term political pressures.