5 Examination of Expenditure and
Public Service Agreements
43. We have continued our practice of conducting
an inquiry into DFID's own Annual Report.[22]
In this year's report, we reiterated the concerns we have expressed
in previous years about the extent to which DFID is able to spend
its funding effectively and efficiently. DFID's budget is increasing
every year towards the goal of the UK spending 0.7% of Gross National
Income on development by 2013. The Comprehensive Spending Review
settlement for 2008-11, which we also examined in this year's
inquiry, continues this trend. However, at the same time DFID
is required to reduce its administrative costs to meet Government
efficiency targets and this essentially means reducing the number
of staff it employs.
44. Our report accepted that DFID cannot be exempt
from Government efficiency targets but we pointed out that the
Department has already significantly reduced its headcount. Further
staff cuts are coming at a time when the Department is increasingly
focusing on the poorest countries, which are often fragile states.
These are countries where development assistance is needed most
and where the potential for poverty reduction, which is DFID's
overarching aim, is greatest. However, working in such environments
is much more resource-intensive, in terms of both money and people,
and therefore expensive. We concluded that DFID will need to make
some difficult decisions about where its future priorities lie—a
conclusion which had also been drawn in the Capability Review
of the Department by the Cabinet Office in March.[23]
45. DFID's Public Service Agreement targets for 2005-08
are specifically linked to progress towards the Millennium Development
Goals. We have commented in previous reports on the difficulty
this presents in measuring DFID's effectiveness in that the MDGs
are internationally agreed goals which are implemented by numerous
bilateral and multilateral donors. It is therefore not possible
to disaggregate DFID's own contribution in assessing whether progress
has been made on a particular MDG, for example reducing infant
mortality. DFID itself acknowledges that this is a problem.
46. As part of the 2007 Comprehensive Spending Review,
new PSAs were agreed for all government departments for the 2008-11
Spending Review period. DFID is the lead department for PSA 29
which is: to reduce poverty in poorer countries through quicker
progress towards the MDGs. It is supported in this by three
other departments: the Department for Environment, Food and Rural
Affairs, the Foreign and Commonwealth Office and the Treasury.
DFID is also a contributor to four other new PSAs for which other
departments have lead responsibility.[24]
47. DFID will focus on 22 countries to monitor progress
on PSA 29 during the 2008-11 Spending Review period. The Delivery
Agreement for the new PSA is still linked directly to the eight
Millennium Development Goals but specific indicators have been
set for each one. For example, MDG 6 is to combat HIV and AIDS,
malaria and other diseases; the indicator DFID has set is HIV
prevalence among people aged 15-49. We concluded that the new
Delivery Agreement should make the assessment of DFID's performance
more meaningful but that we would be closely monitoring how this
worked out in practice in our future examination of DFID Annual
Reports and Autumn Performance Reports.
48. In addition to examining the PSAs as part of
our regular assessment of DFID's Annual Reports, many of our topical
inquiries also form part of this examination because of the direct
link between the MDGs and DFID's PSA targets. In assessing DFID's
contribution to such fundamental development issues as sanitation
and water and maternal health, we are examining the UK's contribution
to progress towards the relevant MDG, and therefore making a judgement
on how well DFID is performing in relation to a particular PSA
target. This will continue to be an essential element of our work.
49. We expedited publication of our report on the
DFID Annual Report 2007 so that it could inform the first of the
new annual debates on International Development on the floor of
the House on 15 November.[25]
Our report was widely referred to during the debate by backbench
and frontbench speakers.
22 HC 64 (Session 2007-08) Back
23
Capability Review of the Department for International Development,
Cabinet Office, March 2007 and Civil Service Capability Review,
Tranche 3: Findings and Common Themes; Civil Service - strengths
and challenges, March 2007 Back
24
PSA 3: controlled and fair migration; PSA 25: alcohol and drugs;
PSA 27: climate change; PSA 30: conflict impact Back
25
HC Deb 15 November 2007, cols 869-928 Back
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