Department for International Development Annual Report & Resource Accounts 2009-10 - International Development Committee Contents


3  Making spending on aid more effective

Aid effectiveness

35. Speaking at the Carnegie Foundation soon after taking office, the Secretary of State announced

Ours is a new agenda, one of value for money; accountability; transparency and empowerment [...] People want to see British aid money saving lives and educating children in the world's poorest countries [...] Today I send a clear signal: value for money will be our top priority for aid.[48]

36. The Government has established three main mechanisms for improving value for money, namely the establishment of:

  • reviews of bilateral, multilateral and humanitarian aid;
  • an Aid Transparency Guarantee, and
  • an aid watchdog (the ICAI).

Reviews of bilateral, multilateral and humanitarian aid

37. DFID has initiated reviews of its bilateral, multilateral and humanitarian aid programmes. These reviews are intended to produce the evidence from which the Department will make decisions about future aid allocations. The November 2010 Business Plan states that savings made from reducing lower priority spending and waste will be re-directed to priority countries and programmes where the impact will be greater.[49] We will comment on the Bilateral Aid Review in our Report on India, the Multilateral Aid Review in our Report on the World Bank and the Humanitarian and Emergency Response Review in our Report on the Humanitarian Response to the Pakistan Floods. We welcome the Government's reviews of bilateral, multilateral and humanitarian aid programmes and trust that they will lead to a switch of spending to organisations and programmes which offer better value for money.

The Aid Transparency Guarantee

38. There is to be a new UK Aid Transparency Guarantee which will mean that information about all DFID's spending over the value of £500 will be published on the departmental website and will therefore be available to the people who benefit from aid funding:

The UK Aid Transparency Guarantee will also help to create a million independent aid watchdogs—people around the world who can see where aid money is supposed to be going—and shout if it doesn't get there.[50]

39. The Department added:

One of the things that's really important is that we make available information that is comprehensible and people can make some use of, so over the last three or four months, we've been redesigning the way we do our project documentation to make it clearer and simpler—not to lose the rigour of analysis, but to set it out in a single document in a clearer way, so that when we start to publish our project documents in January we're putting up something which may not feel like an easy read to everyone, but will be considerably easier and clearer than would have been the case previously [..] We're also going to translate the summaries of core project documents into local languages, so that this isn't just for an English-speaking audience, but in our partner countries we make available summary information on our activities.[51]

40. The Aid Transparency Guarantee should also help improve the ability of people in developing countries evaluate projects and enable them to take more responsibility for evaluating the impact of donor policies.

41. DFID intends to play a significant role in pushing forward transparency at the global level through the International Aid Transparency Initiative (IATI) especially in the run-up to the Korea High Level Forum on Aid Effectiveness to be held at the end of 2011.[52]

42. Most NGOs have welcomed "the commitments made by the Secretary of State for International Development to make information on all DFID programmes readily available online and elsewhere."[53] Owen Barder from the NGO Development Initiatives observed that:

Information about aid funding and programmes empowers the intended beneficiaries, affording them greater political leverage and enabling them to put pressure on donor organisations [...]When taxpayers are able to see directly how their aid is being used [...] it will be the basis of a new social contract between taxpayers in industrialised countries and the aid system.[54]

43. We support the establishment of the Aid Transparency Guarantee. This will help increase the effectiveness of spending on aid and empower aid recipients in developing countries.

The Independent Aid Watchdog

44. The Government has also decided to set up an independent watchdog, the Independent Commission on Aid Impact (ICAI), to oversee aid spending. Announcing the establishment of the body, the Secretary of State said:

We need a fundamental change of direction—we need to focus on results and outcomes, not just inputs. Aid spending decisions should be made on the basis of evidence, not guesswork. That is why we have taken the first steps towards creating a new independent aid watchdog.[55]

45. The main purpose of the watchdog, which replaces the Independent Advisory Committee on Development impact (IACDI) which was set up three years ago, is to be responsible for the production of impartial and objective evaluations of the UK's aid projects and programmes. At present the IACI is a shadow body. A Chief Commissioner, Mr Graham Ward, has been appointed, following a pre-appointment hearing before this Committee. The appointment of three other commissioners is expected in early 2011. The functions of the organisation and lines of accountability are described in the appendices to our report on Mr Ward's appointment. The key points are that the ICAI will:

  • commission evaluations from a consortium which successfully bids to provide them;
  • be accountable to Parliament through our Committee, sending us copies of evaluations;[56]
  • have oversight of all UK ODA, not just that spent by DFID, and
  • be fully functional by June 2011.

46. A major problem the ICAI faces is that effective evaluation is only possible if DFID programmes are designed in such a way that they can be evaluated.[57] The NAO further suggests that DFID is making slow progress at collecting reliable data from international and national authorities on key targets which may hamper effective assessment of projects.[58] Ideally, this would mean as far as possible the collection of base-line data, the use of some form of control and minimising changes to the programme once established. Otherwise, there is a danger that evaluation amounts to little more than asking people for their subjective opinions. However, designing programmes in this way is not easy and presents its own dangers if not done sensitively.

47. A number of submissions commented on the ICAI. Most welcomed its establishment in principle but raised concerns about how the evaluations would be undertaken. The NGO coalition, BOND, pointed to potential pitfalls, in particular the need to consider the long term:

As well as some areas where obvious outcomes can be measured, international development also involves complex, long-term processes that are not always measurable or straightforward to analyse, or to establish attribution or direct cause and effect. In the desire to demonstrate greater development impact it seems that DFID will look to increasingly fund NGO work that focuses on 'measurable deliverables'. This may provide immediate results in the short term. However, it could also mean less impact on the longer term, more complex processes of social, economic and political change that are known to affect poverty.[59]

48. Issues such as good governance are vital to development but results from spending in this area are unlikely to be seen in the short term. The IDS warned that the watchdog must use a variety of approaches to evaluation:

The issue has to drive the methods. And it is not only tools that need to be pluralistic, it is the defining and framing of the issues. Different groups have different priorities and different definitions of success.[60]

49. In our pre-appointment hearing with the Chief Commissioner in October, we questioned him on these issues.

50. We welcome the establishment of the Independent Commission on Aid Impact to undertake independent evaluations of ODA spending. The Commission will report to us and we will examine its programme of work, propose subjects for evaluation and take evidence in respect of some of the evaluations from the Permanent Secretary, the Commissioners and those who undertook them. We will not take evidence on all the evaluations since this would detract from our own core functions and work.

51. We note that the Commission will only be effective if:

  • DFID designs programmes in such a way that they can be evaluated;
  • Evaluations are undertaken sensitively, taking account of the fact that the effectiveness of some programmes, for example those relating to governance, will only become apparent in the long term;
  • Evaluations are designed to be effective but do not impose unnecessary burdens on staff in the field - they should not involve excessive bureaucracy and form-filling for staff, and
  • DFID ensures that it has mechanisms in place to learn from the evaluations.



48   http://www.dfid.gov.uk/Media-Room/Speeches-and-articles/2010/Placing-women-at-the-heart-of-development/ Back

49   DFID, Business Plan 2011-2015 Back

50   http://www.dfid.gov.uk/Media-Room/News-Stories/2010/Mitchell-Full-transparency-and-new-independent-watchdog-will-give-UK-taxpayers-value-for-money-in-aid/ Back

51   Q 55 Back

52   DFID Business Plan, 2011-15 Back

53   Ev w13 Back

54   Owen Barder, open think tank 2010, Better Aid: Spotlight on Transparency, April 2010 Back

55   http://www.dfid.gov.uk/Media-Room/News-Stories/2010/Mitchell-Full-transparency-and-new-independent-watchdog-will-give-UK-taxpayers-value-for-money-in-aid/ Back

56   The Committee undertook a pre-appointment hearing with the proposed head of ICAI, Graham Ward ( International Development Committee, First Report of Session 2010-11,Appointment of the Chief Commissioner of the Independent Commission for Aid Impact, HC 551 Back

57   Q 44-47 Back

58   NAO, The work of the Department for International Development, p 13 Back

59   Ev w13  Back

60   Ev w37 Back


 
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