Examination of Witnesses (Questions 1-19)
SIR SUMA
CHAKRABARTI KCB, MR
MARK LOWCOCK,
MS NEMAT
SHAFIK AND
MS SUE
OWEN
11 JULY 2006
Q1 Chairman: Good afternoon, nice to
see you all again. Perhaps you could introduce your team, although
we all know everybody.
Sir Suma Chakrabarti: Thanks very
much, Chairman. First of all, thank you for rearranging the time
and date of this hearing; it helps to have everyone here on the
day of the meeting. There have been a few changes so I will go
through the team: Nemat Shafik, who I think many of you know,
is the Director General for Regional Programmes; on my far left
is Mark Lowcock, who has switched jobs and is the Director General
who runs Policy International now; and Sue Owen, we are delighted
to have her, having been at the Treasury, she has been Director
General of Corporate Performance for six weeks now, so is a great
addition to our board.
Q2 Chairman: Thank you very much for
that. The change of time has slightly diminished our Committee,
which is partly due to the Energy Review, but you have got quality
here. We will keep you busy! Perhaps if I can just start in the
most general of ways. You have had a DAC review, you have produced
your Annual Report[1]
and produced a White Paper[2]
so nobody can suggest you have been standing around waiting for
things to happen, but you have, which any department must regard
as a very welcome position, had a substantial increase in funds
and a commitment to a substantial further increase in funds, but
you are also being constrained in terms of your staffing numbers.
I suppose I want to ask you how difficult a problem is that for
you? What effect does delivering more aid and more money with
less staff have on the Department?
Sir Suma Chakrabarti: Thank you
very much. I think it is going to be a difficult management challenge,
there is no doubt about that. Just to give you the background,
in the current spending review period we are in, we are halfway
through the three years, we had a 30% increase in the budget,
as you know, and a 10% cut in the headcount. So we are already
having to make a 40% productivity gain. We are on course for doing
that. If we, in the next spending review, next July, find we have,
let us say, a straight line through to 2013, the 0.7 target date,
but with the same headcount, then we are talking about another
40-50% productivity gain. This is a big challenge, undoubtedly,
but that is something we are up for. I think we will have to consider
a number of things in order to, frankly, give you the quality
assurance that we would like to give you, as a board, on the quality
of the programmes. The first thing we need to consider is what
is core and what is non-core; in other words, what do we want
to make in-house—still do the bits it is important for the
Department to do—and what sort of things should we do beyond
the departmental boundary. We need to look at options for outsourcing
and for off-shoring. As a principle, I think we are keener on
the off-shoring idea but that would require the Treasury to play
ball on our administration costs in order to take advantage of
some off-shoring opportunities. So we will have to look at a number
of options there. I think we are also in a better position than
many other departments in that we have operations overseas; we
have already off-shored, in a sense, so we can decentralise. We
have big offices in India and South Africa where there are opportunities,
obviously, to use Indians and South Africans to help with the
programmes, as we have been doing, to grow that. We will have
to, I think, also, look at the use of multilaterals. At the moment,
we put a little less than 40% through the multilateral channels.
There is an issue as to whether multilateral performance can improve
sufficiently so that we can put more money through the multilaterals,
which also helps with other objectives like harmonisation and
so on. So having a reform process and other things like that is
very important to us. I think we have to recognise, and we are
doing a lot of this already, that we have to look at our work
methods. We are known for the quality of our analysis, and I do
not want that to slip—in fact, I want to improve that in
some areas—but we will need to look at whether we can prioritise
better and be more selective. You will not be surprised that that
will require, frankly, some help from Parliament and from our
Ministers to do that. A lot of the choices we make are partly
driven by interests here, and quite rightly so. So those are the
sorts of issues we face.
Q3 Chairman: I know that colleagues
will want to explore some of the points you have made in a bit
more detail, but there is one slightly simple, stark point about
numbers. I cannot remember the exact figure but the difference
in the costs of employing people in London versus East Kilbride
seems to be very substantial. First of all, why is the difference
as great as it is? I can say, as a Scottish MP, I am delighted
to hear of the transition but I am not delighted to hear that
people are not getting equal pay, but is that an element of the
structure? Is it a real cost saving if, for example, you based
people in East Kilbride instead of London because you simply reduce
your administrative costs?
Sir Suma Chakrabarti: That is
a very good point and I will ask Sue to talk about the cost issues,
as to whether there really is a cost saving overall. For us the
key issue on East Kilbride has been, perhaps, unlike the first
15, 20 years of East Kilbride, the question of making sure it
really is seen as the other headquarters of DFID. We have two
headquarters. We are committed to East Kilbride and keeping that
office going. What is interesting is that we have, of course,
a lot of people who are now mid-career who, frankly, cannot afford
to live in the South East.
Chairman: We have met a few of them.
Sir Suma Chakrabarti: You have.
For us, therefore, we can build up some policy capacity in East
Kilbride with people who want overseas/East Kilbride careers rather
than London/overseas careers. That is great news but we have to
build up a minimum size of teams there for that to be viable.
We are doing that, as you have probably seen. On relocation, we
have done very well in terms of relocating over 80 jobs in the
last couple of years. That has gone well. Sue, do you want to
say a bit about costs and so on?
Ms Owen: Yes. We have saved a
bit with the relocations that we have made, and that comes through
the difference between the fact that people in Scotland do not
get the London Weighting, but against that there is the cost of
the relocation itself. So we have saved about £600,000 through
relocating about 85 posts to East Kilbride. However, that is not
the reason why it is cheaper to have people there, and the reason
it is cheaper to have people there is not because of pay—people
are paid the same, apart from a little bit of London allowance.
So the unit costs of East Kilbride versus London will depend entirely
on the grade mix of the people that you have got in the two locations.
The fact that it is cheaper is largely to do with other administration
costs. We pay rent in Parliament Street but in East Kilbride we
own the building and so we pay a capital charge to the Treasury
for that, which is considerably smaller than the rent that we
pay in London. Then there are other costs which are slightly cheaper—cleaning
and that kind of thing—but the driving factor is the difference
in the accommodation costs.
Q4 Chairman: The point is, of course,
the Treasury are asking you to reduce your headcount, not just
your administration costs, there. At the moment you have got to
reduce your numbers even more. I think that is the point to stick
to. You have said you are up for it and you say you can do it;
I think colleagues will want to press that a bit further. I just
want a final question on this one: if you are taking that cut,
one thing people are saying is well, maybe you were actually over-staffed
or well-staffed because of historical reasons. Where will the
cuts fall? Will they fall on the field offices or will they fall
on the larger offices? Is there an irreducible minimum size of
office?
Sir Suma Chakrabarti: I will ask
Nemat to say a bit about size of offices because we have different
models for different places. I do not want to pre-empt the analysis,
obviously, of what is core and non-core, but I would be very surprised
if the analysis did not show that our field presence was part
of our core. It is what makes us more effective than most other
donors because we are in the field with such a big presence. There
would have to be shifts within the field between fragile states
and better performing states, and we can talk about that. I think
there is an issue in the spending round as to whether the Treasury
focuses on headcount, which is actually a more limiting constraint,
or administration costs overall. On the other point you make about
whether we are, in a way, well-staffed, I ask myself: in 13 December
2011—round that time—when actually the British aid
programme will be as big as the size of World Bank programmes
now, the World Bank has 10,000 people and we currently have 2,800.
I think that speaks for itself.
Q5 John Battle: Just a comment: some
of the national charities, when there was a debate about moving
out of London and relocating in Manchester, Leeds and elsewhere,
found that they then paid everybody transport costs to come back
for meetings in London and actually lost the benefits of moving
away. So there are tensions either way. I actually do not want
to ask about home and the arrangements here, but the arrangements
internationally and overseas. In terms of capacity, it strikes
me, while we have been looking particularly at African countries
dealing with post-conflict, that some of the very good and innovative
work that DFID staff are doing is trail-blazing. Are you able
to get the best and the brightest into the field in the right
volume in the right places, or do we end up with more staff in
a country that, perhaps, has a programme that is ticking over
and doing okay and you are able not to move enough staff perhaps
to post-conflict situations where the real imagination and action
needs to be carried forward? What are the tensions there and how
are you able to manage that?
Sir Suma Chakrabarti: I am going
to ask Nemat and Sue to say something about that, but that is
a very germane point for us. If we are going to do more in fragile
states—the DRCs, Somalias and so on—we have to make
sure we have some of our best, brightest and most skilled people
going into those places. Our experience at the moment is a bit
that in some of these conflict situations you get people who are
interested in conflict development issues and you tend to get
the younger people—people who are not attached and do not
have family issues to deal with—or people who are towards
the end of their careers. Some of the issues like getting the
mid-career people to these places is coming up. Nemat, do you
want to say a bit more?
Ms Shafik: As Suma said, the headcount
pressures, what we expect in coming years is actually we are hoping
to put more people in fragile states because we recognise that
it is a huge source of comparative advantage and there is a huge
need. We expect to have less people in our well-performing, low-income
countries where they do not need as much support from DFID people,
and we expect fewer people in middle income countries, going forward.
Having said that, Suma is absolutely right in terms of the incentives
to get people to go to those places. We have recently done an
exercise where we have surveyed them and asked them what is it
that would be required to attract more of them into these difficult
environments, and I think Sue will summarise that, but it is a
complicated set of issues. Money is part of the story but it is
not the whole story; it is also other things around recognition,
around flexibility, around spouses and support needed at different
stages in life for spouses and children. Sue, maybe you want to
highlight that.
Ms Owen: Yes, it is a challenge
for us. At the moment, in a lot of those countries we do have
a lot of vacancies because those posts are hard to fill; in some
cases because they are plain dangerous and in other places because
they are unattractive places to live. We have different arrangements
for staff in countries depending on the security threat, for example.
So in Iraq and Afghanistan we do not allow people to travel with
partners or children; in Pakistan, which you have just been to,
we do allow partners but we do not allow children over eight.
So there are various restrictions like that which impinge on people.
We do pay higher allowances. It does cost us more as a department
because in dangerous places we give people patterns of working
like six weeks on and two weeks off, and we have to arrange for
cover and that sort of thing—breather breaks. It is quite
stressful for people in some of these places and a lot of people
are put off by that. There are people who rise to the challenge
and some of our best and brightest young people have been to these
difficult places, risen to the challenge and proved that they
have got the qualities for promotion and have actually been promoted
earlier than they might otherwise have been as a result. Overall,
the bottom line is that it costs us about double to put someone
in a fragile state than it does in another country abroad. I have
not got precise figures but that is the sort of ballpark we are
talking about. So for the spending review period which Suma was
talking about, yes, we can do what Nemat was saying, we can reduce
numbers in well-performing, low-income countries and we can do
more through multilaterals, but to the extent that we are putting
more people into fragile states it is going to cost more. So going
forwards into the spending review period, a flat admin budget,
probably if it was flat in real terms, we could manage but a flat
nominal administration budget would be a real challenge for us.
Similarly, if we had some flexibility on headcount it would be
a little bit easier.
Q6 John Battle: Let me, as it were,
give you more arrows for your armoury. As well as the innovative
work in the fragile post-conflict states, what about somewhere
like Malawi, where 20% of the highest level civil servants in
the Ministry of Agriculture have been devastated by HIV/AIDS and
wiped out? So they are asking us to help with technical assistance.
The report from DAC recently showed a reduction in DFID's technical
assistance—I think it is down to only 9% in 2004 from 20%.
Have you a problem reconciling those figures as well? If we are
asked for more technical assistance are you in a position to provide
it? If we do not provide it does that jeopardise the programmes?
Sir Suma Chakrabarti: I think
there may be an issue about how technical assistance is scored
there. Taking Malawi, where you have been and which you know well,
in the emergency health service programme, where we have, with
VSO support, helped fill gaps and get training, all that is working
well and retention in the health service has improved in Malawi
in the last two years. I do not think that scored as technical
assistance because I think that would be scored as a financial
aid transfer, but actually what they are using the money for is
technical assistance.
Ms Shafik: Exactly right, and
what is going on is that we have learned over time that the best
sort of technical assistance is home-grown, locally owned and
locally paid. What we count as technical assistance is really
external advice and external experts, whereas increasingly our
budget support is helping the government to hire its own staff
to do its own work, and I think that is a lot more effective.
John Battle: Thank you.
Q7 Chairman: That just raises an
issue about the visits we have made. Inevitably, of course, your
staff on the ground are bound to complain if they feel they are
being asked to do more with less, and we would be quite sympathetic
to that. However, a place like the DRC is not somewhere where
we have a traditional connection. It is staff-intensive at every
level, partly because of language, partly because it is new and
partly because it is a conflict situation. In this kind of pressure
do you not sometimes think: "Why should we be there as opposed
to being in the places where we have a good track record and we
know about, and where we can staff it up properly?" Is there
a conflict there? Hilary Benn gave us a reason but we still ask
the question: what is it that DFID has to offer the DRC that other
donors do not have?
Sir Suma Chakrabarti: I have not
been to the DRC but I think Nemat has.
Chairman: This is not a criticism, by
the way, of DRC staff.
Sir Suma Chakrabarti: No, and
to be honest, from our point of view as managers, we welcome this
sort of questioning because I think that is exactly what we think
about: is there a comparative advantage for us to be in DRC? There
are two: one is a broad level thing, which is happening everywhere,
which is that DFID is now seen second only to the World Bank,
as a sort of global donor in low-income countries. Therefore,
partner countries want us there. It is very difficult for us to
persuade countries that we should get out of a sector, or out
of a country; that is not something they want; they like DFID
being there. That is a macro problem. Then, at the DRC level,
I think there are probably two issues for me. One is that one
of DFID's strengths, as people like Nemat and Masood Ahmed who
was here with us before are always pointing out, is in the area
of political economy and governance. I guess, as you are moving
along that continuum in DRC from conflict through to trying to
have a more effective state, DFID's skills are actually important.
The other reason often given is that the donors you see in the
DRC (again, I have not been there) are not perhaps the most like-minded
type of donors, and perhaps do not subscribe as strongly as some
others to the Paris Declaration on aid effectiveness, and so on.
DFID does, and helps the Government to try and bind some of those
donors together.
Ms Shafik: I would add three points
to what Suma said. First, in terms of our decision to go into
the DRC, we use three criteria to decide which countries we are
in: need, how much poverty there is, how good their policies are
and then, increasingly, we are looking at whether they are over-aided
or under-aided by the rest of the world. We try and compensate
for the failures of the international system. DRC is a country
which has historically been under-aided by all donors to an extreme
degree. So that was an important and compelling reason. On the
poverty numbers they clearly score—it is one of the poorest
countries in the world; Jan Egeland has called it the largest
humanitarian crisis in the world. So on need they qualify and
their policies are dreadful but in terms of support from other
donors they do terribly badly, so we felt we had a unique role,
in particular because of our comparative advantage on governance
as well as on the humanitarian side. I think we had quite an important
contribution to make.
Q8 Mr Hunt: On the occasion of your
departmental report, let me start by congratulating DFID because
I think you are, without question, the nicest government department.
In my year on this Committee I do not think I have met a single
person from DFID that I have been able to dislike. There is, I
think it is worth saying, a fair degree of cross-party consensus
about international development issues. My concern is that in
that rather cosy environment—cross-party consensus, nice
department and popular Secretary of State—some of the big
questions are not being answered, or even asked. If you look across
the whole world you can see, over the last 20, 30 years, some
tremendous development success stories, particularly in India
and China, which feel like they have cracked the problem; even
if they are not there yet, they will be in due course. However,
in Africa it has been a pretty static situation, in terms of poverty,
despite huge effort, huge goodwill and huge amounts of money being
poured in. The comparison I make is the way the private sector
in the rich world has carried on growing like crazy, and the private
sector really does it by specialisation; you have one company
that says: "We are just going to be doing not just IT but
this bit of the IT market and we are going to be the best in the
world at that." That specialisation 3seems to be totally
missing from the international development sector, with a few
honourable exceptions—perhaps Médecins Sans Frontières,
or whatever. Basically, everyone tries to do everything in a way
that seems to work very well for political audiences at home.
If there is a terrible crisis on AIDS then every development agency
can say: "We have contributed this", and if there
is a terrible tsunami every agency can say: "We did that
for the tsunami", but you do not have that specialisation.
I want to put it to you that in an environment where we are massively
going to be increasing aid we need to address the hard question
of whether the global development community should be responsibly
specialising; whether DFID should say: "Okay, we are just
going to do health", or "We are going to do health and
something else", or "We are just going to do these 10
poorest-of-the-poor countries", and set an example to other
donors and encourage them to specialise. I am sorry it is a long
question but I am coming to the point. My concern is the big flaw
in the structure, at the moment. There is no real accountability;
if we miss our Millennium Development Goal on AIDS, which I happen
to be interested in, the truth is that it will be no one's fault
because everyone will be able to say they did something for HIV/AIDS
and it will be no one's responsibility that we have failed to
halt or reverse the spread of HIV/AIDS. So I just want to ask
whether we should be addressing some of those big questions and,
given DFID's incredibly influential role in the global development
community, whether DFID should not be taking more of a lead in
that area.
Sir Suma Chakrabarti: I am not
sure whether "nice" is a word I would really like very
much. I think we are hard-headed as well as being nice, actually.
I think, if I may say so, we do ask ourselves those questions.
They are not in the public debate and they ought to be, so I am
really glad you have raised them. I want to answer a number of
points you made. First of all, on Africa (we will no doubt come
back to this later on), it is worth saying that Africa is not
the basket case it is painted to be always. For the last five
years—not well-known—Africa has out-performed the
world economy every year. That has not happened since the 1960s.
There are a number of African success stories now, but also many
countries where we are really quite worried about policies and
so on—Nemat mentioned one of them. India and China are quite
interesting. The India renaissance, in many ways, started in the
early-90s with the debt crisis. Until then, India's policies were
hopeless. What is the lesson I take from that? I think policies
matter, to the extent that the Committee and others can press
us to push for good policies. That is really important, and that
is one of the lessons for Africa as well—governance, good
policies, and so on. Specialisation and trying to cover the waterfront,
absolutely. I think the international system is all over the place
in terms of too many donors trying to do too many things. Some
countries, to be frank, are better at this than others. Some donors
do have little space in their capitals to specialise more. The
Dutch, Germans, Swedes and Norwegians have much more. They have
debates in their parliaments and in their headquarters but their
field staff are given more of a steer that it should specialise
a bit more. One of the problems I alluded to earlier is that DFID,
because of its success, everyone wants us in every field. We can
go through all the MPs here who have raised questions in every
single area, and if we pulled out of one area we would undoubtedly
get questions as to why we were doing so. So the political incentives
in the UK are part of the issue here as well. Therefore, what
I think is leading to specialisation for us is actually at the
country level. Certain countries are themselves saying: "Yes,
we think DFID is great but we do not want you in every sector,
thanks, because we do not want a donor in every sector. Take Zambia,
where I have just been a couple of weeks ago. The Government there,
quite rightly, said "We will do a division of labour."
In the end, DFID still ended up in five sectors; there should
have been fewer but they have chosen five, and the Norwegians
and Germans three and two. So the actual specialisation, I am
afraid, is going on more in the field now. I think, at headquarters
level, a lot of it is to do with not just the bureaucrats wanting
to do this but actually having the political support for doing
so.
Ms Shafik: The best thing we have
for specialisation is our commitment to put 90% of our aid in
low-income countries, and that forces us and enables us to resist
a lot of pressure and to spread ourselves out more thinly, particularly
in middle-income countries where there are huge pressures and
demands.
Sir Suma Chakrabarti: Our concentration
ratio has risen in the last few years.
Ms Shafik: Which we have met for
the first time this year.
Q9 Mr Hunt: Can I come back to you
on this accountability issue, because if we miss all the Millennium
Development Goals it is going to be no one's fault and we are
all going to be able to pat ourselves on the back and say: "We
increased aid to 0.7% of GDP; we were good people, we did our
bit". Do you not think if DFID was bold and said: "We
will take responsibility for malaria", and you announced
that by 2015 malaria was wiped out of Africa, let us say, your
2,800 people would damn well make sure that malaria was wiped
out by 2015 because, having made that commitment, you would focus
everything on making it happen and you would have that commitment
to a single purpose, which is what makes Microsoft so successful
in its sector, or Toyota so successful in its sector. I know you
can overdo these comparisons but do you not think we need a more
accountable system?
Sir Suma Chakrabarti: I fundamentally
agree that the system would benefit from more specialisation,
and so I would be up for that. Microsoft and Toyota do not work
in a politically accountable system where a number of different
stakeholders are saying: "Actually, I want out of Toyota
10 different types of cars". So they are much more demand
determined. We are demand determined as much as we can be but
we also have supply as well, and pressure groups and interest
groups here. So if I said "We will just do malaria"
and if Hilary Benn agreed to that, on which I would be surprised,
but if he did, then the people in Parliament who care about water,
who care about HIV/AIDS, and so on, might think it is a bit of
an odd choice. That is part of the pressure we are under, but
from a manager's point of view I wholeheartedly agree with you.
Q10 Mr Hunt: At the end of the day,
what you are really saying is that our customers actually are
parliamentarians and the British public, not the poor people of
the world. I am proposing a model which I think would be far more
effective for tackling poverty, and I would like, if you thought
it was a better model, DFID to be taking a lead in saying: "Look,
if you really want to tackle poverty we need specialisation, we
need to concentrate on certain sectors and become experts, not
spread ourselves thinly."
Sir Suma Chakrabarti: I think
we have multiple stakeholders: obviously, taxpayers here, parliament-
arians here, ministers here, but we also do have poor countries
and their people, and what I think I am saying, fundamentally,
is we are getting more joy in terms of specialisation from the
demand end of the spectrum than we are at the supply end. I am
being very frank about it. I think that is what is happening.
Talking about accountability, I could not agree with you more;
that is what this is about. A few years ago you would not have
had in here a Public Service Agreement (PSA) which actually says:
"Yes, we are collectively responsible for these Millennium
Development Goals (let us say in Africa)". However, if things
are going wrong on primary school enrolment for girls in Africa
we have to bear part of the blame, and what are we doing about
it, as an organisation? That is what this is all about. You quite
rightly asked us in a written question "Well, what are you
doing?" We have tried to have a more accountable system.
This is a system which we are trying to sell now to the other
donors, not with a great deal of joy, I have to say, for some
of the reasons you point out. We are quite comfortable with our
collective accountability—all too comfortable.
Q11 Joan Ruddock: My question is,
where does gender lie in your policies? I tackled the Department
on this just a year ago, I think, and I am very keen to follow
up. I am also looking at One World Action and their written submission
to us, in which they tell us: "The restructuring of the Policy
Division has resulted in the position of a Gender and Rights Adviser
in the Exclusion, Rights and Justice Team[3]."
This amounts to just two staff members. They also comment that
within the five Policy Division groups and teams, gender mainstreaming
is patchy. I said a year ago you did not have a gender strategy.
I wonder if you believe you have one now.
Sir Suma Chakrabarti: I will ask
Mark to comment on this in detail because this morning our development
and policy committee met to discuss where we were on gender, and
it was not because we knew we would face a question on this; I
can assure you it was programmed in before. As I said last year
to you, I did think there was an issue here, I am not denying
that. What had happened is that 10 years ago we were seen as amongst
the leaders in this area, and I think we have done an evaluation
now which I think we publish this month or next, and that will
show undoubtedly that we are still doing very well on the policy
work, but what has gone wrong is the movement from policy into
the mainstreaming of the programmes, partly because programmes
have shifted—there is a lot more budget support around and
so it is more difficult to identify the gender component. Nevertheless,
even so, I think there is a job to do in terms of working with
some of those countries on making sure gender is part of their
plan, so part of their strategies, and so on. So there is an issue
there. What is going to happen to follow this up? We are going
to write up a gender action plan and that will be about mainstreaming
and how we do better in DFID on that. That will be ready, I think,
in the autumn to show to the Committee. We have got two or three
good examples of country programme level where we are taking gender
seriously—Zambia, again, where I have just visited, girls'
education, abolishing primary school fees and so on has lifted
the ratios, but we need to do better. So I am not going to pretend
that we have the answer yet. Mark?
Mr Lowcock: The fundamental position
is we have made a start but we have got an awfully long way to
go. The evaluation will be published later this month, but the
headline is that compared to a decade ago there are more people
in the organisation who are better sensitised to these issues.
We have got better policy and knowledge management work. The fundamental
challenge is mainstreaming. So we can point to, as the evaluation
itself does, a bunch of examples which are very good. In Nepal
we have contributed to a halving of maternal mortality over the
last 10 years. In the education sector, the announcement the Government
has made to spend £8.5 billion over the next decade on education
will fundamentally address the gender inequality at the primary
level. In Zambia we have just had very good monitoring reports
on the reduction in the gender gap there, but the problem is these
examples do not add up to a big enough overall package and impact.
This mainstreaming challenge is the generic challenge, actually,
that all of the agencies committed to better progress on gender
are trying to get to grips with, and that is one of the things
the evaluation says. The problem we have is the same problem the
Nordics and the other progressive donors have. So what the action
plan will do is set out actions in a number of areas. One is to
do with our own skills levels. It is not the case that we only
have two people in one little bit of the Policy Division who work
on gender. I had a meeting this morning with our education team
who have a couple of people who work on the gender dimension and
a meeting yesterday with our growth people, who are thinking about
how women can benefit from economic growth, and we can tell a
similar story in other country programmes. Skills are still a
big issue. Another is getting into countries' own development
strategies a stronger focus on the position of women and the things
that would make a difference to women. Some of them are to do
with public expenditure, like better maternal health services;
some of them are to do with wider issues of public policy, access
to land and access to credit services. Personally, I think the
biggest single challenge for us in this area is to do better in
helping developing countries integrate gender issues into their
own development strategies. It will be a very good test for us
to continue to be asked these questions: are we doing better in
future than we have done in the past? That is the fundamental
test.
Q12 Joan Ruddock: I am grateful and,
obviously, look forward to reading the evaluation report. You
mentioned Nepal, which is a bit off this Committee's agenda, but
I have to say I think there is a very good example in Nepal of
a failure of DFID's which is to deal with the situation, or to
provide support, to the widows' organisation in Nepal. It is one
of the biggest issues of all; women are completely scorned if
they are widowed in Nepal. They are suffering, obviously, because
of the tremendous loss of life there of the men and I think you
will find there was a request for support for a shelter, which
has been turned down. I would just say that there are some things
that are not the obvious ones, like maternal mortality and girls'
education, that need to be addressed, and I think you may find
an example right under your nose there in Nepal, if I might say
so. I do not expect you to respond to that. Can I move to the
issue of girls in school, because, of course, one of the shocking
things that we already know is the missing of the first MDG target
on gender disparities in primary education in 2005. I wonder what
has been the Department's reaction to that and what kind of changes
do you intend to make to try to advance the achievement of the
target.
Sir Suma Chakrabarti: It is, again,
going back to the earlier question, this is exactly the sort of
thing we ask ourselves when we see our directors around the PSA
objectives. "What are we going to do, collectively with other
donors?" "How are we going to push the others and how
are we going to push the countries to focus more on these issues?"
Nemat, do you want to say a bit about what we are doing on that
target?
Ms Shafik: As Suma said, I meet
regularly with each of the directors for each of our regions and
probe each MDG and say: "What are you doing and why are you
not delivering?" In the case of gender equality on education,
what we have done is focus our efforts on areas where the disparities
are most extreme. We have just launched, for example, a major
programme in northern Nigeria where, as you probably know, the
social outcomes statistics are dreadful, even by African standards.
That is very focused, looking at a very creative mix of girls'
schools, female teachers, flexible hours, and so on, to try and
increase female enrolment. We have had more success in places
like Uganda and Malawi where we have seen female enrolment come
up quite a bit, I think, with this focus on parts of countries
in the regions and countries where the problems are greatest.
We have got a similar story in Asia, where, again, particularly
in Bangladesh and Pakistan, we have very gender-focused primary
enrolment efforts to try and increase the numbers.
Q13 Joan Ruddock: Can I ask one final
question of you in terms of the evaluation that you have seen,
and that is whether you would consider an accountability matrix
being applied, similar to that which has been adopted by the World
Bank?
Sir Suma Chakrabarti: I do not
know about the accountability matrix of the World Bank, so I may
have to look at it and get back to you on that. Mark, do you know?
Mr Lowcock: I think we will have
something which is very explicit about what the actions are, who
internally is responsible for them and how we are going to monitor
progress against them. That is, essentially, the principle behind
the Bank's frame. So, yes, we will have something very similar
to that.
Joan Ruddock: Thank you.
Q14 Hugh Bayley: Sir Suma, I would
like to push you a bit further on what you mean by productivity.
I am not sure it is wise, if your goal is to maximise the outputs
or, better still, the outcomes of the Department, to use the word
productivity to describe a process where fewer staff are disbursing
more money. If your function is to disburse money, of course,
fewer staff disbursing more money would equal a productivity gain,
but if your goal is to buy, as efficiently as possible, progress
against Millennium Development Goals, then disbursing more money
with fewer people may not lead to more efficient purchasing, pound-for-pound
spent. What exactly is productivity?
Sir Suma Chakrabarti: Productivity
and efficiency, basically, in the terms I was using, is simply
the programme resources as your numerator and your headcount as
your denominator. However, I think your point is absolutely right;
if we do not do something about making sure the quality of our
outputs—if you like, what we are doing—are maintained
then we will not be as effective. There is an effect on this issue
here that I am really concerned about and, I think, the Committee
is clearly concerned about, as we go forward, and that is the
issue that with a headcount of 2,800 or 2,900 and with a programme
the size of whatever it will be in 2010/11/12, there is some serious
work to be done to maintain our effectiveness.
Q15 Hugh Bayley: As an outsider I
would expect your productivity to decline in two ways if you were
reducing the staff and if you were increasing the programme. If
you double the size of the programme in Africa, I would assume
that the things you spend the additional 50% of your expenditure
on will buy less in terms of development gains than the things
that your original budget would be spent on because you, presumably,
try and spend your money as efficiently as possible, and for each
additional million pounds incrementally you are likely to buy
less. Secondly, if you have fewer staff supervising the programme,
surely you run the risk, at least, of spending that money less
well in terms of development gain per pound spent. How do you
overcome that? What sort of discussions do you have with the Treasury
about the difficulties that you face as a result of sharp increases
in the programme and yet reducing your staffing oversight of that
spending?
Sir Suma Chakrabarti: We are just
beginning this conversation with the Treasury in the last couple
of months—we have kicked it off—and it will be the
conversation to be having with them over the next year until we
get to the comprehensive spending round results. You are absolutely
right; I think on portfolio quality we have a very good portfolio
and Nemat has done some real work with directors to improve the
portfolio in the last year or so, which we ought to talk about.
One of the issues is about having enough supervisory time and
effort to oversee those projects which are going off track and
getting them back on track and so on. That is the thing that we
need to maintain. I would obviously be worried if, as an accounting
officer, I was finding that actually we did not have the supervisory
staff who could do that any more, because of the headcount constraints.
I think you can rest assured on this Committee that—and
certainly it is something I have said to Hilary Benn and to the
Treasury—for us fundamentally, as managers, all four of
us, quality assurance is important. If we find that the headcount
constraint is actually leading us to make choices which do not
fit the country context, do not worry we will be saying so; we
will be saying: "Look, we should not be doing this because
it is the wrong thing to do in terms of the quality of the output
we are trying to achieve."
Q16 Chairman: Your staff on the ground
have been saying that, and I certainly thought "they would,
wouldn't they", but some of them clearly feel that, and are
slightly looking to you to fight the corner.
Sir Suma Chakrabarti: I think
those staff that know us well—and there have been some cases
where we have had to be very blunt that we should not be doing
this or that—know that we are doing that. I think what we
need to do is, clearly, try always to tailor our instruments and
so on to the country context. Why is it that we did not spend
as much budget support, for example, in the last year that we
thought we were going to? Now, from a headcount point of view,
clearly, it would have suited us to do that, but we did not because
it was not the right thing to do. So we gave advice, saying: "We
should not do this"; so we care more, at the end of the day,
about quality. What this will lead to, though, if we find there
are lots more cases like that over the coming years, is the conversation
will go back to Mr Hunt's question, which is about selectivity.
One way you can maintain quality with a smaller number of staff
is, frankly, making some choices about sectors, about countries
and those sorts of things.
Q17 Hugh Bayley: There is quite a
lot of debate, of course, in the context of a rapidly growing
aid budget to Africa, about absorptive capacity, but there is
less of a debate about—I suppose you would call it "disbursive
capacity"—and perhaps there needs to be a debate on
disbursive capacity. I strongly support the Government's policy
decision to concentrate resources on least developed countries;
the implication being that middle-income countries or higher low-income
countries ought to develop domestic policies to redistribute resources
from their general budgets to poverty alleviation. However, in
terms of buying poverty alleviation gains, you might well be able
to do that more efficiently in middle-income countries because
you are supported with an infrastructure and capacity which is
not available in lower-income countries. How do you reassure us
that you do not address the problem of disbursive capacity, or
lack of disbursive capacity, by redirecting resources to poor
people in middle-income countries?
Sir Suma Chakrabarti: Fortunately
the Government, in its wisdom, has a PSA target which is 90% of
our bilateral aid has to go to low-income countries. That is not
there for any other reason than because the Government says exactly
as you do, that the pound spent in the low-income countries has
a greater impact in terms of poverty reduction than it does in
middle-income countries. That is what the research evidence shows,
and that is why it has that. So as long as that target is there
it is actually a very useful selection criterion for us to give
us some focus. As Nemat said, we have achieved that this year.
Your point is right; both in terms of disbursive and absorptive
capacity we have got issues. On the disbursement side we have
just talked about some of the issues we have to attend to and
hope to maintain quality; on the absorption side, I think we all
believe there is enough headroom still in Africa for absorbing
the increased state aid that we and others will be providing,
but we have clearly to work at the same time on capacity building
in Africa. That is partly about some of the technical assistance
issues and making sure ministries function well and so on, and
it is partly about donor behaviour changing so that we do not
impose higher transactional costs on any of these countries. The
Zambian example is a good one, where the Zambian Government says:
"We do not want donor X in sector Y, thank you very much;
that is imposing extra costs on us."
Ms Shafik: One additional point:
probably the most important mechanism by which we manage the risk
that you identify is having a diversified portfolio. So for every
additional pound we try and spend in a very difficult, fragile
environment, like DRC, we also intend to spend more in Tanzania,
which is very stable, has reasonable policies, has lots of poor
people and we know is quite effective at delivering poverty reduction.
Similarly in Asia; for every additional pound we spend in Nepal
we are also going to probably spend a bit more in India, which
is again quite an effective state and good at reducing poverty.
So we do not necessarily have to turn to middle-income countries
for more safety; I think we can do that by having a diversified
portfolio of low-income, fragile states but, also, low-income,
good performing countries.
Sir Suma Chakrabarti: There is
an agenda on middle-income countries which, I hope, we can come
to in the questioning, because actually it is quite an interesting
agenda for us going forward.
Q18 Chairman: There was a point raised
by the budget support switch in Uganda, in the switch from Kampala
to projects in the north. Our understanding was it was given to
UNICEF to distribute to NGOs, which is effectively handing over
the disbursive capacity to somebody else, and the feedback at
the moment is that the NGOs are still waiting for their allocation.
Is this an example with budget support, in staff terms—is
it easier when you hand over to your overseas agencies and lose
control?
Sir Suma Chakrabarti: I do not
know about—
Ms Shafik: Your concern is around
whether we have lost control in the case of the UNICEF funding?
Q19 Chairman: Hilary Benn withdrew
£15 million budget support from the Government, ironically,
he said, because of the harassment of the Opposition, although
some of us thought it might also have been due to the lack of
transfer funds to the north. He said the money would go to the
north, but we are told that the mechanism was DFID to UNICEF for
them to disburse it and they have not yet done so.
Ms Shafik: I think the primary
concern, though, as you say, was we did not want to give the money
to the Government of Uganda as a very clear signal of our dissatisfaction
with their behaviour around the elections. So we had to find a
non-governmental delivery mechanism because we felt that for Uganda,
as a country, we should not punish poor people in northern Uganda
because their state mishandled the elections. It is unfortunate
that UNICEF has not been able to disburse those funds as we would
like, and that is often the problem with non-governmental channels,
but I still think given the choices we had we did have to find
another non-governmental mechanism, and UNICEF has the best delivery
capacity we could find.
Mr Hunt: Have you sent the cheque to
UNICEF?
1 DFID, Department for International Development:
Departmental Report 2006, Cm 6824, May 2006:. http://www.dfid.gov.uk/pubs/files/departmental-report/2006/default.asp
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2
DFID, Eliminating world poverty: Making governance work for
the poor, Cm 6876, July 2006: http://www.dfid.gov.uk/wp2006/
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3
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