Annex 1
FURTHER DETAIL ON QUESTION 25
CONFLICT RFRS
2007-08: BUDGET AND
ESTIMATE PROVISION
(£'000)
| Africa Pool | DFID
| FCO | MOD |
| Original Budget | 63,4000 |
| |
| Transferes (out)/in | (33,573)
| 4,510 | 29,063 |
| For future allocation* | 6,249
| | |
| Estimates Provision | 23,578
| 4,510 | 29,063 |
| *In DFID budget but not yet voted in Estimates
| | | |
| Global Pool | DFID | FCO
| MOD |
| Original Budget | | 74,000
| |
| Transfers (out)/in | 8,520 |
(23,760) | 15,240 |
| Estimates Provision | 8,520
| 50,240 | 15,240 |
| Other (non-pool) | DFID |
FCO | MOD |
| (PCRU) | (Peacekeeping)
| |
| Estimates Provision | 6,000
| 201,410 | 0 |
| Conflict RfRs Estimates provision | 38,098
| 256,160 | 44,303 |
| | |
|
Sources:
Original Budget: SR 04 allocation as shown in Supplementary
Budget Information (SBI) published with Budget 2006.
Estimates and Unallocated Provision: Main Estimates 2007-08
and SBI published with Budget 2007.
Progress on DFID's Efficiency Programme: Quarter 4
2006-07
I. HEADLINE MESSAGES
AND GOOD
NEWS STORIES
— By the end of 2006-07, DFID had achieved efficiencies
of £434 million against a milestone of £303 million.
We are on track to achieve our efficiency target of £420
million of sustainable efficiencies in 2007-08.
— There has been a significant improvement in the
success rate of DFID's projects and programmes, resulting in £311
million of efficiencies in 2006-07 (against a target of £106
million).
— Good achievement on portfolio quality and solid
progress in other areas of the efficiency programme aided our
meeting the 2006-07 overall target.
— At the DFID Efficiency Team's request, DFID's
Internal Audit Department (IAD) is reviewing our efficiency programme
for the first time. We are seeking audit scrutiny to ensure our
systems and processes are fit for purpose and in response to the
NAO reports on the government's efficiency programme. One area
IAD will cover in detail is the governance of the programme. They
are due to report in May and DFID will share their findings and
any recommendations with HM Treasury.
— DFID remains off track on programme-based approaches
and EC aid. We are unlikely to achieve our EC aid target due to
an upwards change in the baseline. DFID is updating its internal
information systems to allow more proficient monitoring of PBA
spend and performance.
II. PROGRESS ON
EACH INITIATIVE
Programme-based approaches (PBAs)
1. We remain off track on this target; with 42% of our
bilateral spend in 2006-07 spent on PBAs against a baseline percentage
of 39%. We achieved £13.5 million of efficiencies in 2006-07
against a target of £71 million.
Procurement
2. We achieved our 2006-07 target of £6 million
of efficiencies from procurement savings, with £6.1 million
of cashable gains achieved. Although we are overachieving in percentage
terms, the lower than forecast spend on procurement means that
this target remains challenging.
Administration costs
3. We met our 2006-07 administration costs target, with
an estimated outturn of £232 million against an annual target
of £235 million. This translated to efficiency gains of £13.3
million against a target of £10 million.
4. The estimated administration outturn for 2006-07 totals
£262 million—an increase over the 2005-06 outturn.
This is due to a non-cash End Year Flexibility draw down of £30
million for non-cash central costs. This relates to the former
Natural Resources Institute site at Chatham which DFID rents to
the University of Greenwich. The lease will continue until 2014
and we are considering the sale of our confirmed interest in the
site beyond 2014 to Greenwich University or a third party. The
provision is for the possible difference between our book cost
and the price we are offered. Treasury have agreed to a ring-fenced
administration Departmental Expenditure Limit increase (to £265
million) to allow DFID to make the related accounting charge in
this year's account. However this is not included in our efficiency
reporting since it is an exceptional, non-cash cost.
Portfolio quality
5. We exceeded our 2006-07 portfolio quality target of
£106 million. In quarter 4, 77% of our projects and programmes
were scored as successful, compared with an average of 65% in
2005-06. On average over the four quarters of 2006-07, 74.8% of
our projects and programmes were successful and this translates
to efficiency gains of £311 million. We have adjusted forecasts
accordingly and anticipate that we will make up any shortfall
in other targets with our improved portfolio performance.
IDA
6. In quarter 4 2006-07, the first payment of £20
million was made for the Education Fast Track Initiative and a
payment of £26.85 million was made for IDA debt relief. Payments
in 2006-07 resulted in efficiency gains of £62 million. This
is slightly below our target of £75 million.
EC aid
7. EC aid payments are reported in the fourth quarter
each year. Provisional efficiency gains for 2006-07 are £28
million against a target of £35 million. Figures for 2005-06
are now confirmed and £20.5 million of efficiency gains were
achieved.
8. Forecast EC efficiency gains for 2007-08 have decreased
significantly from £44 million to £24 million. This
has happened for a number of reasons. The principal three reasons
are: updated forecasts of 2007 payments were provided by the European
Commission; the UK percentage share of the EC Budget in 2007 (on
which we base our forecasts) has decreased; and the average annual
exchange rate has changed from £1 = €1.46 to almost
€1.5.
Headcount
9. Headcount at the end of 2006-07 was 1719, which means
we have reduced staff numbers by 188. This means we have achieved
our efficiency target of 170 reductions, though we continue to
work towards the challenging target of 1610 staff by March 2008.
III. DATA MATURITY
PBAs
10. Figures on PBA expenditure are unlikely to change
as they are based on recorded expenditure to date on interventions
identified as PBAs. However, bilateral expenditure figures which
are used to calculate efficiency gains are likely to change as
these are forecast figures until final outturns become available.
(Note: Our estimated spend to date in 2006-07 is provisional and
should only be used for internal Government purposes. It cannot
be published due to National Statistics Protocols.)
Procurement
11. Procurement figures will not change. Reported figures
are total procurement expenditure and savings made through post-contract
negotiations in each quarter and will not be amended once the
quarter is over.
Administration costs
12. Administration expenditure figures may change. They
are based on expenditure figures from DFID's financial systems
or forecast figures until final outturns are available.
Portfolio quality
13. The percentage of our portfolio that is scored as
successful will not change once reported. However forecast and
outturn efficiency savings are likely to change as the percentage
of successful projects is applied to annual bilateral spend figures.
These figures are reported as forecasts until final outturns are
available.
IDA
14. IDA expenditure is made up of various components
with different levels of data maturity. (1) All the Africa Catalytic
Growth Fund figures will not change. (2) All the core and contingent
IDA 14 figures will not change. (3) The debt relief figures for
2006-07 and 2007-08 will not change. (4) All the Education Fast
Track Initiative figures may change. This means that, in quarter
4, a reported £57.1 million of efficiency gains under IDA
will not change but that the further forecasted £5 million
may change.
EC aid
15. EC aid figures for the first three quarters of each
year will not change because we do not report efficiency gains
in these quarters. The final quarter is a forecast figure until
outturns are available. The final outturn figure is supplied by
the OECD and is dependent upon exchange rates so is likely to
change from the forecast.
16. Data for 2005 have now been cleared by the DAC. Figures
for 2005-06 have therefore changed since our last report but now
will not change. The share of allocated EC ODA going to low income
countries was 56% in 2005. This is up from 55% in 2004.
17. Figures for 2006-07 and 2007-08 are likely to change.
Headcount
18. Data on staff numbers provided at the end of each
quarter will not change.
IV. QUALITY MEASURES
19. A narrative on quality measures was provided in quarter
1, 2006-07, for our administration and procurement targets. In
quarter 2, we added quality measures on our portfolio quality
target in line with our continued success against this measure.
In quarter 3, we added quality measures on our EC aid target.
We now have quality measures for all targets except IDA. We will
add an IDA target for our next report—end of quarter 1,
2007-08. We also continue to check the document for updates each
quarter.
V. DATA SYSTEMS
ASSURANCE
20. A narrative on data systems assurance was provided
in quarter 1 2006-07, and slight changes were made to the headcount
section in quarter 2. In quarter 3, we added a paragraph on the
anticipated impact of ARIES for each target. We will continue
to check the document for updates each quarter.
VI. RISK LOG
21. We have produced a risk log for the efficiency programme.
Please see annex C. We will review and manage this on a quarterly
basis.
VII. REVIEW OF
DFID'S QUALITY
ASSURANCE SYSTEMS
22. In 2006-07, DFID-FCPD commissioned an independent
review of the accuracy and consistency of scores over the last
three years. The review was able to validate the accuracy and
consistency of scores on project and programme performance. The
review has identified a number of areas where improvements can
be taken forward and these will be addressed as part of current
work to improve our quality assurance processes.
VIII. PBA CALCULATION CHANGE
23. We discovered that PBA efficiency gains were calculated
on the basis of cash increases, not proportionate increases of
PBAs as a percentage of total bilateral spend. This meant that,
even though the target is predicated on an increase from 39%-53%
of our bilateral programme being spent through PBAs, a reduction
to 38% had produced efficiency gains due to our increased bilateral
budget.
24. We have therefore re-visited calculations for this
target so that they calculate the gain on a proportionate basis.
Using these new calculations, we do not believe we will achieve
the target efficiency gains even if we achieve a 53% spend on
PBAs. A 53% PBA spend would generate £61.5 million of efficiencies,
whereas our target is £111 million. Nevertheless, we believe
it is appropriate to correct the calculations, and we are confident
that any shortfall on the PBA target will be compensated for by
exceeding our portfolio quality target.
26 April 2007
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