Examination of Witnesses (Questions 70
- 79)
TUESDAY 9 MAY 2000
SIR JOHN
VEREKER, MR
BARRIE IRETON
AND MR
PETER FREEMAN
Chairman
70. Sir John, may I welcome you and your team,
Mr Peter Freeman, Principal Finance Officer, and Mr Barrie Ireton,
Director General (Programmes), who are well known to us and have
been to see us on other occasions. We very much look forward to
our discussion on the annual report with you in some considerable
detail. The Committee will also, as you know, Sir John, be going
to East Kilbride, where we expect to concentrate on the contractual
relationships that DFID has with its providers, and also of course
on the technical co-operation sector which we are delighted you
have broken down for us in this report. Many of our comments and
questions in that area will be explored at East Kilbride but we
will if we may ask you some overarching questions in that area
during the course of this morning's discussions. Can I go straight
into questions? I know you have to leave at 12.15. Is that right?
(Sir John Vereker) We are in your hands.
71. I know that a request has been made for
you to be released at 12.15 and we will try and see if we can
contain ourselves within that time. We wanted to start the questions
with output and performance measurement because as part of the
Comprehensive Spending Review each department was required to
produce a set of performance indicators, a Public Service Agreement,
against which the achievements of the departments and their objectives
could be measured. The Department for International Development's
measures are discussed in the Departmental Report, as you know,
Sir John, and its performance against its target is set out in
table form there. That is what we would like to concentrate on
first of all. Are you satisfied that the range of targets included
in the Department's Public Service Agreement provide a comprehensive
and meaningful insight into the contribution of the Department
to the achievement of the DAC targets, for example, the gross
domestic product per capita growth? Do you plan to change any
of these targets or introduce new ones following the new Comprehensive
Spending Review which takes place I believe in July this year?
(Sir John Vereker) Thank you, Chairman. The answers
to the questions are no, we are not entirely satisfied that the
existing PSA targets capture adequately our progress towards the
international development goals, and yes, we do intend to revise
them. It may help, Chairman, if I say a little bit about this.
As you will know, and as the Committee will know, the whole performance
measurement architecture of this Department is designed to support
and to track progress towards these agreed international development
goals which are in box A on page 11 of the DR. The existing PSA
targets show performance against what I would describe as intermediate
targets, that is to say, whereas the international development
goals are for 15 years' time, what you see on page 23 and following
of the report are milestones along the way, but there are some
problems. First of all, they are only loosely related to the international
development targets.
72. Inevitably.
(Sir John Vereker) Secondly, some of the objectives
that are described here are frankly very hard to measure, and
thirdly, as the Committee will appreciate by looking at what is
I think a total of four pages of data, we are trying to cram too
much in. We are covering what are described as programme and productivity
targets. There is a further complication, Chairman, if you will
bear with me. Tell me if I am talking too much.
73. No. You are voicing our internal discussions
on this, how difficult it is to relate one to the other.
(Sir John Vereker) Let me give you a burst on this
and then you can interrogate me. The further complication is that
in parallel to all this as part of the move to resource accounting
and budgeting, all government departments have been required to
develop what are called an Output and Performance Analysis. You
will find that, if you are real enthusiasts, on page 36 of the
report.
74. We will leave that to East Kilbride.
(Sir John Vereker) The problem for the Committee and
for the Department is that there is a significant overlap between
the Output and Performance Analysis and the Public Service Agreement
targets. This derives from the fact that they are driven by different
purposes, one by a general move towards performance measurement,
one by resource accounting and budgeting, and, to be honest (and
I do not think this is a state secret), they are driven by different
parts of the Treasury. Whitehall in its infinite wisdom is moving
as a whole towards improved Public Service Agreement targets.
Your opening question, Chairman, if I may say so, is highly germane
because we will be publishing, alongside other Whitehall departments,
(I think technically the Treasury is publishing), we expect in
July, a whole new range of PSA targets which will cover the period
2001 to 2004. What you will find then I hope are targets which
are simplified, there are fewer of them, they are rationalised,
that is to say they are easier to relate to the overarching goal,
we will I think abandon the OPA, the output and performance analysis,
as a separate measure, and our targets will more closely relate
our own activity to the international development goals. Obviously
I hope that will make it clearer for the Committee. A further
clarification will come in the fact that we will not be including
in the new PSA all this stuff at the end here about productivity
measures. They will be included in — take a deep breath;
we have now got, I am afraid, a new concept — a service
delivery agreement, SDA (do not blame me for all this) which will
be separate from PSA Mark II and that will cover the productivity
processes which were part of the old PSAs and they will provide
efficiency targets which will underpin the public expenditure
allocation that we will get as part of the year 2000 public expenditure
round. I will pause there although I could go on for quite a long
time.
Chairman: Actually I think you have answered
the main thrust of what we were concerned about, which was that
there is overlapping, there are inconsistencies and the difficulty,
as you said in your reply, that much of your reporting marks the
progress towards the international development targets. Of course,
it is extremely difficult to know what part you, DFID, is playing
in that international target realisation. I think the answer is
to hurry on from that technical question to talk in more practical
terms about the real performance of the Department during the
course of the last year against its targets.
Tess Kingham
75. May I come in on that? What we discussed
earlier I think is quite relevant here. You have mentioned the
new Public Service Agreement. Will that work between departments?
You have mentioned in the development report here that there is
an emphasis on joined-up working with other Whitehall departments.
Obviously, if we are going to aim for the DAC targets to be achieved,
we have to consider the actions of other departments too and how
they will have an impact on development and reducing poverty by
2015. I am thinking in particular of cases like the Ilisu Dam
which has recently reared its head as you know. As I understand
it, DFID is not considered to be a part of the process that looks
at whether that will have a negative impact on poverty in the
year 2015, and obviously if 50,000 people are going to be displaced
from their homes it could have quite a large impact on poverty
by that date. I understand that DFID is not part of that process
at present and I would like to ask your opinion on that. Also,
on the joined-up thinking in terms of the strategic arms export
situation, DFID from this report only appears to have an input
where the economic development of a country is threatened, so
DFID can only recommend that a licence be rejected if the economic
development of a country is threatened. Since when have these
performance targets and all the achievement performance indicators
that we have only been based on economic development? Could you
give us some feedback on your views on that please?
(Sir John Vereker) The answer to this is that the
new style PSA, because it is going to be simplified, shorter,
and will more closely relate our expenditure to the targets, is
unlikely directly to capture the kind of joined-up working that
Tess Kingham is after. However, I would want to assure the Committee
that there is a real and continuing mood in Whitehall towards
more joined-up working on the kinds of issues you describe. The
position on arms exports of course reflects the fact that Parliament
itself is brilliantly joined-up with a quadripartite committee
to which I think the Government will be giving a joined-up response
shortly, so I do not want to say much more on that except that
our involvement in the consideration of licence applications is
not only confined to economic criteria. We focus on applications
which are economically significant and on countries where there
may be internal repression or external aggression and we look
at it against the UK criteria for assessing arms export licence
applications. We have a role here. I would suggest that it would
make sense for the Committee to wait for the Government's response
to the quadripartite committee on that. In general I do not think
you should look to the PSA for joined-upness. Joined- upness will
be there in our policies but it will not be specifically captured
in the agreement.
76. In terms of meeting our targets, if on the
one hand we are giving aid to Turkey to repair damage done by
major disasters, the earthquakes there, but on the other hand
we have a situation where another Whitehall department might be
increasing the levels of poverty dramatically in that country,
surely that is negating the targets that DFID will be aiming towards,
the DAC targets for 2015?
(Sir John Vereker) It certainly would be and I hope
it does not happen. I do not see one government department increasing
poverty in Africa. It might be worth drawing the Committee's attention
in this context to the work which is going on in Whitehall which
I believe has been announced publicly towards a cross-cutting
interdepartmental budget to support the work we all do on the
management of conflict, which is of course highly topical this
week. We do not yet have a product from this work but the work
is going well and productively, particularly on the African front,
and I would like to ask my colleague, Mr Freeman, to confirm this
but I think that particular one may be captured in the PSA.
(Mr Freeman) Yes. As part of the overall spending
review there is a series of cross-cutting interdepartmental programmes
that are being worked up across the whole range of government.
We are involved in three or four of them, including, as Sir John
said, one on conflict reduction in Africa. The present intention
is that that will feature in our next version of the PSA.[1]
Ann Clwyd
77. Sir John, Tess Kingham asked you a specific
question about the Ilisu Dam and why DFID has not been asked for
its opinion on what many people believe is a situation where there
could be conflict, where the displacement of between 20,000 and
50,000 people is possible. We do give aid to Turkey. Surely the
Department should have a view on the development of the Ilisu
Dam in a country again where human rights abuse by the Turks against
the Kurds is a very well known fact and it has the potential for
greater conflict there, I suggest.
(Sir John Vereker) This is clearly a pretty difficult
issue. As I understand it, and I am not terribly well briefed
on this, there is no proposition that any funds from my Department
should be involved in it. I do not believe there is any decision
taken about whether Export Credit Funds are involved in the Ilisu
Dam, but even if they were it would not be anything to do with
my Department. I do not believe that it is proposed that it be
subject to World Bank funding. If it were subject to World Bank
funding then we would have a role on the World Bank Board. Seen
from my perspective this is a commercially funded proposition.
I think we have to ask where the limits are even of a department
which is spreading its wings as widely as ours in terms of where
we can and should exert our influence. I think we have to say
that in a country which is technically an aid recipient but it
is an OECD member, it gets a minuscule amount of resource transfer
from my Department, it would be wrong to suggest that my Department
has any significant influence there. We just have to say that
the likelihood of our having a significant role to play in these
kinds of decisions is remote.
78. I am asking you for your view on the displacement
of tens of thousands of people. The World Bank has a view on it.
Surely the Department for International Development should have
a view because if you are concerned about human rights, and clearly
the Department is concerned about human rights, then you must
have a view on this issue.
(Sir John Vereker) The Department does not have a
separate view on these issues because we have not studied them.
Chairman: We are not going to go any
further on the Ilisu Dam.
Ms King
79. We have been talking about the Public Service
Agreement and it is not on the Ilisu Dam but it does relate to
how DFID can measure its outputs. You said that the PSA would
not deliver joined-up government, obviously, but given that DFID
of all the departments relies on that approach, perhaps more than
many other departments, to what extent do DFID's aims depend on
the PSA being able to provide that? I have not quite understood.
You said it would not do it but then what is the purpose of it?
How are you hoping it is going to work in that case?
(Sir John Vereker) Although it is slightly artificial
it is quite useful to distinguish two things, on the one hand
achieving what we are trying to achieve through the expenditure
of the resources that are given to us, and, frankly, that is largely
what drives the PSA process, and I think Parliament itself has
insisted on that, and second, achieving what we want to achieve
by the use of our influence over wider policy issues. As Mr Freeman
has pointed out, there is an overlap in the sense that our PSA
will capture part of this work that is going on in joined-up government,
but there will always be a great deal of work going on in Whitehall
to ensure a co-ordinated approach to a lot of these issues which
is not going to be captured in purely expenditure-driven analysis.
I am afraid that is just life. If it helps the Committee I could
explain, perhaps should explain, and this comes back to Tess Kingham's
concern about attribution and causality here, that we recognise
that there is potentially a gap between on the one hand our measurement
of the impact of our expenditure and on the other hand our achievement
of a policy outcome in a particular country. Of course, working
together within Whitehall for instance to improve the trade regime
or to manage conflict of the kind that Ms King is talking about
could be very important there. Equally we have to be careful not
to become too grand and assert that all the good outcomes in Ruritania
are attributable to a small amount of work by us, for the perfectly
good reason that if we get a poor outcome in Ruritania we do not
want to — quite so. In order to bridge this gap, what we
call an attribution gap, a gap of attribution and causality, we
have made a pretty big investment in policy analysis which we
have published and which the Committee is familiar with. That
is why we have been sending you copies of our country strategy
papers, our institutional strategy papers, our target strategy
papers. That is why Mr Ireton, our Director General who looks
after the Programmes, has converted what used to be a project
committee into a portfolio review committee looking less at the
handling of particular interventions and more at the impact of
the whole DFID portfolio. Mr Ireton's committee will be looking
annually at the performance of our portfolio in large countries
against the targets set out in the country strategy papers and
we will be taking a regular review of institutional performance.
We also have a framework within DFID for taking forward the impact
of the target strategy papers. All that is designed to try to
flesh out what is otherwise a rather mechanical process of reporting
against the PSAs, although I should say that the mechanical process
is also being massively improved by our investment in technology.
If the Committee wishes I would be very happy to give you a quick
burst about our wonderful new PRISM system although, judging by
the look on your face, you do not want this.
Chairman: I think we have some perhaps
not more important but other questions we are burning to ask you
in the time available.
1 See Evidence p. 55. Back
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