| In this report we explore a range of issues which come out of our reading of DFID's Departmental Report 2004. The purpose of this exercise is to make DFID more accountable to Parliament and other stakeholders, and to encourage DFID to reflect on how it manages and spends the increasing UK aid budget, so as to help DFID to make a more effective contribution towards meeting the Millennium Development Goals (MDGs). We comment on the UK's development effort over the past year, as well as highlighting several areas where DFID could improve its performance.
We welcome the Government's announcement of further large increases in aid. If the rate of growth to be achieved by 2007-08 is maintained, the target of providing 0.7 per cent of Gross National Income in aid will be met by 2013. Meeting the target earlier would be better still. We welcome too the Government's announcement on deepening and widening multilateral debt relief, and the progress being made with increasing the poverty focus of the UK's bilateral aid budget.
Our recommendations include, that:
- The Departmental Report provide more information about the poverty focus of the multilateral organisations—such as the EU through which 43 per cent of UK aid is channelled.
- DFID and others with a commitment to international development remain vigilant, to ensure that DFID’s funds are spent on things which will have the maximum impact on poverty reduction. In cases where there are competing priorities—as was the case with the diversion of funds to Iraq DFID ought to encourage a wider open debate.
- The roll-out of Poverty Reduction Budget Support must be evidence-based. If it is not producing the results expected, then the delivery mechanism must be modified.
- DFID improve its useful "traffic light" system of showing progress on its Public Service Agreement targets, by explaining what will be done in cases where progress is unsatisfactory.
By accepting these recommendations and others, DFID could take another step towards being more transparent and more accountable, enabling it to learn more and become a still more effective player in the fight against global poverty.
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