Examination of Witnesses (Questions 120
- 139)
TUESDAY 9 MAY 2000
SIR JOHN
VEREKER, MR
BARRIE IRETON
AND MR
PETER FREEMAN
Mr Worthington
120. I want to be clear about the way you use
the word "accountable". You would see yourself as having
a responsibility for improving the quality of that expenditure,
but you are not personally to be held accountable for how it is
done?
(Sir John Vereker) Exactly that, and I do not sign
accounts to Parliament and my accounts are not audited by the
NAO.
121. One of the things that disappoints me about
the report, although in total I think it is a splendid effort,
is this convention that you do not criticise other bodies. I look
at the European Union expenditure on development and find it woeful,
and you have nothing to say about this at all.
(Sir John Vereker) Mr Worthington, you might find
it helpful to distinguish between us officials and our ministers.
I do not think my Secretary of State is at all shy of saying what
she thinks about weaknesses in other organisations, and she has
put on record that she thinks that it is lamentable that the pattern
of European Union expenditure does not reflect the pattern of
need and that there is very little relationship between the volume
committed and the relative poverty of countries. She has put it
on record that she does not regard the quality, effectiveness
and timeliness of European Union programmes as satisfactory and,
indeed, in our institutional strategy paper for the European Union
I believe that we have a box which shows some strengths and weaknesses
in which we are fairly frank about the weaknesses. I would also
like to say that we are not, generally speaking, shy about listing
weaknesses in institutions with whom we deal, but we are rather
reluctant to get into sharply critical mode because we are in
the same business and we know some of these difficulties. We do
not stand in judgment on others, but we are prepared constructively
to say what we think the strengths and weaknesses are.
122. If I asked you to get humanitarian aid
to Ethiopia and I asked ECHO, who would come out quickest? It
is an easy question.
(Sir John Vereker) Well, it is not, Mr Worthington,
because it is not you that would do the asking. If a decision
were taken this morning to try and get relief aid on an aeroplane
and out to a remote area on the Horn of Africa and that decision
was taken on the one hand in London in relation to DFID and on
the other hand in Brussels in relation to ECHO, I reckon we would
win.
123. Can you describe any circumstances in which
ECHO would win?
(Sir John Vereker) I believe that our colleagues in
ECHO are doing their best under rather difficult circumstances;
but look at the channel of communication and the channel of approval
of process. In the case of the decision taken in London, Mr Ireton
or I would probably have a five minute telephone conversation
with the head of our Conflicts and Humanitarian Affairs Department
who has delegated authority to spend quite a large amount of money,
who has a call-down contract with people on 24 hour notice —
less in some cases — who has a call-down contract with people
who lease airplanes and can just take the decisions and do it.
In the case of our colleagues in Brussels, they need authority
from goodness knows how many different people, including representatives
from 15 countries. They are surrounded by financial processes
designed to ensure accountability and probity, which is always
more complicated in an international institution, and they will
simply find it harder. However, they are getting better, they
are doing their best.
Chairman: I think we must hurry on. Project
Evaluation; Barbara Follett?
Barbara Follett
124. This goes into accounting, not literature
or history. The Committee received, with its papers, extracts
from the synthesis of Project Completion Report, which shows the
forms which are filled in by project managers on the completion
of projects which are over half a million pounds, and the form
in Annex D is the one that has been in use since July 1999. I
want to ask a couple of questions on those forms and on the information
that those forms contain. They seem to be more quantitative than
qualitative, though the form that has been in use since July 1999
does have a section for lessons learned, which does allow some
qualitative reporting. I am interested in how the more general
qualitative lessons learned from projects are transmitted and
whether you think that form D, the up-dated form, is in itself
good enough? I know that in the introduction to the Project Completion
Reports you say that you talk about PRISM, which might give you
a chance to mention it.
(Sir John Vereker) That is wonderful. I am most grateful,
because I was hoping to do that. The short answer to your question
is, yes I think Annex D does serve its purpose reasonably well,
and the comments together with the quantitative data are then
captured in our amazing PRISM system. I know, and I objected to
this last year, the Committee has got a list of questions in front
of it, much longer than we are likely to have time for. Since
I do not have this list of questions, I have no idea what is coming
and I seem to be the only person in the room who does not. However,
can I take one minute to explain how PRISM works, or does the
Committee already know?
Chairman
125. No. One minute.
(Sir John Vereker) Basically, PRISM is an acronym
standing for Performance Reporting Information System for Management.
It captures data which comes from the Project Completion Reports,
which we are talking about now, and the earlier data which comes
from the amazing PIMS, PAMS and POMS system which you will recall
I told the Committee before — Project Information Markers
and so on. PRISM, therefore, contains data which relates to what
happens when the project is conceived, what happens when the project
spends money and what happens when the project is finished. So
it has information about our portfolio, about our spending and
about the quality and, therefore, it is an absolutely wonderful
system because electronically, on screen, when it is all up and
running you can drill a line through it and analyse data by country,
by sector, by time, by quality or any way you want. The answer
to Mrs Follett's question can be found in some of the data now
available, which again I pulled off before coming to this hearing,
on, for instance, South Africa. I will not trouble you with the
detail, but you can get a summary histogram which shows how we
are doing on a scale of one to five, one being pretty good and
five being pretty hopeless. This is the whole of the South African
portfolio and mostly in boxes two and three. Then you get a narrative,
and this is the interesting part, the narrative here contains
some of the qualitative data that you are after. Just to prove
that I do not cheat, the page I pulled off pretty randomly says
some fairly firm things. For instance, about the European Union
it says, "EU outputs are more likely to be achieved now the
extension has been agreed, provided the recommendations in the
mid-term review are taken forward." That is the sort of qualitative
thing you say. Here is one, the Free State Transformation Programme,
"Work is piecemeal, not being undertaken or integrated within
the broader framework of coordination. Other areas of work suffer
from a lack of direction and drive." I was slightly embarrassed
when I pulled this off, but I thought, well, I wonder how many
other government departments are as frank in their published information?
All of it is available on our intranet about our own evaluations
of these things.
Barbara Follett
126. Thank you. That answers my first question.
My second question really concerns your historic data in the Project
Completion Reports between 1983 and 1998, which do not have any
sections for lessons learned. Has there been any way of capturing,
perhaps, a narrative or qualitative data there? I see from your
face that there has not. What are the reasons for the failure
of 75 per cent of the projects approved in Europe and the former
Soviet Union between 1994 and 1998 to achieve their goal? I know
that sometimes looking at the past is not very helpful, but it
might help us in future projects.
(Sir John Vereker) It is a fair point and I am only
pulling a face because I am conscious of the fact that the quality
of our PCR data has not been good in the past and we have had
to make a lot of effort to ensure that we get up to date and complete
PCR information. If we go back to the mid-1990s, I do not think
the data is at all high quality. The better way of answering the
question, "Why did we have a relative lack of success in
the Soviet Union in the mid-1990s?", if that is what the
figure shows, is probably through a sectoral evaluation, the evaluation
of Know-How Fund programmes in Russia in the 1980s, rather than
through this data.
127. I would like to turn, Chairman, with your
permission, to the Special Evaluation Reports. The Department
has produced 12 independent evaluations a year on selected projects,
which we welcome. What percentage of DFID's projects are independently
evaluated, and how are the projects for independent evaluation
selected?
(Sir John Vereker) I think the first thing to say
is that rather fewer of our evaluations now are of individual
projects, the majority are of sectors, or issues, or aggregates,
because we find we learn lessons better like that. I have to ask
Mr Ireton, as Chair of the Portfolio Review Committee, to give
a more quantified answer.
(Mr Ireton) I will try to give you an accurate quantified
answer as to what proportion, either by number or value, about
the projects in turn. I can provide that. It is a small percentage,
it is a small figure. The issue to what sort of programme we evaluate
is a mixture of issues, but we are seeking to learn lessons which
are applicable to our programmes of the future. It is of interest,
of course, to see how we have done in the past, and that is important
in the aspect of accountability, but critically we are looking
at what sort of issues we are likely to face in the future and
what we learn from the programmes that we have done in the past.
Another important feature of our evaluation system increasingly
in recent years has not been to rely entirely on in-depth very
historic evaluations of a single project, but to try and bring
together evaluations of individual projects around a group and
synthesise them, use information about current projects and drawing
lessons that are being learned by other donors as well, including
the Bank and so forth. When you produce a synthesised study about
health programmes or poverty, then we have a much broader and
richer series of material to draw on. Does that help?
128. That helps.
(Mr Ireton) If you want a quantitative figure, we
can look at it.[4]
129. What percentage of DFID's expenditure is
independently evaluated? I do not expect you to have that to hand.
(Mr Ireton) I do not. It will be relatively small,
but we can let you have that.[5]
130. Finally, have you any idea how the conclusions
of these independent evaluations differ from your own evaluations,
or the Department's own evaluations?
(Sir John Vereker) You mean, do outsiders find that
we are less marvellous than we think we are?
131. Or do they find you infinitely more marvellous?
(Sir John Vereker) I am not sure that it is right
to distinguish quite so violently between independent evaluations
and our own. I think the head of our evaluation department, who
is sitting behind me, would assert fairly vigorously that evaluations,
whether they are done in-house or contracted to outsiders, are
in every case done by professional evaluators according to well-established
criteria, and all our evaluations are published. I would be very
surprised if it is possible to detect the kind of trend you are
looking for. I am getting a nod.
Chairman: Oona King has been very patient
and wants to ask a question.
Ms King
132. It is just a general slight feeling of
unease. Can you put me at ease with this lovely glossy brochure
here, because it seems a tiny bit nebulous in terms of the data
itself? It touches on what Barbara is talking about, it is essentially
entirely dependent on self-assessment and we know the inherent
problems with self-assessment. I think that if we had to fill
in a form saying how well we think we have achieved serving our
constituents, we would all say, "Marvellous. Yes, we have
achieved that data." I get the feeling that I cannot quite
monitor how meaningful and useful these PCRs are, because they
are people filling in how they have achieved their own projects
and, inevitably, any doubt on their part reflects poor management
on their part I did really want to get more of a sense of how
you can make these meaningful.
(Sir John Vereker) Of course you are right that you
have got to view quite sceptically anything which contains the
element of self-assessment which is in here. I accept that. It
is quite difficult, without being massively bureaucratic and elaborate,
to come up with something that is more obviously independent,
but I can offer the Committee one or two thoughts of comfort.
First of all, it is rather rare that somebody is filling in a
Project Completion Report on a project that they themselves have
designed and implemented, because, for a start, turnover is such
that it is rather unlikely that that will happen.
133. Does that happen as a matter of course
though?
(Sir John Vereker) No. I take the point, but I think
also that the quote that I read out, which, as I say, is not untypical
of the kind of thing we find in here, shows that staff do actually
fill in these things fairly objectively, and if we were all determined
to do as you suggest that Members of Parliament would do in relation
to the service to their constituents, I do not think we would
find quite so many people saying that objectives were likely only
to be partially achieved, which is 20 per cent of the data in
front of you for South Africa for instance. I think there is some
sign that we are reasonably objective about it. I do come back
to the point that proportionality is a bit of an issue here. We
are talking about quite a large number of individual interventions.
In the case of the ones I am looking at for South Africa, it is
nearly 100. If we set up some kind of system to contract and brief
and quality control and monitor outsiders to do this kind of work,
would Parliament thank me for it? I think not.
Chairman
134. The difference with politicians is that
nobody else is going to blow their trumpet except themselves.
(Sir John Vereker) Only once every four or five years,
Chairman.
Chairman: Piara Khabra would like to
ask you about fraud within the Department.
Mr Khabra
135. I am going to ask you a set of questions
which may be sharp and short, but may be sensitive to the Department.
These questions relate to DFID. DFID has conducted several reviews
relating to fraud, including reviews of its accounting procedures,
and administrative procedures and delegation of authority within
the accounts department, and an ongoing internal audit review.
My first question is, what have been the results of these reviews?
Have they revealed much fraud within DFID? Is there a published
whistleblower arrangement and, if so, how many times has it been
used and to what effect? How much of DFID's budget is lost to
fraud originating either within the Department or outside, each
year?
(Sir John Vereker) I think I am right in saying, subject
to corrections from my principal finance officer on my left, that
we have not uncovered cases of fraud within the Department.
(Mr Freeman) I think that is right, but since I have
only recently taken over this job, I am not sure I can honestly
say that from personal knowledge from previous years.
(Sir John Vereker) As far as I am aware, we have no
recent cases of fraud within the Department. You asked, "How
much has been lost as a result of fraud within or outside the
Department?" Therefore, the answer to the first part of that
question is, nothing, but we can double check. Fraud outside the
Department, there is no simple answer to that question. We do
not believe that we have been subject to recent fraudulent activity,
but of course the Public Accounts Committee has investigated one
or two cases — a procurement agent some time ago and the
pensions fraud in Amman — these were well trawled over several
years ago. I am not aware of any more recent cases. If you are
talking more widely about the extent to which our resources are
put at risk as a result of corruption in developing countries
themselves, I am not sure I can answer that question in the time
remaining in front of the Committee, but I guess that is not quite
what you are asking.
Chairman
136. This question originated from your Box
g on page 26 of the report which is headed "10. Fraud",
so it does not include that factor.
(Sir John Vereker) If we may, Chairman, we will include
in our written response to you after this meeting, a confirmation.[6]
I want to give Mr Freeman a chance to double check the answer.
Chairman: Thank you very much. Oona King
would like to ask about decentralisation of the Department.
Ms King
137. Members of the Committee recently visited
Southern Africa and Malawi, and we saw that over the next two
years your budget is set to increase from £45 million last
year to £70 million. We were wondering, given that the entire
programme is largely run from DFID's offices in Harare, if you
have any plans to open an office in Malawi, and under what circumstances
you consider setting up new offices? I know that some members
of the Committee, when we visited Rwanda, were surprised to find
that in Bujumbura, for instance, they would only see the representative
or the Consulate once every six weeks or so. What are the criteria
for setting up new offices?
(Sir John Vereker) It is quite a complicated question.
As the Committee knows, we are a Department in transition. At
the time of the change of government we had, maybe, half a dozen
regional offices overseas, such as Eastern, Central and Southern
Africa, the Caribbean, South East Asia and the Pacific, and we
had two substantial country offices, India and Bangladesh. A number
of developments have now pushed us in the direction of opening
more country offices. One of those developments, of course, is
growth in programme and activity, but I think the more important
development is our increasing appreciation of the need to work
together with others in the country and to build close relationships
with all those in the country who are affecting the development
prospects. That has already led us to open a country office in
Kathmandu in Nepal instead of having it run out of our regional
office in South East Asia. Ms King is absolutely right that we
have recently opened country offices in Uganda and Tanzania. It
remains the case that the East African department is based and
headed in Nairobi, but there are national offices in Kampala and
Dar es Salaam. What criteria? It is a little bit ad hoc.
It depends very much on the perception of the head of department
and the regional director of what is appropriate for the country
at the time. In Kampala and Dar es Salaam we have reached a critical
mass with our portfolio and intensive relationship with the Ugandans
and Tanzanians respectively, that justifies having quite a large
capacity, 40 or 50 people at quite a senior level, in the country.
I can imagine that we might reach that position in other countries,
and outside the remit of existing regional offices we have already
done so. For instance, we are about to substantially expand our
office in Abuja and we have a substantial office in Beijing. There
are nine people in Beijing, all of them women, and all of them
Chinese speakers.
138. Fantastic. What an amazing revolution of
change.
(Sir John Vereker) Reporting to a female head of department
in London, reporting to a woman director, reporting to a female
Secretary of State.
139. It has only taken 2,000 years. Which other
countries do you plan to open new offices in over the next two
years?
(Sir John Vereker) I have not listed all of the offices
that we have bilateral activities in, and there are some definitional
issues there. I think that we have to be a bit cautious about
predicting. To take an example, Pakistan; under normal circumstances
our programme in Pakistan hovers on the edge of the critical mass
required to justify having a separate office, rather than being
run from London. Under present circumstances it clearly does not,
but that might come right. In Central Africa, the politics in
Zimbabwe are currently rather difficult.
(Mr Ireton) I want to make the point that this is
not a sort of all or nothing, black and white, issue. In any country
where we have a serious bilateral programme, we have a presence
on the ground — the development secretary within the High
Commission or Embassy, and increasingly a number of staff, often
called field managers — who are looking after and working
with the Government in education, or health, or whatever. What
creates the move which then defines something as a country office?
At the point we decide that, the programme manager, who is actually
responsible to whomever it is elsewhere in the DFID, actually
then locates him or herself in that country with a fully fledged
team. We have progressively moved in that direction in a number
of countries, strengthening power in the country presence without
it being called a country office. That is the move we have been
going on and this is what we are looking at, for example, as Sir
John has just said, in the case of Nigeria.
4 See Evidence pp. 54-55. Back
5
Ibid. Back
6
See Evidence p. 55. Back
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