CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 48-iHouse of COMMONSMINUTES OF EVIDENCETAKEN BEFOREINTERNATIONAL DEVELOPMENT COMMITTEE
DFID ANNUAL REPORT 2009 AND DFID WHITE PAPER 2009
|
|
1. |
This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.
|
|
2. |
Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.
|
|
3. |
Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.
|
|
4. |
Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.
|
|
5. |
Transcribed by the Official Shorthand Writers to the Houses of Parliament: W B Gurney & Sons LLP, Hope House, Telephone Number: 020 7233 1935
|
Oral Evidence
Taken before the International Development Committee
on
Members present
Malcolm Bruce, in the Chair
John Battle
Mr Nigel Evans
Mr Mark Lancaster
Andrew Stunell
________________
Witnesses: Ms Nemat (Minouche) Shafik, Permanent Secretary, Mr Mark Lowcock, Director General, Country Programmes, Mr Andrew Steer, Director General, Policy and Research, and Mr Richard Calvert, Director General, Corporate Performance, Department for International Development, gave evidence.
Q1 Chairman: Good morning and thank you very much for coming in on this, our annual session relating to the Annual Report. I wonder if you could introduce your team for the record.
Ms Shafik: I would be happy to. On my right is Andrew Steer, who is our Director General for Policy and who led the work on the White Paper. Mark Lowcock, I think, is familiar to the Committee; he is the Director General for Country Programmes and runs the bilateral aid programme. Richard Calvert is the newest member of the Board; he is Director General for Corporate Performance and he has recently come back to DFID.
Q2 Chairman: Obviously, since the last Report, the Department has published its White Paper, refocusing its strategy particularly on fragile states. I think it is fair to say that there has been a fairly good welcome to that and people appreciate where the Department is coming from, but, on a practical basis, what effect will this have on the way the Annual Report is produced because clearly, if a new strategy has been identified, then one presumably would wish to reflect in an annual report how that is being implemented and delivered?
Ms Shafik: Yes. The White Paper will be reflected in future annual reports, but we have chosen to embed the commitments that we have made in the White Paper in our divisional performance frameworks and into our normal reporting channels, so the commitments that we deliver in the White Paper will be reported within this framework in the future and will be intrinsic in everything that we do.
Q3 Chairman: So you will be changing your performance indicators to reflect that?
Ms Shafik: That is correct.
Q4 Chairman: If you take climate change, for example,when we ask DFID officials about climate change, they say, "Oh, yes, yes, it's part of the programme", but, when we say specifically, "What are you doing that is proactively building climate change into the development strategy?", if I am honest, I am not sure that we always get a clear answer, so do you feel that you are going to be able to do that in the future?
Ms Shafik: Yes, we will. What we have done is we have actually developed quite a detailed reporting mechanism for each of the 'we wills' that we have committed to in the White Paper and we are now tracking 160 commitments that we have made with an individual deadline on each one of those in terms of making sure that we deliver on every one of those commitments. Climate change is, arguably, one of the toughest for us because it is not just delivering a set of commitments like the Climate Investment Fund, which we have set up jointly with the World Bank and other donors to begin to show that adaptation and mitigation finance is feasible through the multilaterals, but it also requires us to change the way we do business in DFID by climate-proofing all of the development interventions that we invest in. Andrew Steer has been leading that work of thinking about how to inject climate into the DNA of DFID and perhaps he would say a couple of words about that.
Mr Steer: I think it is necessary for us still to climb up the curve quite a bit on climate change. I think we are proud of what we have done in the last couple of years, but, looking forward, it is no longer possible to be a serious development agency and not take this very, very seriously indeed, so we had a change programme which is above and beyond the individual deliveries and there are climate change champions throughout the organisation. We meet regularly, we try to hold each other accountable and we are trying to raise the sort of technical knowledge and influencing skills associated with that.
Q5 Chairman: The other thing is that you said that you were going to put 5% of the budget into strengthening accountability.
Ms Shafik: Yes.
Q6 Chairman: How did you calculate that figure, what was the basis of coming to that figure, and how does that compare with what you are currently doing and what effect does making that commitment have?
Ms Shafik: Well, that commitment came out of a criticism of DFID which came out of the evaluation of budget support, which was done by many donors a couple of years ago which said that, in some ways, by doing budget support, we had become too close to governments, that we sort of had lost contact with the need to hold governments firmly to account. The 5% number, there is nothing magic about that, it is a target that we set because we thought that was a realistic number in terms of what we should be doing and it would cover things like strengthening parliaments, strengthening the role of civil society and the media and other accountability institutions, like national audit offices around the world. In addition to that 5%, we have of course launched the Governance and Transparency Fund, which is supporting 38 projects to enhance governance and transparency across the world, and a large part of that is focused on parliamentary strengthening. Mark, do you want to say something a bit more about the country work that we are doing there?
Mr Lowcock: Yes. I think that in some countries we are currently a bit above 5% and in others we are a bit below. Just to give some examples of the sorts of things that Minouche has been talking about, we have been doing a lot of work with the Parliament in Tanzania, providing additional assistance both to the Speaker, who is an opposition Member of Parliament, and to the Chairman of the Public Accounts Committee ----
Q7 Chairman: We visited Tanzania and we met him.
Mr Lowcock: Interestingly, when I had a conversation with the Speaker and the Chair of the PAC earlier this year, one of the things they said to me was that they value the fact that we do a lot through the budget in Tanzania because that reinforces their role in holding the executive to account on the budget. Equally, in Tanzania we do a lot to try to strengthen the voice of civil society organisations to lobby on issues in particular, so we finance the Friends of Education in Tanzania which brings together actually 26,000, I think, people who are trying to improve their local school and to bring forward both individual messages about their school, but also then collective messages to the executive, and we are financing a growing number of women's organisations to try to improve the way in which the executive responds to the needs of women and girls in Tanzania. Those kinds of examples we have in other places as well, but the precise things we do obviously vary from country to country.
Q8 Chairman: So that might feature in future reports?
Mr Lowcock: Yes, absolutely.
Ms Shafik: Yes, definitely.
Q9 John Battle: Just to explore the shift in emphasis in the White Paper to fragile states, but also there has been a budget shift to the fragile states already in some ways, I just want to try and tease out the government expenditure on fragile states so far because I think the question that you answered for the Committee for this financial year is suggesting the disbursal of 50% of country programme funding on fragile states. Can you tell us how much in total did DFID spend on fragile states in the financial year 2008/09 and what is the forecast for 2009/10, and then what proportion of the total aid programme do those numbers actually represent so that I can get some indication of the shift?
Ms Shafik: The amount we spent last year was about £1.2 billion on the fragile states which was about 50% of our bilateral programme, and our commitment in the White Paper is to continue that share of 50% going forward on a growing baseline. This is an evolutionary policy because, as you well know, we think fragile states are under-aided to the tune of about 43% relative to what they should get, given the need and levels of poverty.
Q10 John Battle: To the tune of?
Ms Shafik: The estimate is about 43% under-aided, so we feel that we need to fill some of that gap. Mark, do you want to say a little more about how you see that going forward?
Mr Lowcock: Well, in terms of some of the
specific things that we will do next year, to come on to the other part of your
question, Mr Battle, the Africa budget, where most of our fragile states work
is at the moment, next year will be £1.75 billion compared to about £1.5
billion this year. Almost all of the
increment is going into fragile states and, in particular, four of the biggest
fragile states,
Q11 John Battle: But the implications of that are what? The Permanent Secretary says that, if there is an estimated underspend now and you are increasing the focus of the programme, then the pressure on staffing and resources, given the task in fragile states, will mean that you will get a massive back pressure in the Department on both budget and stuffing, is that not right, and how would you balance then the need for the efficiency savings with the demands for working in not only a more complex environment, but one that is more costly in staff and resources? How are you balancing those factors in that shift?
Ms Shafik: In our decision-making about allocating our administration budget, we have tried very hard to protect the budgets of fragile states and the front line, so, if you look at the proportion of our administration budget spent in fragile states, it has actually increased over this CSR[1] period. We have tried to take the hits on the administration budget elsewhere, primarily in the back office through de-layering and other mechanisms because, you are quite right, the costs of operating are far, far higher and they are much more staff intensive, plus you often have additional security costs. Those costs vary enormously, so in places like Nigeria, the administration cost as a share of the programme is about 6.4%, whereas in Pakistan it is far less, it is about 2.6%, so it varies, and in Afghanistan it is quite high, it is 5.7% because of course you have got lots of additional security costs associated with operating there, so we acknowledge that it is more expensive, but we have tried very hard to protect those front-line resources because we think that the poverty benefits of operating there are really high.
Q12 John Battle: You have given us some indication of the DRC, Sudan, Ethiopia, Afghanistan, Pakistan, and we can all think of some places, but I sometimes think that the phrase or the expression 'fragile states' is a bit of a holdall that we can put anything into. The World Bank has 'insecure states' which clearly refers to governance and, when we are talking about climate change, they talk about 'vulnerable states' as in Bangladesh. I just wondered, in terms of the complex definition of a fragile state, how will DFID ensure that engagement in a country and on the ground actually takes into account the different kinds of fragile states because I imagine that somewhere like Nepal and Bangladesh are very different from DRC, for example, which is very different again from Afghanistan? How are you doing that analysis?
Ms Shafik: That is very true. I often say that fragile states are a bit like unhappy families in Tolstoy's Anna Karenina, that every one is unhappy in its own special way! That is very central to our strategy in fragile states, that there are unique causes of conflict and fragility and you have to understand those very well, which is why the White Paper commits us to doing much more sophisticated political analysis of understanding the sources of fragility and adapting our policy to the very different contexts. Maybe Mark might say a few words about how that plays out very differently in some of the range of countries that you identified.
Mr Lowcock: We have some common analytical tools which we try to deploy in every country to think about our future work programmes, so we have a country governance assessment and we have a conflict assessment. Those things actually came out of the 2006 White Paper, as you will recall, but the point that we have made in the 2009 White Paper is that we have gone a little way in terms of the journey on doing better in analysing how to operate effectively in fragile states, but we have quite a lot more to go, so that is why we have developed this four-part analytical framework looking at political settlements, with a stronger focus on security and justice as a programmatic sector, a stronger focus on basic services delivered to poor people through a conflict and then trying to keep, fourthly, in our minds the whole time what the underlying drivers of conflict are. Now, if you look across the range of our programmes in fragile states, what you will see is that in some places we have a lot on the basic service side, in some places we have more on the security and justice side and in some places we have more on jobs. We have just taken delivery of a first draft of a synthesis of our country programmes evaluations in about seven or eight fragile countries and one of the things that has told us is that we need to do better in striking the balance between building up the capability of the state and directly delivering services. Overall, what the evaluation says is that DFID's devolved model works well because it means we are close to the issues and that we have played a leadership role internationally in trying to get more attention to the fragile states, but that we need to work harder to get senior and experienced staff to work in these places and we need to try to generate a stronger impact from the multilaterals where the evaluation is a little bit critical of some of their performance and also our ability to get traction over that.
Q13 Chairman: Are you able to share that kind of information with us?
Mr Lowcock: We will publish the evaluation. I can run through a few more of the headlines, if that would be helpful.
Q14 Chairman: Or you could give us a note.
Mr Lowcock: Yes, absolutely.[2]
Ms Shafik: I think the evaluation itself will be published in the New Year. It is still in draft form.
Mr Lowcock: It will.
Q15 Mr Lancaster: Chairman, we will come back to the multilaterals in a second. Whilst I do absolutely recognise that every fragile state is different and I would not want to focus entirely on Afghanistan, nonetheless it is an area that you have been operating in now for some time, so can I just ask you what lessons you feel you have learnt from operating in Afghanistan and, given that there have been some criticisms of DFID's work in Afghanistan, what lessons do you feel can be learned when it comes to expanding the programme to other fragile states?
Ms Shafik: I will start and then I will
let Mark elaborate a bit more. I think
on
Mr Lowcock: I think the biggest generic
lesson is exactly the one that the Select Committee put in its Report at the
beginning of last year, which is that we need to have a strong focus on
Afghan-isation, on moving towards a position where the institutions of
Afghanistan are able to do more of the job really in terms of service-delivery,
but are also more accountable. It is
another example of this dilemma that the evaluation exposed of the balance
between direct service-delivery, which we can control ourselves which might be
more effective in the short run in getting services to people, as opposed to
something which over time is building up the capability of the state to do more
of its own job, so that, as I say, from your Report last year, we think is the
biggest lesson to hang on to. The two
things this year we have put more attention on are the ones that the Secretary
of State flagged in his speeches, firstly, in
Q16 Mr Lancaster: I do not disagree with the aspiration at all. I suppose I am a little bit concerned though about the delivery, and I declare my hand as someone who worked as a development officer in Afghanistan in 2006 as a Royal Engineer when, frankly, we saw almost no access on the ground from DFID staff. Now, progress has been made, but one of the current criticisms, which I know is going to come forward soon, is that, even under the current programme, there seems to be a lack through the PRT[3] of the updating of progress on the various DFID programmes. I realise that there is a cross-departmental tension there, but there is criticism that actually, when it comes to the delivery on the ground in Helmand, we are not seeing very much from DFID at the moment at all, so, given that you probably accept to a degree that criticism, how does that bode for future expansions into other fragile states?
Ms Shafik: I do not know how recent that information is.
Q17 Mr Lancaster: About 10 days.
Ms Shafik: Because we are getting the
reporting of quite a lot of progress in many areas in
Q18 Mr Lancaster: It is a conversation I would probably rather have away from the Committee, but I do have real concerns. If that model is being used when it comes to expansion to other fragile states, I am just curious as to how you intend to build on that model.
Ms Shafik: To be fair,
Mr Lowcock: I was last in Helmand in June
and my own assessment then, which is consistent with our continuing assessment,
is that things are better there now in terms of joined-up working across government
and in terms of delivery of real things to the people of Helmand than they were
some years ago. We have built nearly
2,000 wells in Helmand, we have enabled 60 kilometres of roads to be built, we
have provided clean water for over 425,000 people, and
Mr Lancaster: Chairman, I do not want to
dwell on Afghanistan and we should move forward, but on one point, yes, we have
dug 2,000 wells, but we did so without doing a water survey, which means that
we have actually lowered the water table, leaving the ancient karaz's that take
the water running off the hills in Helmand to run dry. That is hardly a badge of honour that we
should be wearing, so I think there are lessons that need to be learned about
how successfully we have delivered programmes in
Q19 Chairman: Just to go back, when we produced our Report, the figure for Helmand was a lot less than the figure you have just given.
Ms Shafik: Yes.
Q20 Chairman: And you made a virtue of the fact that this was a whole of Afghanistan approach here, that this was creating development for the whole of Afghanistan, not just focusing on Helmand, so it does sound as if you have slightly switched away from that, and I do not suppose it is 60%, but it does imply that you are putting rather more effort into Helmand rather than less.
Ms Shafik: The additional resources
partly come from the Conflict Pools, so we have not cut the amount we are doing
nationally, but we have mobilised additional resources from the Conflict Pools
for
Q21 Chairman: Does that mean you are spending less outside Helmand?
Ms Shafik: No, we have not cut the
national effort, but we have mobilised more resources to
Q22 Chairman: So you have put more resources into Helmand additionally, but you have not cut them elsewhere in Afghanistan?
Ms Shafik: Exactly.
Q23 Mr Lancaster: As I say, I do not want to dwell on Afghanistan, I would like to move forward. The Public Accounts Committee have highlighted that many of your usual multilateral partners also struggle when it comes to staff and capability, yet this is one of the areas where you want to sort of increase your work in fragile states, so I am really wondering, given that concern, how we square your desire to do greater work with the multilaterals.
Ms Shafik: They do, and I think that just as we have learnt that, in order to operate effectively in fragile states, you need to bring defence, diplomacy and development in an integrated fashion, you have the same set of issues in a multilateral system. So in a UN context the need to integrate peace-keeping, state-building and long-term infrastructure and development together is a key issue, and it is why we have pushed very hard to get the approved management of UN support operations. We have also pressed the UN, the EU and the World Bank to agree a clear division of labour in fragile states rather than having them blurring the lines of accountability. We have also pressed them to push for further decentralisation of their own staff into fragile states, and again they have struggled in some cases to get the right people and the best people to work in some of these tough environments. We have increasingly made these types of requests and have made our own funding of those organisations conditional on progress in those areas so, for example, in the replenishment of IDA[4] in the World Bank, increasing decentralisation, particularly in fragile states, was a key performance criterion for our funding. Similarly, with the UN state-building and peace-keeping funds, we are again making it contingent on better performance on the ground. We are not there yet, but we certainly are aware of the issues and are pressing the multilaterals very hard to do better.
Q24 Mr Evans: Looking at the effectiveness of multilateral funding, I want to clearly divide this up into the two major ones, which is the European Commission and the United Nations. Looking at the Annual Report for 2008/09 on page 122, it talks about the indicator being the improved effectiveness of the European Commission and the current position was little or no improvement. Looking at page 15 of the statistics, it shows as well that the amount of money in 2007/08 was about £1 billion that they were getting from UK taxpayers and that is going up to almost £1.2 billion, and indeed will relentlessly go up in the way that the European Commission aid funding works. Can you tell us why you think the European Commission is so useless at spending all our money and would it not be better if DFID spent it all itself because, by the indicator, DFID is far more effective at spending the money? When we are looking at the people who are getting it, why is it that we are actually short-changing them by allowing this to continue?
Ms Shafik: I think we would have a slightly more nuanced view of the performance in the European Commission. I think we would make a big distinction between EDF, the European Development Fund, which we think actually performs rather well, and the rest of European aid, which mainly focuses on the neighbourhood and middle-income countries in the neighbourhood. The EDF, in contrast, actually focuses much more on low-income countries and, if you look at the recent OECD peer review of European aid, they point out that EDF has improved enormously on donor co-ordination, on being more predictable, on being more decentralised, getting more people on the ground, on using results-based evaluation and on their portfolio performance, and they have also done a very good job of getting more social protection into the poorest countries during this economic crisis which was quite key for providing a safety net, so EDF has improved considerably. I think the rest of European aid, which does focus more on middle-income countries in the European neighbourhood, is more politically driven and less poverty-focused with much less supervision on the ground to make sure that programmes are effective, and we have a more negative assessment of the performance of that part of the aid. As you probably know, that bit of the European budget is an assessed contribution over which we have very little choice over the amount. The EDF, on the other hand, we do have a choice over, and I think that is why we have been able to drive much better performance with the EDF.
Q25 Mr Evans: So you say that he who pays the piper normally can dictate how the tune is played, and in this case that is not the way it happens at all because the money is taken from us, and you think that if it was up to the United Kingdom to have more control over its own budget then, perhaps, you would have more influence over improving the efficiency of how that money is spent in neighbourhood and middle income countries?
Ms Shafik: Yes. I do not think we have no influence, because we have some say, but, clearly, we have much more say where we have more discretion.
Q26 Mr Evans: It is not good is it? Do you hope to make any influence? I am sure you are working with a number of other donor countries who look aghast at the way that this money is misspent - or not well spent. Are you not able to give some leverage upon it so that it is better spent?
Ms Shafik: We have quite a few levers,
actually. We monitor the performance of
the Commission through our country offices in the countries we operate in; we
monitor its performance through our representation at UKREP in
Q27 Mr Evans: Looking at the United Nations, I can see that clearly they have this United Nations Delivering as One programme. Is the European Commission delivering as one?
Ms Shafik: I think that is a work in
progress, would be my answer. To be
honest, a lot of it will depend on what comes out of
Q28 Mr Evans: I was going to ask you about that as well, actually. I do not know if you want to say anything about how you believe Lisbon is going to impact on it, other than, perhaps, giving more powers to the European Commission to be able to be more effective in aid?
Ms Shafik: We think that a strong Development Commissioner with a clear mandate to deliver development effectively with control over development policy programming and implementation would result in the best and most effective use of European aid.
Q29 Mr Evans: I read a press release that Gareth Thomas put out on 22 October - so it was not so long ago - when he was looking at the United Nations delivery programmes, and he said that in the past, in any one developing country, the United Nations has had different offices for each agency working there. Some countries have had more than 20 different UN agencies working with them. That is just staggering - to think that there is this huge bureaucracy, that money will perhaps be going into some areas and not going into others because everybody thought somebody else was doing it. This is where I am a bit concerned about why we are waiting - I think it is 2007 that this programme came about - and whether the European Commission is missing a trick; that if they have got a lot of agencies working there in different fields there is a lot of money, basically, going on bureaucracy which simply is not getting through to the front line.
Ms Shafik: In the European case they do not have an issue of many multiple agencies, so they do not have that problem, and their administration cost as a share of total spend is actually quite low - it is on the lower end of most development agencies. The UN, I think, is a different story. As you know, we have pushed very hard on the One UN agenda and we have put our money behind it. We have made it clear that we want to see one UN programme, one UN budget, one clear leader and one office, so that it is coherent. In the countries which are the leading pilot countries for the One UN we have said that we will only put our money through that channel; we will no longer fund little bits and pieces for different UN agencies. In addition, we now have five UN agencies on performance contracts, so we say to them: "We will give you core funding but, actually, the incremental funding will be dependent on you delivering against an agreed set of performance benchmarks, and so we now have UNDP, UNICEF, UNHCR, WHO and the World Food Programme on these performance contracts, and we have just done our first assessment of them and about half of them got their performance tranche and about half of them did not.[6] So it was quite clear that performance was consequent. We have now applied that also to the Global Fund, so we are trying to be quite tough in raising the bar on performance. We ourselves are concentrating on money in the UN system in a handful of agencies. We gave about £750 million last year to the UN; 76% of that goes to those five agencies on performance contracts. So we are focusing on the better performers and then raising the bar on performance every year.
Q30 Mr Evans: Looking at the number of countries that are involved in the Delivering as One, it started off as eight and I think a further six were adopted. Where are we now on that? Surely the aim must be that all funding delivery is done via the United Nations Delivering as One?
Ms Shafik: That is, ultimately, our objective and I think they are on programme; I think they are now up to roughly about 40 countries that are supposed to be moving on that path, but we have to keep pushing because there are huge, as you can imagine, forces of inertia against that strategy.
Q31 Mr Evans: The major funders will be the ones that will make the change. Are we liaising with a number of other countries who also give huge sums of money to the United Nations in ensuring that that they snap out of this lethargic inertia which, quite frankly, could be costing lives?
Ms Shafik: Yes, we are working with others. For example, with the performance contracts with the five major agencies, we now have several other donors making their funding contingent against those performance criteria, which obviously increases the leverage considerably.
Q32 Andrew Stunell: Perhaps I could take us on from those specific institutions to the international financial institutions where there seems to be a rather similar range of issues about effectiveness. It is fairly clear that the Paris Declaration targets are not going to be met. Do you think those are going to be renewed? What is going to be the monitoring system post-2010?
Ms Shafik: I think performance against
the
Q33 Andrew Stunell: I was a bit surprised that you actually recorded all of this as being an improvement, bearing in mind that each one, when you look at them, is not an improvement. Can you say something about how you actually evaluate how they are performing and how DFID intends to engage with that in the future?
Ms Shafik: There has been improvement of many agencies and people are on the right trajectory, so the reason it is an improvement is because there is a positive trajectory, but they have not necessarily met the target.
Q34 Andrew Stunell: If there has been no change the trajectory must be rather shallow.
Ms Shafik: For some agencies the
trajectory is shallow; for a large number particularly the UN ones, it is quite
shallow. In terms of how we monitor, all
agencies have to report regularly each year on how they are performing against
the
Q35 Andrew Stunell: Do you take that report on face value or does DFID look behind that and say: "Actually, that trajectory report is like this but it may be more like this or maybe like that?"
Ms Shafik: We use, obviously, our positions on the boards of some of these institutions, like the international financial institutions, to review progress, and to press for further progress and to probe on the numbers to make sure of that progress. For example, we have been having quite a robust debate with the World Bank on whether they are actually making enough progress on decentralisation and getting more capacity and delegation in the field. That goes beyond the narrow discussion of meeting a target but actually asking are they meeting the spirit of the target whereby you have more capacity on the ground to engage with partners in the field.
Q36 Andrew Stunell: Do you make that a performance indicator for them in terms of your support for their projects?
Ms Shafik: Yes. For example, in the case of the World Bank it is a performance indicator in the IDA replenishment, which we fund, and so those discussions as to whether they have met that are a key part of the discussion on whether we would continue to give large contributions to IDA.
Q37 Chairman: When we started out on this process of looking at your annual report and the traffic lights related to the MDGs, we had a discussion that while the MDGs are global, DFID is one player. Where is the connection, and how can you evaluate what you are doing and the impact it is having on that? What do you feel you have put in place to measure that effectiveness and to be able to say that as a result of our engagement, whether it is across sectors or by country, we can show that specific outcomes have happened? Just looking at some of the answers you gave us on skilled birth attendants, you say how many more births are taking place with attendants but it does not say in your answer what effect it has on maternal mortality, which of course is an MDG. Are you better able to make that connection, and if so how?
Ms Shafik: I am going to ask Richard to say something in a moment but I think we have made progress on that. On the new format for our annual report this year, I am particularly proud of the fact that for the first time we have been able to actually show results of things that DFID has achieved in the last year for the first time, so half a billion condoms, seven million bed nets, training of health professionals, and so on, and that is a result of work we have been doing to make sure that we use the same indicators to measure the outcomes from all of our investments, both multilateral and bilateral. So the numbers you see here - say the seven million bed nets - will be seven million bed nets distributed through our country programmes but also through our investments in the Global Fund and the World Bank and others.
Q38 Chairman: So, on that one, the logical thing to follow through is to say what was the incidence of malaria in the year after the distribution of bed nets.
Ms Shafik: Exactly. On that, in the case of bed nets, for example, we know that based on studies that have been done on the impact of bed nets on malaria deaths we have saved 80,000 lives as a result of those seven million bed nets. Similarly, we vaccinated three million children against measles, which we know prevented 30,000 deaths. Some of those bits of analysis are extrapolations from research, which is quite a legitimate way of doing it, but it is something that we continue to try and improve on, and I will ask Richard to say something about how we are working harder to try and more clearly attribute the outcomes from DFID investments.
Mr Calvert: I think, as Minouche says, the challenge has been how to bridge the gap between what we do to manage and score our individual projects and programmes on the one hand and the high level MDGs on the other, and the high level performance framework has been at this global level. By doing that it has enabled us to focus on the key MDGs which are off track. The thing we have put in place to try and bridge that is exactly as Minouche describes; it is the setting of intermediate indicators which will help to get from the country level to the global level. There will never be a simple way of being able to attribute specific outcomes just to what DFID is achieving; we have to accept that there will always be an element of wider attribution, particularly where we are working alongside other donors and governments. If we look at the overall picture on measuring impact and effectiveness, there are a number of other areas where we have tried to step up what we are doing, some of them internal and some through the independent evaluation work that we are funding. So within the Department we have set up the work we do to make sure that all our interventions have clearer outputs specified at the start and clearer measurements specified at the start. We have invested quite a lot of effort in making sure that country teams have the right skills and the right tools to do that. We have moved to setting up results frameworks for each country programme which makes us focus more clearly on what exactly each country team is achieving. Outside that, through the independent evaluation work, we ensure that all our PSA[7] target countries have full independent impact evaluation every four to five years (we are doing four to five of those reviews each year), and that is a chance for a team who are, obviously, not directly involved in programme management to step back and take a longer term look at what we are achieving.
Mr Lowcock: Can I add another thing that we have invested in over the last 12 months? We have done two major reviews of our portfolios in the education sector and in the health sector, where we have tried to aggregate, particularly at the outcome level, what we have achieved. For example, in the education sector we are currently financing five million girls and boys to go through basic education in developing countries - which is slightly more than there are in primary school in this country. It costs us £60 a year to keep a girl or boy in basic education in a developing country.
Q39 Chairman: Is this through either budget support or direct ----
Mr Lowcock: Through a combination. A budget support example is that in
Q40 Chairman: I think that is helpful, but I can give a couple of examples. In Afghanistan the good news story was there were six million kids in school and two million were girls, but that has been the same figure for the last two or three years. Why has that not improved? Indeed, how can you find out (we might want to come back to that on staffing)? How do you know the effect of funding? To take your Tanzanian example, you give them money but are you actually spot-checking and visiting; are you able to really satisfy yourself that not only are you making a difference but the programme is really delivering? As I say, I would have thought we would have heard something different out of Afghanistan by now.
Mr Lowcock: Maybe I can say a little bit
on the
Q41 Andrew Stunell: How much flexibility is there in real life? If you find a programme or a country investment is really not delivering, there are two options: there is the "system working well so send more money" approach or, alternatively, "This is not going anywhere, we will have to pull out". Just tell us about what the mechanisms are for taking yes/no decisions.
Ms Shafik: We actively manage our portfolio (and Mark can say a bit more about this), but every programme that we have we assess on a one-to-five scale every year: one means it is meeting all of its objectives; five means it is meeting none of its objectives. Mark gets a quarterly report on the portfolio quality every quarter; he reviews that regularly with his managers and heads of programme in country offices. We have taken quite an aggressive stance over the last couple of years about what to do with poorly performing projects. So if your project is scoring four or five for six months you are basically sent off to restructure and do something about it. If, after six more months, you cannot restructure and start to deliver better results we have been quite actively managing those projects out of the portfolio and just saying: "Look, if it is not working we can use the resources somewhere else; let's call it a day and move on", and accept that sometimes we do not deliver all our objectives, but better to catch it early and move the resources than to let them languish for many, many years on the books.
Q42 Andrew Stunell: Could you give us an example or two?
Mr Lowcock: Every year we review the extent to which each of the currently 875 major investments we have are achieving their objectives. I think in almost all cases there will be a redesign because, to some degree, there will be scope for improvement or there will be new problems identified, or there will be other issues that arise which require course correction, if you like, as you go through. As Minouche says, we have a growing number of cases where we have either closed a project or we have completely redesigned it. An illustration of that is four years ago we had 1030 of these major programmes; now we have, as I say, 875. A lot of those are not just things coming to the end of their natural life but early closure. Probably, in the past, we were not fast enough on our feet to close things when they were not going well enough; there is obviously a balance to be struck because we are trying to do different things in difficult places and you will often struggle early on in a project, but we probably let things go on too long in some cases, and we have tried to get better at dealing with that. In almost all of our country programmes we have had cases where we started something and did not pursue it, or we dramatically redesigned it.
Q43 Andrew Stunell: So more strategic level decisions about whole country programmes. If you are trying to reach an MDG, the cost-effectiveness of spending £200 million here compared to £200 million there - what is the process of evaluation?
Ms Shafik: As part of our business planning process we go to ministers quite early on with what we call issues of choices papers, where we say to ministers: "Here are the big issues in this country and here are the choices as to where we can intervene", and in most of the countries we work in the needs are vast and our resources are limited, so we could focus on education or we could focus on health or we could do water, and that set of choices is taken by ministers informed by that analysis we have prepared. In an ideal world we would have economic rates of return, social rates of return, calculated for every single possible investment that we could make and then we would choose the highest return investments in poverty reduction that we could. In practice, it is not quite so straightforward and obviously there has to be some judgment, but that judgment is informed with whatever evidence we can mobilise based on what the needs are and what the costs of different interventions are. Andrew chairs the Committee that reviews these country programmes.
Mr Steer: Just a point at a more strategic level, looking at the sector. I think in every single sector we could tell you how the kinds of interventions today are different from what they were five years ago because of a learning. We have to be very careful not to pull out of a sector. That is exactly what the development community did when it became too difficult in agriculture about 15 years ago, when rates of return in rural development projects were really not very good, and the share of donor money going to agriculture and rural development fell from 13% down to 1%, and we now have a big problem because of that. Much smarter would have been to say the problem is just as important as ever it was but we had better learn what we did wrong. So I think what we need to be able to articulate is how the kinds of interventions we are doing today - whether in social protection or urban development or education or health - are different from what they were, not: "This is too difficult; we are failing, therefore we are going to pull out of this sector".
Q44 Andrew Stunell: Choices about: "This is not delivering". How does the decision get taken whether to increase the input to make it deliver or to pull out and say: "Actually, that's a dead horse"?
Ms Shafik: The person who manages each project or programme has to make an assessment against an agreed set of targets which every programme has to meet. That is quantified; there is a baseline in every programme now agreed: "This is where we started; these are the objectives, in year one you have to have achieved X, Y and Z, and in year two you have to achieve", and so on. Each project officer has to assess whether they have met those objectives or not and give it a score. Then that would go to their manager and then decisions would have to be made about the portfolio quality. The managers themselves have to meet targets for improving portfolio quality. At the moment, about three-quarters of DFID's projects meet all or most of their objectives. If that number starts to slip too low in certain parts of the business - Mark would be on the case of the manager responsible and saying: "Your portfolio quality is deteriorating, which are your problem projects?" - we, as the board, get lists of about - it varies over time - 10 to 15 programmes in a portfolio that are not delivering in any quarter, and the people who are running those projects are scrutinised and managed more intensely to make sure that something is done.
Mr Steer: Just looking across countries, we have a development committee that I chair, and the job of that is to both learn from existing portfolios, put the best possible design and best practice out there to our country offices and to forge policy so we can recommend to ministers. Then, 18 months after each policy paper is published, we go back and say: "How is it doing and what are the new lessons that are emerging", so that the next generation will be better. That is a process which is very live and in real time within the organisation.
Q45 Mr Lancaster: Can I take you back (we mentioned it in passing) to risk management and tackling fraud. In particular, the National Audit Office has concerns about the fact that the Department may be exposed to significant risk. In particular, could you respond to the 2009 Capability Review finding that risk management away from the centre, in country offices, was seen to be inconsistent? Do you feel that, perhaps, this is a direct result of staff cuts in countries?
Ms Shafik: I will let Richard say
something about corporate risk and Mark say something about country risk. We operate in a very risky business and we
are very aware of risk in everything we do.
We manage risk in our portfolio in the way we have just described, which
is that we look at which bits of the portfolio are performing badly and we try
to manage out poorly performing programmes.
We also manage quite a lot of security risk in our organisation, and
Mark chairs the security committee which is actively looking at where we face
risk to our staff in security terms in different parts of the world. We also, obviously, operate in climates which
have high levels of fiduciary risk. We
manage that in many different ways, and Richard will say something about that,
but one of the most important ways we manage it is in the choice of instruments
we use in different contexts. So in
countries where we have very little confidence in their ability to account for
money, where we have serious fears around corruption, and we are not
necessarily convinced that the government's policy and intentions are aligned
with ours, we are very reluctant to put our money through their systems, and we
make those judgments in the governance assessments that we make. So just to take an extreme example, in
Mr Calvert: As you say, Minouche, we think of risk probably at three levels. There is a set of generic risks that runs across everything we do. Some of those are about the high level outcomes we are trying to achieve, so at the moment managing the global economic downturn is a key risk running across what the Department is doing. Equally, it picks up fiduciary risk, again as Minouche has said, so across all our programmes we would say that managing funds well and showing they are well used is a key and we have to have some mechanisms in place across the whole Department. We have fiduciary risk assessments, we have stepped up audit and we have stepped up evaluation work. So there is a set of risks that we think about there, and I think those are reasonably solid. Equally, we have a set of risks that are essentially around people and security, which again we take very seriously. The area that we are doing some further work on, and justifies some further work, is this piece in the middle, which is how do we think about risk within the portfolio - within the portfolio of a particular country but also for example across a sectoral portfolio. The point that has been picked up by the NAO and others is that we have not always thought consistently about that, so we have not always had a consistent view across the organisation on what is the balance of risk and return and particularly how do we think about that risk and return equation across the portfolio. Mark mentioned a few minutes ago the portfolio reviews we have done of health and education, and that has given us a good way of starting to think across country programmes about what are we trying to achieve across all our health work; what are the elements of that that are high risk and low risk; where can we get better value for money; and what lessons can we learn? We are complementing that with a piece of work which is looking specifically at riskiness within portfolios so we are looking at how do we think about that risk and return equation across portfolios. It is something which justifies further work. We are doing quite a lot of work on it and I should think over the coming months there will be more we can say about how we then translate that into a set of management tools in the Department.
Q46 Mr Lancaster: Can you say a few words particularly on fraud. Moving forward, you intend to move into fragile states working with third parties. How are you going to manage that when it comes to fraud? If you look at the figures, levels of detected fraud seem surprisingly low, for example. Are you concerned about that? Does that mean that we simply have not got a high level of fraud or we are just not detecting it?
Ms Shafik: We have actually made a bigger investment in fraud and audit over the last couple of years. That is another area of the budget that we have tried to protect because we knew that, going into fragile states and riskier environments, we would need more resources for that, so we are looking more, not looking less, for worries around fraud. We are finding more cases. If you look at our reporting on fraud, there are a growing number of cases but the amounts are still really quite small, so there is nothing so far that has caused us to consider any big systemic risks on fraud, but it is something we are always watching and always aware of. I think the biggest thing, in addition to this investment we are making in more capacity, more auditors, more people monitoring, the fraud hotline and all those sorts of things, is just making sure that we have a culture where people will speak up if they are worried about something. In fact, most frauds we find out because a member of staff or someone we work with has brought it to our attention. That is a key piece of mitigation that I think we are also putting an emphasis on.
Mr Calvert: I think the other thing to say is that we have stepped up the work we do on anti-corruption activities within countries as well. That is an important complement to the direct fraud work that we do within the Department. We look very hard at whether the fraud is directly against DFID funds. I am sure Mark could say more. We have also stepped up the work we do in terms of overall country budgets and corruption activities within partners.
Ms Shafik: We are also
stepping up work in the
Q47 John Battle: Could I turn back to the overall budget and the Comprehensive Spending Review back in 2007. All departments then were put under pressure of value for money and DFID had to adjust to that and put programmes and plans forward. I want to tease out the impact of your efforts in that respect because you have suggested there will be £110 million worth of the savings generated by shifting more resources to countries where "UK aid will have the greatest impact". Does that mean shifting resources to countries with good governance?
Ms Shafik: It is a combination
of countries with good governance and lots of poverty. As you probably know, we have closed offices
in many middle-income countries over the CSR period, in about 12 countries,
mainly in Eastern Europe and
Q48 John Battle: I am slightly anxious sometimes in Britain as well the way that inner city regeneration work programmes work - we go to the areas that can manage it rather than those that cannot so we end up with deep pockets of poverty, not least in my neighbourhood, because the resources never got down to tackling the challenges in the way that they should. I would be worried if you were cherry-picking, to deliberately use an emotive term, the good governance countries. How is that to be reconciled with the focus on fragile states where the poorest of the poor might be?
Mr Lowcock: I think the
main criticism that we hear more often is that we are going too far into the
non-cherry type territory. In my list
earlier -
Q49 John Battle: That is where you say you are making your budget savings. What you are saying is that you are going to save £110 million in the overall budget by shifting resources to countries where UK aid will have the greatest impact. If that is the good governance countries that is the easier bit to do. Where there is good governance you can work with the government, you can do budget support, you can get numbers and figures to prove that the aid is effective. In the fragile states, where I do support you and I want you to be, where it is much more difficult, how can you then generate those £110 million savings because it is going to cost you more?
Mr Lowcock: It is because relative to other places they are under-aided so the marginal impact of aid in those kind of places is higher than it would be in better performing countries. That is how we generate the efficiency calculation.
Ms Shafik: I think the misunderstanding is when we say we are moving resources to where they could be better used, we do not mean the good governance/easy budgets countries. We actually mean the fragile states, so that is why Mark is implying that we are accused of self-flagellating a bit.
Q50 John Battle: I think what I am trying to tease out is I am looking for the strategy not to develop into the UK development strategy, as it might be described although it does not really exist, where we can go into the areas we can easily handle with the big projects and it never reaches the poor in our neighbourhoods. That is why I want to make sure that your budget savings are completely compatible with the prime objective of getting to the poorest people in the poorest countries, which is where DFID is ground-breaking in its approach to development and should stick with it. They are reconciled, are they?
Mr Lowcock: Yes, that is exactly what we are doing.
Ms Shafik: But it does mean we are squeezing other programmes in other bits of the office.
John Battle: And you set that out whether it is the back office or whether it is the focus on central communications, and I do not need to go into that. It is just that particular point I wanted to be clear on.
Q51 Chairman: Can I briefly explore how the exchange rate fluctuations affect you. Obviously there was a point earlier in the year where they were pretty sharp and the pound collapsed very suddenly and by a big amount. What was highlighted then, and the figure I have is £110 million, is that you had to cover the exchange rate gap on the European Commission contribution. On the other hand, you say you have an unrealised exchange rate gain of £760 million so where are you, I suppose is the point? What impact does it have? The point made here is that sometimes it is not as bad as it looks because there are price effects as well. Do you need to think about hedging now that it is government policy that you can? I know hedging is not what you are in the business to do but when you have such large fluctuations, can you handle it within your own flexibility and offsets, where they kind of wipe each other out, or do you have a problem that you really need to handle differently?
Ms Shafik: I am going to let Richard talk about our future plans, but in terms of the impact so far, we are fortunate in that our aid commitments are largely denominated in sterling. The only exception is the European contribution to the EDF where we did take an exchange rate hit.
Q52 Chairman: That is fine for you but it is not necessarily fine for the other side.
Ms Shafik: Exactly and I will come to that. In terms of our partner countries, when the exchange rate fell we did look systematically across them and ask ourselves how much are they suffering as a result of the value of our aid falling. Fortunately, the vast majority of our partners have a diversified set of donors so the fact that our aid was worth less was offset by the fact that their European aid was worth more. The only exception I recall when we did that review was Sierra Leone which was more dependent on UK aid than other countries, but for most countries the effect of the exchange rate was sort of neutral, to be honest. In terms of our own costs, we manage the exchange rate movements through our contingency reserve and up until now that has been sufficient. The Board has discussed this several times, along with the chairman of our audit committee, as to whether we should look at hedging, and up until now we have been able to manage it within our contingency reserve. The amounts of our admin budget affected are quite small. If you look at the amount of foreign exchange we had to purchase for administration costs in our local offices, in 2008-09 it was £3 million more than it would have been had we used the exchange rate at the beginning of the year. So as a proportion of our total administration budget it is not going to break the bank. Similarly, this year the foreign exchange purchases for local offices were £2.1 million more expensive than had we fixed the exchange rate in April 2008. Of course this varies by country. We operate in so many places. We have lost 23% on the dollar and the Vietnamese dong but we have gained 26% on the Congolese franc and 11% on the Zambian kwacha.
Q53 Chairman: From the table in your Annual Report, I guess there is a whole dissertation to be written on exactly why there are variations between sterling and these currencies. Afghanistan seems to be performing better than the UK according to this. Specifically, Afghanistan, Malawi, Yemen and Bangladesh on your table are the ones that are still around the 20% mark. Have those particular countries led you to have to do something specific?
Ms Shafik: We have in
some cases had to make economies where the value of sterling is less.
Mr Calvert: We also made some adjustments in year so last year we put an extra £3-£3.5 million into compensation for the impact of exchange rate adjustments on admin budgets so we did manage to respond to some of that fluctuation during the year. Hedging is all about buying some short-term certainty. It does not necessarily buy you a better deal in the long term. It is something that we have been cautious about stepping into, particularly given the basket of currencies we use on the admin budget. On the admin budget we think we can continue to manage it in the way that we have so far. Where I think we will change is on the programme side and the EDF contribution is a big one and it is vulnerable and, subject to a check on where we think the currency markets are in the spring, we are thinking that we will probably forward buy some euros for the EDF contributions next year.
Q54 Chairman: Where do you make dollar contributions?
Ms Shafik: We do not. We have some operating costs in dollars but we do not make any contributions in dollars.
Q55 Chairman: Obviously it affects your overall purchase and also your international ratings in terms of what the UK delivers in aid, and I notice we have fallen behind a little bit compared with Germany and France, whereas when the pound was strong we were ahead of them. Maybe that pecking order does not matter but has it meant that we have delivered less actual development aid?
Ms Shafik: Well, in those countries where the exchange rate moved against us clearly the value of our contribution was less, so in those countries that you identify, for example, the value of the aid we give was 20% less. In terms of total development effort, that also means that the value the European aid programme gave was worth 20% more, so in terms of the total development outcome I would not say that it was less but our own share of it was certainly less in some places.
Mr Lowcock: It is clearly the case that especially in 2008 the terms of trade moved against a number of developing countries. The oil importers and the fertiliser importers took a big hit, and that was partly about exchange rate changes as well as about price effects, so there is absolutely an impact on many of the countries in which we work of these kinds of movements, and that was part of what motivated the G20 package of support focused on the low-income countries and also partly what has motivated the thinking we have done about where to deploy our growing programmes especially in Africa and South Asia.
Q56 Mr Evans: To carry on with the administration points including staffing costs, the ambition seems to be that the Department wishes to reduce administration costs by 2011 by £8.9 million. Could you just explain to the Committee how you intend to do that?
Ms Shafik: Sure. Our strategy for meeting that efficiency objective is first and foremost to try and protect the front-line as much as we can and to continue to protect those bits of administration spend like audit and evaluation which ensure the quality and fiduciary soundness of what we do. We are planning to make savings in corporate areas, and Richard may say a bit more about that, particularly on HR, finance and comms. We are looking very actively at de-layering the organisation. We have already managed a 20% reduction in the number of reporting officers by flattening out some of the reporting chains in the organisation. We are looking at better procurement and trying to make some savings around procurement and stronger cash management in our multilateral partners. We will look at closing more country offices in the period ahead if we can. We are reviewing things like allowances and we are also being more creative about the delivery mechanisms, so if I may give an example that Andrew has led on, in the White Paper we have a strong commitment to try and do more work on growth. We could have hired 100 more economists in DFID to do that but instead of doing that we set up an International Growth Centre which is a partnership between Oxford, the London School of Economics and the global development networks in a series of organisations in the developing world, which will provide world-class advice on growth to some of our key partners. It will not be inside of DFID but it is in effect a delivery mechanism for one of our White Paper commitments to up our game on growth in some of our key partner countries. That is another mechanism whereby the pressure on admin costs has made us look at alternative ways of achieving some of our policy objectives.
Q57 Mr Evans: You said Richard may want to say something.
Mr Calvert: I could say
some more about the corporate side. As
Minouche says, it is about overall protecting the front-line but then looking
really hard at where are the costs that we have perhaps taken for granted over
the years. For example, we are
subletting part of our office in
Q58 Mr Evans: How many jobs are going to go in HR?
Mr Calvert: If you look
at the ratio at the moment, we have something like
Q59 Mr Evans: They add up to £8.9 million. You mentioned allowances as well. What sort of allowances are you looking at?
Mr Calvert: We are looking across the whole set of allowances. This is essentially for staff overseas who are receiving allowances for cost of living, for travel, for accommodation and for working in difficult environments. What we need to do there is to ensure that we do not disincentivise staff from going to work in exactly the kind of places where we are increasingly working. On the other hand, we have not looked hard at the allowance package for a number of years, so it is quite a good time, given the changing balance of posts, to look at that and see whether there are things we can do to make sure that allowances are targeted so that (a) they compensate people for genuine costs but (b) they incentivise the right kind of moves.
Q60 Mr Evans: I think a number of people were surprised the other day to read that bonuses at the rate of £45 million were being paid to staff at the Department of Defence. Do you also pay bonuses as well in your Department?
Mr Calvert: We do. Within both the Senior Civil Service and within the other staff pay arrangements we do have an element of performance-related pay. On the Senior Civil Service we follow the standard model across government. Within the Department we have a small element of performance-related pay.
Q61 Mr Evans: What is the global figure, do you think? If the Ministry of Defence is £45 million, yours clearly will be a lot less.
Mr Calvert: To be honest, I think I would have to come back to you on that rather than give you a figure that is wrong. We can do that.[9]
Q62 Mr Evans: How many within your staff for instance earn over £100,000?
Ms Shafik: Staff in DFID earning over £100,000?
Q63 Mr Evans: Yes, within the total?
Ms Shafik: It would be under 10.
Mr Calvert: It would be single figures, yes.
Q64 Mr Evans: As far as the general cut in the expenditure is concerned, you are giving a guarantee that with the cut in the costs of £8.9 million that none of that will be reflected in the delivery of service that you are providing? Will anybody be able to notice that they are not getting the same service any longer because of these cuts in 2011 when they are fully delivered?
Ms Shafik: The nature of the services we deliver will be different, so it will not be comparing like for like. I cannot say that we will be doing exactly the same things. Will we still be delivering an excellent development programme? Yes. If we had more staff, could we do more and better? Yes. However, we will not compromise on areas like fiduciary risk, evaluation and presence in fragile states and we will protect the things that are most important. Clearly there are some things we will not be able to do that we might have done otherwise.
Q65 Mr Evans: Could you also list the top five bonuses that were paid as well. I think people would be very interested to see if bonuses are playing a disproportionate amount in activity because clearly this is hugely sensitive now. Finally, as far as the skills gap that you are able to ascertain within your own Department, how are you able to ensure that that skills gap will still be met whilst you are cutting back on staffing costs?
Ms Shafik: We are in the process right now of doing a workforce planning exercise to try and identify what are the key skills we need going forward and what are the skills we need fewer of. Just as a simple example, we clearly need more people with climate change skills going forward in order to deliver our commitments. We need much fewer people doing HR transactions so we have got a strategy for reducing numbers of people doing HR transactions and upskilling and training some of our current people and doing some recruitment for people with climate change skill. Of course that varies by business unit so we are in the process right now of aggregating that story of what skills each business unit says it will need going forward and then reconciling that with our recruitment and training strategy as well as our exit strategy.
Mr Steer: We have 12 what we call heads of profession and they oversee the technical cadres throughout the organisation around the world, and it is their job to assess needs and also the quality and the changing needs and the increasing qualities, so they are very important in that. Issues of fragile states, yes, there is a set of skills that we need to continue to acquire if we are going to grow the programme there, for example, and climate change, and so on. So somewhat fewer of certain skills and somewhat more of others, but I think it is the job of these heads of profession to work with the HR department and the line managers to make sure that there is a coherent picture going forward.
Q66 Chairman: Before Mark Lancaster comes in on fragile states I have a couple of questions but can I ask one small point: where are you between Palace Street and East Kilbride? What is the split now? Are you transferring more to East Kilbride?
Ms Shafik: We currently
have about 750 staff in
Q67 Chairman: That will be a transfer from Palace Street?
Ms Shafik: That is correct.
John Battle: It might be a
small point but the implications are that the job is done there and there is
going to be a relation to the centre as well and travelling up and down on the
train line might cost more than actually moving people there. I say that as somebody who lives in Leeds and
has to get up and down to
Chairman:
They need the jobs in
Q68 John Battle: They need the jobs in Scotland but if they are only there one day a week and four days they are called back to London, it makes a nonsense of it. I am being abusive about it but it is an issue.
Ms Shafik: You are absolutely right and we have to look very carefully at those numbers in making that judgment. Richard, do you want to talk through those numbers because we have looked at that.
Mr Calvert: We have to
work out a clear business case. The cost
of the office in
Q69 John Battle: So you are not calling everybody back to London regularly and undermining the costs of the cheaper rent?
Mr Calvert: No.
Q70 Chairman: The last time we asked you this, you actually said - and I will pick out the quote you just made - "we could do more and better with more staff". I think the Committee might well want to home in on that, but last time you said you were "coping but struggling" with the staff strengths. Wherever we go it is raised with us and you would say, "Well, they would say that wouldn't they?" People are saying, "We cannot get out of the capital city and do the kind of work we want to do because we just do not have enough people to do it." We have had evidence from other organisations, for example when we were taking evidence for our HIV/AIDS report which we have just cleared today. A number of organisations said that they saw that staffing constraints meant that DFID does not do the job as well as they think it should do. Has that fact been reported back to you? Do you accept what people are saying to us that staff shortages are adversely affecting the delivery of your objectives?
Ms Shafik: I think I would probably still say we are coping but struggling. I think we have coped pretty well actually and we are on track to meet the efficiency targets that the Treasury has set for us. There is a good discipline to those efficiency targets. One has to be honest. If we were in the private sector, market forces would be forcing us to be more efficient every day. In the public sector we need a periodic jolt from the Treasury to force us to look at things like whether our HR ratios are as good as they should be and are we being as efficient on the IT side as we can be. I think we have coped reasonably well and I do not think we have compromised the quality of the aid programme at all. Could we do more if we had more staff? Definitely, there are all sorts of things and opportunities that arise that if we had more people we could say, "Yes, let's throw a couple of people at that issue," and really have a big role. Some of that would be on aid administration but also some of it would be on the bigger influencing agenda that has become a big part of who we are. We do see some of the strain on our staff. Some of our staff surveys show that people feel they are overloaded. Having said that, our staff, as you probably know when you have visited our offices overseas, are incredibly committed.
Q71 Chairman: And nor do they spend the whole time when we are with them moaning about it; they get on with it. They quite often say to us as a Committee, "Your visit has given us an opportunity to actually get to places which we should really get to more often but your coming here has focused us on doing that," which is in itself revealing. There are two issues which arise from the comparison we got from DAC about what kind of staff you have and how you deploy them and not the absolute numbers. By field staff I think you mean people not in UK and the figure for the UK is that the percentage of staff in the field according to the DAC figure for June 2009 is 39% against a DAC average of 51%, with Portugal at the low end and Germany at the high end. That is qualified by a difference between your figures and DAC's where DAC have 443 and your Annual Report shows 759, the difference between March and June. That is quite a big discrepancy. Can you explain that specifically and can you then indicate whether or not the argument might be that you have too many people in Palace Street and East Kilbride and not enough people in country?
Ms Shafik: I think the main difference in those benchmarks is that many of the other organisations they are comparing us to do not do what we do so a lot of the comparators are just aid agencies. They do not have responsibility for the multilaterals which in many of our comparator countries is the responsibility of the treasury or a ministry of economy or a separate development ministry which is different than the organisation administering aid. DFID has a greater responsibility for a larger share of the ODA[10] than most of our comparator organisations, which is why the headquarters numbers look higher.
Q72 Chairman: Certainly if you compare the UK with Germany they are 9,500 compared to 443 so it is a different operation.
Ms Shafik: Exactly and the German model is very different. They have a technical assistance body, a ministry and then a development delivery organisation, so they have far more people in headquarters than we would have. I do not think the balance is wrong between country office and headquarters, although clearly part of our strategy for East Kilbride is to have fewer people doing transaction or corporate work and more people doing senior level policy work and analytical work, so we will see higher grade staff over time in DFID as part of a way to cope with this with more of the routine tasks either automated or contracted out. I think that is a key part of our strategy going forward.
Chairman: Obviously you have got a strategy of moving into fragile states which has a lot of implications, and Mark Lancaster will pursue that.
Q73 Mr Lancaster: Before I do ask that question can I just clarify how you classify field staff. I guess as a soldier I would classify it slightly differently. To use an extreme example, would we really classify an executive director of the World Bank as field staff in the same way as somebody working in the PRT in Helmand?
Ms Shafik: They would all be classified as overseas staff.
Q74 Mr Lancaster: Overseas staff or field staff? This is what I am trying to get at.
Mr Lowcock: Field staff is not normally a term we use very much. The vast number of staff who work for DFID in other countries are in developing countries. It is single figures or a few tens who are in multilateral organisations, so we have between 400 and 440 ---
Q75 Chairman: Sorry, Mark, I am not trying to distract you but I did not get your reply to a question which is relevant to that, the 443 against the 759; how do you get that difference?
Mr Lowcock: That bears on
Mr Lancaster's question as well. The 443
number is the number of
Ms Shafik: And just to clarify, the head representative to the World Bank for example is not on the staff any more. They are seconded to the World Bank so they would not count in that number.
Mr Lowcock: In addition to that, we have about 750 staff of the Department who are hired in the country in which we work, many of them professional people, some of them supervising UK-based staff. To be honest with you, I do not know what that other DAC number is.
Chairman: Rather than pursue it now, I just wonder if you might give us a note because there is a clear discrepancy between what you just said. I do not think we should waste time on it now but I think it would be helpful if you gave us a note showing how this figure arose.[11] Carry on, Mark.
Q76 Mr Lancaster: I am only asking because by putting everything together clearly it does mask it. However, I will pursue my question about our representative from the World Bank. Does that mean that Mr Steer's salary is paid by the World Bank? Does that mean that he is not on our staff; he is on World Bank staff?
Ms Shafik: He is on secondment so we reimburse.
Q77 Mr Lancaster: So you are a member of DFID even though your salary is paid by the World Bank?
Mr Steer: Yes, my loyalties lie 100% here.
Q78 Mr Lancaster: But it does not work in reverse?
Ms Shafik: No, because
she is not a staff member of the World Bank.
She is representing the
Q79 Mr Lancaster: We are running down a rabbit hole but it seems slightly odd, if you do not mind me saying so. When do you think you will be able to share with us the Department's review of its staffing in fragile states, as a starter for ten?
Ms Shafik: By review of staffing in its fragile states, what do you mean?
Q80 Mr Lancaster: Concerns over finding members of staff who are prepared to go and work in fragile states, numbers, how you are going to line up with the White Paper?
Ms Shafik: We have done a review of staffing in fragile states which has identified a series of recommendations on how we can accelerate deployment of people to fragile states.
Q81 Mr Lancaster: Can you share some of those ideas with us?
Ms Shafik: Now?
Q82 Mr Lancaster: Just briefly and I think it will spark a million more questions.
Ms Shafik: The main conclusion of that report was, and Mark may want to chip in, that management signals were key. We had to be able to tell people that if you go to a fragile state it would be good for your career. I think that is something that we have tried very hard to do, including by making it clear that a lot of the people who work for us most closely with the senior team and with ministers are people who used to work in fragile states. I hope that is a career-enhancing incentive! Secondly, there are some elements of the package that were reviewed and recommendations made in terms of the incentive package, the ability to get out periodically, particularly for those people working in fragile states where they are home bound for large chunks of the time. I think there were also some issues around Whitehall working and getting people better at Whitehall working, and that would be a key factor in deployment to fragile states where that is an important skill set. Those were the main recommendations.
Q83 Mr Lancaster: Have those recommendations now filtered through to staff and as a result of those recommendations how have the applications changed for positions in fragile states? Has it worked?
Ms Shafik: As an
example, we are fully staffed in
Mr Lowcock: Currently
about a quarter of our UK-based staff who are serving overseas are in places
where they either cannot have their kids with them or cannot have either their
kids or their partner. For lots of
people that is a significant disincentive.
Secondly, as Minouche says, we have been relatively successful in
Ms Shafik: I might add just one more thing. You are probably aware of the Stabilisation Unit's efforts to build up a cadre of 1,000 civilians who are deployable in some of the most difficult environments. We are on track to meet that commitment by the end of the year. That has had a huge impact in improving the quality of people we have been able to deploy in conflict zones. In the early days when we did not have that 1,000 deployable cadre it was fairly ad hoc and we had to do the best we could in terms of recruiting people. Now we have not just a database but 1,000 people who have been interviewed and screened and had proper training in terms of what to do in dangerous environments. When you visit places like the Helmand PRT or DRC or other places we are able to deploy a cadre of people who have served in Bosnia, in Kosovo, in DRC and in Afghanistan and they are on their second tour in Iraq and so on, who have experience of working in these environments as well as having the technical skills that are needed for the job. I think that has been a big help.
Q84 Mr Lancaster: That is good to hear but of course there is a subtle difference between theoretically fulfilling these posts in Afghanistan where you can tick your box in Palace Street and in practice the amount people do in posts. I suppose I speak as somebody who has served in these places. As a soldier, you could be doing a six-month tour and in the middle you have two weeks off. Of course, the terms and conditions for DFID staff are entirely different, where I think it is six weeks on and two weeks off, which means in practice that many of these posts are actually unoccupied on the ground for large periods of time, resulting in a complete lack of continuity and frustration when it comes to delivering the comprehensive approach from other agencies, because at least one time in four they ring somebody up they are either not there or they are having to double-hat somebody else's job who is not there. The reality of delivery on the ground means that these posts are not filled for much of the time. It is one thing to say you have somebody in post; it is another thing to say that in practice they are actually doing their job on a daily basis. Have you had to find a compromise by not changing those terms and conditions which in reality means they are not doing their job on the ground very effectively in order to get the notional fulfilment of the post, or am I being a bit harsh?
Ms Shafik: You are being a bit harsh. I have had this exact conversation in the Helmand PRT and we have very open discussions between military and civilians. The difference is soldiers are running a sprint, civilians are running a marathon. The soldiers go for six months.
Q85 Mr Lancaster: Some go for a year.
Ms Shafik: But most go
for six months and then they have 18 months back in the
Q86 Mr Lancaster: That is my next point.
Ms Shafik: We have learned that and we have now built some spare capacity into our staffing in order to try and manage that. You are right, it is not ideal, but I think if we want civilians to be there for the long term - and development is a long-term business - that is a better model for us than any other.
Q87 Mr Lancaster: I think that is a perfectly reasonable answer and I am delighted that it has been brought in because I do not ask the question as somebody who would be jealous of the working arrangements of DFID. I ask the question as somebody who has seen the practical implications of picking up a phone and nobody being there, especially when time is of the essence, when the whole process grinds to a halt because you cannot get hold of anybody. My simple maths - and I am about to make a fool of myself here - shows that two weeks off every six weeks is not 15% extra staff.
Ms Shafik: It is 20%.
Mr Lancaster: Anyway, it sounds like you have not got enough people.
Chairman: That is the crunch here, is it not? If you are going to put more people into fragile states and you have these perfectly proper human resource management issues, I think the simple question I am asking is can you do all you are doing with the staffing constraints that you have? The Committee is highly dubious, I have to say.
Q88 Mr Lancaster: I am keen for you to respond.
Ms Shafik: As I said, if we had more staff we could do more, but can we do a good job with the staff we have? I think we can.
Q89 Chairman: Mr Lancaster is identifying some of the consequences of that situation. Back to you, Mark.
Ms Shafik: The civilian cadre, the additional 1,000 capacity, do not count against our staffing numbers and so our ability to pull in other people to help, and, as I am sure you have seen in the PRT, there are lots of DFID staff there but there are also lots of people drawn from the civilian cadre so we can find other ways of making sure we have people on the ground who can do the job.
Q90 Mr Lancaster: Finally perhaps a slightly easier question, can you run through for the Committee the "internal pool and cluster approach" when it comes to staffing?
Ms Shafik: The internal pool and cluster approach?
Mr Lowcock: I think this is the system we abolished last year for posting our staff.
Q91 Mr Lancaster: And its impact really, how the change of system has impacted on you.
Ms Shafik: I think the
change in the system has made it much easier and quicker to deploy people into
fragile states. We used to have a
cluster system whereby all DFID posts were posted twice a year, so all the jobs
were posted, people applied, and it was a co-ordinated market. In practice, however, it introduced huge
rigidities, especially for posts like
Chairman: We have just a couple more questions related to procurement and the CDC. John Battle?
Q92 John Battle: The Office of Government Commerce's programme was called the Procurement Capabilities Review and I think DFID were joined in on that, as it were, and it seems that your direct procurement is only referred to as £330 million but in effect you let go of £4.7 billion through third parties. I wondered whether that definition of procurement gave you a bit of a let-out clause really, particularly in relation to multilateral procurement because you hand money over and you do not need to bother about it and if they get it wrong it is not your problem.
Ms Shafik: That review was an interesting process for us because we had taken a fairly traditional view of what procurement was and had focused on our £330 million being done properly and being compliant with EC rules, and so on. I think what the Office of Government Commerce challenged us with was saying you should be thinking about all your investments as procurement. You are procuring services from the World Bank, you are procuring services from the UN, you are procuring services from the Government of Tanzania, in which case everything we do is kind of procurement. To be honest, I think it took us a while to get used to that idea. We have now embraced it and they just completed our mid-year review as to whether we have responded to the recommendations, and I think they think we have embraced it wholeheartedly. For the first time now we have a senior external procurement person who we have hired in Abercrombie, whom Richard manages, and maybe Richard you would want to say a bit about the programme you have been doing in procurement.
Mr Calvert: I think the review showed up that our ambition was a bit too limited in this area. It was not that we had not ever thought about procurement outside the direct £330 million but we had not thought about it strategically enough. Although most of this was before I joined the Department, again we agreed a commercial strategy around a year ago which looked at the whole picture. We recruited someone who has come in with really good experience of running a proper commercial procurement operation as head of the function. He has just completed a restructuring of the function. We have got some new staff come in, a number of staff leaving, and that is all built around giving ourselves capacity not just to do the direct stuff but to work with country programmes and multilateral agencies and to take a wider view of what we are trying to achieve. Mark talked about some of the work on portfolio reviews earlier. That shows the way our thinking is starting to change. We are actually looking at the cost-effectiveness of individual things.
Q93 John Battle: If you were simply analysing value for money in buying in furniture and goods and services for office equipment, I would have been a bit worried. It should also include whether it is research you contract out or indeed mechanisms for ensuring that funding partnerships with NGOs are under the regime. Are they under the procurement regime now because that might help them as well? I am not being vicious about it but it could be good for both parties to do that assessment.
Mr Calvert: Essentially we have opened up the whole programme spend to scrutiny under this strategy.
Q94 John Battle: And you have a head of procurement now. Has that made a difference?
Mr Calvert: It has.
Q95 John Battle: What difference has it made then and what differences has he introduced as well as opening up the equation?
Mr Calvert: The difference is that it has brought in someone who has got a background in procurement over the last 15 to 20 years outside the public sector, who is used to not just buying the bits but thinking about how does procurement contribute to the overall organisational strategy. He has experience of taking us into what is not rocket science but things like proper category management of our procurement and joining up the information. It was not that we had not thought ever that we needed to do some of these things. One of the key benefits of the ARIES system, with which you are familiar, was to give us proper procurement information across the whole programme on what we are buying because prior to that we did not have the systems in place to enable us to get a clear view across the whole programme of how much we were spending through a single supplier and what we were spending on the same category of activity. So it is a combination of a new person with new ideas and good experience plus the system enabling him to have some better tools to work with.
Q96 John Battle: And back-ups. I believe personally that accountancy is a crucial skill in all this business and is often undervalued. Has the head of procurement got staff back-up even with the squeeze on staff to be able to do the job, because it may be employing a few people as accountants to help back up their procurement would enable you to manage the whole programme better? Has that happened?
Mr Calvert: He has brought in a few key people as part of his team. Also we did have quite a lot of people within the Department who were fully qualified in procurement and experienced, so it has been a mix of the two.
Q97 John Battle: I am increasingly confident in your answers as to what you are doing at the head office, whether it is in Scotland or here, but in country the ability in the offices of in-country staff, are they trained in being able to assess their procurement? Do they have accountancy skills in there or not, because I would think there could be a gap there on the ground?
Mr Calvert: I think that is absolutely right. Traditionally, we have had people in country offices who were part qualified as local contracting officers so they were qualified to do basic local procurement. The challenge as part of the strategy is do we have people managing the programmes who can think more strategically about the overall value and commercial approach. The answer is it is work in progress at the moment. It is one of the things the strategy says we need to get to grips with. The guy who we have heading procurement has started working with two or three country offices in particular to see how that might work, and I think there will be more to say over the next year or so on that.
Q98 Andrew Stunell: I wanted to ask a question about CDC but before that could I ask a wild card question. Whenever we visit a country we always get told by the country managers how valuable they think the process of our visit has been. We only get to three or four or five country programmes a year so my question is: do you have an internal select committee which in effect goes around and puts country managers through the same process?
Ms Shafik: I think you are looking at it. We ourselves have a regular programme of visits to country offices around the world and we try and cover as wide a range as we possibly can to try and make sure that most countries are visited. I think Mark is the biggest visitor because of his portfolio but all of us try and do our bit. Of course then we also have ministers visiting pretty regularly. Our target is to try and make sure that every office is visited by one of us at least every couple of years.
Q99 Chairman: Can I come in behind that because another useful thing that happens is we get a very good country brief on what we are spending, where we are spending it, how we are doing. However, it is simply produced for us and it could be posted on the website, it seems to me, because it is the kind of information that ought to be. Is there not more that could be done about that? It seems that we turn up and they marshal information and we get a presentation and it is fantastic but it should not be dependent on us turning up; it must be there and it should be in the public domain so that even local MPs in the countries can get access to it.
Ms Shafik: I think the teams are quite good at recycling briefs. I certainly know when I have visited a country office they have said, "Thank goodness, we will just rehash the IDC brief for you," so I think they are pretty economical. They do not necessarily put it on the web but we do now have something on the web on each of our country programmes which tries to have updated information. I think they are pretty good. It is part of the tight staffing; they economise on their work if they can and recycle some of the stuff.
Q100 Andrew Stunell: Perhaps if I move to the CDC. Can you describe to us how DFID keeps a grip on what CDC does and whether you believe you have got that grip?
Ms Shafik: As you know, the recent NAO report on CDC recommended a tighter regime of oversight of CDC, and I will let Mark say something about how we are putting that into practice because he leads for us on CDC.
Mr Lowcock: We set the policies for CDC. We tell them the places they can invest and the standards to which they have to invest. We appoint the chairman. A year ago today roughly the new chairman took office. We also have a significant voice in the appointment of other non-executive directors and there is a process to identify two new non-executive directors at the moment in which we are strongly involved. Minouche and I have a quarterly meeting with the whole board. We also have a quarterly meeting with the non-executives which gives us a chance to have off-line discussions, if you like, about how the non-executives view the performance of the executive. Then our teams have continuous dialogue with CDC on how they are getting on on delivering their business plan. One of the things that the NAO and PAC said to us was that we need to systemise all of those sorts of engagement. In the first part of this year I signed with the chairman of CDC a memorandum which sets in place all those arrangements, what we will do when, and how therefore we will capture the overall relationship.
Q101 Andrew Stunell: Okay so they produce an annual report, which is probably more of a hagiography than a report. How do you think the assessment of the development aspects is really captured? Apparently they did not do anything wrong at all.
Mr Lowcock: I think that
is a little bit unfair, if I may say so, on the report. One of the other things we have asked them to
do is to put in place a much more structured approach to environmental, social
and governance safeguards, and in the development impact report I think they
have been quite open on some of the problems.
Just to give one example they invest in a company which supplies
security services to businesses in
Ms Shafik: They have also invested in things where they have not made money, although thankfully they have invested in more things where they have made money so their financial position is quite good. However, they have made some bad investments and you would expect that in the sort of highly risky business they are in.
Q102 Andrew Stunell: Do you think you have a good assessment of whether the investments they are making are producing development impacts? There is a difference between investing in a developing country and producing development impacts?
Ms Shafik: Absolutely, and that is why for the first time we have pressed them to produce this development impact report. To be honest, we were quite pleased with it. For starters, it is important to say that the work of the International Finance Corporation at the World Bank, which is a kind of CDC equivalent, has looked at thousands of projects around the world and found that there is an 85% correlation between profitability and good development impact. As someone once said to me, no company that has gone bust has ever had good development impact. It is a bit of an obvious point but actually the expert evidence is supportive of that. I believe that the development impact report shows that the CDC has created a million jobs and tax payments by CDC companies is over $250 million.
Mr Lowcock: It was $2 billion last year that CDC-invested-in-companies paid in tax to the authorities in the countries in which they work. I think there was clearly a gap before the requirement was in place to have the annual development impact report. They have done one and, as Minouche says, we were quite pleased with it. We did not think it was perfect. It is a goal for CDC to be a leader on environmental, social and governance issues and certainly, as the shareholders, making sure that is the case is a big priority for us.
Q103 Mr Lancaster: Given your acceptance that CDC have had some problems in some of their investments - and I am sorry to return to this because I have been impressed - is it right the chief executive or the chairman was paid nearly a million pounds last year? What say do you have on that salary? It does seem pretty enormous.
Ms Shafik: Three-quarters of that is performance-based and based on the long-term performance of the portfolio.
Q104 Mr Lancaster: You said some of the problem is that they have not always made consistent investments, so if you have got a problem with investments and it is performance-based, and he is still paid a million pounds, what would it have been? How do we get here?
Mr Lowcock: It is not the case that in 2008 he was paid a million pounds. In the previous year, when the company made £600 million in profit, the total remuneration of the chief executive was £970,000.
Q105 Mr Lancaster: Sorry, I was £30,000 out.
Mr Lowcock: That was a year in which they had made £600 million in profit which had been returned to the taxpayers. One thing we did when we restructured CDC in 2003, which was after a period in which the company had lost hundreds and hundreds of millions of pounds by making bad investments and there was no incentive for the executive to generate a financial return, the Government deliberately put in place a performance-related pay scheme. The truth is the company turning its assets from £1.2 billion in 2003 to £2.7 billion at the end of 2007 was beyond the wildest expectations that we had when we restructured them, but that was why the chief executive's remuneration was as it was. Last year they did much less well and his remuneration was correspondingly substantially lower. We do think that the performance element has been an important reason for the much better performance of the company over the last several years and obviously our Secretary of State, together with Treasury ministers, set the remuneration policy. One thing that they have decided to retain is that performance element.
Q106 Mr Lancaster: How much was he paid last year?
Mr Lowcock: I would need to check. It was about £550,000.
Q107 Chairman: Andrew Stunell described the CDC's annual report as a hagiography; I would not like to say the Department's report is, but it is very upbeat and very positive. The final question is what do you see as the role of the report? In all seriousness, do you not think you should put into it some of your failures or reassessments which actually say, "Look, this is what we set out to do. Of course these are all our successes but actually this did not work and we had to change it..." or whatever? Whilst this is still a useful document, a good reference, and we will certainly go back to it, as I say it could perhaps be a little more balanced. What is your evaluation of it?
Ms Shafik: I think we welcome feedback from the Committee because you are obviously our primary audience for this. This is a new format this year, we have merged the resource accounts with the Annual Report to try and streamline our reporting to the Committee but also split it into two volumes where this is, sort of, intended to be a more accessible version, focused on what the Department delivered, and the results and the more detailed accounts are in the second volume. We would be interested in hearing whether you found that a useful format. We would be happy to look at including more of our failures and some of the lessons we have learned in future reports, if you think that would be helpful.
Q108 Chairman: We are constantly monitoring and evaluating the Department, and it is no secret the Committee thinks it is a first-class Department and does a very good job. Nevertheless, our job is to keep you under pressure, under scrutiny and hopefully help you to do an even better job. Sometimes actually an acknowledgement, not for us but a general interaction, which says, "This is difficult, this is challenging", yet the report does not really reflect that, it only reflects the positives. It is understandable, that is what company reports tend to do but they cannot disguise the facts if they have made a loss or did not deliver. That is the kind of thing we are looking for, more evaluation of the connection between the spend and the outcomes and an acknowledgement in the process that sometimes you have to change tack for a variety of reasons.
Ms Shafik: We would be happy to do that. What we are aspiring to do, and this report is a first step, is turn this much more into a report around results and increasingly, I hope, about value for money. So being able to tell the Committee, "We have delivered these results and it cost us that much" and having it be a more helpful accountability document for you. I think that is really the next stage of our own work on value for money and evaluation.
Chairman: Thank you very much indeed. It has been, as always, an interesting and mutually constructive exchange. We know at least the ammunition we can throw at your Secretary of State tomorrow! Thank you very much indeed.
[1] Comprehensive Spending Review
[2] Supplementary written evidence submitted by DFID
[3] Provincial Reconstruction Team
[4] International Development Association-the development arm of the World Bank
[5] Multilateral Organisation Performance Assessment Network
[6] UN Development Programme, UN Children's Fund, UN High Commissioner for Refugees, World Health Organisation
[7] Public Service Agreement
[8] Supplementary written evidence submitted by DFID
[9] Supplementary written evidence submitted by DFID
[10] Official Development Assistance
[11] Supplementary written evidence submitted by DFID