Supplementary written evidence submitted
by the Department for International Development
Dear Malcolm,
I am writing in response to the questions posed
by the Committee regarding the UK development programme in Bangladesh,
following the evidence session on 16 December.
I have also included proposed changes to the
transcript of the evidence session. In particular, I have included
additional clarification regarding the 10% cap on ODA-able climate
financing and the funds announced by the Prime Minister as a contribution
towards the EU climate package. Although my response to Q200 stated
the contrary, I can now confirm that the funding for 2010-12 will
NOT be additional to the 0.7% target, although this should still
fall well within the 10% cap. My apologies for any confusion this
may have caused.
I would like to reiterate my thanks to you and
other members of the Committee for your engagement. Thank you
also for your welcome words of recognition for the team and the
programme.
I look forward to receiving and responding to
your report in due course.
11 January 2010
MIKE FOSTER
PARLIAMENTARY UNDER-SECRETARY OF STATE
FOLLOW UP
QUESTIONS TO
THE IDC EVIDENCE
SESSION ON
16 DECEMBER 2009
THE SIZE
OF DFID'S
PROGRAMME
1. In DFID's Annual Report there is a discrepancy
between the figures for net bilateral assistance to Bangladesh
in Table A.3.3 (page 82) and Table A.5.4 (page 98).
The discrepancy is most marked for the year 2006. Can you explain
this discrepancy?
The difference is because table A.3.3 shows
the total DFID bilateral programme spend in each financial year,
and Gross Public Expenditure on Development (GPEX), whereas table
A.5.4 shows Official Development Assistance (ODA). There
are a number of differences between the two:
— ODA is reported on a calendar year basis
while GPEX is reported on a financial year basis.
— ODA is a net figure while GPEX covers
gross flows.
— ODA only includes aid to eligible recipients
(as defined by the DAC) whereas GPEX includes everything.
2. Why was there a reduction in DFID's bilateral
assistance to Bangladesh in 2006 (or 2006-07) from the amount
provided in 2005 (or 2005-06)?
DFID's total bilateral programme expenditure
in Bangladesh in 2006-07 was just over £109 million
(table A.3.3 in DFID's Annual Report). The aid framework
allocation for 2006-07 was originally £120 million,
slightly higher than spend in the previous year. The allocation
was reduced to £113 million to allow increased support
to other parts of the DFID Asia programme following recent major
humanitarian crises in the region (including the tsunami and the
Pakistan earthquake). Some spending (£8 million) was
deferred to 2007-08.
In 2005-06, spend was £123 million
against an aid framework allocation of £119 million.
In 2004-05 DFID's bilateral programme spend
was £127 million which included £25 million
of humanitarian assistance in response to major flooding in 2005.
GOVERNANCE
3. Can you provide information on how the
ombudsman process for DFID's Challenge Funds in Bangladesh operates
and whether it has upheld any complaints?
DFID Bangladesh supports a number of challenge
funds. Each has a rigorous project approval process and complaints
procedure. These include:
— Manusher Jonno Foundation (MJF £30 million),
the Rights and Governance Challenge Fund: Project concept notes
and proposals are assessed by teams of staff. Final approval is
given by the governing board. Since 2003, MJF has received more
than 4,000 project concept notes and 350 project proposals.
It has issued 167 grants.
If MJF receives complaints against any organization
or if any irregularity is noticed during routine monitoring, it
immediately commissions an investigation. Further disbursement
is cancelled if complaints are upheld, and detailed feedback is
provided. Funding for 15 organizations has been cancelled
to date due to a lack of adequate financial, monitoring or personnel
systems.
The last annual review of the programme concluded
that MJF's oversight systems are vigorous and efficient, and are
able to cope with the relatively high number of partners.
— Remittances and Payments Challenge Fund
(RPCF £2 million): All concept notes are considered
by an assessment panel. The panel includes all direct stakeholders
(including DFID, the Bangladesh Bank, and the Ministry of Finance)
and several non-stakeholder experts, chosen by the programme's
Oversight Board.
Given the rigorous approvals process, there is
no separate ombudsman process, but there is an established complaints
procedure. Any complaint received by a stakeholder would be referred
to the chair of the panel wherever the complaint was lodged. RPCF
Managers have not received any formal complaint to date by any
aggrieved individual or entity/applicant/bidder or any third party,
regarding the evaluation and/or selection of concepts and projects
for DFID grant funding, or on any subsequent monitoring reports
or on disbursement of grant funds.
— Economic Empowerment of the Poorest Challenge
Fund (EEP £65.3 million): The selection of NGOs for
challenge fund grants is done through a competitive process, by
an Independent Assessment Panel comprising eminent national and
international experts on extreme poverty issues, based on pre-set
criteria.
To resolve complaints and grievances on the funding
process, EEP has installed the Guarantor of Equity, Fairness and
Transparency (GEFT). The GEFT acts as an Ombudsperson and is an
agency independent of (but contracted by) EEP.
The ombudsperson reviews process and procedural
issues and shall not substantively evaluate any proposals, but
consider if decisions on proposals are made following established
application and evaluation procedures, requirements and guidelines.
The ombudsperson is also responsible for ensuring that appropriate
fraud and conflict of interest prevention policy is in place to
ensure transparency of the selection process.
So far no formal complaints have been lodged
against the NGO selection process.
MANAGEMENT AT
THE TOP
4. How many graduates have left the civil
service and what percentage of those trained so far does this
represent?
As of today none of the MATT 2 graduates
have left the civil service.
NATIONAL BOARD
OF REVENUE
5. When the Committee was in Bangladesh it
was told that the Board was unable to hire people because of a
legal dispute. Has the dispute been resolved? What has been the
impact of the dispute on DFID's objectives?
The legal dispute blocking new recruitment occurred
in the Customs Cadre of the NBR. The legal issue has now been
resolved but administrative delays still continue to hamper the
pace of recruitment in the cadre. The Income Tax and VAT cadres
have also been unable to fill in all vacant officer/inspector
positions in time due procedural complexities/delays arising from
government recruitment procedures. As an example, Officers' recruitment
takes place through the Public Service Commission (PSC) which
requires about two years to complete one recruitment cycle. As
the PSC recruitments hire for all government cadres in one go,
each recruitment cycle, on an average, makes only between 10-15 tax
officers available to the NBR.
The staff shortage makes an adverse impact on
the NBR's overall operations and service delivery. This impedes
NBR's effort to identify, and engage with potential tax payers,
and thus widen the tax base. NBR's ability to detect and penalise
tax evasion, and provide effective tax payer services have also
been limited due to this problem. While the issue has a bearing
on the DFID's objective to help strengthen Bangladesh's revenue
collection, it is unlikely to directly affect the DFID funded
project, Tax Administration Capacity and tax Payer Services (TACTS),
as the NBR positions that will be relevant to delivery of TACTS
are all currently filled.
FUNDING FOR
CLIMATE CHANGE
6. Is the £1.5 billion over three
years which the UK has committed to the fast-track (or Copenhagen
Launch Fund) additional funding for climate change or is it from
the existing DFID budget?
The £1.5 billion for the Copenhagen
Launch Fund is new finance, which has not been previously announced,
but it is not additional to ODA.
On Page 37-40 of the uncorrected transcript,
the Committee discussed additionality of financing for climate
change.
The funding for 2010 to 2012 will
not be additional to the 0.7% target, which the UK will reach
in 2013. The precise aid budgets over the last two financing years
of Fast Start have not been set but fast start funding will be
well within the 10% limit of ODA commitments. Current development
spending such as on health and education will not be affected—and
are themselves also set to increase.
The UK remains committed to providing additional
climate finance starting in 2013, and limiting the amount of ODA
counted as climate finance to 10%.
The UK is on track to reach our ODA commitments
of 0.7% of GNI by 2013. As announced by the Prime Minister in
June, the UK is committed to put forward some climate change finance
that is on top of the 0.7%. While some climate finance can come
from existing ODA commitments—where it clearly meets both
poverty reduction and adaptation or mitigation objectives—a
ceiling should be placed on this. In the UK we will limit such
expenditure to up to 10% of our official development assistance.
And we are working towards this limit being agreed internationally.
7. The Chairman also requested a note of what
expectations DFID had about what climate change funding in Bangladesh
would achieve.
Additional money for adaptation will be used
to support the Government of Bangladesh in implementing its Climate
Change Strategy and Action Plan. This will include a range of
activities including renovating/building embankments and multi-purpose
shelters; enhancing the early warning systems for floods and cyclones;
promoting climate resilient crops and livelihoods; building national
and community-based preparedness for natural disasters; enhancing
access to safe drinking water and sanitation in vulnerable communities;
and conducting action research on adaptation to climate change,
among others.
If Bangladesh gets funds for mitigation, a range
of low carbon opportunities can be explored including expansion
of solar home systems, promotion of energy efficiency in key economic
sectors, aforestation, and even exploration of geo-thermal sources.
The Climate Change Strategy and Action Plan also mentions using
clean coal technology while using coal resources but for this
the mining sites will have to be developed first.
8. Urban Poverty Reduction Programme
DFID will allocate £60 million in
cash prices over seven years (2007-14) to the Urban Partnerships
for Poverty Reduction Project (UPPR) The planned finances are
broken by year as follows:
|
| 2006-07-2008-09 | £5m
|
| 2009-10 | £4m
|
| 2010-2011 | £7m
|
| 2011-12 | £15m
|
| 2012-13 | £15m
|
| 2013-14 | £14m
|
|
| 
