2—Memorandum
submitted by ActionAid
DFID EXPENDITURE ON TECHNICAL ASSISTANCE:
IS IT ACHIEVING
VALUE FOR MONEY?
1. TECHNICAL
ASSISTANCE—THERE
ARE SERIOUS
CONCERNS ABOUT
TA AS AN
EFFECTIVE DEVELOPMENT
TOOL
1.1 There are concerns about both the scale
and effectiveness of DFID's Technical Assistance programmes. Globally,
TA is one of the most criticised aid modalities, and one of the
least well evaluated. Last year's OECD DAC Development Cooperation
Report's chapter on Technical Assistance concluded "There
is little data-based analysis of the overall effectiveness of
TC as an aid instrument, whether in terms of cost/benefit, impact
on growth, fiscal impact or other financial measures."[1]
1.2 DFID's own review of its TA to economic
management in South Africa, concluded that "it is only in
a minority of the cases reviewed that a capacity development impact
can be identified."[2]
1.3 Given these broader concerns about the
effectiveness of Technical Assistance, and the large proportion
of DFID's bilateral budget which is spent on TA—24% or £500
million per year—we believe this to be a vital topic for
future in depth evaluation by the IDC.
2. DFID'S EXPENDITURE
ON TA CONSTITUTES
A SIZEABLE
PROPORTION OF
ITS TOTAL
SPEND
2.1 "Technical Assistance" encompasses
expenditure on consultancy, research and training. It accounts
for 24% of DFID's bilateral expenditure, or £508 million
in 2004-05.
2.2 DFID TA programmes exist in 90 countries,
and in 39 they are a majority of the expenditure. In seven of
those countries, DFID's expenditure on TA is over £11 million—the
average size of a DFID country programme.
3. DFID POLICY
STATEMENTS ON
TA
3.1 Currently, DFID does not have a formal
policy on TA, but has made the following commitments in the 2006
White Paper:
"Technical Assistance—often comprising
specialist staff and training—offers new ideas and ways
of working. Such support only works well when the institutions
themselves want change and are ready to lead reform... As with
financial aid, we believe technical assistance should be provided
through government systems so that developing countries can design
and manage it to meet their needs. And donors should pool funds
to improve co-ordination and reduce administrative burdens."[3]
We are encouraged by this statement from DFID,
but it must now be accompanied by clear plans for implementation.
3.2 DFID has also recently produced a "How
To" note for staff on TA, which contains support for TA reform
along the lines of the statement from the White Paper. However,
many of the statements on TA are accompanied by caveats, and the
language of the document is altogether less strong than that in
the White Paper. Neither is the note binding, since it is for
guidance only. Whilst the "How to Note" is welcomed
as a step forward in DFID's commitment to better TA, it does not
provide a clear policy, nor a plan for real reform.
4. PREVIOUS EVALUATIONS
OF DFID'S
TA
4.1 In 2005 DFID published an evaluation
report of Project Completion Reports in PRISM, including feedback
on a number of TA projects, which cited instances of insufficient
local participation in design and selection, insufficient ownership
of projects, too much use of international consultants, and ineffective
short-term consultancy.[4]
4.2 More recently, DFID have also published
an Oxford Policy Management evaluation of the impact of DFID TA
on capacity building in sub-Saharan Africa.[5]
Whilst the evaluation found that: "In general planned project
or programme outputs have been produced successfully"; overall
the report concluded that "it is only in a minority of cases
reviewed that a capacity development impact can be identified".
This is a particularly concerning conclusion given that DFID cites
its reason for providing TA as supporting partner institutions
to develop their capacity.[6]
This suggests deep seated problems as DFID TA is found to be meeting
its stated objectives, without impacting on its core aim of capacity
development.
5. POSSIBLE ISSUES
TO BE
INCLUDED IN
AN EVALUATION
5.1 Is the market working? Concerns
around the TA market centre on two key areas:
(a) Openness: a genuinely open market would
be likely to see TA consultancy contracted out to an increasingly
broad range of suppliers, with an emphasis on the most competitive
offers. However, five years after untying, only 5% of the value
of centrally awarded contracts[7]
go to developing country firms. The remaining 95% are awarded
to developed country firms, the vast majority of which are UK
companies.
(b) Costs: DFID figures show that a consultant
is typically paid somewhere in the region of $200,000 per annum,[8]
and developing country officials we speak to often raise concerns
about the relative expense of DFID consultants, as compared to
similar consultants used by other donors.
5.2 Is DFID TA effective? The Oxford
Policy Management evaluation of DFID's TA clearly indicates that
is impact on capacity development is limited. In so much as TA
is designed to be a contribution to transformational capacity
development, this implies a clear need to evaluate the whole of
DFID's TA programme for a robust effectiveness assessment.
5.3 Does DFID have adequate systems for
monitoring and evaluating its TA? This year's OPM evaluation
is a rare, but limited example of external evaluation. Given the
concerns it raises, DFID should consider undertaking independent
evaluations to assess the impact that its Technical Assistance
has on the goal of transformational capacity development. Unfortunately,
existing monitoring and evaluation systems are lacking, and there
is no comprehensive approach to monitoring all Technical Assistance
projects funded by DFID. Projects over a value of £1 million
are required to complete a "Project Completion Report",
however, anything which falls under a lesser costing bracket is
not subject to strict evaluation guidelines, and certainly, evaluations
of smaller TA projects are not made publicly available.
5.4 How does DFID TA match up to its commitments
in the White Paper?
The White Paper commits to supporting TA only
in cases where there is:
— Developing country ownership.
— Use of country systems and or support
of pooled arrangements.
— Donor coordination of TA—DFID
has also signed up to a key TA commitment through the Paris Declaration
agreement on donor harmonisation and alignment. Through indicator
4, the UK has committed to ensuring that at least 50% of its TA
will be run through co-ordinated programmes consistent with national
development strategies, by 2010. DFID has chosen to interpret
this target of 50% as pooling (where donor resources for TA are
pooled to avoid duplication of donor work). However, the "How
to note" comments that the DAC target on the partial pooling
of TA is "challenging", suggesting that current practice
is considerably out of line with policy.
5.5 Is DFID reporting accurately and transparently
on its TA?
— There are concerns over the assignment
of internal research and consultancy services to the TA budget
instead of the administrative budget.
— An absence of public information
on costs also makes it very difficult to ascertain whether DFID
is obtaining value for money with regard to its procurement contracts.
— A general absence of information
on TA including where contracts have been procured (centrally
or locally), the nationality of the company or individual consultant
used, and poor maintenance of central records on procurement makes
it very difficult to ascertain whether DFID are in fact following
the policy commitments they have made.
6. ACTIONAID'S
WORK ON
TECHNICAL ASSISTANCE
6.1 ActionAid recently produced Real Aid
2: Making TA work, the second of our detailed international reports
on aid quality. The key focus of this report was Technical Assistance,
and the ways in which systemic inadequacies in the way TA is delivered,
result in aid money being spent inefficiently. We also co-hosted
an expert seminar in May of this year with the Overseas Development
Institute and contributed to a UK Aid Network (UKAN) aid network
seminar in July.
July 2006
1 2005; Development Cooperation Report; OECD; p 119. Back
2
2006; Developing Capacity? An evaluation of DFID funded Technical
Co-operation for Economic Management in sub-Saharan Africa; pxiv;
Oxford Policy Management. Back
3
2006; White Paper on International Development; p 25; DFID. Back
4
2005; PCR Synthesis Report; DFID. Back
5
2006; Developing Capacity? An evaluation of DFID funded Technical
Cooperation for Economic Management in sub-Saharan Africa; pxiv;
Oxford Policy Management. Back
6
2006; How to note; p 1. Back
7
90% of DFID's contracts are awarded centrally; DFID Procurement
Department. Back
8
2005; Development Cooperation Report; OECD; Development Assistance
Committee; p 123. Back
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