The 2003-2006 PSA
25. The new PSA, negotiated and agreed with the Treasury,
was announced along with the conclusions of the Spending Review
on 15th July 2002. The associated Service Delivery
Agreement (SDA) and Technical Note will be published soon. The
design of the new PSA is intended to address various shortcomings
identified with earlier versions, most particularly to ensure
that the MDGs drive DFID's performance through the PSA.[25]
DFID accepts the assessment made by the NAO that whilst DFID has
internalised the MDGs, the PSA has not enjoyed full ownership
within DFID and hence has not been driving performance at the
level of delivery.[26]
This lack of ownership can be explained in part by the fact that
the PSA objectives and targets are sectoral, and that at the level
of delivery, DFID—organised into country teams—is
of course primarily geographical.
26. The new PSA is also intended to address the problem
of attribution; the fact that in an international development
partnership it is impossible to prove the extent to which a development
outcome has been caused by an individual development agency. This
issue was discussed in depth by the NAO in its report on DFID's
performance management,[27]
and by the Public Accounts Committee in its recent report.[28]
We do not intend to revisit this issue in detail, but DFID—along
with all development agencies, NGOs, Governments and others involved
in international development—struggles to cope with the
problem of attribution. It is important that the PSA clearly links
DFID's activities to the MDGs, but this must be done in a realistic
manner which accepts the impossibility of attributing causal impact
to DFID in any simple way. The new PSA, in common with the previous
one, seeks to make progress in this direction, in part by focussing
attention on a smaller selection of key countries where DFID spends
the majority of its resources.
27. DFID told us that the new PSA will set MDG-related
outcome targets which "map directly onto our internal organisational
structure". It will make senior managers directly accountable
for delivering PSA targets, and will enable every member of staff
to see the link between their work-plans, the PSA and the MDGs.[29]
As Suma Chakrabarti put it: "What we are trying to move towards
is having that sort of process whereby the Millennium Development
Goals would be reflected in the new Public Service Agreement.
Then we would expect each of the country directors—Africa,
Asia, the rest of the world—to come up with a strategy for
achieving the PSA outcome that they are responsible for."[30]
The intention is to create a "ladder of accountability"
and a "cascading" system of objectives and targets.
28. As DFID explained to us in a written response:
"At present, the Secretary of State is formally
accountable for progress against DFID's 2001-04 PSA and thus progress
towards the MDGs. Within DFID, senior management are collectively
responsible for DFID's contribution to the MDGs. The performance
management system designed around the proposed 2003-06 PSA will
formalise this internal responsibility by holding senior management
directly accountable for progress against PSA targets and objectives.
Senior Management will manage performance through six-monthly
reviews drawing on the Directors' annual PSA progress reports,
Directors' Statements and the annual Departmental Report. They
will also be provided with the quarterly PSA returns to the Treasury.
Individual Directors in discussion with advisers and other colleagues
will incorporate MDG/PSA objectives and targets directly into
their job plans and allocate resources accordingly. Their success
will be measured yearly against delivery of outcomes. Successful
delivery will require that PSA objectives and targets be 'cascaded'
down to departmental, team and individual work plans. This will
ensure ownership by all parts of the office of each target and
create a 'ladder of accountability'."[31]
29. The new PSA, as expected, incorporates some important
changes. DFID's overall aim is to "eliminate poverty in poorer
countries, in particular through achievement of the MDGs".[32]
There are then five main objectives with associated performance
targets. The five objectives are to: reduce poverty in sub-Saharan
Africa; reduce poverty in Asia; reduce poverty in Europe, Central
Asia, Latin America, the Caribbean, the Middle East and North
Africa; increase the impact of key multilateral agencies in reducing
poverty and effective response to conflict and other humanitarian
crises; and, develop evidence-based, innovative approaches to
international development.
30. With the unexplained exception of the third objective,
and a sixth concerning value for money, each of these objectives
has a series of primarily sectoral outcome targets against which
progress will be measured, with 2000 as the baseline year and
2006 as the measurement date. For objective one, the focus is
on 16 key countries, and, for objective two, 4 key countries.
As such, the new PSA includes a mixture of both geographical and
sectoral objectives, targets, and measurement strategies, a mixture
which maps more comfortably onto DFID's organisational structure.
As ODI put it: "The creation of Directors' Delivery Plans
for each Department within DFID brings greater consistency in
DFID management structure and the PSA targets. These Plans will
articulate how regions (Africa, Asia, etc.) and policy departments
will work to deliver the PSA. In this way, DFID has attempted
to establish more policy-led, top-down management to complement
its traditional, responsive country-led programming and provide
it greater coherence."[33]
31. A further noteworthy feature of the 2003-2006
PSA is its recognition of the need for a clearer focus on a limited
number of countries. This might achieve multiple goals: the more
effective use of resources; an improved ability to address the
attribution issue and to demonstrate the links between DFID's
work and development outcomes; and, a greater ability to monitor
progress in particular countries. This recognition is expressed
both in the strategy for measuring progress against targets in
selected key countries, and—as we discuss below—in
DFID's streamlining of its portfolio of countries.
32. We welcome the new PSA as a serious attempt
to develop a set of objectives and we hope, increasingly SMART—specific,
measurable, achievable, realistic and timed—targets which
will both drive performance and facilitate accountability, and
which will map onto DFID's evolving organisational structure.[34]
We also welcome the continued efforts to grapple with the issue
of attribution. However, we do have some concerns about the focus
on a limited number of countries. We are uncertain whether this
is for measurement purposes, or whether this is part of a move
to greater selectivity in the number of countries which DFID is
involved in. There may well be good policy reasons—beyond
making the measurement of progress more practicable—for
a sharpening of DFID's focus; these should be re-iterated. We,
along with DFID, also feel that a three-year time-frame does not
provide a fair or realistic time-span within which to assess DFID's
contribution to international development, and urge HM Treasury
to think seriously about the suitability of such a framework for
DFID. We also note with some concern the lack of targets or indicators
as regards the effective response of multilateral agencies to
humanitarian crises.
Figure 6: DFID's 2003-2006 PSA
33. Finally, the 2003-2006 PSA includes three joint
targets. The first—with the Foreign and Commonwealth Office
and the Ministry of Defence—concerns conflict prevention
and management. The second—with HM Treasury—concerns
debt relief and the MDGs. The third—with the Department
for Trade and Industry and the Foreign and Commonwealth Office—concerns
the reduction of trade barriers. We welcome the inclusion of
joint targets as a useful mechanism to encourage the joined up
Government which international development so clearly demands.
Country Assistance Plans and Policy
Teams
34. Since its inception, DFID has had institutional
structures and processes to link its stated policy objectives
to its actions. This has been achieved through the production
of strategy papers; Target Strategy Papers produced by sectoral
advisers' groups, and Country Strategy Papers produced by regional
departments and country offices.[35]
Both the country planning process and the structure of policy
teams are in the process of change, in part as a response to the
identification of weaknesses with existing approaches. Howard
White of IDS and David Booth of ODI have argued that DFID's country
planning processes, and specifically the Country Strategy Papers
have had a "missing middle".[36]
That is, they state clearly DFID's poverty reduction objectives
and DFID's planned spending, but lack analysis of the causes of
poverty and strategies to break into these causal relationships.
The new Country Assistance Plans are in part an attempt to fill
in this "missing middle". As DFID wrote before the publication
of the new PSA:
"DFID has recently undertaken a major review
of the Department's country planning processes to ensure that
DFID's proposed interventions would be explicitly linked to DFID's
PSA targets and thus the MDGs. DFID's new Country Assistance Plans
will be required to include an annex reporting on progress at
the country level against PSA objectives/targets, as well as MDGs.
The Plans represent performance contracts between the country
team and the Regional Director. They will be annually reviewed
and will feed into each Director's report on progress in their
Divisions. In the 2003-06 PSA ... regional targets have been aggregated
from targets set out in countries' own poverty strategies. This
will ensure close alignment between the MDGs, PSA targets and
the Country Assistance Plans' interim outcomes".[37]
35. The Country Assistance Plan (CAP) will be an
annual document describing how DFID intends to support a country's
own development plans.[38]
For those countries which have what DFID considers to be a serious
Poverty Reduction Strategy Paper (PRSP), the CAP will build closely
on that. In those countries where there is either no PRSP, or
a PRSP but no serious commitment to reform, the CAP will outline
what actions DFID will take to continue to engage with the Government
and NGOs. We applaud the development of CAPs as an attempt
to fill the "missing middle", and welcome the integration
of CAPs with PRSPs and the implicit recognition that DFID needs
to engage with different countries in different ways.[39]
As well as being a forward planning document, the CAP will have
an evaluation function, providing data on a country's progress
against key MDG targets, and providing a country-level basis for
DFID's outcome-based monitoring of its programmes. This will also
reveal the strengths and limitations of local data collection
systems, and provide a basis for making decisions about where
and how to best offer capacity building assistance in this regard.[40]
36. In addition, DFID is currently restructuring
its policy division. There are now five advisory groups dealing
with specific aspects of development which cut across geographical
boundaries—education, governance, health and population,
infrastructure and urban development, and social development—as
well as the primarily regional divisions. The intention is that
the structure and remit of these advisory groups, which will be
responsible for realising non-geographic goals as well as supporting
country-level work, will be more closely aligned with DFID's core
work and the MDGs.[41]
24 Ev 26, paragraph 5. Back
25
In his contribution to the NAO report-on page 63-Howard White
wrote that in response to his question as to what DFID's response
should be to the likelihood that none of the International Development
Targets would be met at the global level, virtually all respondents
thought that no response was necessary. White's conclusion-that
this shows that data on the Targets embodied in the PSA do not
yield information of operational significance-would seem to be
reasonable. See footnote 8 for web-site. Back
26
Ev 1, paragraph 2. Back
27
National Audit Office Report, Session 2001-2002, Department
for International Development: Performance management-helping
to reduce world poverty, HC739, page 26. See footnote 8 for
web-site. Back
28
Forty-Eighth Report from the Public Accounts Committee, Session
2001-2002, Department for International Development: Performance
management-helping to reduce world poverty,HC793, paragraph
13. See footnote 2 for web-site. Back
29
Ev 1, paragraph 2. Back
30
Q3 Back
31
Ev 31, paragraphs 36-38. Back
32
HM Treasury, 2002 Spending Review, Public Service Agreements 2003-2006,
CM5571, page 23. See http://www.hm-treasury.gov.uk/mediastore/otherfiles/psa02_ch11t.pdf Back
33
The Millennium Development Goals and the IDC: Driving and framing
the Committee's work, ODI, July 2002, paragraph 91. Back
34
National Audit Office Report, Session 2001-2002, Department
for International Development: Performance management-helping
to reduce world poverty, HC739, page 24 and 25. See footnote
8 for web-site. Back
35
The Millennium Development Goals and the IDC: Driving and framing
the Committee's work, ODI, July 2002, paragraph 88. Back
36
"Using development goals to design country strategies",
chapter 4 in Targeting development: Critical perspectives on
the Millennium Development Goals and International Development
Targets, edited by Richard Black and Howard White, Routledge,
2002. Back
37
Ev 31, paragraph 34. Back
38
The first two CAPS, for Ghana and Peru, have been produced. See-http://www.dfid.gov.uk/News/Consultations/files/caps.htm Back
39
See also, Fifth Report from the International Development Committee,
Session 2001-2002, Financing for development: Finding the money
to eliminate world poverty, HC785, page 39, figure 12. See
footnote 19 for web-site. Back
40
The Millennium Development Goals and the IDC: Driving and framing
the Committee's work, ODI, July 2002, paragraph 89. Back
41
See http://www.dfid.gov.uk/AboutDFID/htm; also see The Millennium
Development Goals and the IDC: Driving and framing the Committee's
work, ODI, July 2002, paragraph 90. Back
