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Our inquiry into the Department for International Development's Annual Report enables us to take an overview of DFID's work. This year, we have focused on assessing whether DFID is both efficient and effective. The Comprehensive Spending Review Settlement for 2008-11 continues the trend of increasing of DFID's budget towards the target of 0.7% of Gross National Income to be allocated to Official Development Assistance by 2013. We welcome this. But there is a significant challenge for DFID in using this funding effectively when it is also required to reduce its administrative costs, and therefore staff numbers, at a time when its focus is shifting increasingly towards fragile states where providing assistance is resource-intensive.
We are concerned that DFID continues to emphasise inputs rather than outcomes—it focuses too much on how much it spends on aid rather than measuring the effects of its aid spending on poverty. We believe DFID's new Public Service Agreement Delivery Agreement and the plans to establish the Independent Advisory Committee on Development Impact should make it easier to identify whether DFID's expenditure is effective in reducing poverty in developing countries.
We have also taken the opportunity to examine in more detail a number of significant policy areas where we believe DFID is not yet matching actions to its words:
Gender—We do not doubt DFID's commitment but we are not convinced that it yet has the measures in place to achieve its aim of promoting gender equality across its programmes.
Climate change—It is acknowledged that the impact of climate change will be earlier and more severe for the poorest people in the poorest countries. We welcome the leadership DFID has shown on climate change but believe this has not yet resulted in the necessary change at country office level, which would enable assistance with adaptation and mitigation strategies to be provided.
Governance—We look forward to the positive impact that the Governance and Transparency Fund could bring to developing countries if it is properly targeted. We wish to see DFID doing more to strengthen the capacity of national parliaments to scrutinise recipient governments as part of its overall governance strategy as set out in the 2006 White Paper.
Agriculture—75% of the world's poor live in rural areas. Our view is that promotion of agricultural development is an essential factor in reducing rural poverty. DFID has shifted its focus away from agriculture in recent years and we believe its programmes need to be rebalanced in this respect.
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