More than 1 billion people, the equivalent of one sixth of the world's population, lack access to safe drinking water and 2.4 billion people, two-fifths of the world population, lack basic sanitation facilities. Improving access to water and sanitation is inextricably linked to the alleviation of poverty and is a key factor in improving the health and economic productivity of poor people.
The Department for International Development (the Department) leads the United Kingdom's contribution to global efforts to tackle world poverty and promote international development. We support and encourage the Department in this work, and acknowledge the important contribution of Departmental staff, who often have to operate in difficult and challenging environments. The Department is committed to international efforts to achieve the Millennium Development Goals, which provide a global consensus on objectives for addressing poverty. These include a target to halve by 2015 the proportion of people without sustainable access to safe drinking water. At the World Summit for Sustainable Development in Johannesburg in 2002, participating governments also agreed to the adoption of a target to halve by 2015 the proportion of people without access to adequate sanitation facilities. Achieving these targets represents a huge task for the international donor community.
The Department seeks to achieve its aims by working at global, national and local levels and in partnership with a wide range of organisations, including other donors, governments in developing countries and non-government organisations. The Department's expenditure on water-related activities has averaged some 4% of the bilateral aid programme since 1997 and was £87 million in 2001-02, of which £73 million was spent on water projects in developing countries. The Department is constantly seeking improvements in the effectiveness of its aid and, in recent years, has made increasing use of new methods of providing aid, in particular "budget support". Under budget support, the Department disburses funds directly into the national budget of the recipient government in support of the implementation of an agreed poverty reduction strategy.
Against this background, and on the basis of a Report by the Comptroller and Auditor General, we examined how the Department has sought to maximise its impact in the water sector.[1] The main focus of the Report was on water and sanitation but the Committee also used this opportunity to draw out conclusions and recommendations on wider issues faced by the Department.
We draw the following main conclusions from our examination.
- The Department should base its bilateral assistance in each country on a rigorous assessment of the country's poverty needs and, in individual sectors, should seek to encourage a co-ordinated international donor response. In 2001-02, the Department spent £1.5 billion on its bilateral aid programme. Its individual country aid programmes are framed by and supportive of the Millennium Development Goals. But it is unclear whether such decisions are always based on a thorough and timely assessment of poverty needs and, in the water sector, a full understanding of the approaches of other donors.
- The Department should undertake explicit risk assessments and apply consistently the good practice criteria that are being developed to address the risks inherent in the provision of aid. The Department is concerned that its assistance is used effectively. Risk is inherent in the provision of aid, and different methods of disbursing aid create different risks which need to be managed. In particular, the Department is thinking about the safeguards needed to provide assurance on the use of funds provided through budget support, and needs to be able to demonstrate that good practice is being applied consistently and transparently. Specifically, it should carry out explicit assessments of the risks to UK funds obtain robust and timely data on the use of these funds; and develop monitoring arrangements to evaluate progress towards poverty targets.
- The Department should give greater attention to evaluating the impact of its assistance and to identifying the factors that increase the chances of sustainability. Achieving a lasting beneficial impact in poor countries is one of the Department's key aims, but there is a lack of evidence on the extent to which the Department's projects have achieved a sustainable impact. The Department should address the weaknesses in its current approach, by more frequent follow-up of projects; greater coverage of projects through ex-post evaluations; incorporating monitoring procedures from the project design stage; and tracking UK funds to assess whether they have had the intended impact.
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