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Written evidence submitted by the Department for International Development
Questions to DFID for Written Response
PSA 29
Q1. The summary assessment of PSA 29 states that "The economic crisis may result in some 90 million more people living in extreme poverty in each year after 2010 than previously anticipated" (vII, p107). The Committee would be grateful if the Department would provide (a) information on the basis for such an estimate (including relevant data sources); and (b) a breakdown of this figure by region.
a) The impact of the economic crisis on poverty is estimated by: i) Taking the World Bank's most recent poverty headcount (1.374 billion in 2005) and the World Bank's estimate that a 1% fall in economic growth increased poverty by 20 million (this is equivalent to 1.4% of the poor); ii) Combining this with the difference between projected GDP growth rates made in January and December 2008 by the Global Economics Prospects (GEP), coupled with an estimate that consumption will fall by around half the proportion that GDP does. Consequently we estimate that between 2008-2010 developing country growth rates will be 4.5% less than expected before the crisis; iii) This then provides the 90 million estimate.
The estimate does not take into account non-income dimensions of poverty such as school attendance rates or child nutrition, and the numbers are based upon projections rather than actual data.
b) It is unfortunately difficult to provide accurate regional breakdowns. This exercise sought to generate a global estimate and as the income elasticity of poverty (the rate at which poverty is affected by a reduction in income growth) varies across region using the same methodology would result in misguiding information.
Q2. What other effects does the Department anticipate the current global economic conditions will have on trends in international poverty, particularly in relation to: (a) PSA indicator 29.1; and (b) developed countries' ability to achieve the 0.7% of GNI target for Official Development Assistance (ODA) by 2015?
Q2 (a). PSA indicator 29.1
We have been following events closely but the full economic and social impacts will not be known for some time. Therefore making an assessment of the impact of the crisis on PSA 29 is extremely difficult and indicative at best. Based on revised growth forecasts, we estimate that up to 90 million more people will be living in extreme poverty by 2010 as a result of the crisis than previously anticipated. Other goals, such as increased educational enrolment and reduced child mortality, are also likely to be affected due to falling household incomes, but the severity of such effects depend on policies our partner governments have in place to mitigate the effects of unexpected shocks, for example the availability of social safety nets.
DFID is supporting a number of different initiatives, including with the United Nations and partner countries in which we work, that will assess the impact of the crisis on the poor and vulnerable. The department is also supporting programmes that allow continued expenditure on health, education and other social expenditures in Low Income Countries, in order to support partner governments both to respond to the crisis and maintain progress towards the Millennium Development Goals.
Q2(b). Developed countries ability to achieve the 0.7% of GNI target for Official Development Assistance by 2015?
It is up to each developed country to
fulfil its international commitments and respond to the financial crisis, and
the recent G8 and G20 summits have re-emphasised the importance of fulfilling
ODA commitments despite the financial crisis. EU donors remain committed to
0.7% by 2015, and some non-EU donors are committed to increase their ODA/GNI to
0.5% by 2015. It is also encouraging that the
Q3. Could the Department clarify whether the baseline and target for PSA indicator 29.1 have been revised to reflect the World Bank's updated definition of the international poverty line ($1.25 a day)? If not, does the Department plan to have discussions with the Treasury to reflect this change in the indicator for PSA 29.1? If the indicator has been revised to reflect the new international poverty line, does the Department envisage any consequential implications for its budget?
The measurement of Public Service Agreement (PSA) indicator 29.1 is based on the updated definition of the international poverty line (of $1.25 a day at 2005 purchasing power parities). Progress against this measure was first reported in DFID's 2009 Annual report, and the revised definition and associated data were included in an accompanying technical annex to the Annual Report published on DFID's website at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Annual-report/Annual-Report-2009/. DFID will continue to use this new and better source of poverty data over the PSA period 2008-11. The revised data will have no effect on DFID's budget which was set in the Comprehensive Spending Review 2007 and revised in the 2009 Budget.
Q4. What specific measures is the Department taking to improve progress towards PSA indicator 29.5, and what impact is DFID's "increased priority" in this area having on its various budget streams and resource allocations?
MDG 5 is a major theme of the Government's new White Paper "Eliminating World Poverty: Building our Common Future" and DFID is in the process of updating the reproductive and maternal health strategy for publication in 2010. The White Paper outlines an accelerated action plan focussing on three areas: (i) increased international political support, (ii) additional financing for health, (iii) accelerated delivery on the ground. DFID led efforts to draw up an international framework for action for MDGs 4 & 5, called the Consensus for Maternal, Newborn and Child Health, which aligns international momentum in politics, advocacy and finance behind an agreed set of policies and priority interventions to accelerate progress on the ground. The Consensus is prominent in the new White Paper and has been endorsed in 2009 by the G8 and the Global Campaign for the Health MDGs.
The Prime Minister and the World Bank
President co-hosted "Investing in Our
Common Future: Healthy Women, Healthy Children" during the UNGA week. This
is the culmination of the work of the High-Level Health Task Force for Innovative Financing for
Health Systems Strengthening. It will include
announcements of new finance generated through innovative finances, and has
been accompanied by a push to help developing countries make health services
free. In June 2008, the UK Government made a commitment to spend £6 billion on
strengthening health systems and services over 7 years to 2015 (plus £1 billion
to the Global Fund for AIDS, TB and Malaria). DFID spent £776 million on health
systems and services in 2007/8. The increased spend for 2008/9 is estimated to
be £958.9 million. DFID is currently in the process of
identifying additional programming opportunities in maternal health, family
planning and provision of safe abortion services in a number of countries in
Africa and Asia, including
Recent examples of DFID supported country-level progress include; Rwanda, where assisted deliveries have increased from 39% (2005) to 52% (2007) of all deliveries; Malawi, where free services to pregnant women and mothers have increased the number of births attended by health personnel from 38% (2005) to 45% (2008); and India, where, since 2005/06, the number of babies born at government facilities by trained staff has increased by 30% to 14.2 million deliveries in 2007/08.
Data quality
Q5. Please provide details of relevant actions being carried out by DFID in relation to each of the recommendations contained on p8 of the NAO's June 2009 assessment of the data systems for monitoring performance against PSA 29.
The NAO's June 2009 assessment of the data systems for monitoring performance of PSA 29 made five specific recommendations:
1. DFID carries out an internal risk assessment to consider the risks to the supply of data it uses. This would identify mitigating actions to changes in data sets or other areas of that may influence the data:
The department has carried out a preliminary internal risk assessment of its PSA data and systems. The results are presented in Table 1 below: Table 1: DFID's PSA data system assessment
RAG description:
2. Ensures that adequate disclosures are made about the countries reported against for PSA 29.8, and the rationale behind the final traffic light assessment.
We have published on our website in the Technical Annex accompanying the Annual Report the low income countries that are included in monitoring PSA indicator 29.8. This is found at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Annual-report/Annual-Report-2009/. Indicator 29.8 seeks a positive change in nominal terms and as a % of duty free imports into developed countries from low income countries. The latest report shows that over the three year period 2005-07 the average percentage of duty free imports from low income countries was 66.5% (compared to the baseline position of 66.3%) of average trade value of $90 billion per year. On the basis of 0.2 percentage point difference between the current and the baseline position, the indicator was rated as showing little or no improvement. We will make a final assessment of this indicator when trade data become available for the end of PSA period 2010/11. To address the
little or no improvement rating, the Trade Policy Unit (TPU) is lobbying for a
swift conclusion to the Doha Development Round to lock in duty free and quota
free access for all Least Developed Countries into developed WTO member markets
and some emerging markets. TPU engages with the European Commission, other EU member states and key stakeholders like the In addition TPU have been actively lobbying the European Commission to encourage them to reform preferential rules of origin which will, inter alia, improve access for LDCs to the EC markets under the EU's Everything But Arms (EBA) regime. Progress on rules of origin has already been made. TPU is funding various research studies to understand the development benefits of Economic Partnership Agreements and lessons learnt. We are also pressing through DEFRA for radical reform of the EU CAP which will deliver gains to both EU consumers and LDC exporters.
3. Continues to build strong relations with the UNSD and continues to support the UN in improving the quality of data. We recommend that the Department consolidates its efforts internally to ensure that CPG and GSP are coordinating their work to avoid duplication.
The roles and responsibilities of Corporate Performance Group (CPG) and Global Statistics Partnership (GSP) department are clear and separate. CPG primary role is to monitor and report progress against delivery of Public Service Agreement 29, DFID's Departmental Strategic Objectives and Divisional Performance Frameworks and to report publicly to Parliament twice a year in DFID's Autumn Performance and Annual reports. GSP is set up to help to improve the effectiveness of the international statistical system, including work to help strengthen statistical systems in developing countries so that there is a sustained improvement in the availability of, and access to, reliable statistics. It also within GSP's remit to lobby and support UNSD to improve access to MDG indicator data.
4. Continues to request data from the UNSD directly to ensure that the PSA data is subject to the least amount of formatting as possible. This should be requested by the team best placed to do so, either the CPG or GSP.
As custodians of the PSA measurement system and performance reporting it is CPG's role to collect the necessary data to monitor performance. As at the time of the NAO review, CPG continues to receive MDG indicator data directly from UNSD in a spreadsheet which requires minimal formatting changes to extract the data.
5. Ensures evidence is available for the data controls which are in place. This could include a sheet in the calculation spreadsheet that states who carried out the data entry and who carried out the cross-check to the UNSD database.
We have implemented this change as part of the 2009 PSA assessment round.
Departmental Strategic Objectives (DSOs)
DSO 1: Promote good governance, economic growth, trade and access to basic services
Q7. What actions is the Department taking to mitigate the negative effects of the current global economic situation on progress towards DSO indicator 1.2?
Growth is what will equip countries and individuals with the necessary means for moving out of poverty. The commitments laid out in Chapter 2 of our White Paper describes our strategy to ensure that such growth is realised whilst being resilient, green, and ensuring the poor benefit. Among some of the measures we are committed to are: seeking a rapid conclusion to the Doha trade round, stamping out corruption, supporting climate resilient development, investing in regional integration, and creating the right conditions for the private sector to thrive. DFID has also provided full funding over the next three years for the International Growth Centre which will help developing countries cope with the downturn and provide innovative research on growth.
Our immediate priority however, is to
help developing countries respond to the current crisis whilst protecting the
most vulnerable. The
We have not cut back the level of our
bilateral support, and in some cases, we have brought funding forward or
increased it according to need. Examples include providing an additional £15
million for social protection above the annual commitment of £25 million in
We will monitor the situation closely, and continue to work through international fora such as the G8 to ensure appropriate and co-ordinated action is taken where necessary.
Q8. The Committee would be grateful for more
details on the work of the International Growth Centre in
The International Growth Centre (IGC)
will develop long-term programmes in 15 countries over three years. The IGC has
identified the first 9 countries:
The IGC's work programme is most
advanced in
Q9. Please provide a full run of the trade data that relates to DSO indicator 1.3 since 2000. When are data for 2007 and 2008 likely to be available?
Least Developed Countries' (LDC) and Low Income Countries' (LIC) percentage share of world trade (exports & imports) excluding fuels since 2000 is given in Table 2
Table 2: World trade participation by LDCs and LICs (%)
Source: UNCTAD
Data for 2007 is expected to be generally available on the UNCTAD website in October this year. Data for 2008 will not be available for another year.
Q10. What are the implications of the lack of
progress on the
The conclusion of the Doha Round of
WTO negotiations will not necessarily have a significant impact on DSO
indicator 1.3, as the main objective of
It should also be noted that other trade agreements, such as Economic Partnership Agreements, which are regional trade agreements between the European Union and African, Caribbean and Pacific Countries (ACPs) allowing ACPs exporters duty free access to European markets, are expected to contribute to LDC/LICs' share of global trade and have an impact on this indicator.
Q11. How is the Department "supporting 30 million
extra people to gain access to sanitation in DFID
is supporting improved access to sanitation across
The
UNICEF programme that DFID supports with £36 million is in partnership with the
Government of Bangladesh. Through the provision of hygiene education, it helps
people adopt hygiene practices, such as hand washing after using the latrine or
before preparing food. People in
In
DFID
is also supporting WaterAid and other NGO partners to tackle specific
challenges of reaching socially excluded groups. DFID is integrating water and
sanitation into wider work on schools and in the design of a new health
programme in
In
These
DFID funded sanitation programs will be delivered over different timelines
(2008 - 2013). As of March 2009, we
estimate that our assistance has helped approximately
13 million people gain access to sanitation throughout the region (which
includes at least 4 million in
DSO 2: Promote climate change mitigation and adaptation measures and ensure environmental sustainability
Q12. Under DSO indicator 2.2, Environmental sustainability integrated into programmes, the DAR discusses a review of progress into the UNEP/UNDP Poverty and Environment Initiative to help countries develop their capacity to mainstream poverty-environment linkages into national development planning (vII, p114). When will this review be published? Has a decision yet been made on the potential roll-out of the initiative to additional countries and regions? The independent progress review of the
UNEP/UNDP Poverty-Environment Initiative, conducted by the International
Institute for Environment and Development and funded by DSO 3: Respond effectively to conflict and humanitarian crises and support peace in order to reduce poverty
Q13. Does the Department plan to incorporate each of the following White Paper commitments into its DSOs and, if so, what will be the relevant baselines and targets (where applicable):
· Allocate at least 50% of all new bilateral country funding to fragile countries. · Focus development support in fragile countries on four new objectives to promote peaceful states and societies. · Expand use of political analysis to inform the choices we make. · Consider commitments to peace and security as part of DFID's development partnerships. · Increase support for democratic politics, including peaceful, free and fair elections.
If these commitments are not going to be incorporated into DFID's DSOs, from which financial year does DFID plan to allocate at least 50% of all new bilateral country funding to fragile countries? What will be DFID's definition of a fragile country in pursuit of this commitment?
All of the White Paper's commitments are broadly consistent with DFID's agreed set of DSOs for the 2008-11 spending period and in particular the overarching aim of poverty reduction. As such there are no plans to formally incorporate the above commitments into the DSO set. However, underpinning divisional performance frameworks and business plans will be adjusted to ensure delivery of the White Paper commitments.
This is just one example of the good progress across DFID on implementing the White Paper. We are changing the way we work in order to more effectively deliver on our commitments: in addition to changes to the Divisional Performance Frameworks, Departmental Business Plans and individual objectives have been revised to reflect White Paper priorities; an assessment of DFID's conflict skills has been carried out to help us develop a highly-skilled workforce that can deliver poverty reduction in conflict-affected countries; and Climate Change training has been provided for a wide range of DFID staff as part of the 'Making DFID Climate Smart' initiative, which will continue in coming months. In addition, we have already delivered on a number of White Paper commitments, including: · Global Vulnerability Alert system launched through the UN, with £1m support from the UK · Clean Technology Fund pilots going ahead in Turkey and Mexico · New programmes on security and justice about to start in Bangladesh, Nepal, Ethiopia, Sierra Leone · New UN agency for women agreed in September · Agreement at Pittsburgh to transfer at least 3% of voting power in World Bank to under-represented developing and transition countries · New database on DFID's website provides project information We are
also making significant progress in other areas, including towards
delivering the $50 billion for developing countries agreed at the London G20
summit - we have achieved agreement on $20 billion in Special Drawing
Rights at the IMF and new, bigger, concessional lending packages for In 2008/09 over 50% of DFID's country programme was spent in fragile states. The White Paper commitment ensures that this level of funding will at least be maintained going forward. DFID's definition of fragile states is available on our website at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Making-DFIDs-Aid-more-effective/How-we-give-aid/Fragile-states/.
Q14. If 50% of all new bilateral country funding is to be allocated to fragile countries, what implications will this have for bilateral aid budgets for low income countries that are classed as 'non-fragile'?
Thirteen of our existing 22 PSA
countries (
Q15. Why does DFID regard it as accurate to report progress against DSO indicator 3.1 as an 'improvement' when two of the three success measures do not yet have baselines for measurement of progress? When will these baselines be determined?
The basis for the assessment of DSO Indicator 3.1 was the good progress made against the milestones for 2008/9 set out in the DSO measurement methodology document accompanying the Annual Report. We have now updated the measurement methodology for DSO 3.1 to include both baseline and target information and this is available on our website at http://www.dfid.gov.uk/About-DFID/Finance-and-performance/Annual-report/Annual-Report-2009.
Q16. In relation to DSO 3.2, which four countries do not yet have Security and Development Country Plans? When will each of these be completed? Which are the six countries that have plans in place?
DFID
has not been completing stand-alone Security and Development Country Plans.
Instead, we have sought to ensure that security and development issues are
mainstreamed into our country plans. Of
the 10 Priority Countries the following had, at the end of March 2009,
incorporated analysis of these issues into their planning:
Q17. The second success measure under DSO indicator 3.2 requires a 25% increase in DFID expenditure on programmes that improve security and access to justice for the poor in priority countries. The DAR reports an increase in expenditure from £35 million in 2007/08 to £38 million in 2008-09. To which programmes is this funding being directed? How are these programmes contributing to achieving the target objectives?
Programmes to which this increase in expenditure is being directed include the following new multi-year programmes started in 2008-9:
¨ Malawi - (£1m in 2008/9) to improve awareness, quality and availability of justice services for the poor (particularly women, children and vulnerable groups. ¨ Sudan - (£1m in 2008/9) Darfur Community Peace and
Stability Fund, promoting activities that help to create the conditions for
stability, security, justice and social equity in ¨ Afghanistan - (£1.5m in 2008/9) - Afghanistan Reconstruction Trust Fund Justice Sector Reform Programme, supporting urgent physical infrastructure & IT needs in the state justice system, professional training and development for justice officials/judges, and enhancing access to justice through legal aid and legal awareness training.
Along with a wide range of other new
and continuing programmes, these initiatives will make a real difference to
promoting improved security and access to justice for poor people. For example,
a recently completed £2.9m project on community legal services in The new DFID White Paper takes our commitment to security and development further with a commitment to triple bilateral project funding for security and justice to £120m per annum by 2014.
Q18. In relation to DSO 3.3, have the recent humanitarian responses detailed in the DAR met DFID's own five objectives for an effective humanitarian response, as set out in the policy paper Saving lives, relieving suffering, protecting dignity? If so, how were the objectives met? During recent Humanitarian Responses, DFID has striven to meet all the objectives it set itself in the 'saving lives' policy paper. Our
responses are principled; we
respond strictly on the basis of needs according to our independent field
assessments; demonstrated by the fact that two of our largest responses last
year were to disasters in Our
responses are informed; we continue to maintain an independent field
assessment capacity (DFID Operations Team) with one full-time advisor in
Sri-Lanka and Our responses are well co-ordinated; we continue to try and improve OCHA's capacity to take an effective leadership role. In country we are supporting cluster systems by actively participating in meetings, funding according to cluster priorities and where possible ensuring our NGO funded programmes are cluster endorsed (for example in Myanmar). We also promote inclusion of NGO experts as cluster co-chairs and encourage NGOs to participate in CAP and flash appeal processes; funding through these channels when suitable. Our
responses are appropriate; we address
the requirements of all affected persons while recognising the specific needs
of vulnerable groups by funding disability/age/child/gender specific projects.
We are open to encouraging innovative ideas during responses, as demonstrated
by our support of the highly successful microfinance initiative funded by We
continue to try to improve accountability
across the humanitarian sector by funding the Humanitarian Accountability
Partnership (HAP) and People in Aid, and actively encourage partners to seek
HAP accreditation. We conduct internal evaluations of all our humanitarian
responses. For example we are about to evaluate our programme for Q19. Has the Department disbursed 10% additional funding for Disaster Risk Reduction for each of the humanitarian crises detailed in the DAR?
Yes. DFID is committed to allocating up to 10% of the funding provided by DFID in response to each natural disaster to prepare for and mitigate the impact of future disasters, where this can be done effectively and the initial response is over £500,000. This is in addition to ongoing support DFID provides to disaster risk reduction programmes, through multilateral partners and civil society of approximately £7m per year.
There have been three disasters requiring a response
over £500,000 during the DAR period (2008-09).
Out of the original responses DFID has allocated the following 10%
amounts: £4.5m following Cyclone Nargis in
Among
other things, the £4.5m DRR for
DSO 4: Develop a global partnership for development (beyond aid)
Q20. Would it be feasible to provide longer runs of data for applicable DSO and PSA targets in the DAR to enable readers to assess historical trends?
DSO 4.1: - High quality research and evidence based policies for achieving MDGs. R4D Statistics from launch in April 2006 to July 2009
* Statistics for alerts were not collected until October 07 R4D was launched at the end of March 2006
DSO
4.2: - Cross
The
Center for Global Development has compiled the Commitment to Development Index
every year since 2003. The same 21 countries have been ranked each year, apart
from 2008 when
CGD's Commitment to Development Index Ranking
Source: www.cgdev.org/cdi DSO 4.3 - Greater positive participation by BRICS in multilateral and other development forums and programmes.
Departmental Strategic Objective 4.3 was newly established for 2008/9 and we have no earlier relevant data on which to assess trends. DSO 5: Make all bilateral and multilateral donors more effective
Q21. What steps is DFID taking
to ensure bilateral and multilateral donors meet their Gleneagles and
DFID's recent
White Paper has reaffirmed our commitment to acting together through the
international system to deliver more effective aid. DFID has
ensured that the Gleneagles targets were reaffirmed at the G20 London Summit
and 2009 G8 summit in
While
some progress has been made by the international community on
Q22. For what reasons has the Department's assessment of DSO indicator 5.4 changed from 'improvement' in the 2008 Autumn Performance Report to 'little or no improvement' in the DAR?
The basis for the rating in the Annual Report of "little or no improvement" for DSO Indicator 5.4 is set out in Table 3 below. The table shows that for two broad sub-indicators that underpin the indicator: global country results and implementation of the Paris Declaration targets - the international finance institutions were judged to have made "little or no improvement", while on managing resources, they were judged to have shown improvement. On that basis, the overall indicator was rated as showing "little or no improvement".
This rating is different to that shown
in the 2008 Autumn Performance Report due to more data becoming available. In particular the Paris Declaration survey
shows that the African Development Bank is off track across Table 3: DSO Indicator 5.4 - Improved effectiveness of the IFIs
Footnote 1: This measure is based on the number of field based professional staff, as the data does not distinguish whether staff are recruited internationally. Rating scale: Green = On track - target met or sufficient progress is being made to meet target; Amber = Off track, progress has been made but too slowly to meet target; Red = off track; there is no or negative progress; Grey = inadequate data to make an assessment
Q23. In relation to DSO indicator 5.4, the Committee would be grateful if the Department could provide a detailed matrix tracking the progress of each IFI against each success measure by year and including information on whether the measure is 'on track' to meet its target. Similar information would also be helpful in relation to DSO indicator 5.5 (success measures 1a-c).
In relation to DSO indicator 5.4, the information requested by the Committee is given in Table 3 in answer to question 22. In relation to DSO 5.5, the information is given in Table 4 below:
Table 4: DSO Indicator 5.5 - Improved effectiveness of the UN system
Rating scale: Green = On track - target met or sufficient progress is being made to meet target; Amber = Off track, progress has been made but too slowly to meet target; Red = off track; there is no or negative progress; Grey = inadequate data to make an assessment
DSO 6: Deliver high quality and effective bilateral development assistance
Q24. Is the
Results from the 2008 Paris Declaration
survey show that DFID has already met seven of the ten PD targets relevant to
donors and is on track to meet the remaining three by the 2010 deadline,
including targets 3 (aid on budget) and 7 (in-year predictability). Our recently published action plan "Beyond Accra: What action
should DFID take to meet our · DFID country offices will work with partner governments to identify what further measures they can take to ensure that a greater proportion of aid is shown on budget. Where possible, this should be part of the workplan for a locally owned public financial management reform programme.
· Where DFID's portfolio is mainly project-based and/ or contains a high proportion of technical cooperation, country offices will review the communication of their forward financial programmes for the current and future financial year to ensure that we provide the best and most realistic estimates of expected expenditure and that these are recorded in our partner government's budget (and that these estimates are updated regularly).
· We will commission short case studies on country-led initiatives to increase predictability in two or three countries, in order to share best practice.
Progress is being monitored through DFID's corporate performance system DSO 7: Improving the efficiency and effectiveness of the organisation
Q25. Please provide details on progress on each of the following spending targets related to DSO indicator 7.1:
a)
To double spending in b) To spend 90% of DFID's bilateral expenditure in Low Income Countries. c) To increase spending on education to £1 billion. d)
To spend £200 million on water and sanitation in Sub-Saharan e) To spend £409 million on "Aid for Trade" activities. f) To spend £220 million on research and development.
Spending in each category is shown in the table below:
Table 5: DSO Indicator 7.1
More detailed information on DFID spending will be published in Statistics on International Development in October.
Q26. DSO 7.2, Financial management, compliance and control, is reported as an 'improvement' in the DAR (vII, p130). However, the DSO technical annex to the DAR states that baselines and targets for this indicator are "to be developed". How then is DFID able to assess that there has been an 'improvement'?
DFID has set a baseline and target for DSO indicator 7.2. The Cipfa review of financial management capacity established a baseline score (totalling 26) in March and we have implemented a range of actions which are expected to lead to an improved scoring in the future. We have completed the roll-out of ARIES, DFID's new finance and management information system; strengthened corporate finance teams and frontline operating divisions with divisional and management accountants and put in place a strategy to drive forward change and prioritisation in financial management capability under the Department's organisation change agenda: Making it Happen, including better financial management training. We have updated the technical annex to include baselines and targets for this indicator.
Q27. What steps is the Department taking to ensure progress is made in each of the three 'development areas' highlighted in the Cabinet Office's March 2009 DFID Capability Review?
DFID has fully integrated the actions coming out of the 2009 Capability Review into our organisational change programme, Making it Happen. The five action plans which outline what DFID is doing under Making it Happen (one for each of the main areas of change - People, Money, Results, Communications, Systems) have been revised to include actions from the Capability Review.
The new White Paper has addressed the recommendation that DFID develop "a new vision for development which takes account of the requirements of a broader agenda and the need to build constituencies of support." In order to make progress against the Capability Review recommendations, it is crucial that we implement the White Paper effectively and quickly.
Q28. What progress has the Department made in implementing the recommendations from its Procurement Capability Review and the measures detailed in its PCR Improvement Plan?
DFID has taken on board the findings from its Procurement Capability Review (PCR) and is continuing to make progress with the implementation of recommendations and improvements. Key actions already delivered include: o The development of a Commercial Strategy which has been endorsed and approved by the Management Board and published on internal and external departmental websites. o The appointment of a Senior Civil Service 'Head of Profession for Procurement'. o Developing a plan to re-structure the procurement function. This has been approved by the Management Board and is currently being implemented. o Establishing a Commercial Champion role on the Management Board.
The OGC completed their 12 month PCR Stocktake Report in July 2009, reporting that DFID had "moved a long way since its first PCR" and that DFID's Board and its senior staff have made "significant progress" in facilitating the delivery of improved commercial capability. Spending Review 2002 (SR2002) and 2004 (SR2004) PSA targets
Q29. When does the Department expect final assessment to be available for each of the outstanding SR2002 and SR2004 targets and sub-targets (i.e. SR2004 1.1-1.6, 2.1-2.9 and SR2002 1.1, 2.1, 2,2, 2.7, 2.9)?
The sub-targets underpinning the 2002 and 2004 Spending Reviews (SR) require final outturn data for 2006 and 2008 respectively in order to make final assessments.
We will make a final assessment of indicator 2.7 and 2.9 from SR2002 in the forthcoming Autumn Performance Report. For sub-targets (1.1,2.1, 2.2, ) of SR2002, it might be as late as 2010 or 2011 before we are able to establish the full picture for 2006 as these targets relate to international poverty line data which have substantial time lags in their availability. Similarly, sub-targets (1.1-1.6, 2.1-2.9) from SR2004 also have time lags that mean the final assessment will not be made until 2010 or 2011.
Spending and efficiency targets
Q30. Why was carry-over of over-delivery from the Department's SR2004 efficiency gains (totalling £141 million) not allowed by the Treasury, unlike other departments?
The Department did not request any carry-over of efficiency gains generated in the SR04 period because the CSR07 VFM programme uses different methodologies to assess allocative efficiency and the quality of DFID's portfolio of projects. On allocative efficiency we moved from an approach which focused on two institutions (EC and IDA), to an approach which looked across all the multilateral organisations that we fund. On portfolio quality we moved from an approach that focused on increasing the value of the projects in the portfolio that scored a 1 or 2, to an approach that incentivised improvements in all projects.
Q31. Is the Department on track to deliver overall VfM savings of £647 million by 2010-11? What are the specific efficiency savings now being sought in 2009-10 and 2010-11?
We are on track to achieve our overall Value for Money target of £647 million by the end of 2010/11. Table 6 shows where these specific efficiency savings were made in 2008/09 and are being sought in 2009/10 and 2010/11.
Table 6: DFID savings for CSR 2007
In 2009/10 and 2010/11 we will continue to deliver the programme of savings outlined at the beginning of the Comprehensive Spending Review. These comprise multilateral and bilateral efficiency savings which we will achieve by continuing to shift our resources towards countries and institutions where our aid will have the greatest impact in terms of reducing poverty; improving the performance and quality of our bilateral projects and programmes; and continuing to make administrative savings.
In 2010/11, we will also deliver an additional £155 million of value for money savings.
They will come from:
· International Division: £50 million - achieved through a variety of channels including through driving stronger cash management from the multilateral organisations that we fund. · Policy and Research Directorate: £40 million - achieved through a variety of channels including through developing strengthened partnerships on research and analytical work, and improved procurement and management of policy and research contracts. · Communications Division: £10 million - achieved through a variety of channels including from more effective, focused central communications work and more efficient use of web and social media networks. · Contingency reserve: £55 million - reducing the contingency reserve we have set aside to deal with unforeseen emergencies by 60% will still leave us space to respond to international disasters.
Q32. Does the Department envisage any further reduction in its FTE staff numbers over the next two years?
Since staff numbers are
managed within our agreed budget, DFID has not set targets for staff
reductions. Each DFID Division has flexibility to decide how to use their
budget to meet business needs. Our
Q33. The 2009 DFID White Paper outlined a policy shift, refocusing resources onto fragile countries and treating security and justice as a basic service alongside health, education, water and sanitation. Presumably increased work in fragile countries and conflict areas is likely to be more resource intensive for DFID. How will DFID reconcile this new policy focus with its VfM commitments through to 2010-11?
The White Paper sets out an ambitious new policy shift for DFID. It also explains how we will improve our efficiency, so we can deliver these policies. Some key elements of the efficiency programme include:
· Prioritising our programmes and country presence, focusing our efforts where we can have the biggest possible impact on poverty reduction; · Stronger cash management in the multilateral organisations that we fund; · Focusing our communications efforts; · Improving value for money in the research budget.
DFID has a strong track record of delivering efficiency savings in a situation where we are doing more work in new areas. In the past five years, whilst our total resource budget has increased by 25% our staff numbers have reduced by approximately 15% and we have closed 11 offices. Since 1997 we have cut the number of countries we give aid to by over a third. During this time we have continued to perform well against international standards of aid effectiveness (as evidenced for example in the Paris Declaration Evaluation).
2008-09/CSR financesQ34. How does the Department account for the
variation between its total
As part of the 2009 Budget DFID 2009-10 Main Estimate
Q35. Will the Department be requesting further access in the current financial year to any of the balance of DFID's 2008-09 End-Year Flexibility stocks?
We maintain close contact with the Treasury throughout the year about the management of DFID's programme and administration budget. Any decision to request access to End-Year flexibility stocks will be made on a case by case basis of need and realism and the wider fiscal position. End-Year Flexibility drawdown is then allocated to Departments through the supplementary estimates process.
Q36. Does the Department envisage being required to surrender any (or all) of the remaining balance of DFID's End-Year Flexibility stocks to the Treasury?
Arrangements for accumulating and drawing down End-Year Flexibility are set out in Chapter 14 of the Consolidated Budgeting Guidance 2009-10, which is available on the Treasury website. These arrangements do not provide for departments surrendering End-Year flexibility stocks.
Resource Accounts and analysis of Departmental Expenditure
Q37. DFID's capital budget is set to increase by 56% from 2008-09 to 2009-10. Why is there such a sharp increase and how will the additional funds be spent?
As part of the overall budget increases for DFID, the 2007 Comprehensive Spending Review settlement provided for DFID's capital budget to increase from £876 million in 2008-09 to £1,366 million in 2009/10. DFID's capital budget finances contributions to a range of multilateral institutions, as well as elements of our bilateral programmes; and the financial projections set out in Table 4 of Chapter 5 of the Annual Report include items financed from both the resource budget and the capital budget. The breakdown of the capital budget for 2008/09 and 2009/10 is given in Table 7 below and includes a £200 million contribution to the Global Trade Liquidity Programme announced at the G20 Summit; an increase from £50 to £100 million in DFID's contribution to the Climate Investment Funds; increases in our contributions to the African Development Bank and other multilateral agencies; as well as increased capital spending through our bilateral programme (for example on the North-South corridor programme in Southern Africa).
Table
7: DFID programme capital
Q38. The Analysis of Net Resource Outturn in the Resource Accounts shows that expenditure related to eliminating poverty in Asia of £745 million was 7% less than the previous year (vII, p43). What are the underlying reasons for this reduction in expenditure?
Restructuring of divisions within DFID
means that this line now only includes South Asia (
Q39. The Analysis of Net Resource Outturn in the Resource Accounts shows that Central Departments' expenditure related to eliminating poverty has increased from £74.7 million to £239.3 million (vII, p43). What are the underlying reasons for this increase?
From 2008/09, the Estimate Line for
'Multiple objectives' within
Q40. To what extent has the fall in the value of sterling placed pressure on the Department's finances?
Most of DFID's commitments are denominated in sterling, although our share of EC aid programmes is denominated in Euro. The additional sterling costs of meeting EU payments has reduced the Departmental Unallocated Provision which would otherwise have been available for other purposes. DFID's overseas offices also meet local expenses in local currency, and have met the additional costs arising from the changing value of sterling through additional efficiency savings and by drawing resources from our administration contingency reserve Issues arising from the Government Response to the Committee's Second Report of Session 2008-09
Q41. In response to the Committee's report on the DFID Annual Report 2008, the Department stated that it would "provide updates of progress on the Global Action Plan on Malaria (GMAP) in its Annual and Autumn Performance reports". This has not been provided. What are the reasons for this and what progress has been made on the Global Malaria Action Plan?
DFID's new White Paper "Eliminating World Poverty: Building Our Common Future" Chapter 5 sets out our specific commitments on future support on malaria.
DFID's Annual report should have included an update of the progress made in this important health initiative. The Global Malaria Action Plan was launched in September 2008 and provides a strong framework for malaria control and elimination. Progress reporting on the Global Malaria Action Plan will in future be done by the Roll Back Malaria Partnership, under whose auspices the Plan was prepared and launched. DFID will contribute to this reporting.
There has been good progress in tackling malaria over the last few years. Long-lasting insecticide treated bednets have now been distributed to more than 40 percent of populations in endemic African nations, compared to less than 10 percent in 2005. Overall, African countries have surpassed 40-percent bednet distribution, with 18 countries achieving over 60-percent distribution. Of course, much remains to be done to fill the gaps and ensure distribution leads to use.
A recent (June 2009) European Alliance
against Malaria report took stock of EU progress in contributing to the Global
Malaria Action Plan and highlighted the role the
Q42. Which countries correspond to each of the 52 numbered countries in table 1 (p8) of the Government Response to the Committee's Second Report of Session 2008-09?
As was included in the Government written response to the IDC Second report of Session 2008/09 into DFID's Annual Report 2008, we highlighted that the methodology we employ to calculate the estimate that DFID helps to lift at least 3 million people permanently out of poverty each year is an estimate of DFID's aggregate impact in all countries to which we deliver aid. We do not use the country breakdown of the estimate to infer any estimate of impact in any individual countries. This is because estimates are subject to statistical margins of error. Also the model is based on an assumption that other influences on growth rates (except aid) remain constant. While this is a common assumption in economic analysis, and a necessary assumption to allow estimation of the impact of aid on growth, it does mean that individual country estimates will not always be borne out. We do not believe it is appropriate to put country names into the table showing calculation of the global estimate, in case this is taken to imply that DFID uses this methodology to estimate poverty reduction in individual countries.
Q43. The Committee requests more information on, and any initial results from, the Department's work to update its model that estimates the total number of people DFID helps lift out of poverty each year.
In January this year the latest data series for GDP (incorporating the World Bank's revised Purchasing Power Parity estimates), population, aid levels, CPIA values and percentage living below the poverty line were incorporated into the model.
As a result of this up-date, the model still estimates that DFID helps lift at least 3 million people permanently out of poverty every year. |