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The Department for International Development (DFID) channelled £328 million of its development aid expenditure through Civil Society Organisations (CSOs) in 2004-05. Although this sum was nearly double the equivalent figure for 1997, as a proportion of expenditure it declined from 9.8 to 8.5%. CSOs include large international charities based in donor countries and local collaborative and mutual assistance groups based in developing countries. They play a variety of roles in development. They deliver services in areas including health and education, give a voice to the poor and help hold governments accountable for poverty reduction.
DFID has several funding streams for engaging with CSOs, including in-country funding of local CSOs, strategic partnership agreements (called Partnership Programme Agreements) with key non-governmental organisations, and funding of UK CSOs through a Civil Society Challenge Fund (Figure 1, page 8).
On the basis of a report by the Comptroller and Auditor General,[1] we examined how DFID is engaging with CSOs. This Report covers four themes:
- How and when to engage with CSOs. DFID recognises the important role which CSOs can play in development, but does not systematically assess their effectiveness. DFID is increasing its funding of CSOs which promote accountability and lobby for change;
- Targeting the poorest. Some CSOs have a vital role in providing services to the poorest people. But these CSOs are often small and informally structured which makes it hard for DFID to engage with them. To target its assistance well DFID needs good co-ordination, both internally and with other development partners;
- Measuring achievements. On projects where DFID worked with CSOs, almost half of project indicators were not robust. A particular area of weakness was DFID's support for capacity building and advocacy projects. Only a quarter of Programme Partnership Agreements had specific and measurable indicators; and
- Improving value for money. DFID's projects and Agreements have largely met their objectives. But formal monitoring arrangements provide little insight into value for money. DFID needs to assess not just effectiveness but also cost-effectiveness. It could make more use of competition to promote better value for money.
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