Select Committee on International Development Fifth Report


SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

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).

18.  We welcome the objectives-based structure of the Departmental Report. (Paragraph 36).

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).

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).

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).

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).

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).

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).

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 fulfill their maximum value as instruments for scrutiny. (Paragraph 45).

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).

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).

28.  We recommend that the Government produce a timetable for the full implementation of PRISM, and that future Departmental Reports provide details of progress made. (Paragraph 48).

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 fulfill 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).

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).

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).

32.  We recommend that in future Departmental Reports, a paragraph be included for each international financial institutions, 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).

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).

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).

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).


 
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Prepared 28 July 1998