Memorandum submitted by ActionAid UK

 

24 June 2008

 

Introduction

 

1. ActionAid International is an international NGO working in over 40 countries worldwide, including the UK. While this submission has been put together by ActionAid UK staff, our positions and recommendations reflect the experiences of our staff and partners in Africa, Asia, and Latin America.

 

2. ActionAid welcomes this opportunity to discuss the 2008 DFID Annual Report and DFID's performance and priorities. The Annual Report shows that DFID has made progress in the effectiveness of its development aid. However, there is no time for complacency. Improvement and further efforts are required particularly in the following areas:

· Not diverting the focus of aid from poverty reduction and ensuring policy coherence among UK departments in development cooperation

· Reforming DFID's Technical Assistance Programme, including implementing the 2001 agreement on fully untying UK aid

· Improving transparency in aid processes and strengthening independent monitoring and evaluation mechanisms

· Providing funds from the Environmental Transformation Fund as grants not as loans, and ensuring that funds for tackling climate change are additional to existing aid budgets

· Ensuring the implementation of the Gender Equality Action Plan and mainstreaming gender equality all over its work particularly on its four priority themes

 

UK aid quality

 

Broadening the objectives and purpose of UK aid

3. There has been widespread concern among UK civil society organisations about perceived broadening of the objectives and purposes of aid. The expansion of the 'Conflict Prevention Pool' and the creation of an 'Aid Stabilisation Fund' (a joint DFID, FCO and MoD Fund which counts as Official Development Aid) raises concerns that security and foreign policy objectives may be playing a greater role in directing UK aid spending. Different government departments' aid budgets must be spent coherently with the aim of poverty reduction.

 

Question:

· How does DFID ensure the policy coherence and poverty focus of official aid spent by other departments?

 

Reform of Technical Assistance and implementing the untying of all UK aid

4. In 2006, the IDC made a number of recommendations to DFID on the subject of Technical Assistance (TA, aid money spent on consultants, training and research), including requests for DFID to both carry out a full analysis of the effectiveness of its TA. In 2007, DFID promised to do a review of its 2006

note "How to provide Technical Cooperation Personnel" assessing whether the How to note is sufficient to meet DFID's commitments in the 2006 White Paper. However, DFID has repeatedly delayed the review and the process has still not started. The 2008 Annual Report does not mention either the quantity or quality of DFID's TA programme even though TA still accounts for at least 20% of DFID's bilateral aid budget.

 

5. The 2008 Annual Report reconfirms that UK aid is still tied in practice. In FY 2007/08, 82% of DFID's business was awarded to UK contractors.[1] This suggests that the market is still highly uncompetitive and therefore may not be delivering value for money or offering recipients the best possible choice of options.

 

6. In 2006, DFID promised to do an evaluation of its procurement practices including a review of other donors' practices and experiences of fully untying their aid. However, this has not been done. Instead they conducted a minor review focusing on barriers faced by national/local consultants in South Africa, Bangladesh, India and Nigeria when bidding for UK contracts. This review shows that national/ local consultants often do not have the capacity to bid for big contracts and have not enough access to information on upcoming contracts and feel that big international and UK consultancies are preferred. However, this evaluation has left out more pressing questions, particularly on cost efficiency. For example, no attempt has been made to benchmark DFID Technical Assistance costs against those of similar suppliers. The question of cost efficiency of DFID's aid programs particularly in the area of Technical Assistance becomes even more pressing under the current trend to minimize staff within DFID and tender big aid packages to consultancies.

 

Questions:

· What steps has DFID taken to reform its Technical Assistance Programme to make it more demand-driven and country-led?

· When will its long-promised review be completed, and what plans does DFID have to report to Parliament on this?

· Will DFID conduct a benchmarking exercise, comparing the price it pays for Technical Assistance to other agencies?

 

Improving Transparency and Independent Monitoring Mechanisms

7. Transparency is a prerequisite for strengthening ownership and accountability and improving the effectiveness of aid. DFID's Annual Report is a first step towards more transparency; however DFID's record in communicating its policies, activities and impacts to recipient governments, parliaments, civil society and citizens is very poor. The 2008 Annual Report for instance does not include important data on the quantity, recipients and types of Technical Assistance provided. DFID could turn its current position as transparency laggard into genuine leadership by adopting a comprehensive transparency policy, including:

a. Automatic disclosure of all documents including regional and country strategies as well as monitoring and evaluation reports

b. Proactively making key information about aid processes available and accessible to parliaments and other stakeholders. This information should include disbursement tables, conditions attached to aid and priorities and criteria for allocation of aid.

 

8. Another key challenge ahead is to make DFID's decision-making more transparent. For example, the criteria upon which budget support (and other aid) will be disbursed or withdrawn from particular countries should be clear and transparent to recipient governments, parliaments and civil society.

 

9. In December 2007, DFID established an Independent Advisory Committee on Development Impact (IACDI) as a monitoring body of UK aid effectiveness. However, its independence is questionable as the members have been chosen by and report to the Secretary of State, and the work of the Committee will be supported by DFID staff from the in-house evaluation department. Reporting procedures to parliament are weak. While the Annual Report highlights the importance of impact based monitoring and evaluation mechanisms, there is no mention of further including parliaments, Southern governments, CSOs or other stakeholders in these processes.

 

Questions:

· Will DFID adopt a policy of automatic disclosure of documents with a strictly limited regime of exceptions?

· Will DFID proactively disseminate timely information on aid disbursement tables and allocation priorities as well as on decision making processes to parliaments, governments and citizens?

· How does DFID ensure that recipient governments as well as parliaments, civil society and other stakeholders are included in monitoring and evaluation processes?

 

 

Climate Investment Funds / UK 'Environmental Transformation Fund - International Window' (ETF-IW)

 

Grants not loans

10. ActionAid believes that the UK ETF-IW should be spent as grants not loans. Otherwise poor countries will end up paying twice for climate change: once through the damage done to them, largely by rich countries' emissions, and then again by having to repay the interest on loans.

 

11. DFID has argued that the Bali Action Plan mandates the use of loans yet all it actually says is that loans are one option for 'consideration'.[2] The real reason is that Treasury rules governing the use of ETF-IW money mean that the funding has to be spent as loans - and this is a political decision that could be changed if there was sufficient political will to do so.

 

Question:

· Does the UK Government still believe that debt cancellation can play a positive role in reducing global poverty? If so - why is it persisting with a plan that will increase the debt burden of several of the poorest countries in the world?

 

 

Additionality and innovative financing

12. The ETF-IW also fails the additionality test (additional to the existing 0.7 by 2013 commitment) set by Douglas Alexander in his speech of 14 April 2008:

"But we cannot spread existing aid resources even thinner as this would risk the achievement of the MDGs. It is a key principle for the UK that financing for climate change should support not detract from our efforts to achieve the MDGs."

 

13. The UK must lead by example - even if the funds are a temporary, bridging measure before a new international agreement comes into force in 2012 - and not count climate change funding towards the 0.7% target. In practice this is a 'trajectory test' - does the ETF money - £800 million over 3 years - take the UK ahead of where they should expect to be in 2008-2011 (the initial lifespan of the ETF)? The UK should reach 0.43% for 2008/09 so will including the ETF money take the UK to 0.6% (for example)? If so, it is fair to say it's additional. But if the ETF money helps the UK to reach 0.43% and not go beyond it then it's not.

 

14. The Bali Action Plan mandates countries to investigate "innovative means of funding to assist developing countries" such as taxes on polluting activities such as aviation. The Leading Group on Solidarity Levies is currently investigating innovative sources of finance for development but is not explicitly looking at climate change adaptation. Since the UK is a member of the Leading Group they could encourage it to investigate this area as a contribution to the Bali Action Plan.

 

Question:

· Will the ETF-IW money take the UK beyond its expected target of 0.43% for 2008/09?

· What work is DFID doing to investigate innovative sources of funding for climate change adaptation and therefore to help fulfil this part of the Bali Action Plan?

 

 

Gender

 

Implementation of DFID's Gender Equality Action Plan

15. As noted in ActionAid's recent report, Hit or Miss: Women's Rights and the Millennium Development Goals, insufficient action on women's rights is a key barrier to achieving all of the Millennium Development Goals.[3]

 

16. Last year, evidence from ActionAid, Oxfam and the Gender and Development Network expressed concern that not enough was being done to ensure the effective implementation of the Gender Equality Action Plan, which was launched in April 2007. On the basis of this evidence, the IDC commented in its report:

"We do not doubt DFID's commitment to gender equality but translating this from policy to practical implementation at every level is a complex task. We are not convinced that DFID yet has the measures in place to achieve this but, as the Secretary of State has acknowledged, the Millennium Development Goals cannot be achieved without progress on gender equality."[4]

 

17. DFID is currently conducting a review of the Gender Equality Action Plan, which at the time of writing was not yet available. We would encourage the Committee to request a copy of this review to feed into this year's enquiry on DFID's annual report to assess whether adequate progress has been made.

 

18. Drawing on DFID's annual report, ActionAid's analysis is that although there has been progress, gender equality is still not well integrated into DFID's work across the board, particularly on DFID's four thematic priorities Growth, Peace and Security, Climate Change and Reform and strengthening of international and regional institutions. DFID's approach to gender equality is to mainstream it across all the work of the department. However, it is questionable how successful DFID has been in achieving the step change that is needed to address gender equality adequately across all its work.

 

19. While we support the system of having high level gender champions, the team that drives work on gender equality, the Equity and Rights team, must be much better resourced. Currently there are the equivalent of 1 1/2 full-time staff devoted to gender equality. Although the Social Development Advisers have expertise on gender equality, it is only one of many priorities for them. Experience from DFID and many other international organisations, including ActionAid shows that gender equality is rarely effectively mainstreamed without significant devoted capacity and expertise to drive it forward.

 

20. Last year, DFID commissioned a review of its learning needs on gender issues led by One World Action. The review is not in the public domain and this work is not mentioned in the section of the report on 'Building an Effective Organisation'. We would encourage the Committee to request a copy of the review and information from DFID about how the recommendations are being implemented.

 

21. ActionAid welcomes the integration of gender equality, sexual and reproductive health and violence against women in DFID's HIV and AIDS strategy. This marks a welcome step toward placing the needs of women and girls at the heart of the HIV and AIDS response. The challenge now lies in implementing this strategy effectively, which in turn requires clear, tangible milestones and indicators with which to monitor and evaluate progress.

 

Questions:

· How does DFID plan to step up efforts to mainstream gender equality across all its work, particularly on its four priority themes?

· How is DFID planning to implement the recommendations of the learning review and address the under-resourcing of gender equality work?

· What work is DFID doing to ensure HIV/AIDS data is disaggregated by gender?

 

 

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[1] 2008 DFID Annual Report, p. 89

[2] Decision 1/CP.13: Bali Action Plan, paragraph 1(e)(i),: http://unfccc.int/resource/docs/2007/cop13/eng/06a01.pdf#page=3

[3] See http://www.actionaid.org.uk/doc_lib/aamdg.pdf

[4] See http://www.publications.parliament.uk/pa/cm200708/cmselect/cmintdev/64/6407.htm