RESPONSE TO
THE CONCLUSIONS AND RECOMMENDATIONS MADE BY THE INTERNATIONAL
DEVELOPMENT COMMITTEE
Recommendation 1. We welcome the open approach
of the Department to the questions of what information should
be provided in the Departmental Report and how it should be presented.
(paragraph 2).
16. The 1998 Departmental Report was the first
by the Department for International Development (DFID) and was
transitional. The Committee's recommendations and conclusions
will be taken into account by the Department when planning future
reports.
Recommendation 2. We have a number of criticisms
of the minimalist approach to information in the Departmental
Report, which prevents Parliament from holding the Department
properly to account for its expenditure. Our key criticisms are
threefold:
(a) the information on expenditure provided
in the Departmental Report is divided into categories which are
far too broad to be meaningful;
(b) there is a lack of explanation of the
figures; and
(c) the Report only gives detailed statistics
up to 31 March 1997. (Paragraph 6).
17. The 1998 Departmental Report was exceptional
in that it covered only one year rather than three, to fit in
with the Comprehensive Spending Review and to comply with Treasury
core requirements. The statistics provided up to 31 March 1997
were the latest comprehensive figures on actual expenditure on
a financial year basis at the time of publication.
18. The format and categorisation of figures
in the DR last year was consistent with that requested in previous
years by the Foreign Affairs Select Committee. DFID is publishing
more information in the variety of ways described in the introduction.
DFID notes the Committee's request for more detailed information
and intends to provide more information in the 1999 Departmental
Report.
Recommendation 3. We recommend that future Departmental
Reports include much more detailed information on expenditure
during the most recent financial year. In future Departmental
Reports, we expect all bilateral expenditure to be broken down
into:
(a) country;
(b) sector;
(c) the objectives of the Department; and
(d) method of delivery. (Paragraph 8).
Recommendation 6. We recommend that a table be
included in future Departmental Reports showing expenditure- including
expenditure during the last three years, estimated outturn for
the most recent financial year and planned expenditure for the
next three years - in:
(a) all recipient countries;
(b) developing countries;
(c) high-income countries;
(d) lower- and upper-middle income countries;
(e) low-income countries; and
(f) least-developed countries. (Paragraph
12).
19. The Departmental Report is finalised by the
Department in January. Therefore, British Aid Statistics provides
the figures on actual expenditure for the most recent financial
year. It would be misleading to provide partial expenditure figures
for the financial year still in progress.
20. In future reports, more detailed information
will be provided on planning figures at country, programme and
institutional level. As indicated in the introductory note, planning
figures are taken from the Aid Framework and will vary from actual
expenditure reported in due course in British Aid Statistics.
Further information on the objectives of particular programmes
is available also in the Institutional and Country Strategy Papers
which DFID publishes.
21. British Aid Statistics provides information
on actual expenditure for each of the country income groups. We
can provide similar information derived from planning figures
for future years only insofar as bilateral country programme allocations
are concerned.
Recommendation 4. We expect that resource accounting
methods will enable DFID to ensure that future Departmental Reports
show provisional outturn for the most recent financial year in
much greater detail than has been the case in the 1998 Departmental
Report. (Paragraph 9).
22. If the present timetable for Departmental
Reports is maintained, the Department will not have outturn data
for the full financial year by the time the Report is finalised.
Resource Accounting will enable outturn figures to be available
more quickly after the financial year ends and supplementary information
could be sent to the Committee. Resource Accounting and Budgeting
(RAB) will enable us to provide further detail on expenditure
against objectives. We have made good progress in implementing
the main systems required for RAB and are on target to meet Treasury
deadlines. Full benefit of these systems will be realised in the
next financial year 1999/2000 and will feed into the 2000 and
subsequent Departmental Reports.
Recommendation 5. Since an emphasis on country
partnerships is now regarded as a cornerstone of DFID's programme,
the Departmental Report should afford proper scrutiny of such
an emphasis in practice. (Paragraph 11).
23. An emphasis on country partnerships is indeed
a cornerstone of the Government's international assistance policy
as set out in the White Paper. The Department agrees that the
Departmental Report should consider the impact of the partnership
approach on the Department's programmes. The Committee should
be clear that expenditure levels will not be the only, or even
the most important, indicator of whether the partnership approach
is working.
Recommendation 7. We do not believe that no expenditure
plans exist at a country level for the current year, of which
one month had already passed at the time of the oral evidence
session. If there are no such plans, we have serious concerns.
(Paragraph 15).
24. As explained in the opening note, programme
managers have very detailed financial management information to
enable them to manage expenditure within their Aid Framework allocations.
The Aid Framework allocations however are set at departmental
level. Therefore for the most part these allocations cover more
than one country programme within each departmental total, with
the exceptions of India and Bangladesh where the DFID department
concerned manages a single country programme. This flexibility
is essential to run a quality development programme.
Recommendation 8. We fully understand that the
needs and circumstances of recipient countries may change over
time, and that alterations to plans may occur as a result. Accountability
is precisely about explaining such changes. We expect DFID to
publish its planned expenditure by country, and to justify changes
in those plans, and view this as an essential element of the information
on the basis of which the expenditure of the Department is scrutinised.
(Paragraph 16).
25. As we have said in the answer to Recommendation
3, we plan to publish indicative planning figures by country and
will provide explanations of significant differences between those
planning figures and final expenditure in subsequent Departmental
Reports.
Recommendation 9. We recommend that in future
Departmental Reports, a sectoral analysis of all DFID's expenditure,
both bilateral and multilateral, be included, with statistics
for the past three years, the current financial year, and future
years. (Paragraph 19).
26. The Department cannot provide a sectoral
breakdown of all expenditure because the multilateral institutions
do not provide sufficient information. We are trying to encourage
the multilateral institutions to provide such information. Even
in the case of our bilateral expenditure the analysis is incomplete
because not all assistance can be allocated by sector, for instance
: programme aid, emergency aid, block grants to non-governmental
organisations and some scholarship schemes. Our sector information
follows DAC guidance which allocates each project to only one
sector which obscures the situation in the case of multi-sector
projects.
27. The sector information that is available,
subject to the above caveats, is published in British Aid Statistics
table 9, covering the most recent 5 years.
28. We consider that Policy Information Marker
System (PIMS) data are more relevant because PIMS tracks our objective-based
approach and allows bilateral programmes and projects to be marked
against more than one policy area, reflecting the cross-cutting
nature of our assistance. PIMS data are published in British Aid
Statistics and provisional figures for both commitments and expenditure
are given in an internal report on each financial year by the
following June or July. This will be made available to the Committee.
PIMS cannot provide a sectoral analysis for future years.
Recommendation 10. We recommend that in future
Departmental Reports DFID include much more detailed summaries
of its activities than are provided in the 1998 Departmental Report,
and provide details of sources of further information, such as
British Aid Statistics and relevant Country Strategy Papers. (Paragraph
26).
29. As explained in the Introduction, future
Departmental Reports will contain more information on the Department's
activities and there will be greater cross-referencing to sources
of complementary data.
Recommendation 11. We recommend that Departmental
Reports show Aid and Trade Provision expenditure as a separate
line in the cash plans until all commitments under the Provision
have been fulfilled. (Paragraph 27).
30. We agree, and in the next Departmental Report
will show also existing ATP Commitments by region. We will also
send to the Committee a list of ATP projects on which expenditure
is still to be incurred.
Recommendation 12. We recommend that future Departmental
Reports include a list of non-governmental organisations in receipt
of core grants or other funding from DFID, and the amounts received
in the last and current financial years. (Paragraph 28).
31. Lists of non-governmental organisations which
have received funding from DFID are published each December in
British Aid Statistics. For the current financial year planning
figures can be provided only for those global schemes under which
allocations are made to non-governmental organisations.
Recommendation 13. The lack of explanation of
the cash plans table in the Departmental Report makes it impossible
for us to evaluate DFID's emergency bilateral expenditure. We
recommend that future Departmental Reports include a more detailed
account of emergency expenditure, including explanations of significant
fluctuations in emergency bilateral expenditure. (Paragraph 29).
32. Table 3 on page 12 shows two sources of funds
for emergency bilateral assistance. The first is support for so-called
predictable emergencies which are funded from bilateral country
programmes. The second is an allocation for emergency assistance
which is funded from the bilateral programme and used for sudden
on-set disasters. In addition to these two the Department also
has a Contingency Reserve (also shown in table 3), the first call
of which is for emergency expenditure which cannot be financed
from elsewhere in the programme.
33. Actual expenditure on emergency assistance
is, more often than not, higher than the figure we planned at
the beginning of the year. This is because in the event that emergency
situations occur, and planned resources have been exhausted, we
move resources out of the Contingency Reserve and from other areas
of the programme which are underspending in order to respond to
that emergency.
34. Because of the nature of events necessitating
emergency aid expenditure, it is impossible to predict with any
certainty how much will be spent. The Department will provide
an explanation of any significant variation between planning
figures and actual expenditure.
Recommendation 14. £199.6m (35 per cent of
the UK's contribution to the European Union, and approximately
10 per cent of DFID's overall budget) is expected to be spent
on PHARE and TACIS in 1998-99, which resources are directed towards
Central and Eastern Europe, the New Independent States, and former
Yugoslavia. This is exactly the type of information which should
be included in Departmental Reports if there is to be informed
discussion on the relationship between regional allocation of
DFID's funds and poverty eradication. (Paragraph 30).
35. The Department will include in future reports
more information on the distribution of spending by the EU charged
to DFID's budget. Information on actual expenditure is typically
available from the Commission with a two year time lag (so that
information on spending in 1996 is finalised in 1998); however
earlier information is available on spending plans. We will include
such information in future Departmental Reports.
Recommendation 15. Given that
multilateral expenditure now accounts for almost 50 per cent of
DFID's budget, and in the light of DFID's commitment to place
a much greater emphasis on its work with multilateral institutions,
we recommend that future Departmental Reports display more detailed
figures for recent and planned future contributions to multilateral
agencies, including regional development banks, and provide explanations
of significant year-on-year fluctuations and deviations from plans.
(Paragraph 31).
36. In future Departmental Reports, we intend
to include a breakdown of recent and forecast contributions to
multilateral agencies, with an explanation of any significant
changes.
Recommendation 16. The Comprehensive Spending
Review introduced a timetable for the next three years (1999-2000
to 2001-2002), during which the ratio of official development
assistance (ODA) to GNP will increase to 0.3 per cent. We are
delighted at this first step towards the target of 0.7% GNP, and
congratulate the Department on the outcome of the Comprehensive
Spending Review. We note that some of this increase in resources
will be the result of the sale of a majority share of the Commonwealth
Development Corporation. Presumably this sale will yield a finite
amount of resources, and we trust that once these are exhausted,
DFID's budget will continue to increase. Our earlier recommendation
was that the Government aim to reach the 1997 EU average of 0.37
per cent ODA/GNP by the end of the Parliament. On present projections
this target will not be met. Continuing efforts must be made to
increase further our development spending. (Paragraph 32).
37. We note the Committee's comments. The Government
is committed to the target of 0.7% of GNP for development assistance.
The outcome of the Comprehensive Spending Review resulted in an
increase of £1.6 billion in the development assistance budget
over the next three years. As the Chancellor told the House: "we
will, during this Parliament, increase overseas aid from the low
of 0.25 per cent of national income - the Budget figure that we
inherited - to 0.3 per cent of national income."
Recommendation 17. We are disappointed that the
Departmental Report fails to go significantly beyond the Treasury
core requirements relating to expenditure. The Departmental Reports
of Government Departments other than DFID provide a far more detailed
analysis of spending over several years. For example, the Department
for Education and Employment and the Scottish Office provide detailed
summaries of spending in each section of their Departmental Reports.
We see no reason why DFID should not provide such detail as a
matter of course. We are particularly dismayed at the paucity
of information at sectoral and country levels, the lack of estimated
outturn figures for 1997-98, and the lack of detailed plans for
1998-99. It is simply impossible to scrutinise the work of a Department
with a budget in excess of £2 billion per year on the basis
of the scanty account of its expenditure in the last and current
financial years provided in the Departmental Report. (Paragraph
33).
Recommendation 35. We are in this Report very
critical of DFID's 1998 Departmental Report as an exercise in
accountability to Parliament. It simply does not contain enough
information for an accurate assessment of the Department's activities
and performance. If DFID wants to engage Parliament and the public
in the vital work of development, it must tell more of its story
and tell it better. To do this, DFID must have a clear view of
the purpose of the Departmental Report. Its present style inhabits
an unhappy no-man's land between the White Paper and British Aid
Statistics. The Departmental Report must contain a comprehensive
and more detailed account of past, current and planned expenditure
and a clear summary of the evaluations of performance against
targets and objectives. We look forward to next year's Departmental
Report meeting these requirements and trust our comments will
contribute to this objective. (Paragraph 56).
38. The Departmental Report is not intended to
be the only source of information available on the Department's
activities and performance. As stated in the Introduction, the
Department makes available a wide range of information through
its various publications. There has been a significant increase
in the amount of information made available to the public and
the Department will continue to implement its commitment to greater
openness.
Recommendation 18. We welcome the objectives-based
structure of the Departmental Report. (Paragraph 36).
39. The objectives-based structure of the Departmental
Report (a new departure in the 1998 Report) will be maintained
in future Reports, in line with the White Paper and in the Comprehensive
Spending Review emphasis on outputs and results.
Recommendation 19. We recommend that DFID establish
a clear framework of policies and objectives around which to structure
all its various publications. This would ensure greater transparency
and clarity, which are essential for proper scrutiny. (Paragraph
36).
40. The Department has a clear set of policies
and objectives, incorporated in the White Paper, the CSR and its
Output and Performance Analysis (OPA). The Department is committed
to using these as the basis for reporting on the development assistance
programme in the Departmental Report.
41. In addition, the Department is now publishing
all Country Strategy Papers and Institutional Strategy Papers.
The Department is thus making more information available than
has ever previously been the case. The Department has a publications
strategy designed to highlight aspects of its activities and to
provide information to the public. The Department can let the
Committee have details of this policy if this would be useful.
Recommendation 20. We do not dispute the value
of the international development targets as a driving force for
the international community, and we have welcomed the commitment
of the UK Government to the targets in a previous Report. However,
the international development targets, and the 21 indicators associated
with them, do not relate directly to the efforts of individual
donors; they quite rightly relate to the performance of the international
community as a whole. This renders them useless as instruments
for measurement of the performance of individual donors. (Paragraph
39).
42. Achievement of the International Development
Targets rests primarily with our development partners themselves.
It would be unrealistic therefore for any individual donor to
claim credit for development outcomes on this scale. But it would
be wrong to take this to mean that our efforts do not relate to
the Targets. On the contrary our programme is defined in relation
to three key objectives, each of which relates directly to the
International Development Targets and their associated indicators.
This relationship, which will be set out in our Output and Performance
Analysis, enables us to show the proportion of DFID projects and
programmes meeting their objectives, in each of the Target areas,
in the top 30 UK development partners. At this level we shall
therefore be able to relate the overall effectiveness of our programme
with progress towards the International Targets in those countries
where we can expect to make the greatest impact.
Recommendation 21. Whilst developmental outcomes
may not always be quantifiable, it should be possible in most
cases to identify targets and projected outcomes for individual
projects, to measure the performance of projects and programmes
against those targets, and ultimately to aggregate the results
to provide an overall picture of the performance of the UK's development
assistance programme according to sectors, countries, and as a
whole. We view the establishment of objectives against which the
performance of the Department can be clearly measured as crucial
to proper scrutiny of the work of DFID. (Paragraph 39).
43. All projects have a clear purpose and intended
outputs together with indicators against which performance is
measured. Current DFID systems allow us to monitor and evaluate
the progress of individual projects and programmes against the
purposes set for them, using the appropriate logframe indicators
in each case. Using data from Project Completion Reports we shall
provide in our Output and Performance Analysis an aggregate analysis
of performance against each of our three key objectives.
Recommendation 22. We view Project Completion
Reports (PCRs) as a valuable tool for accountability, and as such
we recommend that more details about recent findings be given
in future Departmental Reports. The study of 1996 PCRs provided
a table summarising the results, followed by a table summarising
the results of the 1995 study. This is extremely useful information,
and we recommend that DFID use similar information in future Departmental
Reports as the basis for their discussion on PCRs. (Paragraph
41).
44. We shall continue to analyse Project Completion
Report data on a chronological basis and reflect this in future
Departmental Reports.
Recommendation 23. We fully support bench-marking
of the performance of DFID projects and programmes against those
of other donors, and recommend that future Departmental Reports
include such comparisons, as well as providing details of strategies
and specific targets relating to improvements in the achievement
of objectives. (Paragraph 42).
45. We shall continue to look at the performance
of DFID projects and programmes against that of other donors,
and to make such comparisons when relevant.
Recommendation 24. We recommend that in its response
to this Report, the Government describe what steps have been taken
and are planned to address the weaknesses in Project Completion
Reports described in the 1996 synthesis study. (Paragraph 44).
46. We are currently reviewing the information
we require at the Project Completion stage in order to bring this
more closely into line with the operational information provided
during project monitoring. To increase the validity of the comparisons
and show the trends more distinctly, we are organising the analysis
chronologically on the basis of year of project approval, while
also using larger samples and grouped years.
Recommendation 25. We welcome the responsibility
of individual authors, rather than the Department, for their own
evaluation studies. DFID must, however, make clear its response
to the studies if they are to fulfil their maximum value as instruments
for scrutiny. (Paragraph 45).
47. We already have systems to ensure that the
findings and lessons of Evaluation Reports are disseminated throughout
the department, and are reflected where appropriate in the design
of new interventions. Where necessary, we shall also publish a
Departmental Response.
Recommendation 26. We recommend that future Departmental
Reports include more extensive analysis of lessons learned from
recent evaluation studies, with details of strategies for making
improvements. (Paragraph 46).
48. We shall continue to provide an analysis
of lessons learned from evaluation studies in future Departmental
Reports.
Recommendation 27. We recommend that in its response
to this Report, the Government explain in detail what steps it
is taking to ensure that the recommendations of the 'poverty guidance'
of 1991 are taken fully into account in evaluation studies. (Paragraph
47).
49. All DFID evaluations are required to address
poverty issues in a manner which reflects this guidance.
Recommendation 28. We recommend that the Government
produce a timetable for the full implementation of [the Performance
Reporting Information System for Management] PRISM, and that future
Departmental Reports provide details of progress made. (Paragraph
48).
50. A pilot phase of PRISM was approved within
DFID in October 1997. The pilot was to run for 12 months and develop
a prototype system for three departments - West and North Africa
Department based in London, and DFID's overseas offices for Southern
and Eastern Africa located in Pretoria and Nairobi respectively.
Proposals for evaluation of the pilot phase after 12 months were
built into the original document.
51. The pilot phase has been completed on schedule,
and arrangements are in hand for its evaluation in January 1999.
On the assumption that the results of the evaluation are favourable,
we will then publish a timetable for the implementation of PRISM
throughout the rest of DFID and provide details of progress in
subsequent Departmental Reports.
Recommendation 29. It is our conclusion that DFID
has broadly adequate performance monitoring systems, and is making
valuable efforts to modify and improve those systems in the light
of the White Paper. In the 1998 Departmental Report DFID fails
to make full use of the information provided by these systems.
The Departmental Report could fulfil a valuable role by filling
the gap between the two extremes of project level reporting on
the one hand, and reporting against international targets on the
other, showing how the Department has performed against its own
objectives at sector, country and regional levels. (Paragraph
50).
52. We have continued to develop these systems
in consultation with the Treasury, other Whitehall Departments
and our international aid partners. Amongst other things, we have
recently agreed with the Treasury the form of an Output and Performance
Analysis statement which will support our resource accounting
statements. Both statements will be produced for the first time
at the end of the next financial year (the 'dry run year'). Where
it is practical and meaningful to disaggregate output and performance
measures e.g. at departmental objective, country and regional
level, we will do so and make this information available.
Recommendation 30. Resource accounting and budgeting
techniques will require the Department to produce more detailed
information on its performance related to its expenditure in the
form of an output performance analysis. We trust that DFID will
use the opportunity presented by the introduction of the new system
to review its performance analysis mechanisms, and the information
relating to them which it will provide in future Departmental
Reports, in order that the Treasury core requirements and the
challenges presented by resource accounting and budgeting can
be met. (Paragraph 51).
53. The Output and Performance Analysis will
indeed provide an important vehicle for reviewing DFID performance
against objectives in a time bound and quantified way as required
by the Treasury.
Recommendation 31. We recommend that DFID provide
details of what progress was made during the UK Presidency of
the EU towards improving the accountability of the EU's development
programme, and outline in more detail its plans to improve the
accountability of other multilateral donors. (Paragraph 52).
54. The Department is preparing Institutional
Strategy Papers, setting out DFID's approach to working with multilateral
donors (including the EC). These documents are expected to be
finalised over the next few months and will be published. They
will cover many questions including accountability.
55. The Select Committee have noted the Government's
commitment to encourage the EU to "set quantifiable targets
for poverty reduction, and measure progress towards these".
During the UK Presidency of the EU in the first half of 1998,
the Secretary of State for International Development co-chaired
a seminar on the international development strategy and targets,
involving EU Commissioners and other member states. At the Development
Council in May 1998, Conclusions were agreed on poverty, including
the EU's support for the international development strategy and
targets.
56. The Committee have also noted the Government's
commitment "to devote more attention to evaluating and monitoring
the outputs of their (ie multilateral institutions) activities,
and to harmonise their impact assessment systems". DFID has
recently completed a study on impact assessment in multilateral
development institutions, which was published in August 1998.
Discussions were held with the institutions covered by the study
during the course of its preparation, and copies have been sent
to senior managers and staff responsible for impact assessment
in each of the institutions. Within the EU, the institutions covered
include DGIA, DGIB, DG8 and the European Investment Bank. The
Commission are currently conducting major evaluations of the most
important regional programmes, including Lomé, MEDA and
the ALA programmes. A further progress report is expected at the
Development Council in November 1998, and a full discussion of
the results of the study at the Development Council in May 1999,
under the German Presidency.
57. Both the poverty focus of the EC's programmes,
and its impact assessment systems, were examined by the DAC during
its review of the EC's aid programmes in September 1998. Commission
officials emphasised the EC's commitment to the international
development strategy, and to improving evaluation systems, to
generate better information on the impact of activities funded
by the EC. Commission officials also emphasised their commitment
to improving the availability of information on the EC's external
assistance programmes.
Recommendation 32. We recommend that in future
Departmental Reports, a paragraph be included for each international
financial institution, including each regional development bank,
describing DFID's assessment of the performance of each institution
and outlining strategies for improvements where appropriate. These
paragraphs should include clear references to sources of further
information. Previous Departmental Reports of the Foreign and
Commonwealth Office provided specific targets and performance
information relating to the accountability of multilateral development
agencies, and we recommend that DFID resume this practice. (Paragraph
53).
58. We shall include a section covering all of
the Multilateral Development Banks, and include our objectives
for each of them. But the Committee should note that our institutional
strategy papers will cover these issues in greater detail.
Recommendation 33. In future Departmental Reports,
we recommend that discrete sections be included providing details
(including costs) of recent, current and planned research relating
to each of the Department's objectives. (Paragraph 54).
59. The Department accepts this recommendation.
Future Departmental Reports will provide fuller information on
recent, current and planned research. Systems are currently being
put in place to relate the contribution of all Departmental projects
to each of our objectives, and available information will be summarised
for the Report.
Recommendation 34. We would expect the Departmental
Report to include an analysis of staff employed in senior positions
overseas, showing the number, grades and pay of locally-employed
staff. We were disappointed to note that this information was
not provided in the Departmental Report, the reason being that
the information was not held centrally by DFID. We are, however,
encouraged to learn that DFID is currently compiling such a database,
and we look forward to a summary being provided in the 1999 Departmental
Report. (Paragraph 55).
60. The Department is working to establish systems
aimed at collecting this information with a view to publishing
the information at the earliest opportunity. Substantial progress
has been made on the locally engaged staff database and we expect
to be able to meet this requirement in the 1999 Departmental Report.
21 October 1998
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