Memorandum submitted by the Department
for International Development replying to additional questions
submitted by the International Development Committee
RESOURCES AND
FINANCIAL TABLES
Q1. Table 1 shows the headline resource spending
for the Department. 2002-03 £3,644 million, 2003-04 £3,689
million and in 2004-05 £3,806 million. This represents a
1% increase for 2003-04 and a 3% increase for 2004-05. With inflation
at 3% this represents a cut in real terms, how is this cut translated
into your programme?
The 2000 Spending Review gave DFID a settlement
of £3,348 million in 2002-03 and £3,560 million in 2003-04,
an increase of 6%. The figures in the DR have been adjusted due
to the move to resource based budgeting and, in 2002-03, due to
certain in-year exceptional adjustments, such as EC rollover and
central reserve allocations, the equivalent of which are not yet
seen in 2003-04.
Although the increase in headline resource spend
between 2003-04 and 2004-05 is 3%, with respect to our programme,
the real increase is higher due to a reduction of £260 million
in spend on EC attribution as we no longer have to cover those
countries expected to accede to the EU in 2004.
Q2. £195 million of assistance to Iraq
is planned for 2003-04 with nothing for subsequent years. How
can the Department spend so much, so quickly without waste?
£195 million was earmarked for Iraq in
2003-04 to enable DFID to respond immediately to critical needs.
Details of the £98.7 million of this sum that has already
been allocated are attached (see Annex 1). We are working
with our partner organisations to make sure that it is not wasted.
Further allocations to support immediate, medium and longer term
rehabiltation of Iraq will be considered over the coming months
in view of the developing situation there, and the forthcoming
IFI and UN needs assessment.
Q3. In Table 2 how does reporting the outturn
and planned future expenditure on multilateral aid demonstrate
how DFID is "Improving the Effectiveness of Multilateral
Aid"?
This line shows our financial contributions
to the concessional arms of the multilateral development banks,
the European Development Fund, and the UN system.
Underpinning all our contributions is a policy
to improve the effectiveness of the multilateral agencies, in
particular to achieve alignment with Poverty Reduction Strategies.
We are increasing the scrutiny we put on the relative effectiveness
of multilateral agencies and our PSA and SDA targets linked to
this finance set specific goals for assessing improved effectiveness.
Q4. Has any work been done to quantify how
the £865 million contribution to "EC Development Programmes"
meets DFID's objectives?
The Development Policy Statement of November
2000 put poverty reduction at the centre of EC policy, in line
with DFID's objectives, but question marks remain as to how widely
the policy has been applied.
A key objective for DFID is to increase the
poverty focus of EC expenditure. We monitor the proportion of
EC funding going to low-income countries on an annual basis. The
latest figures we have are from 2001 where the proportion rose
from 38% in 2000 to 44%.
Broader effectiveness is more difficult to quantify,
but we are working to produce a framework to measure the relative
effectiveness of multilaterals. The European Commission itself
is about to embark on a mid-term review of all of its country
programmes and DFID will participate in that exercise both in
country and through Brussels.
The Commission produces an Annual Report on
its activities and achievements in development which the UK, along
with other member states, scrutinises and debates in the General
Affairs and External Relations Council.
POVERTY REDUCTION
STRATEGIES, MEMORANDA
OF UNDERSTANDING
AND BUDGET
SUPPORT
Q5. Can a note be provided giving further
details of how Memoranda of Understanding operate? What accountability
is built into these? How do they relate to Poverty Reduction Strategies?
DFID is developing Memoranda of Understanding
(MoUs) with—currently—a small number of developing
countries as a framework for shaping the overall medium and long
term relationship with a partner government. MoUs are based on
a set of core guiding principles which encourage the establishment
of developing partnerships based on best practices.
MoUs:
— Provide the framework for determining
the overall aid relationship with a partner-country government,
and define the basis for having substantive dialogue on key issues.
— Are open and explicit about our conditionality
and expectations. This includes explaining to our partners the
expectations placed on DFID by the UK Parliament, auditors and
public.
— Inform our partners about the predictability
of our support, particularly where where we are providing direct
budget support.
— Increase our accountability as they
clearly set out our commitments and indicate mechanisms for reviewing
progress on an annual basis.
— Provide a stimulus for greater donor
co-ordination and harmonisation, and alignment in support of national
poverty reduction strategies (PRSs).
In preparing MoUs, we endeavour explicitly to
relate these to the Poverty Reduction Strategy (PRS) process or
a similar national process. MoUs encapsulate the partner government's
own aspirations and objectives and set out how best we support
them in achieving these objectives. In so doing, they stress the
centrality of poverty reduction strategies to the development
process. MoUs draw on indicators specified in PRSs where these
are sufficiently detailed and credible for reviewing and reporting
on progress. To reduce transactions costs, we aim to develop joint
MoUs, and use PRS-outputs and outcomes as a basis for common monitoring
and review.
In return we expect our partners to honour their
commitments; in particular those specified in PRSs, greater involvement
of civil society in the policy process, transparency, and observance
of good governance codes, such as those agreed under specific
arrangements eg NEPAD.
Q6. Can further details be provided of the
systems for assessing progress against a Poverty Reduction Strategy
and what independent review takes place?
Once countries have developed a full PRSP, they
are expected to produce annual progress reports outlining progress
in implementation. These are discussed by the Boards of the World
Bank and IMF, as the basis for continued World Bank and IMF assistance.
In addition, the Operations Evaluation Department of the World
Bank is currently preparing an independent review of overall progress
in PRS implementation.
THE NEW
PSA
Q7. Has the new PSA resolved former difficulties
allowing the Department to map budget allocations more clearly
against them? Has this added greater transparency to the budget
allocation process? Is it possible to provide the committee with
a breakdown by function or programme (not country programme) of
where funds are spent linked to PSA objectives and targets?
The PSA has added greater transparency to the
budget allocation process. Our resource allocation process first
considers what share of resources should go to each PSA objective.
For example, our first PSA objective is to reduce poverty in Africa,
and we have set a budget for that for each year up to 2005-06.
Once such budgets are set, Directors prepare proposals for more
detailed allocations, as eventually set out in the Aid Framework
(Table 4 of the Departmental Report). We do not generally set
sectoral spending targets. Resource requirements for sectors such
as primary education or health are identified through divisional
and departmental planning processes in the light of both our overall
priorities, as expressed in the PSA, and local circumstances.
Tables 2, 3 and 6 in the Departmental Report,
now split the budget between headings that reflect the main PSA
objectives. In addition, Table 4, which shows DFID allocation
by programme, allows the explicit mapping of funds to the PSA
targets of reducing poverty in Sub-Saharan Africa and Asia, by
showing the funds allocated to the key 16 African and four Asian
countries named in the PSA. The allocations are also consistent
with meeting the PSA target of increasing the proportion of funds
going to Low Income Countries to 90% of DFIDs bilateral programme
by 2005-06. Other targets, implementation of HIPC, increasing
impact of EC aid on poverty reduction, and progress on the Doha
Development Agenda on trade, are not as directly a function of
DFID's internal resource allocation.
Q8. In areas not covered by detailed PSA
targets what internal targets are set, and what are the accountability
arrangements? For example on Objective 3? Is reporting performance
integrated in with reporting against the PSA targets?
DFID's PSA maps directly onto our organisational
structure. This means that the work of each division—and
therefore the majority of the work of the Department—is
covered by a PSA Objective. Every division, irrespective of whether
it has a PSA target related to its Objective, sets a number of
internal, lower-level performance targets which detail what it
will deliver in order to achieve its PSA Objective. These lower-level
targets are described in a "Directors' Delivery Plan"
(DDP). In turn every department, country-office, team and individual
in each division has a set of related performance targets based
on achievement of their DDP.
Some support departments in DFID—for example
our Human Resources or Information Departments—do not have
their own PSA Objective. These departments help the rest of the
office to deliver DFID's overall PSA (for example by ensuring
we have the right staff to do the job). Their work is covered
by a series of Service Level Agreements which are reviewed annually.
Objective 3 of DFID's PSA covers the work of
our Europe, Middle East and Americas Division (EMAD). EMAD's Director
has set out a detailed Delivery Plan for achievement of her division's
PSA Objective ("Reduce Poverty in Europe, Central Asia, Latin
America, the Caribbean, the Middle East and North Africa").
Within EMAD, the country offices and UK-based departments have
drawn up plans with performance targets which detail how they
will support their director to deliver her PSA Objective. They
will report progress annually to their Director who will use this
information to report to DFID's Management Board.
Directors (who head each Division) have to report
progress annually against their Delivery Plans. They are therefore
personally accountable to DFID's Management Board for progress
against their PSA Objectives. Within their divisions, directors
will set out their own performance reporting processes. The PSA
therefore provides a clear accountability chain. Staff are accountable
for their performance to their line-managers; heads of department/country-office
to their Directors; Directors to Management Board; and the Management
Board to Ministers.
Q9. What is the current system used to report
upon, monitor and measure policy outcomes within DFID? To what
extent is this disaggregated from other bodies who are also lobbying
for similar outcomes?
The policy outcomes that DFID is seeking are
set out in the Public Service Agreement. DFID publishes progress
towards the PSA targets twice a year, in the Departmental Report
and in the Autumn Performance Report. In addition the Treasury
now publishes progress towards all the government's PSA targets
on its website.
DFID works with a variety of organisations around
the world. Achieving the policy outcomes in the PSA is a collaborative
effort. Success and failure will be shared. The Service Delivery
Agreement sets out in more detail what DFID will have to do over
the next three years to make sure the Public Service Agreement
objectives and targets are met. The targets in the Service Delivery
Agreement are more about DFID-specific inputs over which we have
more control.
Q10. What work is being done to have policy
outcomes independently validated?
DFID's Evaluation Department is responsible
for design and delivery of evaluation studies to assess DFID's
policies and operations, including DFID's collaboration with other
donors. These studies are undertaken independently of line management.
Evaluation Department's programme of studies
is set out in a plan covering a three year period, which is updated
each year. The current evaluation programme is oriented towards
evaluation of key policy objectives and targets set out in the
Millennium Development Goals, and more specifically in DFID's
current Public Service Agreement and Service Delivery Agreement.
The programme of independent evaluations is necessarily selective,
serving to complement monitoring, review and evaluation activities
undertaken by spending departments themselves. Evaluation Department's
programme of studies includes not only studies focused exclusively
on DFID's activities, but also wider studies often undertaken
jointly with the evaluation units of other development agencies.
Independent evaluations assess progress against
policy objectives in key sectors: for example, with respect to
Universal Primary Education (MDG2), Evaluation Department recently
published an evaluation of UK support for primary education over
the past 10 years; and is currently participating in a multi-donor
evaluation of support to basic education, due to report by the
end of 2003.
Country programme evaluations commissioned by
Evaluation Department will independently assess DFID's contribution
towards reducing poverty and key development targets in selected
countries (PSA objectives I, II and II): pilot studies are now
under way. Several ongoing studies are assessing the effectiveness
of DFID's support for poverty reduction through multilateral agencies,
for example WHO and UNFPA (PSA objective IV). DFID's support for
poverty reduction through knowledge and innovation (PSA objective
V) is the subject of several studies including DFID's contribution
to reform of trade policy; evaluation of aid instruments, specifically
general budget support; and a study, led by the World Bank's Operations
Evaluation Department, of the Comprehensive Development Framework
which underpins poverty reduction strategies in many countries.
However, given poor statistical data, it is
often difficult to monitor development outcomes accurately. Further,
evaluation studies show that is difficult to attribute success
or failure to specific actions or agencies, given the many stakeholders
and complicating factors involved. DFID's Evaluation Department,
through the World Bank's Operations Evaluation Department, is
supporting methodological work to deepen understanding of how
to evaluate impact better.
In addition to the independent evaluations delivered
by DFID's Evaluation Department, the National Audit Office has
undertaken a number of "Value for Money" studies of
DFID policies and programmes. These studies, focused on key policy
areas such as water supply and HIV/AIDS, have a significant evaluative
component since they examine the logic linking policy, design,
operations and delivery.
Furthermore, the NAO will be conducting a formal
review of all Government Department's PSA data systems, which
will start over the next year. In advance of this, DFID and the
NAO are working together on an internal review which will help
to identify areas where DFID can strengthen its PSA data monitoring
systems. This will ensure that we have reliable means of monitoring
progress against the policy outcome targets we have set.
6 June 2003
Annex 1
Agreed DFID Emergency Funding for Iraq
RED CROSS
International Federation of the Red Cross £15,500,000
Support to pre-positioning stocks, deployment
of delegates, as well as disaster preparedness/response activities
of the relevant National Societies.
International Committee of the Red Cross £16,500,000
Support to pre-positioning stocks, deployment
of delegates, emergency medical support, water and sanitation,
protection and assistance activities.
Total Red Cross £32,000,000
UN
World Food Programme £33,000,000
Support to enable the procurement, transport
and distribution of foodstuffs, including operational and logistical
support. Support to the provision of the United Nations Humanitarian
Air Service and the United Nations Joint Logistics Centre. Food
pre-positioning for 250,000 for ten weeks. Upgrading logistics
and communications capacity.
United Nations Children's Fund £9,000,000
Pre-positioning emergency supplies. Developing
campaign for mine awareness. Enhance capacity of field offices.
Support to key activities in water and emergency sanitation, routine
immunisation and mine risk education throughout Iraq.
United Nations High Commission for Refugees £1,750,000
Winter kits for 350,000. Procurement of remaining
kits for target caseload of 600,000. Site identification and deployment
of additional emergency officers.
World Health Organisation £6,000,000
24 emergency health kits pre-positioned. Training
on communicable diseases and awareness for CBW. Need to preposition
76 additional health kits and 20 surgical kits. Strengthen WHO
field operations, logistics and communications.
Office for the Co-ordination of Humanitarian Assistance
£900,000
Deployment of personnel to Country Teams and
Larnaca. Deploy IRIN officers to Cyprus, Turkey, and Jordan. Develop
public information capacity. Support of information, coordination
and technology in Iraq and the region.
Office of the United Nations Security Co-ordinator
£600,000
Enhance current security structure with 1 Regional
Security Coordination Officer, 6 Field Security Officers, oversight
and training.
Food and Agriculture Organisation £1,500,000
Support to agricultural and poultry production
in war-affected areas of southern Iraq to boost food security
and contribute to improving the nutritional status of project
beneficiaries in areas targeted.
United Nations Development Programme £7,035,100
Emergency assistance in the electricity sector
focusing on Central and Southern Iraq. Work includes assessments
and rapid rehabilitation.
United Nations Mines Advisory Service £4,000,000
Support to mine clearance activities and mine
action co-ordination
Total Funding to UN Agencies: £63,785,100
NGOS
Merlin £265,000
Emergency health, mobile units, rapid health
assessments
International Medical Corps £220,000
Emergency Trauma care, primary care for under
5s and pregnant woman and obstetric care
Save the Children UK £500,000
Health, non-food items and tracing
HelpAge International £150,000
Non-food items, shelter to elderly IDPs and
their dependents
GOAL £305,834
Assistance and Primary Health Care to southern
Iraq
BBC World Service Trust £390,600
Emergency radio programme & media audit
BBC WST
War Child £613,133
Emergency bakeries programme
MedAir £295,565
Assistance to IDPs in northern Iraq
Mines Advisory Group £80,883
Mine action preparedness, mine marking and deployment
of coordinators to centre/south Iraq
4RS £105,673
Assistance to vulnerable women in northern Iraq
CARE £499,070
Rehabilitation of water, sanitation and health
facilities in centre/south Iraq
Total NGO'S £3,425,758
Grand Total Funding Agreed: £99,210,858
(Total Funding Committed: £115,000,000)
SECTORAL BREAKDOWN
AT 3 JUNE
2003
| Sector | Agency
| Funding |
| Health, nutrition | WHO, UNICEF, Merlin, IMC, SCF, HelpAge, CARE, GOAL, Health kits
| £8.5 million |
Water and sanitation | UNICEF, CARE
| £4 million |
Food | WFP, Warchild
| £33.6 million |
Agriculture | FAO
| £1.5 million |
Security | UNSECOORD
| £0.6 million |
Mines action | UNMAS, MAG, UNICEF
| £4.7 million |
Media | BBC World Service Trust
| £0.4 million |
Co-ordination and information |
UNOHCI, OCHA, HIC | £1 million
|
Displaced people | UNHCR, Medair, 4RS
| £2 million |
Power, fuel | UNDP
| £7 million |
Education | UNICEF
| £0.2 million |
Unearmarked | |
£35.7 million |
Total: |
| £99.2 million |
| | |
Unearmarked contributions are those to agencies such as ICRC
operating multi-sectoral programmes where our contribution is
not for a specific sector. In addition we are providing seven
secondments to UN agencies.
| 
