Examination of Witnesses (Questions 180
- 199)
WEDNESDAY 16 DECEMBER 2009
MR MIKE
FOSTER MP AND
MR CHRIS
AUSTIN
Q180 Chairman: Can I just stop you
for clarification on that because this was raised with us at the
meeting we had in Tower Hamlets rather critically. They were very
concerned, was the question, that the UK Government was giving
money to USAID. I did not want to stop your flow but I just wondered
if you could explain a little bit more that particular relationship.
Mr Austin: The kind of arrangement
is not completely unknown and in fact in Bangladesh we are about
to receive some funds from Australia under a delegated corporation
arrangement to support the Chars livelihoods programme second
phase. With the Americans we needed to be satisfied that their
procurement rules would allow the tender for managing the Challenge
fund to be untied. One of their options allows them to do untied
procurement, whereas for a lot of US assistance it has to be tied
to US companies. The purpose of our putting part of our funding
through them, I think it is about £10 million over five years
and the Americans are putting in more than that, I think £25
million, is that we will be more efficient as development partners
having a single mechanism supporting the same objectives with
a diverse range of partners in Bangladesh who will help to implement
it.
Q181 Hugh Bayley: That is helpful.
I do have some further questions for the Minister but first, Mr
Austin, you have a £20 million programme over five years,
of which £1 million or £1.5 million to £2 million
might go to the Westminster Foundation. Given the importance that
the prime minister clearly attached, from what she said to us
when we met her, to the Westminster model, it strikes me as rather
odd that so much of the funding, 80%, 85%, should go to institutions
with no experience of the Westminster system which the government
itself wants to emulate to some extent. I might say a year or
so ago the Africa All Party Group, which I chair, published a
report on parliamentary capacity building and it was absolutely
clear that political and parliamentary strengthening is not the
same as building capacity amongst tax collectors, shall we say,
to administer things better. It has to be built within the political
context that exists there. It cannot be imposed from outside.
How do you square the feeling coming from the government that
they want to learn some lessons from Britain—not exclusively,
I presume and they emphasise Britain in particular—with
putting 85% of the budget behind institutions that just do not
have that experience?
Mr Austin: If I could explain
the breakdown, I think about £10 million is being channelled
through USAID. £7.5 million is a grant to Transparency International
Bangladesh to support the services that the Minister described
a little earlier. At the moment we have suggested £1 million
to the Westminster Foundation to support their activities, as
a start. This will be allocated without any competition because
of the unique status of WFD. We believe there is quite a lot that
could be done with that amount of money, but we want to assess
progress and react to the ongoing debate between WFD and their
Bangladeshi counterparts about how that might grow over time.
That explains the breakdown of the funding in this particular
programme.
Q182 Hugh Bayley: Could I turn, Minister,
to the wider question of your department's relationship with the
Westminster Foundation, not specifically with regard to work in
Bangladesh? The Foundation was set up 15 or 20 years ago at the
time of the fall of the Berlin Wall. It was funded as a Foreign
Office non-departmental public body to nurture democracy within
central and eastern Europe. It has grown its mission in Africa
and in the MENA region[6]
in particular. From time to time your department has funded work,
quite recently very effective work in my view, around the elections
in Sierra Leone and, amongst other things, did a role play with
the then President Kabbah on what he would do if he found he was
not elected. On what day would he move out of the state house?
On what day would he pass command of the armed forces to a successor?
Of course he was not re-elected and he did perform as he performed
in the role play. I think you did an extremely effective job of
work. You have also through your Governance and Transparency Fund
made funding of I think £5 million available to the Westminster
Foundation for parliamentary capacity building work in six countries,
two in Europe, two in the MENA region, two in Africa. You are
clearly building up a relationship with the Foundation. The Foundation
in their evidence to us have said, "Why does not DFID develop
a strategic relationship with the Foundation in the same way that
the Foreign Office does?" In other words, to provide it with
core funding and to provide officials who keep in close touch
with the Foundation and indeed attend board meetings so that you
can improve the performance or tailor the performance of the Westminster
Foundation to your needs as a department in the same way that
the Foreign Office does. It says, "This is a priority for
us." Is that something that you will consider seriously when
you are in discussions with Meg Munn?
Mr Foster: I do not know what
is on Meg's agenda when she comes to meet me in January, but I
am willing to explore the nature of the relationship that we have
with the Westminster Foundation. At the moment we probably feel
that it is better on a project by project basis as the organisation
matures and grows its own capacity, but in the longer term it
might be that we end up with a more strategic arrangement like
a PPA.[7]
I do not know whether now is the right time for that, but I am
more than happy to explore it with Meg when she comes to see me
in January.
Q183 Hugh Bayley: I would say—and
I hope you will reflect on this before you meet with Meg—that
I sense that DFID feels that WFD was created in the Foreign Office
mould to do work of a kind that the Foreign Office wished to pursue.
That does not fit neatly and perfectly with the development paradigm.
It is not there as exactly the organisation you would want to
choose. You hope it will develop more in that direction and you
may develop a strategic relationship if that were to come about.
It will never develop in the way that you want unless you roll
up your shirt sleeves and you get involved with it and you have
your officials working with it on a regular basis. These individual
projects are valuable to your department, valuable to the Westminster
Foundation, but you are not going to turn it round. How do you
as a department strike the balance between the need for untying
aid, which I accept, whilst at the same time providing funding
through British institutions if that is the appropriate thing
to do? You talked about Chevening Scholarships a little while
ago. You would not dream as a government Minister of saying, "Let
us scrap Chevening Scholarships. They are tied to British institutions.
Let us just provide a scholarship programme that can go to Australia,
India or Canada." We provide Chevening Scholarships because
we want our higher education institutions to have links and partnerships
with the rest of the world. Should we not be doing the same with
governance or should you not at least be considering whether you
should develop a strategic relationship with a British governance
body which is itself part of the government?
Mr Foster: I recognise the line
you are asking me to consider. When I meet with Meg I will certainly
be mindful of what you have had to say. Of course if the Committee
want to make that as one of their recommendations in terms of
future directions for DFID then clearly we will respond and reflect
upon those considerations. You are right. There are other issues
that we also have to take into account. The tying of the aid bit
is part of the equation but it is also, if we had a programme
with the Westminster Foundation, what it would deliver. The point
about the Chevening Scholarships was not just that a higher education
institution in the UK has links but somebody coming over for a
Chevening Scholarship gets the type of education and discipline
of the course in particular that can benefit the particular country
that has embarked upon the scholarship programme to begin with.
That is the delivery end we also have to consider. We are very
mindful of what you say.
Hugh Bayley: You have made that particular
point better than I made it and I hear what you say. It will be
up to the Committee what recommendations it puts forward and by
the time you respond you will have had your meeting with Meg.
May I just say this last thing in passing? When the Labour Party
came to government 12 years ago, it made a commitment to joined
up government, to saying, "We will not have government working
in departmental silos. We will think what is it that our government
wants to achieve and then we will work on a cross-departmental
basis to deliver." Both you and the Foreign Office have sums
of money to work on governance although you have, I would guess,
90% of it and yet this is a field in relation to the Foundation
where you have silos big time. We really must have some joined
up government. That is my view and I hope my colleagues will back
that as well.
Chairman: Watch this space, Minister.
Q184 Mr Singh: For once I certainly
will back you up. It is not very often. From the top to a bit
lower down, we had a conversation a little time ago about local
government and we raised the issue of increasing demand for services.
What is DFID doing to support civil society to create that demand?
Mr Foster: A couple of examples
spring to mind. One is the work that we do with Transparency International
that I mentioned in terms of the grass roots campaigning there.
Another one that is a useful tool—I know it is aimed at
a national level but it actually has ramifications at a local
level as well, as we will have seen here in the UK—is through
the BBC World Service Trust. They run a sort of Question Time
type equivalent programme and there is a way in which politicians
are being made to be on a platform, being accountable for their
actions. Although it is at a national level, there have been some
spin-offs from that particular programme and it actually does
put politicians in direct contact. People see that as a model
by which they in future can hold even local politicians to account.
Q185 Mr Singh: That is very helpful
but civil society has to be local. It has to belong to where it
is and neither Transparency International nor the BBC World Service
are civil society, important though they are, in the kind of sense
that I am talking about. If we go back to the point we had earlier
about local government and increasing demand, which mechanism
would that demand come through but local civic and civil society?
Mr Austin: Transparency International
is Transparency International Bangladesh, its own chapter. It
works with what I think of as the equivalent of citizens' advice
bureau. As the Minister explained earlier, that programme support
that the UK and several other European donors are funding is going
to be expanded into more districts. The model for a lot of development
activities in rural areas and urban areas, as we discussed a little
earlier, is to form or support the formation of community groups.
It is partly sensitisation. It is partly stimulating demand for
the right school classrooms to be added to state schools, to ensure
that clinics are functioning, that they have drugs and supplies
in them and that they have doctors and nurses working in them
as well as the media campaign. The successor to the BBC Sanglap
kind of programmes will be support through the mechanism to be
managed by USAID with our money and their money.
Q186 Mr Singh: There must be in Bangladesh,
like in many areas in south Asia and south east Asia village committees
which are probably heavily gender biased but have influence. We
could try to change that gender bias and try to give them some
more influence to demand something more from local government
or local governors or local district commissioners. Are we doing
anything in that area?
Mr Austin: The Challenge Fund
Programme for Rights and Governance works with local NGOs and
supports local community groups and may well work with village
and ward committees as well. Whenever there is a humanitarian
situation and disaster preparedness, the programme that we have
been supporting there works with local communities so they are
empowered because they are the people that we talk with and provide
information to, to arrange or supervise the delivery of services,
whether it is an emergency situation or a longer term one. The
status of those groups is not something that we can influence
directly as a development partner, but it is part of the fabric
of Bangladesh that makes social services available to the vast
majority of the people. I think something like 80% of health services
are private sector in some way, not necessarily big, shiny hospitals
but small scale interventions.
Q187 Mr Singh: The dichotomy is that
we just had a conversation with you about the Westminster Foundation.
I do not mean this in any derogatory sense because I come from
a peasant background, but what about a peasant foundation and
increasing local empowerment?
Mr Austin: It is not for us as
a development partner to tell Bangladesh how to organise its local
government. Our understanding of it and our discussions with government
including with the NGO Affairs Bureau lead us to provide quite
a large amount of our assistance through local NGOs and community
groups and we find that effective. The dilemma for the UK as a
donor and for Bangladesh as a country is that that has become
the status quo, that social services are delivered by your local
NGO rather than made possible by your local councillor or by your
local MP. There is a bit of a tension there. In one of your conversations
with MPs, they suggested that they would like to have more direct
authority over what happens in their constituencies. I am not
personally persuaded that that would be the most efficient model.
Q188 Mr Singh: Is there any donor
coordination of community initiatives or support for civil society
or is everybody doing their own thing?
Mr Austin: It is probably yes
to both of them, to be frank. There is improving donor coordination
through what are called sub-groups of the local consultative group.
There are five that cover the broad area of governance. One of
them looks at support through local communities. There is some
exchange of information about policy dialogue and interestingly
the group that we co-chair with Germany has commissioned a joint
country governance assessment, which will start early in 2010,
which is a positive step in joining up our analysis and thinking.
Where I think there is fragmentation is in operations. At the
operational level, UK programmes, US programmes, German programmes,
UNDP programmes, can operate in their own little space and not
be connected very much. We need to do more to improve that.
Q189 Chairman: Just taking up the
point on the role of the NGOs and government, how do you get the
links between government and NGOs to work and indeed to improve,
given the exact tension you have described? Government does not
deliver as well as NGOs but wants to. How do you actually prioritise
between the two and get them to link together?
Mr Foster: One of the challenges
that is out there is the capacity of government to deliver and
whether it is capable of doing so, obviously, looking at the risk
of going through a government mechanism, which is why we have
had that investment in public sector financial management and
better governance of cash that way. For us as a department it
is about maintaining the broad range of mechanisms to fund our
development work whilst engaging the government. To be fair to
the government of Bangladesh, they are engaged in issues of donor
coordination, in examining aid effectiveness, so they know that
there is a gain to be made by taking away some of the tension
that was mentioned that faces us wherever we have a development
relationship between our own individual, direct intervention which
might well be very capable and minimal risk in terms of donor
funds but loses the connection between the people and the government,
which is obviously something we want to strengthen and foster
in the longer term. Engagement with the government itself is the
way forward, but making sure that our work is aligned to their
particular challenge and the things that they want us to deliver
will also help.
Q190 Chairman: One would assume that
part of the idea is to demonstrate by working with NGOs that the
NGOs can deliver almost a challenge or an engagement to government
to say, "You could pick that up if you could deliver it the
same way." We noticed that in the education budget you have
been giving £15 million in support for NGOs and £3 million
for government in the current year. Next year you are reducing
the NGO support to £3.5 million without any corresponding
increase in government. Is that an indication that they are both
failing or is something else going on?
Mr Austin: That is just an indication
of the case load of programmes. The NGO funding for education
is BRAC. We have provided £18 million to BRAC over one Bangladesh
financial year which is slightly different to ours. It runs from
1 July to 30 June. We are not going to support that programme
individually in the future because we are going to have a strategic
partnership with BRAC where our funding will be core funding.
The level of spend on the government programme reflects a reduced
share of the UK contribution next year but we are one of I think
nine development partners supporting the primary education programme.
If I could offer two or three examples of how we are supporting
NGOs to connect with government and government to connect with
NGOs, in the health and education sector programmes, there are
steering boards chaired by government which are monitoring delivery
of objectives. We have secured with other development partners
agreement that in the health sector government will contract NGOs
to deliver some services for it. We have secured recognition through
the government that BRAC's teacher training qualification is as
good as the state teacher training qualification. The new education
strategy rather boldly proposes extending basic education from
five years to eight years and the strategy covering non-state
and Madrassa schools as well as state schools. The third example
I would offer is in the Disaster Response Committee, chaired by
the government's Ministry for Food and Disaster Management, which
choreographs donor funding direct to NGOs to support civilian
and military relief operations.
Q191 John Battle: Again, I thought
BRAC was incredibly impressive. The most impressive part of BRAC
was our visit to the village where they are working with the ultra
poor, where I saw the pattern of working with basic livelihoods
with people that had to develop their incomes to get enough to
get a loan from the Grameen Bank. It was reaching the parts the
others were not reaching. The community development was in there.
The social enterprise was in there. Legal advice was in there.
I think they call them barefoot lawyers as well as barefoot medical.
I have never seen that put together before. I thought the complexion
of that was the best in the world, frankly. I was quite excited
to find out when we came back here can we do it in my constituency.
They are developing ideas and projects in Tower Hamlets, so some
of that work is replicable here in a holistic way to tackle some
of the inner city challenges we face. It is a really important
organisation. Having said that, I want to press on how consultations
are going with the proposed new money arrangements with DFID.
It seems to me you are almost treating them now as the government
and doing a kind of budget support with BRAC. Where are those
conversations up to at the moment?
Mr Foster: First of all, we are
mindful of the expertise on the ground that BRAC are delivering.
There is no doubt they are delivering as a development partner
in the way that you have just described. It is, I think, the biggest
NGO in the world, as Chris has said, but in terms of does it replace
government, no, it does not. In terms of the scale of what it
delivers on education for example, I think I am right in saying
that BRAC educates one million children at primary school compared
to 16 million through the government, so the scale is not there
to replicate government; nor is the desire to replicate government
either.
Mr Austin: On the specific question
about the negotiations for a Programme Partnership Arrangement,
we have completed the due diligence assessment of BRAC's institutional
arrangements and financial management arrangements, so we are
quietly confident that we will be able to conclude a PPA with
them by March. We will shift our funding from project specific
to core funding and we will need to work out a smooth transition,
both for the financial change but also for our technical engagement
with BRAC on the design and delivery of implementation which they
are keen to hold on to and we are keen to stay connected with.
We are treating BRAC more as an international NGO rather than
as a government.
Q192 John Battle: I would imagine
you have also managed the relationships with the other NGOs, some
of which are quite renowned. Professor Wood has experience with
those. Proshika is one of them. I know the scale and size are
not quite the same but there are other quality NGOs in Bangladesh.
How do you make sure you do not send the wrong signals to other
NGOs that you are putting all your eggs in one basket? They are
the best and world class and you go with them. That does not mean
you put money into low quality ones of course, but what signal
does it also send to the NGOs relative to the state sector? I
am actually more passionate probably than any other Member of
this Committee for budget support, defending the state, local
government and national government as a structural way of taking
people out of poverty and getting the economies running properly,
not displacing them with NGOs. Perhaps the question that was left
behind at BRAC was when we met Fazle Abed and he made one remark
that he did not deal with political parties because he did not
want to get into any murky business. He was almost saying that
the alternative civil society structure was there but the institutional
structures are not there. I do not think you can have one without
the other in the best of all worlds. I just wonder what is the
signal and the implication of that decision of funding BRAC to
that extent for the other NGOs and for the government?
Mr Foster: In terms of the signal
that we are sending, it is a special relationship that we have
with BRAC in Bangladesh. In terms of our funding for other NGOs,
we are not looking to say, "Right, we are now going to channel
all our money through BRAC as a mechanism." That is not the
purpose of it. It is just to reflect the special nature of BRAC
as an organisation and as a delivery mechanism, not just for BRAC
Bangladesh, but also looking ahead at BRAC's development relationship
in other parts of the world as well, Africa, Afghanistan, Pakistan,
Sri Lanka. There are other areas where a further, deeper engagement
with BRAC I think will bring wider benefits compared to, say,
some of the smaller NGOs that you are referring to.
Q193 Chairman: Like China really.
Mr Foster: Very similar, yes.
Q194 Andrew Stunell: Can we just
take a look at the implications of climate change on DFID's programme?
I have two aspects in mind. One is the actual amount of money.
The other is the mechanism by which it is decided to spend it.
If we could just take the money issue first, there does not appear
to be any budget line in the existing budget which could be said
to be the climate change line. We have had two figures which we
are a bit uncertain about of £60 million and £75 million
as being allocated to Bangladesh to deal with climate change.
Could you say how they are going to be disbursed and what the
timescale is? Of course an issue for this Committee is to be absolutely
clear that we are talking about additional funding and not taking
funding from core poverty relief and MDG goals and programmes.
Mr Austin: We have committed £75
million over five years to support the Bangladesh climate change
strategy and action plan. Of the £75 million, £60 million
has been committed to a new multi-donor trust fund that will be
administered by the World Bank under government of Bangladesh
direction. Other donors are lining up to contribute to that too.
That will fund a range of activities on adaptation, potentially
also mitigation and research, for the government to determine.
Of the other £15 million, £12 million is for the second
phase of the comprehensive disaster management programme with
the Ministry for Environment, implemented by UNDP. We are continuing
to channel our funds through UNDP for that part of it. The final
£3 million is to support specific research activities which
Bangladesh asks us to fund. We are also using some of that money
to fund Bangladesh's preparation of its position paper and participation
in the current Copenhagen meetings.
Q195 Andrew Stunell: That is over
a five year period. We are talking about something like £15
million a year or something like that?
Mr Austin: Yes. The disbursement
phasing will be contingent on how quickly the multi-donor trust
fund starts operating and disbursing. That is the most obvious
support that we are providing to help Bangladesh deal with climate
change. The disaster management programme has been ongoing. The
Chars programme is building household level resilience to flooding
by helping homesteads to be raised above the flood line. That
is part of the climate proofing of our programme. We have provided
technical advice to the Ministry of Primary Education on design
of school buildings so that they can be multi-purpose. That has
influenced the design of a number of schools that have been rebuilt
since Cyclone Sidr at the end of 2007. We will be providing advice
through IFC[8]
for the siting of special economic zones to make sure that they
are put in areas where industrial outlets will not be affected
by excessive flooding.
Mr Foster: The point about additionality
is well rehearsed now in terms of what the Prime Minister and
the Secretary of State have said about additionality to deal with
climate change adaptation and mitigation. It is part of the negotiations
that are ongoing in Copenhagen last week and this and of course
to reinforce the UK's position we have put in our 10% limit of
ODA[9]
that can be routed towards climate change. The 90% is geared for
straightforward development and not to be delivering climate change
funding.
Q196 Andrew Stunell: If we look ahead
over the next few years, in the near future we are going to have
a figure produced by the UK government relating to the Copenhagen
agreement hopefully and some of that will be available for Bangladesh?
Mr Foster: Yes.
Q197 Andrew Stunell: I am not quite
sure how the 10% limitation interacts with that figure. If we
take a notional £150 million programme at the present time,
10% of that would be £15 million, which is approximately
what is allocated at the moment, so approximately the 10% is already
being spent in Bangladesh. When, say, another £50 million
turns up, to take a notional figure, from the Copenhagen agreement,
how is that going to be transmuted into programming and budgeting
in Bangladesh?
Mr Foster: In terms of our ODA,
what we have said is that 10% of our ODA can be used for climate
change adaptation and mitigation. In terms of new forms of finance
that come out of Copenhagen and how they will be allocated to
developing countries, that is an issue that is literally being
discussed while we sit here. My understanding is that the mechanism
of allocation to particular countries dealing with climate change
problems has not yet been determined, although clearly Bangladesh,
given the wider range of challenges that it is going to face,
would in all likelihood be a major recipient of any new finance
that comes out of Copenhagen.
Q198 Andrew Stunell: I was not really
trying to get you to give a specific commitment to Bangladesh.
I was trying to understand what the interaction of the 10%, let
us call it, deduction from the poverty programmes in support of
climate change is and what is going to happen to that 10%. Does
that 10% come back into poverty reduction when there is a different
£50 million coming in? You can see the questions I am asking.
It may be that that is something you would want to give us some
separate advice on but it seems to me a crucial question as far
as this Committee is concerned in terms of whether or not the
poor are losing out or could potentially lose out.
Mr Foster: That is exactly why
we have been very clear that climate change financing has to be
additional to our ODA commitment. Our 0.7% commitment by 2013—any
climate change financing that comes out of Copenhagen has to be
additional to that particular 0.7%. What is being discussed at
the moment are more innovative forms of financing that commitment.[10]
Q199 Chairman: I hear what you say
Minister. Nevertheless, the Prime Minister's announcement about
the increased funds created some kind of negative comments from
what I saw, possibly because people are confused. We had a figure
of £800 million as the first figure, which the Prime Minister
is committing towards the Environmental Trust Fund. Then he said
£1.5 billion towards the EU package. It is understandable
in those circumstances—I think that is the line of Andrew
Stunell's questioning—that this starts to look like a potential
threat to the ODA. Notwithstanding what ministers are saying,
sums are being tossed into the pot that do not look entirely consistent
with the 10%.
Mr Foster: My understanding is
the £1.2 billion was in effect a UK offer that was made in
discussions with President Sarkozy. We have subsequently moved
forward that offer to £1.5 billion.
6 Middle East and North Africa. Back
7
Partnership Programme Agreement. Back
8
International Finance Corporation of the World Bank. Back
9
Official Development Assistance. Back
10
The Minister subsequently sent a note to the Committee to correct
this statement. See Supplementary written evidence submitted by
DFID, Ev . Back
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