Select Committee on International Development Sixth Report

DFID's Public Service Agreement (continued)

15.The PSA has the difficult job of knitting together various aspects of DFID's work and its

 diverse relationships. Firstly, the PSA is the major way in which the Treasury and the UK Government hold DFID accountable for spending resources in pursuit of governmentally-agreed objectives. Secondly, the PSA translates the internationally-agreed MDG targets, as articulated in the two White Papers, into DFID-specific objectives and subsequently actions. The PSA is a tool for both (mainly external) accountability, and for improving organisational performance.[14]

16.It is inevitable and desirable that a PSA has both these roles, but this might also be a source of confusion. Confusion is also the likely product of imposing an unsuitable PSA on an organisation with a matrix structure of primarily sectoral goals and primarily geographical processes of resource allocation and delivery. As Howard White of the Institute of Development Studies (IDS)—the author of appendix 2 of the National Audit Office (NAO) report on DFID's system of performance management—argues, systems of performance management such as the PSA should be integrated into existing management systems, rather than separate or parallel.[15]

17.To summarise, the PSA is meant to translate primarily sectoral MDG targets into local development actions and interventions, drive organisational performance, and enable external accountability for the spending of resources which are allocated primarily geographically (see figure 5). A good PSA would be mapped closely onto DFID's organisational matrix, and would cover all of DFID's activities. As we discuss below, DFID has had three PSAs; the second and third PSAs have been designed, in the light of experience, to perform their various functions more effectively.

Figure 5: The Central Place of DFID's Public Service Agreement

18.Whilst the PSA does translate some of the MDGs into DFID-specific objectives and targets, the Departmental Report fails to provide an analysis of spending either by PSA objective or by MDG target. DFID explained to us that they are unable to provide such an analysis because of the structure of the 2001-2004 PSA, because the PSA objectives are not mutually exclusive, and because the PSA objectives do not cover all DFID spending.[16] In the absence of such information it is difficult to ensure that resources allocated to objectives, properly reflect Departmental policies and priorities. We are pleased that DFID has taken the opportunity offered by the Spending Round to define new PSA objectives against which it will be possible to map budget allocations more clearly.[17] In addition, if the PSA is the clearest statement of its objectives, DFID ought to give serious consideration to structuring its Departmental Report around its PSA so as to make itself more accountable for progress towards its objectives. We would also like to know what would happen were DFID to fail to meet its PSA objectives.

14   See also National Audit Office Report, Session 2001-2002, Department for International Development: Performance management-helping to reduce world poverty, HC739, page 58. See footnote 8 for web-site. Back

15   A drop in the ocean? The international development targets as a basis for performance measurement, Howard White, 2001, page 7. See footnote 8 for web-site. Back

16   Ev 1, paragraph 3. Back

17   Ev 1, paragraph 3. Back

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