House of Commons - International Development Committee

DFID's Performance in 2008-09 and the 2009 White Paper - International Development Committee Contents

Written evidence submitted by the Department for International Development

QUESTIONS TO DFID FOR WRITTEN RESPONSE

PSA 29

Q1. The summary assessment of PSA 29 states that "The economic crisis may result in some 90 million more people living in extreme poverty in each year after 2010 than previously anticipated" (vII, p 107). The Committee would be grateful if the Department would provide (a) information on the basis for such an estimate (including relevant data sources); and (b) a breakdown of this figure by region.

(a) The impact of the economic crisis on poverty is estimated by:

(iii) This then provides the 90 million estimate.

The estimate does not take into account non-income dimensions of poverty such as school attendance rates or child nutrition, and the numbers are based upon projections rather than actual data.

(b) It is unfortunately difficult to provide accurate regional breakdowns. This exercise sought to generate a global estimate and as the income elasticity of poverty (the rate at which poverty is affected by a reduction in income growth) varies across region using the same methodology would result in misguiding information.

Q2. What other effects does the Department anticipate the current global economic conditions will have on trends in international poverty, particularly in relation to: (a) PSA indicator 29.1; and (b) developed countries' ability to achieve the 0.7% of GNI target for Official Development Assistance (ODA) by 2015?

Q2 (a) PSA indicator 29.1

We have been following events closely but the full economic and social impacts will not be known for some time. Therefore making an assessment of the impact of the crisis on PSA 29 is extremely difficult and indicative at best. Based on revised growth forecasts, we estimate that up to 90 million more people will be living in extreme poverty by 2010 as a result of the crisis than previously anticipated. Other goals, such as increased educational enrolment and reduced child mortality, are also likely to be affected due to falling household incomes, but the severity of such effects depend on policies our partner governments have in place to mitigate the effects of unexpected shocks, for example the availability of social safety nets.

DFID is supporting a number of different initiatives, including with the United Nations and partner countries in which we work, that will assess the impact of the crisis on the poor and vulnerable. The department is also supporting programmes that allow continued expenditure on health, education and other social expenditures in Low Income Countries, in order to support partner governments both to respond to the crisis and maintain progress towards the Millennium Development Goals.

Q2 (b) Developed countries ability to achieve the 0.7% of GNI target for Official Development Assistance by 2015?

It is up to each developed country to fulfil its international commitments and respond to the financial crisis, and the recent G8 and G20 summits have re-emphasised the importance of fulfilling ODA commitments despite the financial crisis. EU donors remain committed to 0.7% by 2015, and some non-EU donors are committed to increase their ODA/GNI to 0.5% by 2015. It is also encouraging that the USA has recently announced plans to double foreign assistance. These commitments will lead to further substantial increases in global ODA levels post-2010. The UK is on course to meet its commitment to reach 0.7% by 2013.

Q3. Could the Department clarify whether the baseline and target for PSA indicator 29.1 have been revised to reflect the World Bank's updated definition of the international poverty line ($1.25 a day)? If not, does the Department plan to have discussions with the Treasury to reflect this change in the indicator for PSA 29.1? If the indicator has been revised to reflect the new international poverty line, does the Department envisage any consequential implications for its budget?

The measurement of Public Service Agreement (PSA) indicator 29.1 is based on the updated definition of the international poverty line (of $1.25 a day at 2005 purchasing power parities). Progress against this measure was first reported in DFID's 2009 Annual report, and the revised definition and associated data were included in an accompanying technical annex to the Annual Report published on DFID's website at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Annual-report/Annual-Report-2009/. DFID will continue to use this new and better source of poverty data over the PSA period 2008-11. The revised data will have no effect on DFID's budget which was set in the Comprehensive Spending Review 2007 and revised in the 2009 Budget.

Q4. What specific measures is the Department taking to improve progress towards PSA indicator 29.5, and what impact is DFID's "increased priority" in this area having on its various budget streams and resource allocations?

MDG 5 is a major theme of the Government's new White Paper Eliminating World Poverty: Building our Common Future and DFID is in the process of updating the reproductive and maternal health strategy for publication in 2010. The White Paper outlines an accelerated action plan focussing on three areas: (i) increased international political support, (ii) additional financing for health, (iii) accelerated delivery on the ground. DFID led efforts to draw up an international framework for action for MDGs 4 & 5, called the Consensus for Maternal, Newborn and Child Health, which aligns international momentum in politics, advocacy and finance behind an agreed set of policies and priority interventions to accelerate progress on the ground. The Consensus is prominent in the new White Paper and has been endorsed in 2009 by the G8 and the Global Campaign for the Health MDGs.

The Prime Minister and the World Bank President co-hosted Investing in Our Common Future: Healthy Women, Healthy Children during the UNGA week. This is the culmination of the work of the High-Level Health Task Force for Innovative Financing for Health Systems Strengthening. It will include announcements of new finance generated through innovative finances, and has been accompanied by a push to help developing countries make health services free. In June 2008, the UK Government made a commitment to spend £6 billion on strengthening health systems and services over seven years to 2015 (plus £1 billion to the Global Fund for AIDS, TB and Malaria). DFID spent £776 million on health systems and services in 2007-08. The increased spend for 2008-09 is estimated to be £958.9 million. DFID is currently in the process of identifying additional programming opportunities in maternal health, family planning and provision of safe abortion services in a number of countries in Africa and Asia, including Ghana, Ethiopia, Bangladesh, Pakistan and India.

Recent examples of DFID supported country-level progress include; Rwanda, where assisted deliveries have increased from 39% (2005) to 52% (2007) of all deliveries; Malawi, where free services to pregnant women and mothers have increased the number of births attended by health personnel from 38% (2005) to 45% (2008); and India, where, since 2005/06, the number of babies born at government facilities by trained staff has increased by 30% to 14.2 million deliveries in 2007-08.

DATA QUALITY

Q5. Please provide details of relevant actions being carried out by DFID in relation to each of the recommendations contained on p8 of the NAO's June 2009 assessment of the data systems for monitoring performance against PSA 29.

The NAO's June 2009 assessment of the data systems for monitoring performance of PSA 29 made five specific recommendations:

DFID carries out an internal risk assessment to consider the risks to the supply of data it uses. This would identify mitigating actions to changes in data sets or other areas of that may influence the data:

The department has carried out a preliminary internal risk assessment of its PSA data and systems. The results are presented in Table 1 below:

Table 1

DFID'S PSA DATA SYSTEM ASSESSMENT

Risk	Likelihood (RAG)	Mitigating Action	Comment
Main data supplier, United Nations Statistics Department (UNSD), unable to provide timely data through portal	Green	— provide data off-line (in a spreadsheet)—as is currently done — obtain data from individual UN agencies or other responsible collecting institutions—the World Bank, Development Assistance Committee, the IMF — Use DFID's network of posts in country to supply the data	UNSD is mandated by the UN-Secretary General to produce an official annual progress report on the MDGs, using the same internationally agreed MDG indicator data as those that appear in the PSA, and to make the MDG data publicly available at the same time. The report and data are normally available in the summer in good time for Autumn Performance and Annual reporting. We consider this risk to be minimal.
Change in data methodology or classification	Amber	— report any change, including that affecting the baseline position.	Data or methodological revisions can occur, but DFID is notified of any change well in advance of change occurring coming from DFID membership of the Inter-agency and Expert Group on the MDG indicators, good links with UNSD and well established connections with UN agencies and the IFIs
Poor quality data	Amber	— report data limitations (as we currently do in Annex G, Vol II, Annual Report) — use network of post in regional/country departments, including statisticians, to quality assure the data—as we currently do — consider alternative data sources, including qualitative sources to substantiate progress or otherwise — work with developing countries to improve data supply and quality—as we currently do	As the data come from developing countries with varying statistical capacities, the available data do have some limitations for reviewing progress
Data lags become too long	Amber	— Disclose the limitation—as we currently do — Use more timely proxy indicators eg births attended by skilled personnel for maternal mortality; child TB immunization rates for child mortality, and report progress on these in the interim	A feature of the MDG data are time lags, ie data for 2011 might be available as late as 2013 or 2014. This is disclosed in Annex G of the Annual Report
Data or analysis is compromised	Green	— Source data is maintained separately and securely from data processing and is validated against source — Processing procedures are checked by at least two people and protected preventing corruption — Quality assurance of data performed by network of statisticians and comments and feedback are recorded — Network used to sign-off final assessment	The integrity of the data is maintained as this is stored separately from the analysis. Processes for analysis are checked and password protected. We consider this risk to be minimal
Insufficient resource to process data	Green	— Data and systems are documented allowing users to follow procedures — Use central statistical resource — Employ other professional groups in the task	Dedicated resources are provided for the entire data system and monitoring as high priority. Insufficient resource is very unlikely
Source: DFID assessment
RAG description:

Red High risk; the probability or impact of risk is high, or mitigating actions are not sufficiently effective

Amber Medium risk; the probability or impact is medium, or the mitigating actions are partially effective

Green Low risk; the probability or impact of the risk is low, or the mitigating actions are effective

2. Ensures that adequate disclosures are made about the countries reported against for PSA 29.8, and the rationale behind the final traffic light assessment.

We have published on our website in the Technical Annex accompanying the Annual Report the low income countries that are included in monitoring PSA indicator 29.8. This is found at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Annual-report/Annual-Report-2009/. Indicator 29.8 seeks a positive change in nominal terms and as a % of duty free imports into developed countries from low income countries. The latest report shows that over the three year period 2005-07 the average percentage of duty free imports from low income countries was 66.5% (compared to the baseline position of 66.3%) of average trade value of $90 billion per year. On the basis of 0.2 percentage point difference between the current and the baseline position, the indicator was rated as showing little or no improvement. We will make a final assessment of this indicator when trade data become available for the end of PSA period 2010-11.

To address the little or no improvement rating, the Trade Policy Unit (TPU) is lobbying for a swift conclusion to the Doha Development Round to lock in duty free and quota free access for all Least Developed Countries into developed WTO member markets and some emerging markets. TPU engages with the European Commission, other EU member states and key stakeholders like the US, India and Brazil, and funds evidence-based research into development-friendly outcomes. TPU also supports LDC's capacity to participate actively and strongly in WTO negotiations to help them argue for a good deal.

In addition TPU have been actively lobbying the European Commission to encourage them to reform preferential rules of origin which will, inter alia, improve access for LDCs to the EC markets under the EU's Everything But Arms (EBA) regime. Progress on rules of origin has already been made. TPU is funding various research studies to understand the development benefits of Economic Partnership Agreements and lessons learnt. We are also pressing through DEFRA for radical reform of the EU CAP which will deliver gains to both EU consumers and LDC exporters.

3. Continues to build strong relations with the UNSD and continues to support the UN in improving the quality of data. We recommend that the Department consolidates its efforts internally to ensure that CPG and GSP are coordinating their work to avoid duplication.

The roles and responsibilities of Corporate Performance Group (CPG) and Global Statistics Partnership (GSP) department are clear and separate. CPG primary role is to monitor and report progress against delivery of Public Service Agreement 29, DFID's Departmental Strategic Objectives and Divisional Performance Frameworks and to report publicly to Parliament twice a year in DFID's Autumn Performance and Annual reports. GSP is set up to help to improve the effectiveness of the international statistical system, including work to help strengthen statistical systems in developing countries so that there is a sustained improvement in the availability of, and access to, reliable statistics. It also within GSP's remit to lobby and support UNSD to improve access to MDG indicator data.

4. Continues to request data from the UNSD directly to ensure that the PSA data is subject to the least amount of formatting as possible. This should be requested by the team best placed to do so, either the CPG or GSP.

As custodians of the PSA measurement system and performance reporting it is CPG's role to collect the necessary data to monitor performance. As at the time of the NAO review, CPG continues to receive MDG indicator data directly from UNSD in a spreadsheet which requires minimal formatting changes to extract the data.

5. Ensures evidence is available for the data controls which are in place. This could include a sheet in the calculation spreadsheet that states who carried out the data entry and who carried out the cross-check to the UNSD database.

We have implemented this change as part of the 2009 PSA assessment round.

DEPARTMENTAL STRATEGIC OBJECTIVES (DSOS)

DSO 1: PROMOTE GOOD GOVERNANCE, ECONOMIC GROWTH, TRADE AND ACCESS TO BASIC SERVICES

Q7. What actions is the Department taking to mitigate the negative effects of the current global economic situation on progress towards DSO indicator 1.2?

Growth is what will equip countries and individuals with the necessary means for moving out of poverty. The commitments laid out in Chapter 2 of our White Paper describes our strategy to ensure that such growth is realised whilst being resilient, green, and ensuring the poor benefit. Among some of the measures we are committed to are: seeking a rapid conclusion to the Doha trade round, stamping out corruption, supporting climate resilient development, investing in regional integration, and creating the right conditions for the private sector to thrive. DFID has also provided full funding over the next three years for the International Growth Centre which will help developing countries cope with the downturn and provide innovative research on growth.

Our immediate priority however, is to help developing countries respond to the current crisis whilst protecting the most vulnerable. The UK was instrumental in the agreements reached at the G20 London Summit in April where a $1.1 trillion programme of support to help the world economy through the crisis and to restore credit, growth and jobs was agreed. This included $50 billion for Low Income Countries (LICs), and the establishment of a Rapid Social Response Fund to which DFID is contributing £200 million. We will continue to ensure that this assistance is disbursed in a timely and targeted fashion as appropriate for individual country needs rather than a one-size-fits-all approach.

We have not cut back the level of our bilateral support, and in some cases, we have brought funding forward or increased it according to need. Examples include providing an additional £15 million for social protection above the annual commitment of £25 million in Ethiopia, early disbursement of budget support in Mozambique, and increased budget support in Malawi. The need for further adjustments is under constant review.

We will monitor the situation closely, and continue to work through international fora such as the G8 to ensure appropriate and co-ordinated action is taken where necessary.

Q8. The Committee would be grateful for more details on the work of the International Growth Centre in Ghana, Tanzania and Ethiopia to date. To which further 15 countries will the initiative will be extended over the next three years?

The International Growth Centre (IGC) will develop long-term programmes in 15 countries over three years. The IGC has identified the first nine countries: Bangladesh, Ethiopia, Ghana, India, Mozambique, Nigeria, Pakistan, Sierra Leone and Tanzania. The remaining six countries will be identified at a later date.

The IGC's work programme is most advanced in Ethiopia, Ghana and Tanzania. In all three countries, the IGC is responding to the demand from policy makers for specific analysis advice. In Tanzania the IGC is working on macroeconomics (eg improving inflation forecasting with the Bank of Tanzania), growth and poverty linkages and public expenditure management (eg prioritising public expenditure). In Ethiopia the IGC has developed a work-programme on agricultural transformation and industrial development. The areas Ghanaian policy-makers have been asking the IGC to focus on are agriculture, natural resource management and finance and firm capability. The IGC is designing a programme of activities in these areas.

Q9. Please provide a full run of the trade data that relates to DSO indicator 1.3 since 2000. When are data for 2007 and 2008 likely to be available?

Least Developed Countries' (LDC) and Low Income Countries' (LIC) percentage share of world trade (exports and imports) excluding fuels since 2000 is given in Table 2.

Table 2

WORLD TRADE PARTICIPATION BY LDCS AND LICS (%)

Year	LDC (%)	LIC (%)
2000	0.53	7.13
2001	0.58	7.67
2002	0.60	8.57
2003	0.60	9.45
2004	0.59	10.17
2005	0.63	11.18
2006	0.65	11.79
Source: UNCTAD

Data for 2007 is expected to be generally available on the UNCTAD website in October this year. Data for 2008 will not be available for another year.

Q10. What are the implications of the lack of progress on the Doha Round of WTO negotiations for progress on DSO indicator 1.3?

The conclusion of the Doha Round of WTO negotiations will not necessarily have a significant impact on DSO indicator 1.3, as the main objective of Doha is to lower trade barriers around the world, allowing countries to increase trade globally. Therefore a successful Doha would bring absolute gains to most countries, including LDCs/LICs, but will not necessarily increase LDC/LICs' share of world trade.

It should also be noted that other trade agreements, such as Economic Partnership Agreements, which are regional trade agreements between the European Union and African, Caribbean and Pacific Countries (ACPs) allowing ACPs exporters duty free access to European markets, are expected to contribute to LDC/LICs' share of global trade and have an impact on this indicator.

Q11. How is the Department "supporting 30 million extra people to gain access to sanitation in South Asia by 2011" (vII, p 112)?

DFID is supporting improved access to sanitation across South Asia through a range of programs. In Bangladesh, we support poor people access clean water and sanitation through three programmes: WATSAN, delivered through UNICEF; the Chars Livelihoods Programme (CLP) and the Urban Partnerships for Poverty Reduction (UPPR) programme.

The UNICEF programme that DFID supports with £36 million is in partnership with the Government of Bangladesh. Through the provision of hygiene education, it helps people adopt hygiene practices, such as hand washing after using the latrine or before preparing food. People in Bangladesh will also benefit from new or improved latrines.

In India, the new National Urban Sanitation Policy, the first of its kind in India, is a major outcome of the support provided by DFID through the World Bank's Water and Sanitation Program. In addition, 34 million rural poor have benefited from DFID support through UNICEF on sanitation. 3.6 million slum dwellers have also directly benefited from DFID's urban development programmes, (which include water and sanitation). Millions more are expected to directly benefit over the next five years.

DFID is also supporting WaterAid and other NGO partners to tackle specific challenges of reaching socially excluded groups. DFID is integrating water and sanitation into wider work on schools and in the design of a new health programme in Bihar.

In Nepal, DFID supports poor people's access to clean water and improved sanitation through the Gurkha Welfare Scheme. In addition, our programmes providing support to local government bodies often deliver drinking water schemes and toilets in response to local demand.

These DFID funded sanitation programs will be delivered over different timelines (2008-13). As of March 2009, we estimate that our assistance has helped approximately 13 million people gain access to sanitation throughout the region (which includes at least four million in Bangladesh and nine million in India). Through our continued support, we currently anticipate approximately 17 million more people will benefit by 2011.

DSO 2: PROMOTE CLIMATE CHANGE MITIGATION AND ADAPTATION MEASURES AND ENSURE ENVIRONMENTAL SUSTAINABILITY

Q12. Under DSO indicator 2.2, Environmental sustainability integrated into programmes, the DAR discusses a review of progress into the UNEP/UNDP Poverty and Environment Initiative to help countries develop their capacity to mainstream poverty-environment linkages into national development planning (vII, p114). When will this review be published? Has a decision yet been made on the potential roll-out of the initiative to additional countries and regions?

The independent progress review of the UNEP/UNDP Poverty-Environment Initiative, conducted by the International Institute for Environment and Development and funded by Norway, was completed and released on 31 August 2009. No decision has been taken on the roll-out of the initiative to additional countries and we are not expecting one to be taken in the near future. The UK is keen to see the Poverty and Environment Initiative implemented and delivering effective results in its current pilot countries before being rolled-out to additional countries and regions.

DSO 3: RESPOND EFFECTIVELY TO CONFLICT AND HUMANITARIAN CRISES AND SUPPORT PEACE IN ORDER TO REDUCE POVERTY

Q13. Does the Department plan to incorporate each of the following White Paper commitments into its DSOs and, if so, what will be the relevant baselines and targets (where applicable):

— Allocate at least 50% of all new bilateral country funding to fragile countries. — Focus development support in fragile countries on four new objectives to promote peaceful states and societies.

— Expand use of political analysis to inform the choices we make.

— Consider commitments to peace and security as part of DFID's development partnerships.

— Increase support for democratic politics, including peaceful, free and fair elections.

If these commitments are not going to be incorporated into DFID's DSOs, from which financial year does DFID plan to allocate at least 50% of all new bilateral country funding to fragile countries? What will be DFID's definition of a fragile country in pursuit of this commitment?

All of the White Paper's commitments are broadly consistent with DFID's agreed set of DSOs for the 2008-11 spending period and in particular the overarching aim of poverty reduction. As such there are no plans to formally incorporate the above commitments into the DSO set. However, underpinning divisional performance frameworks and business plans will be adjusted to ensure delivery of the White Paper commitments.

This is just one example of the good progress across DFID on implementing the White Paper. We are changing the way we work in order to more effectively deliver on our commitments: in addition to changes to the Divisional Performance Frameworks, Departmental Business Plans and individual objectives have been revised to reflect White Paper priorities; an assessment of DFID's conflict skills has been carried out to help us develop a highly-skilled workforce that can deliver poverty reduction in conflict-affected countries; and Climate Change training has been provided for a wide range of DFID staff as part of the "Making DFID Climate Smart" initiative, which will continue in coming months.

In addition, we have already delivered on a number of White Paper commitments, including:

— Global Vulnerability Alert system launched through the UN, with £1 million support from the UK.

— Clean Technology Fund pilots going ahead in Turkey and Mexico.

— New programmes on security and justice about to start in Bangladesh, Nepal, Ethiopia, Sierra Leone.

— New UN agency for women agreed in September.

— Agreement at Pittsburgh to transfer at least 3% of voting power in World Bank to under-represented developing and transition countries.

— New database on DFID's website provides project information.

We are also making significant progress in other areas, including towards delivering the $50 billion for developing countries agreed at the London G20 summit—we have achieved agreement on $20 billion in Special Drawing Rights at the IMF and new, bigger, concessional lending packages for Ghana, Tanzania, Ethiopia and Mozambique.

In 2008-09 over 50% of DFID's country programme was spent in fragile states. The White Paper commitment ensures that this level of funding will at least be maintained going forward. DFID's definition of fragile states is available on our website at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Making-DFIDs-Aid-more-effective/How-we-give-aid/Fragile-states/.

Q14. If 50% of all new bilateral country funding is to be allocated to fragile countries, what implications will this have for bilateral aid budgets for low income countries that are classed as "non-fragile"?

Thirteen of our existing 22 PSA countries (Afghanistan, Bangladesh, Cambodia, DRC, Ethiopia, Nepal, Nigeria, Pakistan, Rwanda, Sierra Leone, Uganda, Yemen and Zimbabwe) are currently identified as fragile. The projections set out in table 4 of the Annual Report for 2009-10 and 2010-11 provide for more than 50% of bilateral funding in those years to be directed to fragile countries; so published projections for non-fragile states are already consistent with the White Paper commitment.Allocations beyond 2010-11 for both fragile and non-fragile states will, of course, depend on the overall size of DFID's budget in those years, among other factors. The White Paper establishes a firm commitment about the proportion of these future allocations which will be directed to fragile states.

Q15. Why does DFID regard it as accurate to report progress against DSO indicator 3.1 as an "improvement" when two of the three success measures do not yet have baselines for measurement of progress? When will these baselines be determined?

The basis for the assessment of DSO Indicator 3.1 was the good progress made against the milestones for 2008-09 set out in the DSO measurement methodology document accompanying the Annual Report. We have now updated the measurement methodology for DSO 3.1 to include both baseline and target information and this is available on our website at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Annual-report/Annual-Report-2009.

Q16. In relation to DSO 3.2, which four countries do not yet have Security and Development Country Plans? When will each of these be completed? Which are the six countries that have plans in place?

DFID has not been completing stand-alone Security and Development Country Plans. Instead, we have sought to ensure that security and development issues are mainstreamed into our country plans. Of the 10 Priority Countries the following had, at the end of March 2009, incorporated analysis of these issues into their planning: Nigeria, Pakistan, Bangladesh, Somalia, Jamaica, and Kenya. Work is currently underway on Iraq, Yemen, Afghanistan and Sudan to address these issues as part of work on DFID or joint HMG country strategies.

Q17. The second success measure under DSO indicator 3.2 requires a 25% increase in DFID expenditure on programmes that improve security and access to justice for the poor in priority countries. The DAR reports an increase in expenditure from £35 million in 2007-08 to £38 million in 2008-09. To which programmes is this funding being directed? How are these programmes contributing to achieving the target objectives?

Programmes to which this increase in expenditure is being directed include the following new multi-year programmes started in 2008-09:

— Sudan—(£1 million in 2008-09) Darfur Community Peace and Stability Fund, promoting activities that help to create the conditions for stability, security, justice and social equity in Darfur.

— Afghanistan—(£1.5 million in 2008-09)—Afghanistan Reconstruction Trust Fund Justice Sector Reform Programme, supporting urgent physical infrastructure and IT needs in the state justice system, professional training and development for justice officials/judges, and enhancing access to justice through legal aid and legal awareness training.

Along with a wide range of other new and continuing programmes, these initiatives will make a real difference to promoting improved security and access to justice for poor people. For example, a recently completed £2.9 million project on community legal services in Bangladesh reached 110,000 people and provided free legal advice in 36,414 cases. 96% of beneficiaries stated that the legal support provided helped them to become less poor, and direct returns to the poor amounted to more than 50% of DFID's investment.

The new DFID White Paper takes our commitment to security and development further with a commitment to triple bilateral project funding for security and justice to £120 million per annum by 2014.

Q18. In relation to DSO 3.3, have the recent humanitarian responses detailed in the DAR met DFID's own five objectives for an effective humanitarian response, as set out in the policy paper Saving lives, relieving suffering, protecting dignity? If so, how were the objectives met?

During recent Humanitarian Responses, DFID has striven to meet all the objectives it set itself in the "saving lives" policy paper.

Our responses are principled; we respond strictly on the basis of needs according to our independent field assessments; demonstrated by the fact that two of our largest responses last year were to disasters in Myanmar (Cyclone Nargis) and Haiti (Caribbean Hurricane Season).

Our responses are informed; we continue to maintain an independent field assessment capacity (DFID Operations Team) with one full-time advisor in Sri-Lanka and Pakistan networking with NGO's on the ground, in addition to the London HQ. We also support "flash appeals" through the UN, with the majority of funding for our response to Cyclone Nargis being channelled through this mechanism.

Our responses are well co-ordinated; we continue to try and improve OCHA's capacity to take an effective leadership role. In country we are supporting cluster systems by actively participating in meetings, funding according to cluster priorities and where possible ensuring our NGO funded programmes are cluster endorsed (for example in Myanmar). We also promote inclusion of NGO experts as cluster co-chairs and encourage NGOs to participate in CAP and flash appeal processes; funding through these channels when suitable.

Our responses are appropriate; we address the requirements of all affected persons while recognising the specific needs of vulnerable groups by funding disability/age/child/gender specific projects. We are open to encouraging innovative ideas during responses, as demonstrated by our support of the highly successful microfinance initiative funded by DFID and carried out by a local NGO (Fonkoze) in the aftermath of the Caribbean Hurricane Season. We allocate 10% of all response funding for Disaster Risk Reduction where appropriate and feasible.

We continue to try to improve accountability across the humanitarian sector by funding the Humanitarian Accountability Partnership (HAP) and People in Aid, and actively encourage partners to seek HAP accreditation. We conduct internal evaluations of all our humanitarian responses. For example we are about to evaluate our programme for Burma after our £45 million response following Cyclone Nargis. And we welcome Parliamentary and other public scrutiny.

Q19. Has the Department disbursed 10% additional funding for Disaster Risk Reduction for each of the humanitarian crises detailed in the DAR?

Yes. DFID is committed to allocating up to 10% of the funding provided by DFID in response to each natural disaster to prepare for and mitigate the impact of future disasters, where this can be done effectively and the initial response is over £500,000. This is in addition to ongoing support DFID provides to disaster risk reduction programmes, through multilateral partners and civil society of approximately £7 million per year.

There have been three disasters requiring a response over £500,000 during the DAR period (2008-09). Out of the original responses DFID has allocated the following 10% amounts: £4.5 million following Cyclone Nargis in Burma, £355,000 following the earthquake in China and £600,000 following the hurricane season in Haiti.

Among other things, the £4.5 million DRR for Burma has included £600,000 over nine months to a joint UNDP/UNHABITAT project to increase community-level disaster preparedness. More specifically this included establishing and training community groups in search and rescue, first aid, early warning dissemination and evacuation. The project also trained community facilitators and local artisans in integrating disaster risk reduction methods when rebuilding human settlements. In addition, DRR has been incorporated by DFID into the £2.93 million allocated for livelihoods and household shelter programmes in Burma following cyclone Nargis.

DSO 4: DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT (BEYOND AID)

Q20. Would it be feasible to provide longer runs of data for applicable DSO and PSA targets in the DAR to enable readers to assess historical trends?

DSO 4.1:—High quality research and evidence based policies for achieving MDGs

R4D STATISTICS FROM LAUNCH IN APRIL 2006 TO JULY 2009

Financial Year	Mean Number of Visits per month	Mean Number of Visitors per Month	Mean Number of users signed up for General Alerts during year*
2006-07	7,356	3,139
2007-08	18,838	10,309	216
2008-09	36,904	22,656	651
2009-10—July	54,235	33,462	1,071
* Statistics for alerts were not collected until October 2007
R4D was launched at the end of March 2006
DSO 4.2:—Cross Whitehall agreement and support for coherent, pro-development policy

The Center for Global Development has compiled the Commitment to Development Index every year since 2003. The same 21 countries have been ranked each year, apart from 2008 when South Korea was also included. The UK's position for each year is detailed in the table below.

CGD'S COMMITMENT TO DEVELOPMENT INDEX RANKING

Year	2003	2004	2005	2006	2007	2008
UK Position	11th	=4th	=10th	12th	9th	6th
Score	4.2	5.9	5.3	5.1	5.5	5.6
Source: www.cgdev.org/cdi
DSO 4.3—Greater positive participation by BRICS in multilateral and other development forums and programmes

Departmental Strategic Objective 4.3 was newly established for 2008-09 and we have no earlier relevant data on which to assess trends.

DSO 5: MAKE ALL BILATERAL AND MULTILATERAL DONORS MORE EFFECTIVE

Q21. What steps is DFID taking to ensure bilateral and multilateral donors meet their Gleneagles and Paris Declaration commitments, both of which are unlikely to be met based on current trends?

DFID's recent White Paper has reaffirmed our commitment to acting together through the international system to deliver more effective aid. DFID has ensured that the Gleneagles targets were reaffirmed at the G20 London Summit and 2009 G8 summit in l'Aquila. We are concerned by OECD DAC projections that both of the Gleneagles targets are likely to be missed, mainly due to underperformance by some EU donors. This will be discussed by the GAERC in November and next year. We are working with our EU colleagues to ensure that in November Ministers will have an accurate assessment of EU ODA projections for 2010 and address any shortfalls.

While some progress has been made by the international community on Paris targets, it is too slow to meet them by the 2010 deadline. Accelerating progress requires political leadership because in most cases the obstacles to progress are political rather than technical. DFID recognises that it is critical that we influence other donors to meet their Paris targets if we are to make all aid more effective in achieving the MDGs. For example, we are leading the International Aid Transparency Initiative to help donors implement their transparency commitments. Sixteen other donors have now joined the initiative. Mutual Accountability is one of the Paris targets where progress is most off-track. DFID offices in all countries where a recognised mutual accountability framework/ mechanism does not currently exist (according to the DAC Paris monitoring survey), will start a dialogue with other lead donor agencies and partner countries on reasons for lack of a mutual accountability framework/mechanism and what needs to be done to develop one, based upon international best practice. In the mid term review of IDA 15 (November 2009), and through IDA 16 negotiations (2010), we will be pressing for firmer WB commitment to internationally agreed aid effectiveness indicators. We will also prioritise key reforms to the Bank's lending instruments and quicker decentralisation of its staff, both of which will facilitate further progress on aid effectiveness across the WB.

Q22. For what reasons has the Department's assessment of DSO indicator 5.4 changed from "improvement" in the 2008 Autumn Performance Report to "little or no improvement" in the DAR?

The basis for the rating in the Annual Report of "little or no improvement" for DSO Indicator 5.4 is set out in Table 3 below. The table shows that for two broad sub-indicators that underpin the indicator: global country results and implementation of the Paris Declaration targets—the international finance institutions were judged to have made "little or no improvement", while on managing resources, they were judged to have shown improvement. On that basis, the overall indicator was rated as showing "little or no improvement".

This rating is different to that shown in the 2008 Autumn Performance Report due to more data becoming available. In particular the Paris Declaration survey shows that the African Development Bank is off track across Paris indicators. Improvements in operational effectiveness including Paris Declaration indicators will be a top priority for DFID in the upcoming ADF replenishment.

Table 3

DSO INDICATOR 5.4—IMPROVED EFFECTIVENESS OF THE IFIs

Success measure	International Finance Institution	Baseline	Position at 2008-09 end-year review	Target	DSO Assessment
Country Global results
	Year	2006	2008-09	2010-11	Little or no improvement
Increase the portfolio	World Bank	81%	75%	84%
quality of projects	Asia Development Bank	70%	Too soon to tell	80%
	Africa Development Bank	78%	78%	81%
Increase the % of MDB	World Bank		Too soon to		Little or no
country strategies with			tell—		improvement
strong results framework			awaiting
			Country
			Assistance
			Strategy
	Asia Development Bank		All country partnership strategies had baseline data
		10%		75%
	Africa Development Bank		Of 15 country strategy papers, all had defined outcomes, but 10 had no or incomplete baselines
Managing Resources
Increase the % of internationally recruited staff based in country offices	World Bank Asia Development Bank1 Africa Development Bank	21% 9% 12%	25% 20% 19%	25% 15% 7%	Improvement
Increase the % of portfolio managed by country offices	World Bank Asia Development Bank Africa Development Bank	30% 28% 0%	33.5% 39% 9%	35% 31% 15%	Improvement
Implementation of Paris Declaration targets
		2005	2007	Illustrative 2010 targets
% of field missions are joint	World Bank Asia Development Bank Africa Development Bank	21% 5% 19%	31% 16% 13%	40%	Little or no improvemnt
% of country analytic work that is joint	World Bank Asia Development Bank Africa Development Bank	49% 49% 55%	56% 15% 41%	66%	Little or no improvement
% coordinated donor support for capacity development	World Bank Asia Development Bank Africa Development Bank	57% 37% 38%	86% 78% 31%	50%	Improvement
Number of Project Implementation Units (PIU) parallel to country structures	World Bank Asia Development Bank Africa Development Bank	223 39 132	79 40 113	74 13 44	Little or no improvement
Footnote 1: This measure is based on the number of field based professional staff, as the data does not distinguish whether staff are recruited internationally.
Rating scale: Green = On track—target met or sufficient progress is being made to meet target; Amber = Off track, progress has been made but too slowly to meet target; Red = off track; there is no or negative progress; Grey = inadequate data to make an assessment

Q23. In relation to DSO indicator 5.4, the Committee would be grateful if the Department could provide a detailed matrix tracking the progress of each IFI against each success measure by year and including information on whether the measure is "on track" to meet its target. Similar information would also be helpful in relation to DSO indicator 5.5 (success measures 1a-c).

In relation to DSO indicator 5.4, the information requested by the Committee is given in Table 3 in answer to question 22. In relation to DSO 5.5, the information is given in Table 4 below:

Table 4

DSO INDICATOR 5.5—IMPROVED EFFECTIVENESS OF THE UN SYSTEM

Success measure	Baseline	Position at 2008-09 end-year review	Target	DSO sub-indicator assessment
UN system meets Paris Declaration targets	2005	2007	Illustrative 2010 target	Little or no improvement
Increase the % of aid, excluding humanitarian aid, from the UN in-country report on national budgets	34%	39%	60%
Increase the % of aid that is directly channelled through country Public Financial Management systems	18%	18%	50%
The % of UN aid that is provided through programmed based approaches	29%	34%	66%
Rating scale: Green = On track—target met or sufficient progress is being made to meet target; Amber = Off track, progress has been made but too slowly to meet target; Red = off track; there is no or negative progress; Grey = inadequate data to make an assessment

DSO 6: DELIVER HIGH QUALITY AND EFFECTIVE BILATERAL DEVELOPMENT ASSISTANCE

Q24. Is the UK is "on track" to meet Paris Declaration targets 3 and 7? What measures is DFID taking to ensure its Paris Declaration targets are met at a country level?

Results from the 2008 Paris Declaration survey show that DFID has already met seven of the ten PD targets relevant to donors and is on track to meet the remaining three by the 2010 deadline, including targets 3 (aid on budget) and 7 (in-year predictability). Our recently published action plan "Beyond Accra: What action should DFID take to meet our Paris and Accra commitments on aid effectiveness by 2010?" identified three priorities for action to ensure DFID meets all the targets. These are improving the predictability of DFID aid; improving transparency of aid, including getting more aid on budget; and increased use of mutual accountability mechanisms at country level. For example:

— We will commission short case studies on country-led initiatives to increase predictability in two or three countries, in order to share best practice.

Progress is being monitored through DFID's corporate performance system.

DSO 7: IMPROVING THE EFFICIENCY AND EFFECTIVENESS OF THE ORGANISATION

Q25. Please provide details on progress on each of the following spending targets related to DSO indicator 7.1:

(a) To double spending in Africa from 2005 levels to £3 billion.

(b) To spend 90% of DFID's bilateral expenditure in Low Income Countries.

(c) To increase spending on education to £1 billion.

(d) To spend £200 million on water and sanitation in Sub-Saharan Africa.

(e) To spend £409 million on "Aid for Trade" activities.

(f) To spend £220 million on research and development.

Spending in each category is shown in the table below:

Table 5

DSO INDICATOR 7.1

	2007-08	2008-09
Africa	£2,021	£2,348
LIC	90%	91%
Education	£595	£710
Water and sanitation in Sub-Saharan Africa	£128	£134
Aid for Trade	£466	£606
Research and Development	£129	£144

More detailed information on DFID spending will be published in Statistics on International Development in October.

Q26. DSO 7.2, Financial management, compliance and control, is reported as an "improvement" in the DAR (vII, p130). However, the DSO technical annex to the DAR states that baselines and targets for this indicator are "to be developed". How then is DFID able to assess that there has been an "improvement"?

DFID has set a baseline and target for DSO indicator 7.2. The Cipfa review of financial management capacity established a baseline score (totalling 26) in March and we have implemented a range of actions which are expected to lead to an improved scoring in the future. We have completed the roll-out of ARIES, DFID's new finance and management information system; strengthened corporate finance teams and frontline operating divisions with divisional and management accountants and put in place a strategy to drive forward change and prioritisation in financial management capability under the Department's organisation change agenda: Making it Happen, including better financial management training. We have updated the technical annex to include baselines and targets for this indicator.

Q27. What steps is the Department taking to ensure progress is made in each of the three "development areas" highlighted in the Cabinet Office's March 2009 DFID Capability Review?

DFID has fully integrated the actions coming out of the 2009 Capability Review into our organisational change programme, Making it Happen. The five action plans which outline what DFID is doing under Making it Happen (one for each of the main areas of change—People, Money, Results, Communications, Systems) have been revised to include actions from the Capability Review.

The new White Paper has addressed the recommendation that DFID develop "a new vision for development which takes account of the requirements of a broader agenda and the need to build constituencies of support." In order to make progress against the Capability Review recommendations, it is crucial that we implement the White Paper effectively and quickly.

Q28. What progress has the Department made in implementing the recommendations from its Procurement Capability Review and the measures detailed in its PCR Improvement Plan?

DFID has taken on board the findings from its Procurement Capability Review (PCR) and is continuing to make progress with the implementation of recommendations and improvements.

Key actions already delivered include:

— The development of a Commercial Strategy which has been endorsed and approved by the Management Board and published on internal and external departmental websites.

— The appointment of a Senior Civil Service "Head of Profession for Procurement".

— Developing a plan to re-structure the procurement function. This has been approved by the Management Board and is currently being implemented.

— Establishing a Commercial Champion role on the Management Board.

The OGC completed their 12 month PCR Stocktake Report in July 2009, reporting that DFID had "moved a long way since its first PCR" and that DFID's Board and its senior staff have made "significant progress" in facilitating the delivery of improved commercial capability.

SPENDING REVIEW 2002 (SR2002) AND 2004 (SR2004) PSA TARGETS

Q29. When does the Department expect final assessment to be available for each of the outstanding SR2002 and SR2004 targets and sub-targets (ie SR2004 1.1-1.6, 2.1-2.9 and SR2002 1.1, 2.1, 2,2, 2.7, 2.9)?

The sub-targets underpinning the 2002 and 2004 Spending Reviews (SR) require final outturn data for 2006 and 2008 respectively in order to make final assessments.

We will make a final assessment of indicator 2.7 and 2.9 from SR2002 in the forthcoming Autumn Performance Report. For sub-targets (1.1, 2.1, 2.2) of SR2002, it might be as late as 2010 or 2011 before we are able to establish the full picture for 2006 as these targets relate to international poverty line data which have substantial time lags in their availability. Similarly, sub-targets (1.1-1.6, 2.1-2.9) from SR2004 also have time lags that mean the final assessment will not be made until 2010 or 2011.

SPENDING AND EFFICIENCY TARGETS

Q30. Why was carry-over of over-delivery from the Department's SR2004 efficiency gains (totalling £141 million) not allowed by the Treasury, unlike other departments?

The Department did not request any carry-over of efficiency gains generated in the SR04 period because the CSR07 VFM programme uses different methodologies to assess allocative efficiency and the quality of DFID's portfolio of projects. On allocative efficiency we moved from an approach which focused on two institutions (EC and IDA), to an approach which looked across all the multilateral organisations that we fund. On portfolio quality we moved from an approach that focused on increasing the value of the projects in the portfolio that scored a 1 or 2, to an approach that incentivised improvements in all projects.

Q31. Is the Department on track to deliver overall VfM savings of £647 million by 2010-11? What are the specific efficiency savings now being sought in 2009-10 and 2010-11?

We are on track to achieve our overall Value for Money target of £647 million by the end of 2010-11. Table 6 shows where these specific efficiency savings were made in 2008-09 and are being sought in 2009-10 and 2010-11.

Table 6

DFID SAVINGS FOR CSR 2007

Specific Savings (£m)	2008-09 Actual	2009-10 Target	2010-11 Target	CSR Target
	Original CSR VfM Savings
Multilateral Efficiency Savings	53.4	49	61	157
Bilateral Efficiency Savings	74.1	89	80	257
Improved Portfolio Quality	31	42	66	66
Administrative savings	9.9	8	12	12
	Additional £155m VfM Savings
International Division	—	—	50	50
Policy and Research Directorate	—	—	40	40
Communications Division	—	—	10	10
Contingency Reserve	—	—	55	55
			Total	647

In 2009-10 and 2010-11 we will continue to deliver the programme of savings outlined at the beginning of the Comprehensive Spending Review. These comprise multilateral and bilateral efficiency savings which we will achieve by continuing to shift our resources towards countries and institutions where our aid will have the greatest impact in terms of reducing poverty; improving the performance and quality of our bilateral projects and programmes; and continuing to make administrative savings.

In 2010-11, we will also deliver an additional £155 million of value for money savings.

They will come from:

— International Division: £50 million—achieved through a variety of channels including through driving stronger cash management from the multilateral organisations that we fund.

— Policy and Research Directorate: £40 million—achieved through a variety of channels including through developing strengthened partnerships on research and analytical work, and improved procurement and management of policy and research contracts.

— Communications Division: £10 million—achieved through a variety of channels including from more effective, focused central communications work and more efficient use of web and social media networks.

— Contingency reserve: £55 million—reducing the contingency reserve we have set aside to deal with unforeseen emergencies by 60% will still leave us space to respond to international disasters.

Q32. Does the Department envisage any further reduction in its FTE staff numbers over the next two years?

Since staff numbers are managed within our agreed budget, DFID has not set targets for staff reductions. Each DFID Division has flexibility to decide how to use their budget to meet business needs. Our UK departments and overseas offices are currently re-assessing their priorities in line with the new International Development White Paper Building our Common Future (published in July 2009) and the associated balance of staff and skills needed to deliver these.

Q33. The 2009 DFID White Paper outlined a policy shift, refocusing resources onto fragile countries and treating security and justice as a basic service alongside health, education, water and sanitation. Presumably increased work in fragile countries and conflict areas is likely to be more resource intensive for DFID. How will DFID reconcile this new policy focus with its VfM commitments through to 2010-11?

The White Paper sets out an ambitious new policy shift for DFID. It also explains how we will improve our efficiency, so we can deliver these policies. Some key elements of the efficiency programme include:

— Stronger cash management in the multilateral organisations that we fund.

— Focusing our communications efforts.

— Improving value for money in the research budget.

DFID has a strong track record of delivering efficiency savings in a situation where we are doing more work in new areas. In the past five years, whilst our total resource budget has increased by 25% our staff numbers have reduced by approximately 15% and we have closed 11 offices. Since 1997 we have cut the number of countries we give aid to by over a third. During this time we have continued to perform well against international standards of aid effectiveness (as evidenced for example in the Paris Declaration Evaluation).

2008-09/CSR FINANCES

Q34. How does the Department account for the variation between its total DEL at the time of the CSR2007 and that which is reported in the DAR (vI, p61)? What are the Department's projections for UK ODA by financial year over the remainder of the current CSR period?

As part of the 2009 Budget DFID DEL for 2010-11 was reduced by £155 million as part of a range of cross-governmental efficiency savings. Projections for UK ODA remain unchanged from those made at CSR2007.

2009-10 MAIN ESTIMATE

Q35. Will the Department be requesting further access in the current financial year to any of the balance of DFID's 2008-09 End-Year Flexibility stocks?

We maintain close contact with the Treasury throughout the year about the management of DFID's programme and administration budget. Any decision to request access to End-Year flexibility stocks will be made on a case by case basis of need and realism and the wider fiscal position. End-Year Flexibility drawdown is then allocated to Departments through the supplementary estimates process.

Q36. Does the Department envisage being required to surrender any (or all) of the remaining balance of DFID's End-Year Flexibility stocks to the Treasury?

Arrangements for accumulating and drawing down End-Year Flexibility are set out in Chapter 14 of the Consolidated Budgeting Guidance 2009-10, which is available on the Treasury website. These arrangements do not provide for departments surrendering End-Year flexibility stocks.

RESOURCE ACCOUNTS AND ANALYSIS OF DEPARTMENTAL EXPENDITURE

Q37. DFID's capital budget is set to increase by 56% from 2008-09 to 2009-10. Why is there such a sharp increase and how will the additional funds be spent?

As part of the overall budget increases for DFID, the 2007 Comprehensive Spending Review settlement provided for DFID's capital budget to increase from £876 million in 2008-09 to £1,366 million in 2009-10. DFID's capital budget finances contributions to a range of multilateral institutions, as well as elements of our bilateral programmes; and the financial projections set out in Table 4 of Chapter 5 of the Annual Report include items financed from both the resource budget and the capital budget. The breakdown of the capital budget for 2008-09 and 2009-10 is given in Table 7 below and includes a £200 million contribution to the Global Trade Liquidity Programme announced at the G20 Summit; an increase from £50 to £100 million in DFID's contribution to the Climate Investment Funds; increases in our contributions to the African Development Bank and other multilateral agencies; as well as increased capital spending through our bilateral programme (for example on the North-South corridor programme in Southern Africa).

Table 7

DFID PROGRAMME CAPITAL DEL ALLOCATIONS

		£'000
	2008-09	2009-10
	Outturn	Plans
BILATERAL
South Asia	0	52 000
Africa	0	110 000
Overseas Territories	15,401	16,000
MULTILATERAL
IFAD	29,411	0
IDA	524 806	503 000
Africa Development Fund	139,000	168,000
Asia Development Fund	28,534	29,000
Caribbean Development Bank Special Development Fund	0	13,000
HIPC Trust Fund Programme Capital	13 931	14 000
HIPC 100% Programme Capital	0	5,000
Multilateral Debt Relief	52,830	25,000
Rapid Social Response Fund	0	50,000
Promoting Private Sector Initiatives Program	22,525	24,000
Global Environmental Funds Programme Capital	50,000	100,000
Global Trade Liquidity Programme	0	203,000
Unallocated Reserve	0	54,000
Total capital budget DEL	876,438	1,366,000

Q38. The Analysis of Net Resource Outturn in the Resource Accounts shows that expenditure related to eliminating poverty in Asia of £745 million was 7% less than the previous year (vII, p 43). What are the underlying reasons for this reduction in expenditure?

Restructuring of divisions within DFID means that this line now only includes South Asia (Afghanistan, Bangladesh, India, Nepal and Pakistan). In 2007-08, this line also included South East Asia and China. Expenditure related to South Asia only in 2007-08 was £674 million, and has therefore increased by 10.5% to £745 million in 2008-09. Expenditure on South East Asia and China is now included within the "Rest of the world" line.

Q39. The Analysis of Net Resource Outturn in the Resource Accounts shows that Central Departments' expenditure related to eliminating poverty has increased from £74.7 million to £239.3 million (vII, p 43). What are the underlying reasons for this increase?

From 2008-09, the Estimate Line for "Multiple objectives" within DEL has been discontinued, with the related expenditure now being included within the "Central Departments" line. This expenditure mostly related to spending within our Civil Society Department, and our Communications division. Restating 2007-08 expenditure on a comparable basis therefore gives a figure of £210.7 million, giving an increase of 12% in 2008-09. This mostly reflects increased amounts paid through Programme Partnership Agreements with Civil Society Organisations.

Q40. To what extent has the fall in the value of sterling placed pressure on the Department's finances?

Most of DFID's commitments are denominated in sterling, although our share of EC aid programmes is denominated in Euro. The additional sterling costs of meeting EU payments has reduced the Departmental Unallocated Provision which would otherwise have been available for other purposes. DFID's overseas offices also meet local expenses in local currency, and have met the additional costs arising from the changing value of sterling through additional efficiency savings and by drawing resources from our administration contingency reserve.

ISSUES ARISING FROM THE GOVERNMENT RESPONSE TO THE COMMITTEE'S SECOND REPORT OF SESSION 2008-09

Q41. In response to the Committee's report on the DFID Annual Report 2008, the Department stated that it would "provide updates of progress on the Global Action Plan on Malaria (GMAP) in its Annual and Autumn Performance reports". This has not been provided. What are the reasons for this and what progress has been made on the Global Malaria Action Plan?

DFID's new White Paper Eliminating World Poverty: Building Our Common Future Chapter 5 sets out our specific commitments on future support on malaria.

DFID's Annual report should have included an update of the progress made in this important health initiative. The Global Malaria Action Plan was launched in September 2008 and provides a strong framework for malaria control and elimination. Progress reporting on the Global Malaria Action Plan will in future be done by the Roll Back Malaria Partnership, under whose auspices the Plan was prepared and launched. DFID will contribute to this reporting.

There has been good progress in tackling malaria over the last few years. Long-lasting insecticide treated bednets have now been distributed to more than 40% of populations in endemic African nations, compared to less than 10% in 2005. Overall, African countries have surpassed 40% bednet distribution, with 18 countries achieving over 60% distribution. Of course, much remains to be done to fill the gaps and ensure distribution leads to use.

A recent (June 2009) European Alliance against Malaria report took stock of EU progress in contributing to the Global Malaria Action Plan and highlighted the role the UK is playing.

Q42. Which countries correspond to each of the 52 numbered countries in table 1 (p 8) of the Government Response to the Committee's Second Report of Session 2008-09?

As was included in the Government written response to the IDC Second report of Session 2008-09 into DFID's Annual Report 2008, we highlighted that the methodology we employ to calculate the estimate that DFID helps to lift at least 3 million people permanently out of poverty each year is an estimate of DFID's aggregate impact in all countries to which we deliver aid. We do not use the country breakdown of the estimate to infer any estimate of impact in any individual countries. This is because estimates are subject to statistical margins of error. Also the model is based on an assumption that other influences on growth rates (except aid) remain constant. While this is a common assumption in economic analysis, and a necessary assumption to allow estimation of the impact of aid on growth, it does mean that individual country estimates will not always be borne out. We do not believe it is appropriate to put country names into the table showing calculation of the global estimate, in case this is taken to imply that DFID uses this methodology to estimate poverty reduction in individual countries.

Q43. The Committee requests more information on, and any initial results from, the Department's work to update its model that estimates the total number of people DFID helps lift out of poverty each year.

In January this year the latest data series for GDP (incorporating the World Bank's revised Purchasing Power Parity estimates), population, aid levels, CPIA values and percentage living below the poverty line were incorporated into the model.

As a result of this up-date, the model still estimates that DFID helps lift at least 3 million people permanently out of poverty every year.