House of Commons - International Development

Select Committee on International Development Twelfth Report

2 Funding

8. As the International HIV/AIDS Alliance points out, DFID's new Strategy represents "a shift in DFID thinking about how to fund the AIDS response" which has resulted in a much greater emphasis on funding health systems rather than specific HIV/AIDS programmes.[10] DFID plans to spend £6 billion in the period to 2015 to strengthen national health systems and services in developing countries (this is sometimes referred to as "horizontal" funding). DFID, in common with many other major donors, already allocates a significant proportion of its development assistance direct to national governments' budgets. This can be unallocated general budget support or more targeted support for particular sectors, such as health and education (also known as Sector-Wide Approaches (SWAps)).

Funding for health system strengthening

9. DFID states that "major, sustained efforts to strengthen health systems are critical to achieving universal access" to HIV/AIDS treatment.[11] It explains that: "We want to fund the health sector in its entirety rather than individual elements of it as this will deliver the sustainability needed in the longer term."[12] DFID's Strategy refers to the UNAIDS (the Joint UN Programme on HIV/AIDS) recommendation that 25% of the resources needed to achieve universal access should go to strengthening health systems.[13]

10. Witnesses agreed that there are advantages in directing funds towards health systems. Interact Worldwide's written evidence said "it is now widely acknowledged that expanded support for health systems strengthening is essential to the response" to HIV/AIDS. Interact believes that dedicated HIV/AIDS funding has resulted in HIV services which are superior to general health services; the latter now need to be brought up to the level of HIV services and this can only be achieved through broader health system strengthening.[14] The UK Consortium on AIDS echoed this view: "it is undeniable that health systems funding and budget support is an essential aspect of the AIDS response and critical to delivering the health MDGs".[15]

11. Strengthening national health systems provides a sustainable long-term solution to HIV/AIDS as its builds countries' own capacity, enabling them to respond to the demands which HIV/AIDS makes on them. For example, it is estimated that Africa needs an additional 427,500 health workers to achieve universal access to HIV/AIDS treatment.[16] Funds for national health systems will contribute to training more health professionals and paying them at a rate which may help to prevent them leaving their home countries to earn higher salaries abroad. Such funding will also contribute to the other necessary elements in building up a capable and sufficient health workforce including: the expansion of health education systems; in-service training; human resource management; and improvements in working conditions.[17]

12. When asked about the reasons for DFID's decision to concentrate on strengthening health systems the Minister said;

I think there was a broader consensus that actually, in terms of the UK's continued world leadership in this area, this was the right thing to do. Now, it is a judgment call and not everybody agrees with us, but we are absolutely convinced that this is the right thing.[18]

DFID's written evidence makes clear that the UK's decision to focus on horizontal funding was at least in part to complement the strong emphasis which other donors place on targeted (or "vertical") HIV/AIDS funding. The Minister reinforced in oral evidence that the need to balance vertical funding from other donors had been a significant factor in DFID's decision to give such weight to funding for health systems.[19]

13. One of the most notable sources of vertical funding for HIV/AIDS comes from the United States through the President's Emergency Plan for AIDS Relief (PEPFAR) which has provided $19 billion to support national AIDS responses since 2004.[20] However, PEPFAR funding comes with certain conditions. For example, the initiative has a special emphasis on 15 countries—all of them in Africa except for Vietnam; and it advocates abstinence and being faithful—the so-called 'AB' strategies—with limits being placed on condom provision and promotion.[21] Similar conditions also apply to US development funding more broadly. Should the new US Administration decide to review its approach to development funding, including the US President's Emergency Plan for AIDS Relief (PEPFAR), we would urge the UK Government to take an early opportunity to discuss with them potential areas for co-operation.

14. Strengthening health systems is an important component of HIV prevention. As the Strategy emphasises, nearly 7,000 people become newly infected each day; the disease is not curable; the cost of providing anti-retroviral drugs throughout an individual's life may therefore be considerable and, given the high prevalence in many countries, the burden of treating people with HIV/AIDS is likely to be unsustainable for those countries in the future.[22] Prevention is therefore central to a cost-effective and sustainable approach to tackling HIV/AIDS. Prevention is multi-faceted. Messages about the steps which can be taken to prevent infection, such as condom use and avoiding high-risk behaviour, need to be conveyed at every opportunity when people access health services. National health systems in developing countries will have much greater capacity to take forward this cross-cutting approach to HIV prevention if they are well-resourced and staff are properly trained. DFID's funding can clearly make a significant contribution to building this capacity.

15. Concerns have, however, been raised as to whether horizontal funding actually improves health systems to a level where high quality treatment is being given. Some fear that funding for health sector strengthening might stretch resources too thinly, to the point where the actual improvements in the services that people receive are marginal. This has led some commentators to characterise horizontal funding as resulting in "generalised insufficiency".[23] Evidence from Médecins sans Frontières (MSF) also points out that "general systems measures take a long time to bring about improvements at the patient interface" and will not produce the rapid change required in access to HIV/AIDS services. MSF believes that the focus of DFID's health systems funding should therefore be on the abolition of user fees, recruitment of health professionals and ensuring that a reliable supply of drugs is available.[24]

16. It is also much more difficult to pinpoint the effect that health systems funding has on tackling a particular disease than it is with dedicated, disease-specific funding. Witnesses believed that DFID must ensure that health system strengthening delivers results on the ground. Alvaro Bermejo, Executive Director of the International AIDS Alliance, told us:

It is […] important that health systems strengthening has specific health outcomes in mind […] We need to retain that focus on health outcomes and if it is not improving health outcomes then it is not good health system strengthening.[25]

Dr Kent Buse, a health policy analyst, highlighted that, at the moment, there is little evidence about the tangible impact that money spent on health system strengthening has on combating HIV/AIDS.[26] The UK Consortium on AIDS drew attention to a case study in Zambia which found that support for the health sector budget helped the government deal with routine health problems but "not the extraordinary problems such as AIDS, TB and malaria". The Consortium also highlighted that in Mozambique it had been found that funding delivered through budget support increased resources for health services but that these only benefited certain groups.[27] Interact Worldwide was concerned that measuring the impact of DFID's health system funding would be difficult because:

[…] the allocation of this funding has not been well articulated. Much of it may already be committed to multilateral financing processes […] The development of indicators for monitoring and evaluation of the Strategy are currently being negotiated. Without a transparent split of available of funds it will be impossible to trace the impact of this regardless of the indicators in place.[28]

17. We were anxious to clarify how much of the £6 billion pledged for health services strengthening in the Strategy represented new money rather than funding that DFID had already committed or planned to spend through its country programmes or through multilateral programmes. The Minister told us "as far as I know, it is new money".[29]

18. Witnesses highlighted in oral evidence that, despite the substantial amounts of development assistance specifically allocated to the health sector in developing countries, a significant funding gap remains. They told us that around $9-14 per capita per year is being spent on healthcare, against an estimated required spending level of somewhere between $40 and $80 to provide an adequate level of healthcare.[30] The Minister pointed to the UNAIDS estimate of an overall funding gap of £8 billion in the resources needed to tackle HIV/AIDS.[31] Alvaro Bermejo of the International HIV/AIDS Alliance believed that increasing current overall per capita health expenditure, which is insufficient to meet the health Millennium Development Goals (MDGs), was more important than discussing how funds should be allocated.[32]

19. Funding for health system strengthening is an essential part of development assistance and we welcome the substantial sums that DFID is allocating to it. Developing countries will never be capable of tackling HIV/AIDS effectively unless the overall capacity of their health systems is built up through adequate funding, including the capacity to pursue robust prevention strategies. Our concern, however, is that DFID has included this funding as part of its HIV/AIDS Strategy but the specific impact that it may have on HIV/AIDS will be difficult to measure. We recommend that, as part of its monitoring and evaluation of the Strategy, DFID put in place indicators to assess the impact that funding directed at health system strengthening is having on reducing the spread of HIV/AIDS and related diseases.

20. The Minister was only able to give us a partial reassurance that the £6 billion DFID has allocated for strengthening national health services is genuinely new money, which is additional to any previous funding announcements, rather than simply being a redirection of existing commitments. Further clarification is required. We therefore request a full breakdown of how this £6 billion total has been calculated in response to this Report. Moreover, DFID has not yet spelled out in clear terms how this substantial sum will be spent. Until the precise allocations, and their timescales, are known, it will be impossible to assess how much impact this apparently bold allocation of funding is likely to have or whether it will be adequate to meet the ambitious target of universal access by 2010. We therefore invite DFID to provide the necessary detail in response to this Report.

Disease-specific funding

21. The second significant block of funding within the Strategy is targeted specifically at addressing HIV/AIDS and associated diseases (often referred to as "vertical funding"). This funding, first announced in September 2007, will provide £1 billion to the Global Fund to Fight AIDS, Tuberculosis and Malaria ("the Global Fund") over a seven-year period.[33] DFID's view is that it is important to maintain its support for targeted funding of this kind as without it, it is unlikely that health systems in hyper-epidemic countries would have coped with the burden that HIV/AIDS has placed on them.[34] Its submission draws attention to the view held by supporters of vertical funding that, without such funding, "governments would have made very little progress towards achieving universal access" particularly "where political leadership and accountability are weak and commitment to AIDS is lacking."[35] Interact Worldwide agrees that disease-specific funding continues to fulfil an important function:

While horizontal funding through health systems strengthening will be able to improve the medical response to the epidemic, vertical funds have a place in ensuring that this response is comprehensive in its impact.[36]

22. Alvaro Bermejo, of the International HIV/AIDS Alliance, told us of several cases where vertical funding had contributed to the creation of a stronger health system. Such funding has reduced the burden that HIV patients put on the health system, provided treatment for health staff (who themselves are often living with HIV), improved procurement procedures and brought groups that do not normally attend clinics into the healthcare system.[37] In its written submission, DFID gives the example of Ethiopia where the Global Fund has become the major donor in training and allocating 30,000 community health workers.[38]

23. However, disease-specific funding can also have a negative impact. DFID states that "vertical funds can both strengthen and undermine broader health systems" and that it is "aware of the argument that earmarking funds for AIDS can be distorting, unsustainable and can overload fragile health systems".[39] Disease-specific programmes can draw staff away from working in the public health system by offering higher salaries. The UK Consortium on AIDS highlights a study in three African countries (Mozambique, Uganda and Zambia) which found that AIDS programmes had adversely affected health systems in terms of information management, supply and human resources.[40]

24. Disease-specific AIDS-funding is also generally 'off-budget'—it is not part of the national government's expenditure, and it can therefore be difficult for partner countries to track and monitor.[41] As we pointed out in our recent Report on aid effectiveness, funding which is not part of national budgets can also place onerous reporting requirements on partner countries.[42] DFID is keen to point out that "it is essential that whatever the chosen mechanism for support that donors do not create additional burdens or transaction costs for countries".[43]

25. Country health systems can also be by-passed by vertical funding because it does not come from national governments and therefore does not incentivise programme managers to co-ordinate their work or engage with government-run programmes. This risks undermining "country ownership", a key principle of the Paris Declaration on Aid Effectiveness, which emphasises that developing countries themselves should exercise leadership over their development policies and strategies.[44] We have commented previously on the importance of this principle in improving aid effectiveness.[45]

26. We welcome DFID's substantial funding for the Global Fund to Fight AIDS, TB and Malaria. Disease-specific funding continues to provide vital resources to tackle the HIV/AIDS epidemic and the Global Fund's work has been invaluable. However, it is important that vertical funding supports rather than conflicts with national government healthcare systems and that it adheres fully to the principles of the Paris Declaration on Aid Effectiveness, to which the Global Fund is a signatory. We recommend that DFID continues to use its position as a major donor to the Global Fund to ensure that its funding is fully accountable to national governments and civil society in the countries where the Fund operates.

TRACKING THE IMPACT OF DISEASE-SPECIFIC FUNDING

27. We have commented previously on the challenges presented in tracking funding channelled through multilateral organisations.[46] It is very difficult to disaggregate the impact of DFID's specific funding within the multilateral body's overall expenditure. Channelling funding through a multilateral organisation also puts DFID at arm's length from the delivery of the services it is funding.

28. In our evidence session with the Minister we questioned him about the Global Fund's decision to grant $500 million to Zimbabwe. Zimbabwean law requires foreign exchange to be deposited with the Reserve Bank, which the government controls. Concerns had been raised by opposition parties and NGOs in Zimbabwe that the money would be diverted by the government away from the intended beneficiaries—those living with HIV/AIDS and related diseases.[47] The Minister acknowledged that, when DFID contributes to multilateral organisations, it relinquishes some control over its resources. But he assured us that "the UK has a very clear record in demanding maximum accountability and maximum transparency, and we will continue to do that."[48] Since the evidence session, the Global Fund has requested the return of $7.3 million of the $12.3 million it gave to Zimbabwe last year as it was discovered that these funds had not been used for their proper purpose. The Global Fund has temporarily frozen its funding for Zimbabwe.[49]

29. We were concerned to learn that a substantial sum from the Global Fund has been misappropriated by the Zimbabwean government. Zimbabwe is arguably a unique case and it appears that the Global Fund has dealt appropriately with this example of misuse of its money. However, the case highlights the need for DFID to continue to press for the highest standards of accountability and transparency in the use of funds which it channels through multilateral organisations, particularly in countries with weak or undemocratic governments.

An integrated approach to funding

30. The different challenges presented in using health system strengthening (horizontal funding) and disease-specific (vertical) funding to tackle HIV/AIDS means that greater attention is turning to using an integrated (or 'diagonal') approach. This aims both to tackle HIV/AIDS and to support and drive growth in health systems and services by using "funding for AIDS treatment and prevention [...] [as] the driving wedge for urgently needed increases in the overall level of resources available for health."[50]

31. DFID acknowledges that an effective strategy requires both horizontal and vertical funding. However, as Alvaro Bermejo pointed out, if DFID is to pursue effective integrated funding, it is not sufficient merely to fund both health system strengthening and disease-specific programmes: "that is not integration, that is a balance of two investments".[51] To achieve effective integration, DFID needs to take steps to ensure that its funding for health system strengthening reinforces the positive benefits that disease-specific funding has for health systems.[52] In terms of delivery of services, MSF cautioned that "the emphasis on integration needs to be handled with care"; the primary health care systems in many countries are:

[…] non-existent or of very poor quality. Much work needs to be done before HIV/AIDS care can be integrated without compromising on quality and access, and premature integration could cause a setback in AIDS care delivery.[53]

The UK Consortium on AIDS points to an attempt in Zambia to integrate the vertical TB programme into the mainstream health system which led to the collapse of the TB programme. It believes this highlights the need for political commitment and proper planning and management if integration is to be successful.[54]

32. The International HIV/AIDS Alliance provided a positive example of the integrated approach. The Global Fund's grant to Rwanda for the period 2005-09 included specific health systems strengthening (HSS) objectives; a mid-term evaluation found that many of the targets had been exceeded. More broadly, the Global Fund has established an HSS funding window which aims to strengthen health systems to provide HIV/AIDS, TB and malaria services but also to directly fund partner governments in support of their national AIDS and health plans.[55] Another positive example of an integrated approach, and one that we highlighted in our Maternal Health Report earlier this year, is Malawi's Emergency Human Resource Plan, a six-year programme funded by the Government of Malawi, the Global Fund and DFID, which has expanded training capacity in the health service by 50%, increased the salaries of health workers and addressed the reallocation of health resources.[56]

33. There is therefore a consensus that a more integrated approach to HIV/AIDS funding is required to ensure that disease-specific funding supports broader health systems and that the capacity of national health services is built up to enable them to provide essential care and treatment to people living with HIV and AIDS. The International Health Partnership (IHP) launched by the UK in September 2007 and now led by the World Health Organisation would seem the obvious mechanism for DFID to take forward an integrated approach, particularly as UNAIDS, the Global Fund and the UN Population Fund are members of the Partnership.

34. A new Taskforce on Innovative Financing of Health Systems has also been established under the chairmanship of the UK Prime Minister and the President of the World Bank, with the aim of mobilising funding for health systems. The Taskforce is intended to complement the IHP which has no funding capability but which focuses on co-ordination. The UK has pledged to spend almost £450 million over three years to support national health plans in eight IHP countries.[57] This funding is included in the £6 billion commitment which DFID has made to health systems strengthening as part of the AIDS strategy.[58]

35. We believe that a more integrated approach to HIV/AIDS funding is required. The International Health Partnership and the Taskforce on Innovative Financing of Health Systems are UK initiatives which feed directly into a more integrated approach to HIV/AIDS funding. We would encourage DFID to use the full capacity of these initiatives to ensure that its funding streams for health systems strengthening and disease-specific programmes are mutually reinforcing and to press other donors to follow the UK lead towards such an integrated approach.

Tackling HIV/AIDS in middle-income countries

36. If Millennium Development Goal 6 is to be achieved by 2015, and universal access to treatment for HIV/AIDS by 2010, tackling HIV/AIDS in all high-prevalence countries needs to be given a higher priority. Several of these are middle-income countries (MICs), including in southern Africa, Latin America and the Caribbean. However some witnesses have raised concerns that DFID is no longer paying sufficient attention to the prevalence of HIV/AIDS in middle-income countries. The International HIV/AIDS Alliance said in its written evidence:

Middle Income Countries with concentrated epidemics have some of the highest incidence rates in the world. It does not make sense for one of the leading donor governments to withdraw its resources, including expertise, at such a critical time in the progress of the epidemic in these countries.[59]

MICs will not benefit from the bulk of the funding that DFID has pledged in the Strategy because of the UK's longstanding commitment to spend 90% of its bilateral resources in lower income countries (LICs) and only 10% in middle-income countries.

37. DFID makes it clear in the Strategy that "we have limited capacity to support work in MICs".[60] DFID officials told us that these countries have sufficient resources of their own to tackle HIV/AIDS and that therefore DFID's focus should be on providing technical support to enable them to use these resources effectively.[61] In addition to relying on multilateral organisations to lead HIV/AIDS work in MICs, the Strategy envisages an enhanced role for the Foreign and Commonwealth Office (FCO) in supporting the UK's efforts on HIV/AIDS.[62] When we asked what practical training and engagement DFID officials had undertaken with FCO officials we were told that there were regular discussions but were given no details of what further support DFID intends to provide to the FCO to ensure it is properly equipped to take on this enhanced HIV/AIDS role.[63]

38. Targets for tackling HIV/AIDS will not be achieved without substantial progress in prevention and treatment in middle-income countries. The Strategy envisages that the Foreign and Commonwealth Office will take on an enhanced role in tackling HIV/AIDS, particularly in middle-income countries where DFID has a minimal presence. It is vital to ensure that FCO officials are properly equipped to carry out these duties. We invite DFID to share with us its detailed planning for cross-departmental working on HIV/AIDS, particularly in middle-income countries with high prevalence levels.

10 Ev 72 Back

11 Ev 41 Back

12 Ev 36 Back

13 Achieving Universal Access, p 35 Back

14 Ev 60 Back

15 Ev 102 Back

16 UNAIDS, Financial Resources Required to Achieve Universal Access to HIV Prevention, Treatment Care and Support, September 2007 Back

17 UNAIDS, Financial Resources Required to Achieve Universal Access to HIV Prevention, Treatment Care and Support, September 2007 Back

18 Q 61 Back

19 Qq 66-71 Back

20 Ev 41; and Achieving Universal Access, p 49 Back

21 The President's Emergency Plan for AIDS Relief online at www.usaid.gov/our_work/global_health/aids and "What is the President's Emergency Plan for AIDS Relief?", Avert website, www.avert.org/pepfar. It should be noted that in practice PEPFAR funding can go to any US-funded HIV/AIDS work worldwide. Condom provision and promotion is aimed at certain groups under PEPFAR, mainly high risk users, rather than general populations. Back