Conclusions and recommendations
1. We welcome the
changes to the report made in consequence of our recommendations
last year. We also welcome the fact that this year the report
provides links and references to further information where there
is not the space to address these issues in detail. (Paragraph
4)
2. We recommend that
the Department aim to include more information within future annual
reports about how it is pursuing its objectives. In particular
there should be more information about what steps it is taking
towards the achievement of joint targets, and then what specific
contribution it has made to performance against these. Explanations
for underperformance against targets are essential but the Department
must do more to ensure that these do not become a substitute for
adequate descriptions of actual performance. Equally, it must
be clear what specific steps are being taken to remedy underperformance.
In particular explanations must be included, as addenda to each
relevant PSA target, of how problems with data have affected the
measurement of performance and how these problems are being addressed.
(Paragraph 7)
3. There will come
a point where old PSAs need to be relinquished. However, for the
present we recommend that DFID continues to report progress against
any targets or sub-targets which are outstanding from previous
Public Service Agreements until they have been met or until the
target deadline has expired. (Paragraph 8)
4. We welcome the
suggestion by the Department that the 2004 Departmental Report
be structured around DFID's objectives. Next year's report should
present a comprehensive account of activity and performance under
each objective including the reporting of progress against internal
targets in areas not covered by specific PSA targets. As a matter
of good practice this further performance reporting should follow
the same format as that concerning the PSA targets. (Paragraph
10)
5. We would suggest,
in future reports, 'joined up' reporting between the Spending
Review and the Departmental Report to demonstrate the links between
funds secured and commitments made in the Spending Review and
the performance recorded in the Departmental Report. (Paragraph
11)
6. We would like to
see clear, consistent and transparent reporting of DFID's past
spending and future plans in a way which facilitates tracking
progress and demonstrating changes in policies and priorities.
We recommend that the Department ensure that in future years financial
tables are stated in equivalent terms and that more complete and
fuller explanations are provided for year-on-year variations (Paragraph
13)
7. It would assist
understanding of the report if the Department identified the extent
to which expenditure plans represent funds already committed to
country programmes and projects, as well as providing a full breakdown
of direct budget support expenditure and plans. (Paragraph 14)
8. We were pleased
to learn that the Department is committed to making use of financial
flexibility in order to link funds with performance. However we
would welcome more information (and acknowledgement) in the annual
report about how this process works. There is still work to do
in order to make contributions to multilaterals more performance-oriented.
We attach a high priority to the Department securing good value
for money for these contributions, and demonstrating that it has
done so. (Paragraph 15)
9. We consider that
the annual report could be more explicit about the choices that
the Department has to make and how it addresses new risks and
opportunities, by providing examples related to specific countries
and programmes. Although there is much information on DFID's risk
management processes available elsewhere, there is very little
within the report itself. Communication of what risks the Department
faces and how it is handling them is central to managing the expectations
of the public and Parliament. We would also like therefore to
see a brief overview of the Department's risk management processes
within this report. Finally, we would welcome more information
on staff flexibility, and in particular what happens to staff
when responding to sudden crises or changes in policy priorities.
(Paragraph 16)
10. We welcome the
work being undertaken to evaluate the success of these new methods
of disbursing aid. It would have been relatively easy for the
Department to commit funds and then sit back for three years,
but instead they have chosen to engage fully and monitor the effectiveness
of the aid and commitment of the recipient government to poverty
reduction. We will continue to follow this closely and will be
looking for evidence that DFID, even when acting in concert with
other donors, continues to take hard decisions when UK aid objectives
are not being met. Other donors' own objectives may not necessarily
fit with those of the UK. (Paragraph 18)
11. We believe that
the Department should continue to attach a high priority to building
statistical capacity in the countries in which it operates. Obviously
this process will take time, therefore in the interim we would
expect a frank summary of the limitations of the performance measurement
system as it relates to the Department's Public Service Agreement,
and what validation has taken place. This should include any findings
from forthcoming NAO work to validate the PSA data systems. (Paragraph
19)
12. We consider that
improvements could be made in how these policy achievements are
reported upon, in order to satisfy a sceptical reader who may
not necessarily accept that these positive policy outcomes are
as a direct result of the Department's work. One way would be
to include more details about the original policy target, the
timeframe to achieve this, actions taken and other partners.
(Paragraph 20)
13. We would welcome
DFID's view on how it protects its priority budgets against the
risk of currency fluctuations. (Paragraph 21)
14. In order for DFID
to meet its own objectives we consider it essential that the issue
of reforming EC development issues and developing systems to monitor
the effectiveness of this multilateral aid continues to be given
a high priority within the Department. In addition, we would like
to see more information in the departmental report about how these
funds are used, the framework for distributing EC development
funds, current shortcomings and limitations in this, including
in measuring aid outcomes and DFID's own efforts in this area.
(Paragraph 23)
15. The trend seems
to be towards providing development aid for good performers and
humanitarian assistance for crisis countries. But provision of
humanitarian assistance alone will not help to encourage reform.
It can only be a stop gap measure rather than a real push along
the road to development. The choice between getting the best development
return for your money and not wanting to abandon "failed
states" is a difficult one. Recent experiences in Afghanistan,
Sierra Leone, Sudan and the Democratic Republic of Congo have
highlighted the inadequacies of a policy of humanitarian assistance
only for poor performers. Identification of potential future
problem states is essential for avoidance of the failed states
dilemma. We were reassured by DFID's Deputy Director of Policy's
comment: "The new policy division will be doing a lot more
work on trying to spot the future Zimbabwe so that we can better
prepare our response and prevent conflict and governance breakdown".
(Paragraph 28)
16. It is vital that
DFID assists countries in developing financial management and
tracking systems, and we commend the work that DFID is doing in
conjunction with the National Audit Office in this respect. We
also support the Department's emphasis on statistical capacity
building to help developing countries entrench more effective
monitoring. This will permit an evaluation of the success of direct
budgetary support, and the measurement of progress in implementation
of Poverty Reduction Strategies. We agree with DFID that aid-receiving
countries should not be overburdened with evaluation mechanisms
through donor requirements for parallel reporting systems. This
emphasises the need to enhance recipient governments' performance
management, accountability and PRS monitoring systems as these
are the key mechanisms that DFID uses for measuring the impact
of DBS. The assumed benefits of DBS may justify the associated
risks, but careful monitoring and evaluation to minimise these
risks and maximise the benefits is crucial. (Paragraph 30)
17. Direct budgetary
support is intended to provide greater predictability of aid flows
for recipient governments. It is, however, unclear how a recipient
country could achieve this or restrict donor exit from the DBS
club unless it sticks strictly to conditions imposed upon it.
….We support the Department's intention to develop consistent
principles and practices that take account of the risks and benefits
of withdrawing budget support. We would like to see, in future
Departmental reports, greater information and discussion of the
way in which DFID uses DBS as a lever for influencing government
policy in recipient countries. (Paragraph 31)
18. While such effective
donor coordination is commendable, DFID still needs to make independent
assessments and evaluations, not least because donors' goals and
objectives are not identical. (Paragraph 32)
19. We agree that
NGOs should focus on communicating their service delivery potential
to the governments of aid-receiving countries. (Paragraph 33)
20. It is commendable
that the Department has maintained its financial and political
support for the UNDP's Millennium Development Goals Support Programme
and highlighted the importance of linking this to Poverty Reduction
Strategies and to the need to build statistical capacity. We welcome
the work that DFID is undertaking in statistical capacity building
relating to monitoring PRSs. We also support DFID's efforts in
building statistical capacity of developing countries to allow
more effective monitoring of progress towards the MDGs, as we
recommended in our report last year. However, it is also essential
to ensure that DFID target countries currently without a PRS
can benefit from development assistance, which is increasingly
given in support of such strategies. (Paragraph 34)
21. We believe that
DFID should re-examine its policy on technical assistance in those
countries with large skills gaps—particularly those affected
by AIDS and HIV. The level at which technical assistance is be
provided is significant. Providing technical assistance at middle-ranking
civil service level may be more helpful and less divisive than
merely targeting the highest levels of administration. One particularly
interesting suggestion came from Dr Bingu Wa Mutharika, Malawi's
Minister for Economic Planning. In common with many sub-Saharan
African countries, Malawi loses many of its skilled and professional
workers to the lure of higher wages in the developed world. Dr
Bingu suggested maintaining a database of skilled Malawians working
abroad and encouraging them to return to Malawi on sabbaticals
to provide capacity where needed. Donors could play a useful role
in funding such sabbaticals from the African diaspora as a form
of technical assistance. The Committee will shortly be starting
an inquiry into migration and development and will investigate
such ideas further. (Paragraph 37)
22. Parliamentary
participation in the process has to date been slight and needs
to be increased. It is essential that the PRS process does not
merely become a box-ticking exercise for aid-receiving countries.
Genuine participation requires an early engagement with parliaments,
civil society, and multi-stakeholder groups, even before a PRS
is drafted. (Paragraph 40)
23. We agree with
the importance placed on country ownership of PRSs but think that
donors should be more explicit about the influence they have over
the content of PRSs. Furthermore, donors should explain how they
seek to balance the need for country ownership and the need for
good policy, wherever that policy originates. (Paragraph 42)
24. We welcome the
development of these frameworks for working with partner governments
and the links with the other national processes DFID is operating.
We would welcome further information and details on progress within
next year's annual report. (Paragraph 43)
25. Donors should
explicitly recognise the influence they exert of the content of
PRSs and the donor-recipient dialogue on PRS content should be
formalised, possibly using MoUs. This may be useful to countries
preparing PRSs and would allow donors to identify important but
sometimes neglected issues such as gender or trade capacity building.
(Paragraph 44)
26. DFID needs to
use realistic indicators, that reflect what its work can achieve,
and measure progress towards meeting its objectives. As we stressed
in our report last year, DFID should explicitly analyse the relationship
between its need to achieve its own objectives, and its support
for locally-owned development strategies. (Paragraph 45)
27. We encourage DFID
to push for adoption of reporting and monitoring systems along
these lines so that it can better demonstrate the effectiveness
of assistance provided in support of PRSs. (Paragraph 46)
28. We encourage DFID's
efforts to influence the international policy environment and
to defend the policies agreed at the ICPD as complementary to
progress towards the MDGs. (Paragraph 47)
29. While we welcome
the proposal to structure future reports according to DFID's objectives,
it would be useful if they could also present key financial data
with respect to SRH. In addition, the importance of adequately
explaining instances of 'flexible financial management' within
future reports is underlined by the confusion surrounding the
reporting of variations in the UNFPA's core grant allocation since
2000/2001. (Paragraph 48)
30. If the intention
is to 'mainstream' SRH within DFID, we would like to hear more
in future reports about the mechanisms by which this will be achieved.
We would also like to see information detailing how, since its
restructuring, DFID has continued to prioritise the full range
of SRH issues (including gender-based violence, unsafe abortion
and young people's access to SRH information and services), not
just those which are more easily identified within the MDGs. (Paragraph
49)
31. In future reports
we would like to see evidence of how these funding strategies
have supported DFID's objectives in relation to SRH, with particular
attention paid to the participation of "Southern" NGOs.
(Paragraph 50)
32. We remain concerned
that the existence of MDG relating to HIV/AIDS should not be allowed
to cause a shift in Departmental focus and funding away from broader
issues of SRH. (Paragraph 52)
33. We would like
to see evidence of the steps DFID is taking to develop a broader
analytical approach to the power relations between men and women
across all sectors of their work. In future reports we would also
like to see more detailed information on the nature and operation
of gender budgets and how they can assist in analysis of the
gender impacts of public expenditure. As with SRH, we are concerned
that the diffusion of responsibility associated with mainstreaming
gender equality should not result in its invisibility. (Paragraph
53)
34. We support the
proposal that the new 'scoping' team established within DFID's
Policy Division should examine the Department's strategy for engagement
in post-primary education and training, including the achievement
of gender equity in higher education. (Paragraph 54)
35. We hope that the
establishment of the agricultural policy team will mark a change
in DFID's emphasis. Its work should not be restricted merely to
creating an enabling framework for agriculture, but should encompass
specific measures to boost smallholder production. It is important
that the team is built up to deal with Renewable Natural Resources
(RNR) as a whole, and should make use of the experience already
available among RNR advisers. (Paragraph 60)
36. The establishment
of an agricultural policy team in DFID should provide an opportunity
for serious thinking about alternative routes to agricultural
development that are sustainable, give farmers choices, promote
rather than confuse private sector actors, and have an exit strategy
for donors like DFID. (Paragraph 62)
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