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CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 511-iii House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE INTERNATIONAL DEVELOPMENT COMMITTEE
TUEsday 23 June 2009 MR RICHARD SHAW and MR GEOFFREY PAYNE MR DAVID SATTERTHWAITE and MR LARRY ENGLISH Evidence heard in Public Questions 98 - 166
USE OF THE TRANSCRIPT
Oral Evidence Taken before the International Development Committee on Tuesday 23 June 2009 Members present Malcolm Bruce, in the Chair John Battle Hugh Bayley Richard Burden Mr Virendra Sharma Mr Marsha Singh Andrew Stunell ________________ Memorandum submitted by UK Local Government Alliance for International Development
Examination of Witnesses Witnesses: Mr Geoffrey Payne, Geoffrey Payne & Associates, Consultants, and Mr Richard Shaw, Chair, UK Local Government Alliance for International Development, gave evidence. Q98 Chairman: Good morning. I would like you to identify yourselves for the record and then we can start with the evidence session. Mr Shaw: I am Richard Shaw. I am the Chairman of the UK Local Government Alliance for International Development. The Alliance brings together a number of local government partners and they include the Commonwealth Local Government Forum, the Improvement and Development Agency, the Local Government Association, the National Association of Local Councils and the Society of Local Authority Chief Executives. Mr Payne: I am Geoffrey Payne. I run a small consultancy working on urban development issues in developing countries. I have been doing teaching, training, consultancy and research throughout that period, much of it funded by DFID and its predecessor ODA.[1] Q99 Chairman: Thank you very much. Welcome to both of you and thank you for coming in. As you appreciate, we are getting to grips with the whole issue of urbanisation and urban poverty and how you tackle what is a fast-growing issue. We visited Lagos last week, where there is a dispute about what the population of Lagos is. The census said nine million, most people assumed that the actual figure was between 18 million and 19 million, and the projection was that it would be between 26 million within a few years time. That makes the targets of reducing slum dwellers by 100 million a little easy to achieve but not meaning very much, if the numbers are rising so fast. I suppose that raises the question of how you slow the development of slums, which seem to be exploding, and how you improve the lives of the people living there. What are the main issues? Is it money? Is it how quickly you respond? Is it how quickly you coordinate things? Mr Payne: In my experience, you need a twin-track approach. First of all, you need to improve far more than the 100 million that the Millennium Development Goal (MDG) target stipulates. We need to be increasing that tenfold effectively, but at the same time we need measures that will increase the development of land for urban development in ways which help all those stakeholders concerned: the farmers, the agricultural landholders, the developers who need to make a reasonable profit, but, also, the planning authorities who need to manage and control the process. I think the idea of controlling growth is not appropriate. It is a question of managing and regulating it but, first of all, accepting that it is inevitable. I was speaking to the Permanent Secretary in one country recently who said, "The problem is that if we help the poor by increasing access to land, housing and services, we will only attract more migrants," so there is almost an anti-urban bias in some countries which is sadly reflected to some extent in the donor community. There is a reluctance of donors, not just in the UK but internationally, to withdraw or to reduce a low level of urban funding in the first place, and I think that needs to change. Q100 Chairman: There is a UN body, UN-Habitat, which is supposed to be addressing this. Of course it is a relatively small body. Is it up to the job? I do not say that necessarily in a qualitative sense, but does it have the resources, does it have the commitment, or do we need something else? Just using the Lagos example, there seems to be a general recognition that the people are going to arrive and there is no plan as to how to deal with it. How do we bring the agencies together? Mr Shaw: If there is to be a coordinated strategy for tackling urbanisation issues, then we need to look at the resources of that and how it is going to be planned. I think the resources going into urbanisation at the moment from donor communities are probably not sufficient for the job. My view of UN-Habitat would be that what it is doing is very good but it is relatively small scale and there needs to be a broader, more coordinated approach. In terms of your first question, I would say a couple of things. First, on the target of 100 million slum dwellers' lives being improved-as you have pointed out, we have one billion slum dwellers now, so that is only tackling one-tenth, and the population of slum dwellers is forecast to virtually double in 20 years or so, so we are talking about one-fifth of the future population, and so it is relatively marginal. Some of the MDG targets are perhaps lacking a bit in ambition and focusing more sometimes on inputs or potentially outputs, but rarely on outcomes. I think looking afresh at some of the targets might be a good starting point. In terms of what we might do to slow down the growth of slums and improve the lives of slum dwellers, I think urban planning is at the heart of that. Having local urban development plans with local organisations that have the capacity and the capability to do that strategic planning has to be a starting point. Chairman: We will come back to that. Q101 John Battle: SIDA, Sweden's development agency, have dedicated sections to do with urban development issues and DFID does not have that. Is that a problem? How might DFID organise itself better. Should it have a dedicated staff, dedicated and focused on urban poverty? Mr Payne: Certainly SIDA has recently lost its own urban division. From being one of the leading agencies ---- Q102 John Battle: It has gone backwards. Mr Payne: It has gone backwards, as has DFID. I am sure you are aware of the document Meeting the Challenge of Urban Poverty, to which several of us contributed. It was produced by DFID in 2001. I was unable to get that when I contacted DFID publications recently. They seem to have lost a lot of the information which they have produced. I do sometimes think they suffer from institutional Alzheimer's. DFID has produced a number of extremely effective programmes and products and policies. DFID was the leading agency, it has withdrawn. SIDA has, sadly, gone the same way. In terms of improvement, DFID is doing some extremely good things and those need to be built on. There is a project in Bihar, for example, the poorest and most corrupt state by general acknowledgement in India, where a new Chief Minister is being supported by £50 million, a six-year programme of DFID funding, to improve urban governance, land administration policy and public sector capability and management. This can have measurable outcomes for a given set of investment which can be managed effectively with international and local support. That is very much the sort of example on which DFID might do well to expand. Q103 John Battle: Here in London, at the centre, should they reorganise the organisation? Mr Payne: One of the problems is that the role of policy advisers in DFID has been dramatically reduced in recent re-organisations. They no longer have budgets. There is therefore no reason why anybody should listen to them. The PRSP[2] way of allocating funding seems to me to raise a number of serious concerns. I would not say that I have any evidence to reject them but it does mean that money is being given to governments, effectively, on the basis of an agreed policy. That policy may or may not be agreed, subject to international standards, because of the local staffing, and I do wonder what the regulatory management and administration of these programmes is. In other words, if DFID is party to an agreement that is not working, on what basis is it going to blow the whistle or revise that policy? I think a review of PRSPs would be very justified, and I think the role of policy advisers should be perhaps strengthened. Mr Shaw: The Committee is probably aware that DFID for some time has been under administrative financial constraints and it is having to make the same sorts of administration savings as other departments despite the fact that its budget is rising (unlike in most other departments), so it is getting squeezed by having more money to spend but fewer people to spend it currently. I think that does put quite substantial constraints on its ability to take on board new priorities and it is having to take some tough decisions about how to prioritise. That is where it is. Nevertheless, I would say that urbanisation, the pace of urbanisation is emerging as such an important issue that it would be surprising if DFID did not develop at least a strategy towards that. As for its organisational structure, I think I would leave that to DFID to sort out, but it ought to have a stance on this. I think there is a legitimate question to ask as to whether DFID should be the lead body internationally on an issue such as urbanisation or whether it should be supporting and looking to other people to take the lead. Chairman: We are going to develop that. Q104 Andrew Stunell: There needs to be a coordinated UK Government approach to urbanisation issues and obviously DFID's relationship with other departments like DCLG[3] is important, particularly with the World Urban Forum and so on. Could you say something about how you think that relationship is working and how you think it should work in order to get the most bang from our buck for this cooperation? Mr Payne: I think DFID has made significant strides in the last two or three years to reach out to a number of other government departments and it has now built quite productive working relations with the likes of Foreign Office, Ministry of Defence, DECC[4] on climate change, and Business & Enterprise. I am not really aware, but this might be my failing, of the same investment of time and effort in building relationships with CLG which might help it develop strategies for developing local government capacity overseas and urbanisation strategies - but I may be wrong about that. Q105 Andrew Stunell: You are in a good place to know whether it was right or not. What would be desirable? What would you want to see that would make a difference? Mr Payne: I would like to see the issue of urbanisation on the table. I would like to see DFID recognising explicitly, strategically, that local government overseas and, indeed, in this country have a lot to contribute to the MDGs and to see them sitting down to discuss how we can make the most of that relationship. Q106 Andrew Stunell: There seem to be all sorts of ad hoc arrangements between individual, local authorities and other cities overseas and sometimes countries overseas. How far do you think DCLG should be getting involved in that and what is the role of DFID in sponsoring that.? Mr Payne: I think local government here responds to signals from central government, and if central government says, "Please focus on this issue," local government tends to do that to the exclusion of focusing on other issues. Local government in this country has not had, in my experience, the encouragement or the incentivisation to look at developing relations overseas or contributing its expertise or contributing to city management. We have quite a lot of expertise in this country. I would have thought that relationship could be better exploited, but it needs a national framework in which central government addresses local government here and says, "We want to draw on your expertise, we want to have that dialogue with you." Q107 Andrew Stunell: Should DCLG be the pivot for that or DFID? Mr Payne: They both should - together. I think DFID would have to work through DCLG to reach out to local government here. Q108 Richard Burden: I would like to ask you about land titling and how important you think that is. Hernando de Soto, amongst others, posited a while ago that it could be really important in terms of allowing poor people to get more control of their lives through the release of capital and so on. Mr Payne, you have indicated that it may not be quite as useful as that. How important do you think it is? Mr Payne: I did write a paper for the Cabinet Office some five or six years ago on this, following an approach by a group seeking UK support. I think the situation since then has enabled us to say with confidence, based on empirical research in which I and others have been involved, that it should be one among a number of policy options. The problem is that whilst the advocates of land titling have made a very effective case, it lacked any empirical foundation whatsoever. It is an argument made on a number of assumptions. Where those assumptions apply, of course land titling can have benefit. But there are a number of disbenefits, particularly where there are large numbers of tenants, so of course the land prices go up and even the land-owning beneficiaries of titles do not receive the maximum benefits because they get taken over by others who know how the market works more effectively. I think the whole approach was based on the experience in Peru, where the large cities are surrounded by government-owned desert and therefore it is relatively easy to allocate and give a piece of paper. The danger is that the approach only really needs a photocopying machine. You photocopy the titles, you allocate the titles, and government can then walk away and say, "It's now your responsibility to lift yourselves out of poverty." The problem is that titles do not give access to credit in developing countries because the banking system is more responsible and more conservative than it is in the US and the UK. In many cases we found people saying, "My house is too low standard, therefore the bank won't give me a loan," or "I'm too poor to get a loan." The benefits of land titling are insignificant relative to the claims being made. That is not to say that land titling should not be an option among others for improving, but I do find, interestingly, that the countries which have most likely gone into a land titling approach are those which are sympathetic to the needs of the poor in the first place and where insecurity of tenure is not an issue. The countries where it is most needed are those where forced evictions or market displacements are most common, and that is where they are least likely to be implemented. Q109 Richard Burden: Given that, as you say, land titling is not the silver bullet but may have a role in some places, DFID says it is considering support for some kind of pilot programme in Punjab to strengthen tenancy rights. Is that the kind of thing that DFID should be doing? Should it be doing more? Should it be doing different things in that area? Mr Payne: I do not know if the programme in the Punjab is an urban or a rural base, but certainly improving tenancy rights or improving property rights, and working on those things which are effective in a local context, building on what has social legitimacy, which is administratively effective in a given context, is, I would suggest, most useful as a policy approach. Whether the particular policy in the Punjab is similar to that, I am afraid I do not know, but if it is a rural programme then titling is an easier thing to implement by and large. It is in the urban and peri-urban areas that it becomes very complicated and where potential conflicts over interested claimants may be much greater. Q110 Richard Burden: On the specific issue of women's access to land and property, there are obviously particular challenges and problems there. Do you think there are things that DFID or, indeed, other donors could be doing to try to help women secure better access to land rights than is there at the moment? How could you in a lot of developing countries extend, let us say within the limits and context you are saying, access to land rights without perhaps simultaneously building in discrimination against women that is there in the first place? Mr Payne: Certainly the needs of women are considerable in terms of rights in many respects, and land is a critical one. I think that is one of the benefits of land titling, to be fair. It is often the case that land titling programmes have improved the rights of women by stating them as joint beneficiaries, but of course that is not the only means by which you can do that. I do see in the Bihar programme, which is a major state-wide programme, that that is making gender issues central to all aspects of urban governance - not just land access, but credit, services, education, health and so on. It is a cross-cutting issue, obviously; it is not just one aspect of policy. But I do think that one can tackle these things on particular programmes, as well as in a broad DFID statement of conditionality or PRSP programmes. Q111 John Battle: Perhaps I could ask you about local government and recommendations to local government and whether they have to do more to assist in management. Could there be actions that government could take nationally here to strengthen the local governments' work? I am thinking perhaps of some exchanges. Given that I am worried about the constraints on local government funding here, how could we fund officials of local government perhaps to go to other countries, to urban settings, to work and look at new urban planning issues, urban management issues, and perhaps urban budgeting issues, where there could be some mutual benefit? Mr Shaw: For me the starting point is that the objective should be to strengthen local government's capacity overseas. That is where it is required. Q112 John Battle: When you say overseas, do you mean local government in other countries, or do you mean the capacity of local government in Britain to go overseas? Mr Shaw: Both, if I may. We must be clear, the starting point should be strengthening local government capacity in developing countries to sort their own problems, to do the urban planning that we have been talking about and so on. That is where the sustainable solutions will be found. I do think that as part of that - and it is not a panacea at all, but a part of that - there could well be benefit in drawing on the skills and talents of UK local government. A number of other countries do that. I think we have given the Committee examples from Canada, Norway, Belgium, Sweden. Germany has just recently explicitly acknowledged the contribution that its local government could make. I think we could draw on that. Organisations like VSO have been working for 40 years on the same principle and there are benefits both ways. It is a two-way benefit. Q113 John Battle: Your recommendations are to DFID and perhaps how DFID could help strengthen local government overseas in the context of the poor. I am thinking that the expertise they should draw on should be local government here, but I do not see us top-slicing an element of Leeds City Council's budget to say, "As well as a little bit of twinning, can you now start working in Lagos." Mr Shaw: In many developing countries there are local government associations there too. That is where we need to start plugging in as a country. DFID need to spearhead this, and on behalf of the UK they need to spearhead it. They have country offices that are plugged into local areas. Q114 John Battle: How could they spearhead it in a cost-effective way? What do you see DFID focusing on to do that? Would it be to make suggestions to local government in a developing country context or would it be to get resources from local government here to supplement their work? How would you see it working in practice? In the long list you would send to DFID, what should they be doing to co‑ordinate it in the first place? Mr Shaw: If DFID were minded as part of a strategic approach to urbanisation and local government capacity building overseas, to have a dialogue with UK local government about how that would best be done, we would wish to have that dialogue. I suspect we would want a policy framework. There may need to be some encouragement and incentivisation, and these things do not just happen on a whim. They need to be planned quite carefully too or they can go wrong, and you can get the wrong people going to the wrong places. I would have thought a programme of that nature may well contribute. Q115 Chairman: There are some examples of those kinds of exchanges that have taken place. Mr Shaw: Yes, there are. Q116 Chairman: Richard Kemp[5] personally lobbied me about this and said, "We've got expertise and there are some programmes." I wonder if you could give us an indication of specific programmes. There has been mention of Warwickshire Council sending programmes on waste, health and staff development to Sierra Leone. That was an example that we were given, but maybe there are others. How do they work? Has that been entirely done within local government's resources, from local government funds and without any central government aid? After all, local government is under pressure too. How does it work at the moment and how could it expand if DFID decided there was a role for it? How much could you respond in reality if you were given the challenge? Mr Shaw: At the moment I think I am probably right in saying that Warwickshire, Leicester and so on, which have taken these initiatives, have done so effectively at their own initiative. I do not think they have had external support, unless they have been able to find it from some source on an ad hoc basis. They have done so because they wanted to and because they saw benefit in it. I think it is fair to say that local government is not encouraged across the board to think in those terms. What I think we would need is central government to approach local government and say, "We would like you to think about contributing your expertise and your resources." We do have in the local government family an organisation called the Improvement and Development Agency, which for quite a number of years has been promoting good practice within local government administration, both politically and managerially. I think that is a model that could be applied internationally. We could also look at how successful some of these schemes from other countries are, in Norway, Canada, Sweden and so on, which have been running with central government support and encouragement. Q117 Chairman: My understanding is the LGA are seeking a meeting with the Secretary of State to discuss this. Presumably they would be able to give an indication of how these particular programmes have worked as a case study and say, "We could do more of this with DFID support." That is the kind of approach you are looking for, I suppose. Mr Shaw: Yes, that is right. Q118 Chairman: I think we would be interested in that. Given that DFID is under pressure and you have resources, if there is a way of doing that it is of interest. Mr Shaw: Yes. Q119 John Battle: Also giving a new dimension to the work of local government. New localism might be new localism with global and local at the same time, so the internationalism of the local experience, and it could well be mutual. Mr Shaw: Yes. The Commonwealth Local Government Forum had its annual conference, last month I think, and endorsed the Alliance's submission to DFID for its White Paper which made similar points to our submission to this Committee. Q120 Chairman: Have you had any response from DFID at this stage? Mr Shaw: No, it is going into the mix for the White Paper. Q121 Chairman: It is timely. Mr Shaw: It is timely. We are aware of demand from developing countries for this kind of expertise sharing. I do not know if the Committee is aware of the report that Nigel Crisp, Lord Crisp, wrote in 2007, I think on behalf of the Prime Minister at the time, called Global Health Partnerships. He was looking at health issues and he toured about 17 health ministries in Africa and found a very strong desire for expertise exchange. There is strong demand there and I think the benefits of it could be two-way. Q122 Chairman: That is very helpful. Mr Payne: One of the key issues in my experience is the issue of governance. The UK does have considerable experience in innovative ways of bringing the private sector into development in ways which have a public benefit. It is not always successful, of course, but it is innovative. It has achieved major benefits socially in deprived areas. I think that experience is something which would be certainly exported, on a twinning basis, perhaps, on certain DFID projects. The issues, in my experience, are not those of policy ignorance or policy constraints. All the innovative ideas, on land, on services, on finance and so on, are already in the public domain. The World Urban Forums, the World Bank Research Symposia, the UN-Habitat agendas, Google and so on, all the academic literature shows that everything that we need to do is in the public domain. There is no excuse for ignorance. The real constraint, it seems to me, is that on governance - whether it is the political, economy aspects and so on, the ability to do something with it. I think the UK does have a major contribution to make in terms of our experience of managing urban areas, and certainly in terms of exchange, I do see there is a massive amount of interest among young professionals in the UK. I have personal experience in the UK and Europe where young professionals are very, very keen to do something. I was very interested to hear the US Government is talking about national service for all 18 year olds. One American student said, "It will help take us out of our bubble" - which I think is interesting. The scope for that sort of innovation across the board is considerable. Q123 Chairman: We get regular submissions from the Institution of Civil Engineers across the road who would be very keen to offer their assistance. Mr Shaw: Yes. Mr Payne: Yes. Q124 John Battle: Governance is sometimes interpreted as telling other people how to do democracy, and we might have to learn a bit more about doing that well ourselves. To take a practical example, something like waste management - and the Daily Mail are campaigning against green wheelie bins at the moment, so we do not quite have that right, but we do have some good ideas - waste tips in slums is the big issue. Waste management and the environment could be a joint project from which we could learn mutually and develop some new methodology. Mr Payne: Exactly. I would not want to give the impression that it is a one-way traffic of paternalistic advice. I think it is a two-way experience. We could also learn from developing countries. Chairman: We had a specific short discussion in Kano, on our visit to Northern Nigeria, about waste to energy. They have a severe energy shortage - the lights go out about every five minutes - and they have a massive waste problem. We were saying that maybe they could put these two things together. Q125 Andrew Stunell: Urban areas are places where social and cultural constraints are relaxed, and if you have poverty it is worse. Crime and disorder is a major problem in many of these areas. Do you think there is scope for DFID to co-operate with other government departments in the UK to take some elements of what we have learned in this country to such communities? Mr Shaw: Yes, I do. I think that is another area, akin to waste management and so on, where we have been wrestling with this for quite some time. I think the enlightened approaches to community safety in this country are often where local authorities help to bring partners together and bring communities together, and you build community cohesion essentially. Certainly it is not just about cracking down on crime; it is much more than that. We have some good expertise in this country of where that has been done with local authorities, police, voluntary groups working together to build community safety. One of the case studies - and I am not sure whether we shared this with you or not - is Leeds City Council. Q126 John Battle: That is my neighbourhood. Mr Shaw: I understand it is working in South Africa. Q127 Andrew Stunell: I was just going to ask if you had any practical examples which are working now, but you got there ahead of me, so that is absolutely fine. Do you think there is a reasonable area for co-operation and development linking local government experience council to council, or should this be Home Office and DFID working together? What would you like our report to say about how those links should be strengthened? Mr Shaw: Again we are talking cross-departmental, are we not? This is an area that affects the Home Office, which has the lead on crime prevention, but it also affects CLG, which has the lead on local governance. I would expect a strategy as part of the wider approach to urbanisation to be developed, with those two departments working hand-in-glove with local government to develop it. Q128 Andrew Stunell: I suppose what I am working towards slowly is: is there a suite of policy solutions which we have and they do not have? What exactly do you see us transferring? What would be the vehicle for transferring it? Mr Shaw: I am sorry, I am not sure if I am quite answering the question in the way you are encouraging me to, but we do have good practice in developing local community safety solutions. One of the mechanisms of the IDeA, the Improvement and Development Agency which I mentioned earlier, is a Beacon Council Scheme and that draws attention to a small number of authorities that have excelled in a particular area. One of its beacon categories is community safety, and there are a number of authorities that have particularly good experience in community safety. We are talking here about the potential matching of really good expertise where it exists. There are 407 local authorities in this country and they are not all the same and they are not all good at the same things, but where that expertise does exist, I think it can be matched. It needs to be matched carefully; it needs to be matched within a managed programme. Q129 Chairman: One of the things that has been made clear to us in the course of this evidence is that a lot of the expansion of people living in urban slums or poor urban areas is not driven by immigration but by population growth within those communities. Is there or should there be a strategy, given that it is running away from us? Should we be more rigorous in some kind of promotion of trying to keep the natural growth of the population within parameters, or is that a lost cause? Mr Payne: The old story is that the best contraceptive is development. Q130 Chairman: Yes, I think we do accept that, but does that mean that is it? Or do you think you have to try to encourage people to it? Mr Payne: If people are given better access to clean water, to education, especially for girls, and women's rights are enhanced, that in itself helps to reduce fertility levels. But it does need to be balanced with economic growth. A lot can be done without necessarily changing the whole structure of government policy. For example, in one city I know, the amount of empty government-owned land within an urban area is sufficient to accommodate all planned growth or anticipated growth for the area. I am talking of a large city. Q131 Chairman: In that case, I will now turn to Mr Shaw. Within that context, it seems that is partly urban planning, but what about the clean water and the sanitation? Is there a role there for local government in helping to ensure that happens as part of the process of easing the problem, inasmuch as you are improving the quality of advice but you are also taking the pressure from population growth that is offered? Mr Shaw: Yes. Local government in developing countries, if we can help strengthen its capacity, can develop better urban planning and that will lead to more sanitary conditions, and hopefully the better living conditions and improved life expectancy will help to alleviate the population growth. Coming back to your first question about population, I was in India during the Indira Ghandi emergency when some approaches to family planning were taken which set back the cause of family planning for a generation, so I think it is a very tricky, sensitive area, and we have to be very careful, but I certainly take your point that population growth is outstripping the gains that have been made in international development and often claims are made, for example, that such and such a proportion of the population has been lifted out of poverty. I was in a country recently where it was claimed that only 35% or so of the population were now living in poverty compared to over 40% a few years ago but in that time the population had almost doubled, so the absolute number of those in poverty had increased substantially. I do think there is a real issue there about population growth outstripping our gains. Mr Payne: I think there is considerable scope for improving the support to secondary cities in countries, to help them expand their economic and physical base so that they can absorb people more easily, give an alternative to the major conurbations, and plan in advance before situations do get bad. Q132 Chairman: I would like to thank you both very much. You have been concise in your answers and you have addressed directly the issues we are addressing. The Committee certainly is of the view that addressing urban poverty is of much higher priority than perhaps it has been given. There is a tendency for things to go in fashion. Ironically, at the other end of the scale agriculture was a focus, then it went off and now it is coming back. Urbanisation was a focus, and now it maybe needs to come back. I do not think we see local government as a resource to supplement DFID. DFID has access to money but it is short of people Mr Shaw: Yes. Q133 Chairman: That seems to me where there can be a connection that would be mutually beneficial, both to local government in the UK and to the development of good local government in developing countries. Without prejudging what the Committee might say, I think that is an area for us to move to some quite interesting recommendations. Mr Payne: Perhaps I could make one other comment which I think might help, and that is that I think DFID had until recently an innovative and successful research programme, not just on urban but on other related subjects, which has now been outsourced. There is a tendency for research budgets to be channelled more into a fewer number of large projects which I think has been very disappointing to the research community. Q134 Chairman: I take that not as a special pleading but as an observation. Mr Payne: Yes. It is something I personally would benefit from in the long run, but I do see the younger generation of professionals not getting the chances that I had when I was starting, and so I say that on their behalf, not my own. Chairman: That is a good point to note and we will take note. Our advisers have written that down. Thank you both very much. Memoranda submitted by International Institute for Environment and Development and Homeless International
Examination of Witnesses Witnesses: Mr David Sattherthwaite, Senior Fellow, Human Settlements Group, International Institute for Environment and Development (IIED), and Mr Larry English, Chief Executive, Homeless International, gave evidence. Q135 Chairman: Thank you very much for coming in. Welcome, gentlemen. You were in the last session, so you have heard something of what we have been discussing. For the record, I would ask you to introduce yourselves. Mr Satterthwaite: I am David Satterthwaite. I am with the International Institute for Environment and Development. I also manage a grassroots fund which supports urban poor slum federations direct. Mr English: I am Larry English. I am the Chief Executive of Homeless International, which was set up by the social housing movement here in the UK. We work with organisations of the urban poor to enable them to generate sustainable solutions to short-term settlement. Q136 Chairman: Thank you. You have made your own submissions, for which we thank you. You are expressing some disappointment, I think, in DFID's lack of focus in this area. What do you think DFID's response ought to be, given that it used to have a team and it no longer does? Do you have a specific view as to what DFID should now be doing to respond to the increasing pressures of urban poverty and urbanisation? Mr English: I think urbanisation should have equal status to climate change. In an earlier submission someone made the point that urban is a context not a sector and I think that urban issues are multi-sectoral, require integrated approaches, not just within DFID itself but within DFID and the different sectors in the UK and internationally. That kind of consideration is a role that DFID can play. Mostly, the issue of urban development needs to be pushed higher up the agenda, not as a sector but as a context around which all these issues revolve. Mr Satterthwaite: I think each of the DFID country offices needs an urban expertise, and that expertise has been lost over time. DFID country offices have to learn to work with the urban poor direct and their own community organisations. In a sense urban poverty reduction is still seen as something we deliver for them. They have amazing capacities, the capacity to organise, to mobilise, to vote, to do things, to build, and we need much more support for their own capacities, so that aid is a dialogue and a mutual partnership, it is not a one-way street. Q137 Chairman: You have made a fairly radical statement, Mr English - and I am not disagreeing with it - that you want to put it on a par with climate change. Of course climate change has been pushed up the agenda and there is a climate change unit in DFID that has been expanded. Do you both think urban development requires a dedicated unit or is it something more organic than that. I take your point, Mr Satterthwaite, that you are saying it should be in country. Should there be something like, for example, the Conflict Prevention Pool, which brings together resources from the Foreign Office, Defence, and DFID? In this context it would also need local government, for example, and many other departments, so that, rather than just a DFID organisation, it would be a cross-government organisation. I have put in rather too many questions there, but it is really to try to get a feel as to what you think. If you were given a free hand, how would you organise DFID's approach to this issue? Mr English: My experience in South Africa was that when housing was prioritised as a political issue it achieved a status which was cross-cutting. In any local authority, in any city, housing ran across the different line functions and had a mandate to supersede and to prioritise housing issues. That is because, from the centre, it was made an important issue. I think the same thing can happen, but obviously not housing as a narrow function. It needs to be recognised as cross-cutting; it needs to be managed. You mentioned the idea of a unit and I think it needs that kind of oversight. It needs people who understand cities not as infrastructure purely or as local authorities, but people who understand that cities - and cities are unique wherever they are in the world - require co‑ordination. But it also needs authority. I think that should happen within DFID, but I also think, on the ideas presented about utilising local authority/local government association expertise and the third sector housing association expertise in this country, that those voices need to be at the table too. They also need to be included. Mr Satterthwaite: DFID has some very good urban specialists, but if there is no clear explicit policy they cannot bring their knowledge and their capacity to that. It is funny about climate change. I have been on the IPCC[6] for the last two assessments. What is the priority in urban areas to confront climate change? Good water, good sanitation, good drainage, good healthcare. The capacity of the poor not to live on flood plains and steep slopes. Dealing with climate change, at least in the next 20 years, is a good urban poverty reduction agenda. In a sense that is why you want urban poverty reduction to get up the agenda because that also is one of the main components for addressing climate change. Q138 Chairman: A passing observation is that most of Lagos is below sea level and it is going to have a population of 26 million in a few years time. It looks like a disaster waiting to happen. Mr Satterthwaite: Yes. Absolutely. Q139 John Battle: I was interested to listen to your comments about the capacities of people in poor neighbourhoods. My background before I came into the House was some experience in Latin America with dwellers in Sao Paolo and the whole urban question there. My information is a bit out of date. I served as foreign minister dealing with Latin America and South East Asia. That is where the fastest growing communities are and some of the pressure there, whether it is Jakarta again or Sao Paolo or, indeed, the African cities. I wonder whether DFID is in the right places. In your first response you referred to DFID's country offices, that they are not perhaps in the right places. Given the comments we have heard previously on the staffing restrictions within DFID, what scope is there for DFID to support urban development through other agencies? Are they in the right place for making the right connections? For example, should they increase their funding to UN-Habitat? How could they make more use of the research base that they have? Are they going in the right direction or would you re-direct them and say that the urban question is elsewhere from where they are going. As the Chairman said earlier, we spend a lot of time pushing them to refocus on agriculture again, rather than just building dams and engineering energy plants. What would be your response to that? Mr Satterthwaite: Some countries in Latin America and Asia have done a fantastic job on an urban poverty reduction agenda. Brazil certainly-both local government and national government has dramatically reduced urban poverty. Chile also. Mexico also. Thailand has one of the most effective urban poverty reduction programmes in the world. A lot of them have certain characteristics. A key role for national government, a key role for local government, a key role for civil society and those working together. I would like DFID to focus on the rapidly urbanising nations in Asia and Africa that do not have good national policy as of yet and to build that alliance between the representative organisations of the urban poor, local government and national government. There are some helpful signs in India. In India the national government for the first time is taking seriously the funding for urban poverty reduction. It is still the very technocratic, top-down, professionally-driven agenda, not working with the knowledge and expertise of their slum dwellers. Q140 John Battle: Are there lessons that could be learned from India and taken across to African policy by DFID? Is there expertise in the programmes that they have in India that could be taken across? Mr Satterthwaite: Yes, absolutely. The funny thing is that the slum dwellers in Africa have learned from the slum dwellers in India. There is this amazing exchange. Women's savings groups which formed originally from pavement dwellers in India have gone all around Africa teaching slum dwellers how to save and how to give loans and how to lobby local government. It would be nice if DFID did the same. Q141 Hugh Bayley: Everyone talks about a multi-sectoral approach. I would like you to describe what you think it means and whether you think DFID is multi-sectoral enough. Which bits of the DFID response to urban growth in developing countries are appropriate? Where do you think there are gaps that need to be plugged? In which sectors are DFID strong and in which are they weak? Mr English: Homeless International co‑ordinate CLIFF.[7] It has been supported by the public development finance institution section of DFID, not infrastructure. In fact that fragile thread of urban is being kept alive by that group of individuals and that department. Our experience of the multi-sectoral nature is fairly limited. We have tried to get support for CLIFF from DFID in India. We are not sure as to what the take-up is of that. Mr Satterthwaite: Who is the most multi-sectoral in all of this? The women's savings groups I work with and the federations of slum dwellers. They are looking for land, they are looking for tenure, they want to get their kids into school, they want decent healthcare. They are pushing the police to put in community police stations. In a sense, you need a unique urban unit in DFID with expertise that addresses those demands. As it learns to address those demands, so it becomes multi-sectoral. The best upgrading programme I know driven by a government is in Thailand. The Thai government has a national agency that has available funding expertise and support for everything that slum dwellers want to do, want to drive themselves, and that means that all the upgrading programmes they do are completely multi-sectoral. They do electricity, tenure, water, sanitation. With this national agency supporting slum dwellers, the slum dwellers then go to local government and say, "Okay, we need funding for the school. We need this, we need that." If we can get that drive from the bottom up supported, it becomes multi-sectoral. Mr English: Slum upgrading is the nexus of all these issues. As distinct from the city, any one slum encapsulates education, health, all the MDGs, and so, as I was saying earlier, if the context were that special entity, slums or cities, they would, by confronting the issue, have to be multi-sectoral. What would bring cogency to the activity or the programme would be the space in which it operates. If we tackled it city by city, that would be the entity of management To be effective, it would need to be multi-sectoral, not just multi-sectoral but multi-institutional. It would need to have the organisations of the urban poor involved, much as I think some people have mentioned participatory planning, so top-down and bottom-up at the same time. So those are, really, the parameters for being effective around multi-sectors rather than being multi-sectoral as a set of programmes that you have within the institution. I think that the spaces are important, and defining where those places are. Q142 Hugh Bayley: David, your image of street dwellers seeking to provide solutions to a range of needs is compelling, but how would you reconcile the programmes that a large, bilateral agency, like DFID, has in particular sectors - it will have an education programme possibly funded through the Ministry for Education; it will have a sanitation and water programme and so on - with programmes which are single sector programmes? You are arguing that in an urban setting, especially, you need a multi-sectoral approach. How should DFID or the World Bank or other bilaterals reconcile those two ways of working in an urban setting? Mr Satterthwaite: They have got to start talking to the urban poor. I will give you a dramatic example: in Mumbai the World Bank was giving a big loan to manage sewage outfalls - $100 million - but half the city does not have sewers. So as they began local negotiations they realised that they actually had to divert some of this money for community water and sanitation. In a sense, there you have got the solution. Community water and sanitation works great but you need the water coming in and the sewers and the drains going out. What we have seen in cities that work with the urban poor is that the city provides the trunk infrastructure and the community organisations do all the messy, complex bit of making sure that all the water connections and the sewer connections and the drainage gets built within what is normally termed as the slum. I have seen this transform many areas of Karachi, for instance, where the community built the sewers, the drains and the water supply systems, and the local authority put the mains in. I have seen it transform slums in India; I have seen it transform slums in Thailand. There is a good division of responsibility. You need a very competent water and sanitation agency that just does that, as long as you have got the population organised and the city government able to respond to the needs of each community. Q143 Hugh Bayley: We saw in Lagos a redevelopment of a neighbourhood which the city found frustrating because buses and trucks would park in the middle of a road and create traffic jams, and which people found frustrating because the big drain that was supposed to drain all their water and rainfall into the lagoon was blocked and a school was not provided. There was an attempt to bring the agencies together but it did seem to me to be a top-down exercise run by city hall and there was a lot of policing to make it work. If you were a city planner talking to DFID and saying: "We need to clear this drain, build a new school and create a bus station or a truck park", what would you advise them to do to make it work? Mr Satterthwaite: You begin working where the urban poor are very well organised, and they become your partner. In Lagos there is no federation of slum dwellers with whom to work. Take Malawi: when the Malawi national government began to get interested in working with the urban poor there were these women's savings groups and the women's saving groups federated and met each other and worked together, so that in Lilongwe or Blantyre when the city government wanted to work with them these women could demarcate plots, build their own homes and negotiate with the water and sanitation agency. What we found dramatic was that in 1990 there was only one federation in India and in 1994 there was the South African federation of slum dwellers; now there are 20 nations with national federations of slum dwellers, all based on women's savings groups. City government could find these wonderful partners to work with. I know it is a silly thing to say but in Lagos what they need is 2,000 women's savings groups who then work together to offer Lagos city government a partnership. Maybe they should pop down to Accra to see how it is working. Q144 Chairman: I think there are a lot of things they should pop down to Accra for! Mr English: If 50-70 % of cities are slum dwellers, obviously (I have had that situation before) you need to have people you can work with, particularly if you want to be effective and respond to their needs. So slum dwellers have to be organised but it costs them to organise. The groups that we have dealt with, as David said, start through a crisis even - preventing eviction - starting to save, building solidarity and building their organisation in that way. However, I would say this: ultimately, those organisations need to understand how the city operates and have to develop their capabilities, which they do, particularly in Asia they do. In Africa that is not necessarily the same situation. So getting from the women's savings group to actually a group that responds and understands the city they live in and is able to interact with the city around issues which are around bulk infrastructure, transport issues, etc, takes some time and requires investment. That is the kind of support that CLIFF is premised on, but certainly the 15 to 20 years of building that institution prior to CLIFF - one cannot credit DFID with that because that has come through individuals and organisations in this country, housing associations, supporting these organisations to form and recognising the value that they can play in the city, ultimately. However, getting from just a mass movement to actually being an effective player in the development of a city takes some time and investment. Q145 Mr Singh: David, you said that DFID probably needs something like an urban unit specialising in urban poverty, which is a very interesting idea. Yes, I can see an urban unit in headquarters but I cannot see every in-country programme having an urban unit. In the meantime, is there enough co-ordination between different DFID advisers and technical supporters, and whatever? Is there enough co-ordination, at the moment, or does that need improving in the meantime? Mr Satterthwaite: Co-ordination in what sense? Q146 Mr Singh: You have said we need a multi-sectoral approach. In-country, in terms of urban poverty, does DFID have that? Is there enough co-ordination between the different advisers and different sectors? Mr Satterthwaite: What we find is there is very little urban expertise. Say, in country X there is a good opportunity; the central government is committed, the local government has possibilities and the urban poor are organised; there is no one in DFID that actually will talk to them. That is the difficulty for me; there is no knowledge, no expertise, no commitment to address urban issues. There are exceptions: the office in India has some very good urban specialists. In a sense, you need this in every country. It is accepted that you have good agricultural development specialists. Actually, in every country in Africa, more than half the GDP is in industry and services; in most it is 70 %. In every sub-Saharan nation more than 40 % of the workforce now works in industry and services. There is no policy for that; there is no expertise for that. Almost all the population growth in the world in the next 30 years will be in urban areas- how can you not have expertise amongst aid agencies? Q147 Mr Singh: Is there any aid agency from whom DFID could learn and get some lessons from? Is there a model aid agency? Mr Satterthwaite: I do not think there is a model. The trouble is that there are very few bilateral agencies that have taken urban seriously, as Geoff said previously. The Swedes had a very good urban policy for 20 years and now with the cuts in SIDA that is one of the first units to go. In Britain some of the best urban researchers writing about development are based here; it is not as if there is not an expertise. As I said, even within DFID there are some very good urban specialists, including a few of my ex-students, who are quite exceptional and outstanding. It needs leadership at the top to say: "We're going to take urban seriously". Then DFID can move quite quickly. Q148 Chairman: You are making, in a sense, quite a simple, specific proposal that DFID should have an urban development sector or unit - whatever you want to call it - to drive urban development both here, in terms of policy, and in terms of strategic priority within country. Mr Satterthwaite: Yes, and very much support country programmes. Yes. Chairman: I think that is clear enough. Thank you very much. Q149 John Battle: What I find so inspiring about this International Development Select Committee is I sit here and I am regularly referred back to my own neighbourhood, and to think positively about it. Just listening to David, the key in my neighbourhood to tackling loan sharks that went round the doors is a group of women that organised a savings group called the Bramley Credit Union - wonderfully written up in a newspaper recently - run by two women in their 70s, and it was commented that if they had been running some of the major banks in Britain instead we might not be in the mess we are in now. The question I want to ask you is about measuring poverty, really, in facts and figures. It has always struck me that a person who is poor in a rural area could survive from things that are grown in the neighbourhood and from support from families. But you move to a town, on to the street, and try living under a motorway bridge with a shack that you have put together from cardboard and old bits of wood that you have found around the place, and your poverty could deepen immensely compared with a rural person. How do we get donors to be sure that they are basing their responses on accurate assessments of urban poverty? How can we get the measures right? Mr Satterthwaite: The first thing is for the donors to change the way they measure poverty. In most Asian and African nations poverty is measured on the basis of food expenditure or food consumption and you add a little bit. Now what you add is not calculated on how much the urban poor are paying for keeping their kids at school; getting to and from work - the real non-food costs. Sometimes you get these crazy statistics - I remember there was a famous one - Kenya has no urban poverty. I spent 20 years walking through Gicheru, and half of Nairobi lives in some of the worst conditions you can imagine. If you get the assumption on which you base your measurement wrong you get the measurement wrong. The dollar-a-day poverty line is also another measure that is disastrous because, obviously, living costs vary. A dollar a day in rural Malawi will get you quite a lot; a dollar a day in Mumbai or in Buenos Aires will not get you anything at all. So, first, the donors have got to accept that they have to change the way they measure poverty. Rowntree did a pretty good job in York in 1902 and actually had a more sophisticated methodology than the World Bank employs at the moment. Having got the measurement right then you have got to recognise that so much of what you measure does not reflect the fact that you cannot get your kids into school; does not reflect the fact that you cannot get on the voters' register; does not reflect the fact that you are facing discrimination from the police. So, in a sense, you get the monetary measure more accurate, then you recognise that an awful lot of poverty is non-monetary. The loan sharks, as you mentioned - you would not measure that with a dollar-a-day poverty line. Q150 John Battle: Who do we get to change that agenda? There are some academics that are working on that agenda, Homeless International, that there should be changes in the way the statistics are measured. Do we need to change DFID? The Treasury? The World Bank? Who do we need to wake up to bring in more sophisticated and more sensitive measures? Mr Satterthwaite: The World Bank is much the most influential agency in setting poverty lines. Q151 John Battle: So we need to get to them really? Mr Satterthwaite: Yes. Mr English: There is another aspect, that poverty is aggregated by countries yet not by cities. So the context of poverty within a city may be completely different to the national aggregate. That makes it very difficult sometimes to isolate urban poverty and urban issues from the national aggregate. When so much aid is dependent on your national poverty status it means that sometimes actually doing work which could be replicated in other parts of the world - some of the work we are doing in India; India is now regarded as a much more wealthy country than others, but certainly in cities conditions are poorer than some of the conditions we face in African cities. It stymies some of the work that we are doing on poverty - the way we aggregate data. Q152 Hugh Bayley: Can I pick up on the Rowntree model? At one level Rowntree was working from a far, far better base of statistical information on income in Victorian Britain, in that he records what the diet of a workhouse inmate is, and of course there is no workhouse in Lilongwe or Lagos. I am trying to relate what Rowntree did in a laborious way in one small city to what the World Bank might do across urban metropolises in the developing world. It seems to me the most important parallel you could draw would be those coloured maps that Rowntree produced of the poorer streets and then quintile poorer streets, and so on, until you get right at the top of a tree of the servant-keeping classes. Is that what you would argue for in Lagos? In other words, should you do neighbourhood surveys of income and then target development initiatives on the areas that are poorest? Mr Satterthwaite: There is no point doing income surveys because no one is going to tell the truth. You can do expenditure surveys, which are more reliable. When Rowntree set the poverty line he accepted that there were costs other than food, and he documented them and then made an allowance for them. Oddly enough, when the US Government first used poverty lines in the early-60s they took the cost of food then they multiplied it by three, so the poverty line was the cost of food and two times as much for non-food needs. That was based on some pretty dodgy survey work, but at least that was a decent poverty line. Many of the poverty lines in these nations are the cost of food plus 10 %. That 10 % has to pay for rent, for water, for sanitation, keeping your kids at school, health care, transport. What we need to do is measure what the cost of housing, water, sanitation and drainage is and then add that to the poverty line. Q153 Hugh Bayley: When we were talking earlier you stressed the need for building a matrix of community organisations in the slums. If DFID was to put money into the Urban Poor Fund International, how many people would it support per million pounds it put in? How much capacity do you think the Urban Poor Fund International has to ramp up its activities if it got further support? Mr Satterthwaite: Where money needs to go is where it is available to urban poor groups; the Urban Poor Fund International is a great way; Homeless International is a great way; Homeless International has probably done more to fund the urban poor organisations than any charity in the world in the last 10 years. You want effectiveness. Three hundred homeless women in Zimbabwe needed $18,000 (they had been offered land on the periphery) and no one would give it to them. They wanted a loan of $18,000. The Urban Poor Fund International gave them $18,000, they got the land and 2,500 people are now housed in that settlement, and they are gradually paying back. Obviously, in Zimbabwe, with the economic conditions, you cannot pay back, but at least there is a recognition that that $18,000 came to help them get housing and then, as they got housing, it should be passed on. You can correct me if I am wrong, but in South Africa when the federation of the urban poor build homes they build a decent, four-room home for $2,000. Mr English: Yes. Mr Satterthwaite: In Malawi, when the homeless people's federation build houses they have got them down to about $1,500. In Thailand, where most of the upgrading is funded by loans, apart from the purchase of the land, which is expensive, everything else is $500 or $1,000 per person. Most of that money is getting paid back to fund other schemes. Money goes a very long way when it is grassroots' organisations - especially the women's savings groups - that manage it; they use every penny. They also have this commitment to repay to help other women in their federation to do things. Mr English: I think there is a lot that makes that work. There is a tremendous amount of solidarity that has been built up, and trust and transparency in the way money is used. These organisations of the urban poor, these women that manage these projects, obviously, can deliver their housing and water - their solutions - much more effectively, much more sustainably and much more efficiently than any outside organisation, but it does mean investment in not just projects; it means investments in those institutions as well to get those efficiencies. Q154 Hugh Bayley: What scale of resources is needed, and which particular urban community development organisations should be supported? Mr English: The funds that we have received from DFID have been around the Civil Society Challenge Fund. So the fact that we are providing funds to organisations; those activities have been activities that have helped to develop civil society rather than the institution, rather than that being the aim. There is a lot of scope for continuing that kind of funding. If I could just frame it differently, when 50-70 % of the urban population are the urban poor, the only way that city is going to develop is to include the poor. The only way that you can work with the urban poor is if they are mobilised; they are in groups and those groups actually are able to manage finances and able to undertake small projects, particularly the domestic projects. There was a point made earlier about the role of local government. Obviously, there is a reciprocal role. Urban poor groups do not do bulk infrastructure, do not do bulk transport activities, but when it comes to domestic infrastructure - housing infrastructure - they can do that more effectively than anyone else. If we do not mobilise 50-70 % of urban populations around the world we are not really going to get anywhere near the deficit that we currently face. So it is not just about clever techniques and clever programmes about how to put infrastructure on the ground, it is about building these institutions that mobilise the human resource that exists in the world. It is reciprocal; it is about those activities, and it is about water infrastructure, but water infrastructure is actually helping to build civil society. These two reinforce each other. To be honest, it is a very positive outlook for the future of the world to actually look at what can happen in urban areas that cannot happen anywhere else in the country. Q155 Hugh Bayley: Can I ask a question in a slightly different way before you come in, David? Both of you are making a case that, first of all, you need to mobilise the urban poor themselves because you will not get the multi-sectoral approach that is needed unless they are in the leadership. That in itself costs money. Then, of course, once you have a mobilised the urban poor you need funding for infrastructure, improvements to education, and all the other components of a multi-sectoral approach. What, in terms of resources, for the first is needed to spread the benefits from Asia to Africa, if you like, and to keep the growth of community organisations ahead of a growth in population in urban areas globally? Then, what level of funding - perhaps in proportion to the first - is needed for the actual urban upgrading programmes which you would expect the urban poor to fashion and craft and be consulted on and to lead? Mr Satterthwaite: It has been happening for 20 years, and it has not cost us very much. India developed a national slum-dwellers' federation by itself; it developed Mahila Milan-"women together"-this amazing network of women's savings groups, 800,000 members. What really helped in India was funding to allow them to try things out; funding so that a collection of women slum dwellers could build their own community toilet. Once they had built the toilet they negotiate with the local government - local government is now funding 600 of these community toilets. So the external funding was quite small; it allowed them to organise, it allowed them to meet and it allowed them to show: "We can do things differently". Once they get to that scale - in India - they need constant support to allow them to keep innovating, but the actual big money is coming from the Indian Government, from local governance. As they develop their confidence and their capacity they will negotiate money locally. The Urban Poor Fund International - maybe £5-10 million a year - guarantees that it can always reach the new groups. There is a group in Madagascar that is interested and wants to learn how they save, or there is a group in Sierra Leone that has developed. In terms of funding for infrastructure, again, they will get most of it locally. If I was to dream, each national federation would have its own fund where it can draw as it needs - a little CLIFF fund - where it has complete accountability and transparency to DFID in everything that is funded, and complete accountability and transparency for the women's savings groups it serves. In this way you can then have DFID learning in each country about the experiences in each country with a financial institution in each country. My guess is that that could start with $10 million and easily go up to $100 million as 25, 30 or 40 national federations come. It is pretty small money given how many people you are going to be working with and how much you are going to be achieving. Q156 John Battle: Could I, perhaps, ask Larry a bit more about Homeless International's Community-Led Infrastructure Finance Facility (CLIFF). It is just about their financing of it, really. I think you get funds from DFID and from SIDA. Are they a grant and a one-off or have you got core funding, a rolling programme, or have those expired, and where do you see the funding coming from in future? Mr English: The funding has expired; it has not been completely utilised. It is about £10 million in total - that is between SIDA and DFID. 75 % of those funds are for capital projects and 25 % for the overhead of actually sustaining these organisations, for them to employ professionals locally, etc. So that is how the funding is made up. It essentially capitalises a local fund in that country. There are two things that I would like to contextualise. The story begins long before CLIFF; the initial exchanges happened between the poor themselves. So the people who start an organisation, who face eviction or face the need for water and sanitation, our first intervention would be to provide just a few thousand pounds - not just us - for an opportunity for Kenyans to go and visit the Malawians, or the Malawians to go and visit the Tanzanians to help them set up their organisation. When they start implementing small projects to demonstrate what they can do, you could add a zero, so £10,000. When that group starts to attract the attention of local government as to what it can do, it begins a conversation; local government invariably provides land, it provides an opportunity: "Well, if you know how to do that in that street could you do this here?" So it ups the ante and they need further funds, and that means you need to add another zero, so now you are talking, probably, about £50-100,000 to actually do that work, and to do it to scale. The problem was reached when the funds that were available through statutory and through international aid were limited because they suddenly started to, particularly in India, be able to have the opportunity as organisations of urban poor to engage in large-scale, city-scale infrastructure and housing development, and they need millions. Where are they going to get that from? So CLIFF was introduced as a way of bridging. One, we realised the institution needs large-scale funding to demonstrate it can do it at scale, and, two, it needs to have the credibility to be able to borrow from banking institutions. No financial institution would lend to an organisation like this. So that is what CLIFF has been able to do; CLIFF has actually changed the way the organisation of urban poor, particularly in India and now in the Philippines and in Kenya, is viewed by government and viewed by banks; is viewed by the physical, urban development industry, and that is where CLIFF comes in. I just thought it is very important to understand that. Mr Satterthwaite: He gave you a better answer to your question than I did. Mr English: Can it do more? Well we have to go through the same trajectory in other parts of the world. The second part is DFID have actually committed to another phase of CLIFF, and SIDA, because of the recent erosion of the urban development sector, find it more difficult but through private sector investment are going to continue funding. So we have a commitment for another five years of funding in new countries. Q157 John Battle: Those new countries will be in Africa, will they, mainly? Mr English: Mostly in Africa. We also try to demonstrate something, and what has made it very difficult is sometimes the best place could be in a country which is a very, very poor community but has a banking institution it is wanting to get engaged. So to test the model sometimes it is better to test it in India or in an emerging economy, where the poor have been left behind, than in a very poor country which does not have a banking sector and has an unwilling government. Q158 John Battle: You might think this is completely speculative and quirky. I kind of have a theory that the north-south fracture of the 20th century will not be the one of the 21stcentury, and that the lines will look very different. I just give an example of another place I used to visit and work in, South Shore Chicago. Do you envisage the work that you develop in India, Kenya and the Philippines being applied in northern cities as well? Mr English: You can hear from my accent I have not always lived here, but I think there is a lot that can be integrated here. In this country we refer to urban regeneration, which is a composite of a whole range of issues: social, economic, etc, etc. That is the same as slum upgrading. The methodologies and the approaches that David has outlined, if we had to adopt those particular approaches in any northern city that has the same problems, there is a lot of lessons to learn, which would change a lot of things. The politics of the way we do development, certainly. Q159 John Battle: Just to follow that through, why cannot, then, some of the research work that you are doing be funded by the Communities and Local Government Department as well, here in Britain? Mr English: I think there is a lot of opportunity. I think the kinds of discussions we have had through the Cities Alliance and with the Local Government Association here is: is there a way that we could work in the same space in Kenya, or in any city in Africa, or in Asia? It is simple on paper. One of the things that will not be transferable is that you are not the authority, you are a facilitator. When you are working with urban poor you do not have all the power, and it is a different way of working. I do think that there is a way of the housing associations in the UK, the local government and organisations of the urban poor in the south actually working together. Q160 John Battle: The Tenants' Association. Mr English: We have had discussions with the TSA[8] and they are very willing to do it. It is how we actually get that to happen. What we do have the opportunity to do is we do have places where that is set up to happen. It just needs the kind of authority, the kind of sanction, that would resource those different entities to be in that same space. John Battle: Thank you. Q161 Chairman: You are saying that DFID has a lack of focus on urban poverty and poverty reduction, but is that not true of the developing countries as well? Is it true that they have their supposed Poverty Reduction Strategies but do they really build in a focus on urban poverty? To be fair, the Committee - and I give some credit to Mr Battle, who was very anxious that we do this report - has probably taken a little while to cotton on to the fact of how much development needs to be addressing people living in urban poverty in developing countries. The image of development, very often, is rural, with wells and villages and things. Of course, that is relevant but that is almost the whole image to most people, yet there are more and more people in that situation. Are the governments and the communities of developing countries on board on this? Are they really clued up to the fact that actually, perhaps, the top of their strategy ought to be to deal with their urban poor? Mr Satterthwaite: Some certainly are. A shocking fact: you can go to a 300-page PRSP and you ask "slums" - nothing; "squatter settlements" - nothing; "urban" - appendix 7. It just is not in the conception of the people that develop the PSRPs that there is a thing called "urban poverty" that has importance. I think that is mainly the fault of the World Bank staff. It is not the fault of the nations. That is a slight exaggeration; India is certainly taking urban poverty very seriously; pretty much every Latin American nation is; most of the middle income nations in Asia are - some with very good policies. In North Africa there are some very good urban policies, but in sub-Saharan Africa less so. Which of the African countries? Senegal has had a reasonable policy on urban poverty, but I am kind of struggling to look for good examples. Q162 Chairman: Mr English was shaking his head when I was asking my question. Mr English: I think this is a point we made. The observation that I feel is clearest is from Thomas Melin of SIDA who said that the complexity of the interdepartmental collaboration that is required to actually address slum issues (even where they are highlighted in the strategy) is difficult in this country but more difficult in sub-Saharan African countries. So it is unlikely that the mechanics of developing a strategy and prioritising housing is going to happen if there is not a culture of interdepartmental collaboration. So it could be purely the lack of that policy or that way of managing the issue that is not identified. There is a lot of anti-urban bias. I have been to ministers of housing in Africa - even the one in Nigeria said: "Could you focus on building houses in rural areas so that these people can go back home?" That has been repeated with many, many other countries. There are a lot of other people who have written about this; the fact that cities are regarded as places for the elite. Q163 Chairman: Other evidence that we have been given as we have gone through this inquiry is that although it requires investment and it requires planning, in some ways it is easier to deliver poverty reduction in an urban environment than it is in a rural environment - to deliver water, sanitation, power and all these other things. Mr English: Exactly. In one small space you can deliver on just about every MDG just by one intervention, and that is what makes it, sometimes, so difficult to understand. Q164 Chairman: Just a comment on the irony of Nigeria, and then a final question. Mr English: My example was some time back, I must say. Q165 Chairman: What we were told every day, and we experienced every day, was that the big problem in Nigeria was the shortage of electrical power, which meant the lights were literally going on and off all the time and, consequently, everywhere you went people were running generators, because they could not rely on the power system. Yet, the price of power is subsidised. They said: "We cannot possibly put up the price of electricity in order to fund investment because it will hit the poor"; but the reality was that the poor were not buying electricity; they were generating it much more expensively through diesel generators. Going back to the earlier discussion, you are saying DFID needs to get its act together as a leading donor, then it needs to work with developing country partnerships to help them get their act together. So there is a quite major shift required if we are going to address this, I think, is what you are both telling us. Mr Satterthwaite: Yes. One interesting indication: DFID understood that governance was very important, but it hardly focused on local governance. If you are looking at the poor in Lagos it is all local organisations they need to negotiate with: for tenure, for schools, for health care, for drains, for water, for sanitation, for transport. It is getting the understanding that you have got to drive local governance reform if you are going to deliver. We would never have got rid of cholera in the UK if it had not been driven by city government, by municipal government. You need that competence and capacity in city/municipal government all over Africa. Chairman: That is a very important point. We actually visited the Megacity project in Lagos. It is a wonderful empty office; it would have been completely empty if we had not turned up! The professor actually had to come in to meet us in his own office to discuss the project that was not being taken forward. I think we have got quite a lot of food for thought, and I think by the time we have finished DFID is going to have quite a lot of food for thought as well. Q166 Mr Singh: The only difficulty I have is that budgets are both limited and committed. It is easy to make a recommendation in this Committee that DFID should do a lot more about urban poverty. What would suffer? I do not think the budget is going to expand to cover that. Will we do this at the expense of tackling rural poverty? Mr Satterthwaite: Absolutely not. If DFID decided, over the next five years, to ramp up support to £100 million, that is a very small part of DFID's total commitment. If it is steering that with and through the urban poor and local governments, you get incredible value for money. It sounds very heretical but some of the best aid agencies I know have very heavy staff costs because they engage with the urban poor and their community organisations and give the least money that is needed. I know this is really tough; every bilateral agency is judged on its spend and its staff costs, but if you actually want to work with the urban poor and never give them too much money it takes a relationship, and a relationship needs staff and it needs staff on the ground. We have got to think of urban poverty reduction as a partnership with the urban poor driving it, and that means you have to structure your funding differently. Sometimes that $18,000 provided quickly in response is going to have tremendous implications, much more than the $50 million that you were planning on a big initiative. How do we get DFID to support hundreds of community-driven initiatives which then filter up and begin to address the local governance issue? Institutionally difficult but if we do not think of a way of doing it we are not going to reduce urban poverty. Mr English: I would like to add the same point that was made in the last session around local government. I do think that there is a lot of resource in the UK; there is a lot of expertise. What, probably, many people do not know is a lot of our support has actually come from, as I have mentioned before, housing associations that have twinned with other organisations in the south, helped them to develop over time and have been patient enough to do that We have already had discussions with the TSA, with the NHF[9] and the Scottish Federation and the other federations, as well as the CIH,[10] to actually mobilise more resources - and I mean resources, not just financial, in terms of people who want to get involved. The reason we have always stayed away from that is the question of translation; it is a completely different environment and, often, it can be well-intended and those kinds of resources are not helpful. However, I still think it is a challenge that DFID does not meet. It is not just financial resources; I think DFID needs to engage its own sectors; it needs to involve. We have personally taken it upon ourselves to make sure that every person who is into housing in this country understands the housing issues outside of this country. Chairman: A good question to ask, Marsha, and I think you got a good answer. Thank you both very much indeed. As I was saying, I think we have a serious challenge here. More and more people living in an urban environment are an increasing proportion of the poor people we are supposed to help and, yet, it would appear, really, as we go through this inquiry, we do not have proper structures for dealing with it. I believe this is going to be a timely and important inquiry. It will not be in time for the White Paper but, frankly, that is beside the point, I think. Thank you both very much indeed. [1] Overseas Development Administration [2] Poverty Reduction Strategy Paper [3] Department for Communities and Local Government [4] Department of Energy and Climate Change [5] Deputy Chair, Local Government Association [6] Inter-governmental Panel on Climate Change [7] Community-led Infrastructure Finance Facility [8] Tenant Services Authority [9] National Housing Federation [10] Chartered Institute of Housing |