Examination of Witnesses (Questions 100
- 119)
TUESDAY 9 MAY 2000
SIR JOHN
VEREKER, MR
BARRIE IRETON
AND MR
PETER FREEMAN
100. So, it is country by country, rather than
having a common form?
(Mr Ireton) I think that is the right approach, because
at the end of the day, particularly if you take something like
universal primary education, the critical action is at the national
level. What matters is whether a country can get its children
into quality schooling and achieve the target by, and preferably
well before, 2015.
101. In terms of our top 30 recipients of ODA
and their achieving of targets related to the DAC targets, is
there a large range of results between the countries, between
those in the top 30? If so, do you think it would be useful to
disaggregate the figures to show the progress of the least developed
countries separately from other developing countries? Are we getting
a clear picture?
(Mr Ireton) Personally, I think that is a very valid
point. Although, of course, the majority of those 30 top United
Kingdom bilateral recipients will be low income countries, there
will nevertheless be some considerable differences between them,
and it will be interesting to measure the progress into various
categories of countries.
Chairman
102. The Departmental Report states that four
reviews have taken place so far, under the Better Quality Services
Initiative. What were the results of these four reviews?
(Sir John Vereker) Can you draw my attention to the
part in the report?
103. It is page 35 and it is number 7 on that
page, Box g, "Public Service Agreement." It says here,
"Regular and systematic reviews of services and their delivery,
better quality services initiative, with 60 per cent of services
reviewed by 2003. The baseline is not applicable. The 1999-2000
target review programme produced and implemented", and it
says, "Of course, the rolling programme of reviews has been
devised and agreed with the Cabinet Office. Four reviews have
been completed." What were the results of those reviews?
(Sir John Vereker) It is 25.
104. It is page 25.
(Sir John Vereker) Sorry, we were all looking at 35.
Page 25, "Better Quality Services."
Mr Robathan: Paragraph 7.
Chairman
105. Perhaps you would like to write to us about
that.
(Sir John Vereker) If you would like, Chairman, a
list of these reviews, I think we would probably have to do that
in writing.[2]
106. Yes, you do that. Can I ask a question
here that does not seem to fit exactly into this section about
the performance measurements? In several places, particularly
on visits to South Africa, the Committee was faced with the assertion
that in fact you had a policy in the Department of moving to what
you call sectoral-wide approaches — SWAPS, I think you know
them as — as against having project development. "That
is old hat", we were told, "and now we are going to
have SWAPS." As far as I can gather, this involves going
back to an old policy which you used to indulge in, which was
to simply invest large dollops of money into a government-led
and designed programme and hope for the best. We were very frequently
disappointed I think, Sir John and all of us here, Mr Ireton and
Mr Freeman, can remember those disappointments. What I am worried
about is, is this your policy? Is my description of that policy
totally erroneous? Thirdly, if you are going to persist in this
policy, how are you going to account for it? How are you going
to report progress against the target, which I hope you will have
agreed with the country and the department involved?
(Sir John Vereker) Chairman, I will ask Mr Ireton
about this, because it is very much on his side of the House that
this approach is being developed. I think your characterisation
of it is not entirely fair to us, because of the important difference
of context. We will only be prepared to enter into this kind of
approach where we are confident that the context is one which
justifies it, and that context in particular is a context of a
quality of economic management and a medium-term budgetary framework
which, not only we but donors collectively, have confidence is
well judged and well managed. I think I will ask Mr Ireton to
say a bit more about this approach, because it is important and
becoming quite well embedded.
(Mr Ireton) Firstly, Chairman, alluding to what you
said about the past, I do not think — though nothing is
entirely new in any business, least of all our own — that
these should be linked to things such as integrated development
programmes in the 1970s, if that is what one had in mind. They
are not like that at all, or, indeed, rather old fashioned taking
a time slice of an investment programme, which you may have also
had in mind, for the following reasons. Going back to the point
I was making about education and achieving basic education for
all, or, indeed, in health where we are making better progress,
I have to say, in the sector-wide approach than in education at
the moment, there are a number of principles at stake here. The
first one is that we are encouraging governments to take ownership
on a sector-wide basis of what it is they are trying to achieve.
This is not just about a project, it is about the allocation of
resources in the broader context of the medium-term budget framework
that looks at the Government's overall finances and potential
aid flow over a period of time, and then within that to realistically
allocate a certain level of funding, for example, for basic health,
and within that then to develop a programme which the Government
itself owns, which is involved not just with investment and not
just with how better to allocate its recurrent resources, but
the key policy changes, management changes, that are actually
required if effective services such as basic health are to be
delivered, and of the sort that people actually want. That is
quite a change, getting governments to achieve that, both with
a political will, but, importantly, the capacity. In a number
of countries we have responded very flexibly in helping ministries
of health to formulate such programmes and not to hurry them in
that process, not to say, "Look, you need to do this in the
next three months", but simply help them progressively to
achieve that. The second thing is that we have encouraged that
process to be a very consultative one with civil society, with
consumers, if you like, and to buy them into that process, so
that those programmes can be more effective. Then, in a sense,
we turn to the donor side and say, "Well, what is the donors'
response to this?", and importantly it is that donors should
then only finance activities which are within the agreed programme.
They should not have their own pet projects, as it were, which
may be inconsistent with that programme and encourage governments
to let them go ahead with such projects. A final stage in this,
and one which is, for some donors, more problematic than others,
is that increasingly we want donors to agree to fund that on a
more pooled basis.
107. Plural basis?
(Mr Ireton) Pooled basis.
108. Pooled?
(Mr Ireton) Yes. In other words, instead of within
this agreed programme the Japanese saying, "We will do that",
and the Swedes saying, "We will do that", and the DFID
saying, "We will do this thing over here", the more
we should pool funds, and increasingly pool them, through the
budget of the country concerned, which is very important in our
view. You cannot really take meaningful decisions about priorities
in resource allocation unless donor funds as well as the domestic
resources are actually being channelled through a budget which
is transparent and for which the Government is accountable. That
final stage is not always easy. Government accounting and financial
management systems are not always as strong as we would wish,
and there are occasions where important technical assistance activities
may need to be taking place in parallel where it makes sense,
at least in the medium-term, for us to have a more direct relationship
with the Government. This is a very ambitious agenda.
109. Yes, it is.
(Mr Ireton) But we think it is a very important one.
It is one which our Secretary of State, as you probably know,
has given a great deal of priority to and recently went to Tanzania
with three other development ministers to see how, in practical
terms, this can be taken forward, for example, in the health sector
in Tanzania, and we are encouraging other donors to do likewise.
We are making progress on this, particularly in health. I was
in Bangladesh recently where the Minister of Health was enthusiastically
explaining to me what they were trying to achieve. They were very
appreciative of our flexibility in helping them to design the
programme. I can no longer remember the exact figure, but they
quoted a significant figure for the administrative savings they
were making through not having to administer and report 100 or
200 separate donor projects, because this was to be part of their
everyday activity. Does that give you a flavour of what we are
trying to achieve?
110. Yes, and it is different from what I thought
it was. Just to complete it though, if you have now got what is
huge coordination, which you have not had before, have you now
got to account for it back here to Parliament?
(Mr Ireton) Yes, indeed.
111. So, the activity in getting the agreed
programme with the country then has to be combined with a project,
a programme, which you will identify, presumably separately, and
then manage and account for. Is that how accountability will be
achieved?
(Mr Ireton) In part, but we are hoping that progressively
we shall be able to put, let us say, in the case of Bangladesh
and the health programme, approximately £10 million a year
into the Ministry of Health budget, together with other donor
funds. The important thing is that we have a very clear understanding
with the Ministry of Health as to what its programme is, what
indicators it is using to measure its progress against the international
development targets and the sort of management changes that are
required over a period of time. The challenge for us, and I think
it is an exciting one and an effective one, is that we have a
continuous dialogue and monitoring process with the Ministry and
the other stake-holders to measure progress against that. If progress
is not being made, of course, the issue will arise, should we
continue to support that process? Then we have to look carefully
at why progress is not being made, if it is lack of political
will, if it is lack of capacity or whatever, and seek remedial
measures or, in extreme cases, we may have to decide to withhold
support. My final point is, it is important that we have systems
in place for accounting for our funds, not least so that Sir John,
as accounting officer, can account for those and, indeed, before
the PAC.
(Sir John Vereker) I would say, Chairman, that I think
this is part of a welcome move away from accountability, simply
in terms of, "What have you done with the money?", and
towards accountability in terms of, "What have you achieved
with the money?" Increasingly I think you are going to find
the accounting officer for this Department not only coming along
and saying, "Of course I know what we have done with the
money, and we can show that we have not made off with it",
but also being able to say, "We have contributed towards
this outcome in the health sector in Bangladesh."
112. Sir John, I would be horrified if the Chairman
of the Public Accounts Committee said to this Committee that you
have not been requiring the Department for International Development
to account properly for what it is doing. On the other hand you
can say, "We know where the money has gone and we know where
it has been spent, but we have achieved X, Y and Z", I think
that would actually enhance the quality of accountability and,
indeed, of the programme. Andrew Robathan?
Mr Robathan
113. I have to say that we have had rather lengthy
responses, so I would rather like a short one. Are you satisfied
with the accountability of the 30 per cent of your budget that
goes directly to the European Commission? Yes or no, really, because
I do not want a long answer.
(Sir John Vereker) Not accountable for it. That part
of it which is on the European Union's budget, I do not account
to Parliament for.
114. Who does?
(Sir John Vereker) Treasury.
115. It is a lot of our money.
(Sir John Vereker) I promise this will not be a long
answer, but it is an important theological point. Resources which
are attributed to our budget as a result of the United Kingdom's
contribution to the European Union are accounted to Parliament
by the Treasury and not by individual accounting officers, because
we have no control over it. We do have a little bit of influence
over them, but we have no technical audit accountability for them.
Mr Rowe
116. Let us move swiftly from theology to literature.
In Julius Caesar he is described as "bestriding a
narrow world like a colossus" and we have had, in this Committee,
really quite a lot of formal, informal and written evidence that
people who do business with you are afraid of you, and that means
that when they have criticisms of the way a project has been managed
or the way a project has been allocated, or anything of this kind,
they mute it because they are scared that the next time they apply
they will be discounted, which is a very worrying phenomenon.
We met it literally all over the world. We would like to know,
I think, whether you are aware of that and, if you are, whether
you have in place a mechanism where people can come and make complaints
about the way something has been handled, or they themselves feel
they have been handled, in confidence which will not thereby damage
their future?
(Sir John Vereker) I am not aware of a general fear
of doing business with this Department. We have almost invariably
a large response to invitations to tender for business which we
fund. We are popular both to work for and to work with. Of course,
Mr Rowe, I recognise that anybody in a dominant position in a
particular market can exercise a lot of influence on that market
and people need to behave responsibly. In answer to your question,
"Are there avenues, if people are concerned about the way
we are behaving or aggrieved with the way they are treated?",
there are plenty of avenues and judging from the correspondence
that I see, on the whole, people are not afraid to use them. The
Committee has in front of it an interesting account of us, which
they have copied to me, from the British Consultants' Bureau.[3]
I do not quarrel with what they say there. I have answers to some
of the questions and there is certainly implicit there some criticism
of dealing with us because they find that one bit of it says one
thing and one bit says another, and I have answers to that, but
they are not afraid to put that down in writing and send it to
you and they are not afraid to send it to me.
117. The British Consultants' Bureau may not
be afraid to put it in writing, but I wonder whether an individual
consultant might be afraid to put it down in writing, that is
the question.
(Sir John Vereker) All I can say is that I have had,
and so have our colleagues in the contracts branch, plenty of
lively exchanges of correspondence on contractual issues. This
does not mean to say that there is not some correspondence which
might take place if people were not afraid of us, but it is a
rather difficult thing to prove. Obviously, if the Committee is
picking this up around the world and believes the evidence is
more than anecdotal, then I can only invite the Committee to pull
it together in some way and let us have a look at it. The last
thing we are is vindictive because somebody challenges our approach.
I would be interested to know what is at the root of it. Are people
saying we demand too much of them? Are people saying that we are
too rigid in our determination to have competition and, therefore,
value for money? Are these people who have failed to put in bids
on time and complain that we stick to the International Competitive
Bidding Rules and do not allow latecomers to be accepted? Is it
people who would like to be paid more for the job they are doing
than we are paying? Is it people who complain if we get after
them because they do not deliver their outputs? I would like to
know what it is, but we do all of those things.
Chairman: I think, Sir John, we will
have to discuss amongst ourselves how we can proceed further usefully.
Can I just bring to the attention of the Committee that we have
done four questions, there are 15 on our paper and we are now
at a quarter to twelve and we wish to ask Sir John about project
evaluation, fraud within DFID, decentralisation, DFID's expenditure
plans, policy performance funds, emergency humanitarian aid, European
Commission, bilateral country programmes and, finally, Zimbabwe,
so we need to hurry along if we are to get anywhere near our objectives
in terms of answering questions.
Mr Worthington: Chairman, you will have
noticed my intense self-discipline so far.
Chairman: Indeed, I have. Mr Worthington?
Mr Worthington
118. I want to return to what Andrew Robathan
said and just to be clear about what Sir John is saying, that
with regard to the European Community he is not accountable for
that. I look at your report and it says at present 50 per cent
of DFID's expenditure is spent through multilateral channels.
Is Sir John saying he is not accountable for that?
(Sir John Vereker) No, I am not saying that. I gave
a very brief reply to this question because I was asked for one,
but the precise position, Mr Worthington, is that I am accountable
for everything except that part of European Union expenditure
which is attributed to my budget for which I do not account to
Parliament. I certainly accept accountability to Parliament and
to this Committee for all multilateral expenditure, other than
that which is on the EU budget.
Chairman
119. As opposed to EDF, is that right?
(Sir John Vereker) That is right. The EDF is on our
budget and I am technically accountable for it. Having said that,
of course, as a department we also have to accept some responsibility
to try and improve the quality of that European Union expenditure
which is funded from their budget, it is just that I am not technically
accountable to Parliament for it.
2 See Evidence p. 54. Back
3
See Evidence pp. 100-102. Back
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