The Secretary of State's Plans for the Department for International Development - International Development Committee Contents

Examination of Witnesses (Questions 1-86)

RT HON ANDREW MITCHELL MP

15 JULY 2010

  Q1 Chair: Good morning, Secretary of State. Can I first all congratulate you on your appointment to the role of Secretary of State, something I know you have shadowed for a long time and long had aspirations to. Congratulations to you and welcome, obviously, to your first evidence session in front of our Committee. We look forward to working with you in the course of the Parliament. As you know, we do not normally encourage opening statements but, as you have set out some of your agenda in the House and elsewhere, I thought it would be helpful to the Committee to give you a brief opportunity to perhaps set out your stall and some of your priorities first, and then for us to follow that up with a range of questions to see if we can draw them out. If you would like to take the floor on that basis, we will take it from there.

Mr Mitchell: Thank you very much, Chairman. Perhaps I might just very briefly make four introductory points. The first is to say that I think this is an area of policy which hugely benefits from the fact that it is seen as British and not particularly partisan; it is not a Labour, Conservative, or Liberal policy but a British policy. Obviously, the Coalition has confirmed that DFID will remain as a separate Department, British aid will remain untied and we will enshrine in law our commitment, a cross-party commitment, to reach 0.7% of our gross national income by 2013. The second point I wanted to make was that I think all of us understand that there are three key ingredients to development. The first is tackling conflict: trying to stop it starting and, once it has started, stopping it and thirdly, once it is over, trying to reconcile people, which was the reason I first went to the Rwanda, to try and see how on earth you recover from the sort of dreadful conflict that had engulfed that country. It seems to me that it is conflict which condemns people to remain poor, it is wealth creation and jobs which help people lift themselves out of poverty, and aid, spent well, works miracles. It is really on the subject of my Department's budget and aid that much of the public tend to focus, particularly at the moment, in the very difficult economic times we face, rather than the other two ingredients, which are of course, as this Committee will appreciate, absolutely critical to development generally. In respect of the aid budget, we are absolutely clear that we will never maintain public support for Britain's significant and important aid budget unless we can demonstrate clearly to taxpayers that for every pound of their hard-earned money that we spend on development they are really getting 100 pence of value. It is for that reason that we have long argued in opposition for two key changes which we are now seeking to implement. The first is that we must focus very specifically on results, on outputs and outcomes, and less on inputs. I think for the last 10 years, perhaps characterised by Gleneagles, there has been a very strong focus on the inputs to development and on donor support in cash and money terms. We think that 10 years' focus on inputs will now give way to a 10-year focus on outputs. I said in the Chamber of the House of Commons that we wanted to bring the same focus on outputs and outcomes that the former Government had given to inputs. We are quite clear on the essential nature of focusing on results and on outputs. If I can explain what I mean by that, the Prime Minister going to Maputo on a daytrip to announce half a billion dollars for primary school education is important, and an input. The output is what that money does, how many schools you build and how many teachers you train and, even more important, the outcome, of how many children get a quality education. The second change, which is obviously closely related to that, is the setting up of an independent aid watchdog, because we just do not believe that the public will trust Ministers when they say everything is going swimmingly. We think we need detached, independent audit of what Britain's aid budget is achieving. That is why we have long argued for an independent aid watchdog and that is what we are now, in close consultation, I hope, with your Committee, Chairman, going to seek to do, bolstered, of course, by the Transparency Guarantee that I announced at the beginning of June, putting everything that we possibly can into the public domain. The fourth point that I wanted to make was that this work is bolstered by a bilateral review of every single country in which Britain is involved in development terms, looking to see whether we should be there, placing our results focus on the programmes, looking at each programme, drilling down into what it is seeking to achieve, whether we can make it more sharply focused, and whether we can get more value out of every British development pound spent in each country. The bilateral review really informs and drives much of the other work that we are doing in the Department: the multilateral review, of course, taking the same approach to the money that we spend multilaterally, looking to see whether we are getting the value that we require; the Emergency Response Review, which I announced yesterday, to be chaired by Lord Ashdown, to make sure that, in responding to these horrific emergencies that take place across the world with sad repetition, we are actually performing to the very best of our ability in terms of bringing relief to people at a time when they are in dreadful circumstances; and of course the Poverty Impact Fund which we want to set up to assist with the funding of some of the NGOs and charities which do brilliant work around the world, where it would be a very good deal for the taxpayer if by doubling their money we can double the outputs and the outcomes they achieve. The taxpayer piggybacking on that would be very good value for money and very good for development. Perhaps I could just end my opening remarks by saying that the lights are burning late in DFID as we carry out all this work. I hugely welcome the support and advice of this Committee. I know there is a deep expertise on this Committee. I followed it very closely in opposition under your Chairmanship, Mr Bruce. I was a great fan of it in opposition. I thought it was one of the most effective Select Committees operating in the House of Commons and I greatly look forward to working extremely closely with you, taking advice both formally and informally from all the members of this Committee.

  Q2  Chair: Thank you very much, Secretary of State. That was a helpful prioritisation of your objectives. I might say that flattery will get you somewhere but not everywhere in your relationship with the Committee. There is a number of things you touched on and clearly we want to follow that and see if we can tease out some more detail from you. You quite rightly highlighted the fact that within Parliament you have support for the protected budget and for the aims and objectives, and you are absolutely right to say that this Committee has characterised itself by saying we all want aid to work and be effective, and we are all committed to the 0.7%, even if we have differences of approach as to how that can best be achieved. On the other hand, we are seeing not exactly a clamour but the beginnings of a "noise off" about why on earth the budget of the International Development Department should be protected when swingeing cuts are likely to be imposed right across the sector. You touched on that in your remarks. There was a poll published, I think, in the Financial Times this week asking people across Europe first of all whether they believe that deficit reduction was a priority, to which the majority said "yes", but then asking where it should start, to which the majority said "with overseas aid". That was across Europe, including the UK. How do you defend the aid budget—and you have set out points about accountability—to a sceptical public, and also, given that not all British aid goes through your Department, how can you be reassuring that all UK aid will be subjected to the same stringent degree of transparency and accountability that you have set out?

  Mr Mitchell: That, of course, is the key question. I sought to answer it to some extent during the debate on development that took place in the Chamber about a fortnight ago. Let me make clear that the independent evaluation agency—we have not yet finally settled on a name for it but we are narrowing the shortlist—will focus on all ODA money that is spent by government. We are determined to drive up the quality and standard by which ODA is spent.

  Q3  Chair: And you have agreement across government?

  Mr Mitchell: We have agreement across government that the agency will follow the ODA spend and I think that is very important really for the reasons which you suggested. The second point I would make is that DFID's running costs are not immune from the same strong action that has been taken across the whole of Whitehall and we will see 33% reductions in the administrative spend of my Department. I should say that the spending on administration is only 3% in DFID. The average across the other donors is nearly 5%, 4.9%, and for those who have reached the 0.7, it is higher than that. So it is extremely important that we ensure that the staffing matches the requirements of the budget and the budget does not have to match the requirements of the staffing.

  Q4  Chair: Can I just pick you up on that? Certainly in opposition you had made comments, as indeed has the Committee, about concerns about staffing levels and whether that would compromise DFID's delivery. Have you changed your view on that?

  Mr Mitchell: No, and I am going to, I hope, be completely consistent with what I said in opposition. If you do not address that point and you have a situation where the budget has to be spent according to the staffing rather than what is clearly right, and what the Committee, I think, in agreement with what I was saying in opposition made clear, that the staffing needs to be right for the budget. Otherwise you have money tipped out of the door into the multilaterals and so forth and you are not able to give to the British development pound the correct scrutiny and level expert guidance that you need. We are in discussions with the Treasury, and those discussions are going well. It is in the context, as I said, of the reduction of one-third in the administrative budget but we will need to make sure that the programmes for the Department are supported by the right level of staffing and, as I say, the discussions on that point are well understood in the Treasury and we are, I hope, going to reach agreement on that shortly.

  Q5  Chair: On that basis then, if that is the case, what are you going to stop doing? You are going to have to make savings somewhere if you are going to protect.

  Mr Mitchell: We have a corporate reform programme which will save £40 million by 2012-13. It will focus on making savings in the back office function. It will see a reduction in travel costs and allowances, and indeed reduced accommodation costs. I have already let out one floor in Palace Street and have plans to let out another. We are looking at making sure we get the best possible value out of the space that we have. That is the approach we will take to the administration reductions but I want to reaffirm what I said in opposition, that the staffing must fit the needs of the budget and not the other way round. Returning to your central point about the public view of the development budget, I think there is a strong and broadly spread consensus in Britain that there are two key reasons why the development budget is right to be protected, to be ring-fenced, and indeed to increase. They are, first of all, that it is morally right and, secondly, that it is in our national interest that this budget should continue to grow. Perhaps I might just say a word or two about both those two points. I think there is a strong view that our generations have an ability to make progress on doing something about these colossal discrepancies of opportunity and wealth which exist in our world today and a deep commitment to achieve that. I said in the Chamber that I thought that in 100 years' time people will look back on our generations in much the same way that we look back on the slave trade, with a mixture of astonishment and incredulity. The fact that every day today 25,000, mainly children under five, die of diseases which we absolutely have the power to prevent I think is a powerful motivator underlying the morality of what we are seeking to do. As I say, through globalisation and other points as well we are able to do so much more than we could do in the past; now is development's time but, secondly, it is very much in our national interest to address these points of difficulty which come out of the developing world. I think Paul Collier has changed the way many of us think about development because we always used to believe that there were one billion of us, principally in Europe and America, who were developed, and 5 billion people developing but we have discovered that is not true; there are 5 billion of us who are developing and a billion who are caught at the bottom who are not developing, who are often going backwards in terms of the Millennium Development Goals and whom we really need to focus on. These are countries, often badly led, dysfunctional countries, conflict-ridden countries, which are exporters of people, this great weight of people who seek to come into Europe, often up through Libya and Italy or through Senegal and into Western Europe. These are often not feckless benefit seekers, seeking to take advantage of the British benefit system; they are the brightest and the best in their societies who are seeking a better life for themselves and their communities. How much better to try and offer them hope and assistance in building those societies in their own countries? In the end, intervention upstream in trying to tackle the causes of these difficulties is much less expensive than having to tackle the symptoms further downstream. It is not only, of course, migration; it is the danger of disease spreading and it is conflict and violence and small arms and ordnance and dysfunctional government. Tackling these issues is at the heart of development—I mentioned in my opening remarks the importance of tackling conflict—and it is very much in our national interest as well.

  Q6  Chris White: Secretary of State, the issue about administrative costs and staffing: one of the usual hidden staffing costs is the cost of consultancy. I would be interested to know if that would be an area where you will be targeting first rather than getting rid of the typical frontline staff?

  Mr Mitchell: We do not intend to get rid of frontline staff for the reasons I said. When the Chancellor was the Shadow Chancellor and made his announcement about his approach to consultancies across Whitehall in Birmingham two years ago, he specifically excluded consultancies run by DFID. Let me make two points about this. The first is that much of the brilliant work that DFID is doing is done through consultancy arrangements. I think, for example, of the work that is being done to build the capacity of Prime Minister Fayyad's office in Ramallah so that if the two-state solution is implemented in the Middle East he has the sinews of governance within his prime ministerial office: his relations with civil society, his responsiveness in terms of service delivery to the people whom he would represent. That sort of spending is enormously valuable. It is some of the best aid and development expenditure I have seen anywhere in the world, and much of it is being delivered through consultancy arrangements. Often the consultancy work which DFID is doing in terms of technical assistance and so forth is incredibly valuable. The danger, of course, of staff restrictions is that, because of those staff restrictions, to do the work implied in our programmes and our budgets you have to go and hire consultants, who are much more expensive than having them on your own staff. Also, you do not have them under quite such good control and organisation. The case for consultancies has always got to be fettered by value for money and ensuring that we are really achieving through this spending of hard-earned taxpayers' money what we set out to achieve, but consultancies per se often are very important to the work of development.

  Q7  Chair: I hope that reassurance on staffing means that you will be able to respond to this Committee's needs promptly and efficiently, if you are not going to be subjected to staffing controls, because we have had some slight problems in the past of not always getting answers as quickly as we might. I just ask you to take note of that.

  Mr Mitchell: I can assure you, Chairman, that will be at the very top of my priorities, and if ever you have any reason for concern, I trust you will contact me immediately.

  Chair: Thank you.

  Q8  Jeremy Lefroy: We have been given some figures about efficiency savings, with 2009 £155 million of efficiency savings, which seem to us to apply right across the Department because the administrative budget is only about £157 million, as we understand, anyway and an overall target of £647 million by 2010-11. My concern is, much as you may deliver efficiency savings within the Department, a lot of money goes out multilaterally. What can be done to ensure that those multilateral institutions are being as effective in delivering efficiency savings for the British taxpayer as you will have to do, and no doubt will do this to the highest standards possible within the money under your own direct control?

  Mr Mitchell: Mr Lefroy is absolutely right in the extent to which not quite half the budget goes out through the multilateral work that we are doing, and it is very important indeed to hold the multilateral agencies to account. I was in New York meeting most of the principal UN agency heads a fortnight ago and I was able to explain to them that this review of their work is extremely important to us. It will determine our relationship in financial terms with the multilateral agencies. I was able to explain to them this results focus that we require on outputs and outcomes, and I made it absolutely clear that where they work well and we think they are the most effective way of delivering aid, we will perhaps do more through them but where we think that they are not adequate in what they are doing, we will reduce our support and even in some cases eliminate it. The key point that will drive the multilateral aid review is effectiveness. Where we are getting effectiveness, we will build on it, and where we are not, we will take the necessary action to ensure that there is public confidence in the way this money is being spent. In terms of the figures that you mentioned, I am very happy to write to the Committee explaining how those figures are put together but from the moment I arrived in the Department we sought immediately to underline this value for money agenda; we immediately froze between the door of the Department and the Secretary of State's office some of the development awareness funds, which, frankly, we thought were bringing development into disrepute. I have mentioned before the hundreds of thousands of pounds for Brazilian dancers specialising in percussion in Hackney; this does not seem to me to be a good use of the development budget. So there is a role for development awareness but I start from the basis that development money should be spent overseas, advancing the general objectives of our development aims and budget. In addition to that, we have identified something like £150 million of work that is not performing well, or that we think could be better targeted, and we will be coming forward with some detailed proposals in respect of that with some detailed changes. We are looking at all the work of the Department to see whether it is meeting the fundamental requirements I set out in my opening remarks. That is the lens I hope we and the Committee will see this development spending through.

  Q9  Anas Sarwar: Just picking up on the point you made, Secretary of State, about development awareness, I recognise the need to obviously have efficiency in terms of programmes that are not effective and do not give results but, going back to the point the Chairman made about trying to maintain public support or at least minimising public distaste with maintaining our budget in International Development while other budgets are being cut, do you accept that we still need to invest in awareness programmes within the UK to try and encourage people to either relate to charities which do work abroad or even relate to the DFID budget itself?

  Mr Mitchell: I fully accept that the importance of getting across the case for development in schools and across the whole of our country is vital. I am dubious about the extent to which some of these programmes, which I have been through with my officials with a fine-toothed comb, are actually giving value for money in achieving that. Clearly, where there are good projects which should be supported we will support them. We are strongly supporting the work of the British Council, for example. There is good school twinning work which I think should be supported by the taxpayer but we have to see this through the lens I described in my answer to Mr Lefroy, really about value for money and the best way of doing it. I have allowed some of the projects to proceed and of course, when the Poverty Impact Fund is set up, this matched funding in return for doubling the outputs concept I think will also apply to some of the projects which currently have been seeking development awareness funding.

  Q10  Mr Brown: This is not so much a question for the Secretary of State but more of a comment and to urge caution. Secretary of State, can I say I did expect to hear about the drummers in hackney this morning, it is your favourite, at the end of the day, but in terms of back office functions, I would urge caution because all too often those back office functions are the vital element that ends up assisting frontline service delivery. I just urge caution in that, that it is not just about sweeping away back office functions because sometimes frontline service delivery will not happen without those functions.

  Mr Mitchell: I completely accept the point that Mr Brown is making. We cannot stand immune from the general effects of the financial and economic position that is affecting the whole of Whitehall and we must take our place and play our part in addressing that extremely difficult issue but of course, it must be addressed sensitively and sensibly and I have absolute confidence that my officials are doing precisely that.

  Chair: May we ask for slightly sharper answers. We have a full attendance of the Committee and a lot of questions to get through.

  Q11  Mr Clappison: Welcome, Secretary of State. You have already made a lot of comments about the bilateral review which you are carrying out and I am sure the public acceptability of aid is increased if people can be convinced that aid is getting through to the very poorest people. I wonder if I could ask you what your thinking is on the allocation of aid when you are looking at the nature of the countries concerned and how poor the countries are as a whole as opposed to the poorest people within those countries. You have already made an announcement as regards China and aid to China. Many people, rightly or wrongly, put India in the same bracket as China and a lot of our aid does go to India. What is your thinking about bilateral aid to India?

  Mr Mitchell: We are looking through the bilateral aid review very carefully at aid to India. I think India is different from China, firstly because of the deep historical links which exist through the Commonwealth—India is the largest democracy in the world. We have very strong historical ties with India—secondly, because in India there are more poor people than in the whole of sub-Saharan Africa and thirdly, because, again, looking at your analogy with China, the average income of an Indian is a third of the income of a Chinese. Equally, however, India is a country with a space programme, it is a nuclear state, in the part of the world that Mr Burden and I represent we have very welcome extensive investment from Indian industry in our industries, and we have to be sure that we can justify the spend, which is currently the largest programme that DFID has, nearly £800 million over the next three years. We have to be sure we can justify it, and we are working hard to assess how best to re-orientate the Indian programme and I will be coming forward with proposals as part of the bilateral review in that respect.

  Q12  Mr Clappison: The UK actually has a very good record compared with other agencies of getting money through to the poorest people in the poorest countries. Had you any thinking on the criteria which you are going to use for middle income countries and assistance going to them?

  Mr Mitchell: A very small amount of money goes to middle income countries and, of course, India will become a middle income country, thank goodness, before much longer. Because of the extent of poverty in certain states in India, we would then have to look anyway at whether or not we move to a more state-based and less federal programme. Those are the sort of considerations which will apply.

  Q13  Mr Clappison: There are some countries in the world which seem to fall through the net sometimes. There is an expression "donor orphans". Will you be looking at countries currently which are very poor countries which we currently do not give much money to as well?

  Mr Mitchell: Can I ask Mr Clappison which countries he is particularly thinking of?

  Q14  Mr Clappison: I am thinking in particular of some countries in sub-Saharan Africa which seem to fall through the net as far as our aid is concerned, and also EU aid, much of which actually goes to middle income rather than to the genuinely poor countries. If I can give you a specific example with EU aid, that the three highest recipients of EU aid, which is a significant part of the overall aid effort, are Turkey, Morocco and Serbia, poor though they may be compared with us, which are not remotely amongst the poorest countries in the world, whereas a country like Burkina Faso, which is a very poor country by any criteria, receives much less aid proportionately from the EU and also from ourselves.

  Mr Mitchell: We will be looking through the bilateral aid review at all the countries where we are currently placed and some countries where we are not, and I will certainly, in view of Mr Clapperton's comments, ensure that Burkina Faso is one of those countries that we look at.

  Q15  Mr Clappison: There are a number of other African countries in the same category actually.

  Mr Mitchell: Clearly, I have been looking at the position in Niger/Chad at the moment, where there is a dreadful crisis and a deep food scarcity which is affecting very large numbers of particularly children there. We have agreed to send some additional taxpayer support very specifically to provide food and nutritional extras, particularly for children there. We look at it through the lens of which other countries are supporting them, whether there are historical links as there are there, for example, with France, what other EU countries are doing and then make our decisions accordingly.

  Q16  Mr Clappison: Can I very broadly ask you, what is your initial thinking on the distribution of EU aid? A lot of money does go from this country one way or another to the EU, which claims to be fighting global poverty but has a much criticised aid programme in fact, and one which does not give money to the poorest countries sufficiently well, in the view of many aid organisations.

  Mr Mitchell: There are two ways in which we support the EU aid programme. One is through own resources, over which we have limited direct control, and the other is through the European Development Fund, the EDF, where we do have much greater control as to how much we put in. As it happens, I am seeing the Aid Commissioner, Andris Piebalgs, this afternoon to discuss the very issues which you have mentioned, but our contribution through the EU to development is the subject of the multilateral aid review in the way that the other multilateral agencies are and, obviously, we will look at it in the way that I described earlier, in terms of value for money and effectiveness.

  Q17  Mr Clappison: Can I finally put one question as the Secretary of State is having very helpful meeting: could you bear in mind when you have the meeting that, looking at the EU aid globally, a lot of it seems to go to countries where the EU has political objectives and which are located closely to Europe rather than the countries which have the greatest development needs. I am thinking particularly of Western Balkan countries, which the EU includes in its aid programme and claims that it is fighting global poverty.

  Mr Mitchell: I think that is a point to be taken into account but there is the other side of that coin as well, which is that we do not want the EU replicating bilateral programmes, and in some parts of Africa there is a danger that we support bilateral programmes there which are highly effective and, through our contributions to the EDF and own resources, we may also be supporting EU programmes which are replicating some of the aspects of our programme. There is an argument which says that the EU aid should concentrate on building up capacity in the surrounding EU countries so that we can trade with them, so that infrastructure gets built up more effectively, to the greater enrichment of the surrounding countries as well as us.

  Q18  Mr Clappison: That is not what the public would really see as combating global poverty though, is it?

  Mr Mitchell: I think it is a question of using the right ... Mr Clappison is entirely correct that the EU budget, as we have always said, should focus on poverty elimination but I am just making the point that we have to have an eye to duplication and we have to have an eye to ensuring that we do not over-bureaucratise these programmes because of that duplication and also meet the needs—and there are some quite serious issues which affect our national interests in the Balkans and the work that is being done there on development I think is playing an important part.

  Chair: Just for the record, Secretary of State, the Committee is looking at our engagement with the multilateral institutions, starting with a visit to Brussels in September, and we will also be looking at our aid programme to India there after. Just for the record, we have made those decisions.

  Q19  Chris White: Very quickly, I for one welcome the 0.7% figure. It has already been raised by my colleagues on the right how difficult it is to persuade the public, looking at opinion polls or whatever. When we look at India specifically, we are obviously going to need to make a stronger case, I think, than historical ties when there are other countries that could be argued to have unequal opportunities such as Brazil. Can you make a better case perhaps for the position you are taking on the EU question?

  Mr Mitchell: I am not taking a specific position on that. I am exploring the facts through the bilateral review, drilling into the programme in great detail, and it is not just the historical links; it is also the fact, as I said, that there are more poor people in India than in the whole of sub-Saharan Africa. I think there is a difference in many ways with Brazil and India, but I am not approaching the bilateral review on India with any preconceived notions. I think it would be very helpful, Chairman, if as part of our bilateral aid review we have the benefit of the Committee's conclusions on India, so I will look forward with great interest to the report on that.

  Chair: We will approach it with an open mind on the evidence, as we did our report on China, I stress.

  Q20  Richard Harrington: Just a quick question, as we are discussing the bilateral aid programme: it may be early days yet but do you foresee our policy being to concentrate bilateral aid on fewer countries more significantly, or to go the other way, which is obviously spreading the cake more thinly? One of the reasons I ask is because clearly, with the pressure on administrative costs, the costs of running programmes, I know one cannot quite talk in terms of management time in the same way as you can in a business but it would seem sense for effectiveness to cost on fewer, larger programmes.

  Mr Mitchell: I suspect that the bilateral review will probably conclude that we should be in less places than we are at the moment. I do not want to prejudge that. We have said, as you have rightly mentioned, that we think we should withdraw from China, and indeed from Russia, but rather than salami-slice the review, I think we should now wait until we have the review in front of us. If you ask me what my supposition is, DFID is involved in something like 90 countries and I suspect that the bilateral review will want to focus more sharply on some fewer countries than that.

  Q21  Richard Burden: If I may, I would just like to take you back briefly to the comments you were making earlier on about the ring-fencing of ODA and just to clarify a little bit more closely what you mean by that. Obviously, one of the huge challenges facing the developing world is the impact of climate change, and it would be, I guess, theoretically possible to end up with absolutely vast amounts of development spend simply going on countering the impact of climate change because the problem is so great, but the consequence of that could be that other really important development objectives are lost in the process. One of the things the previous Government did was to maintain an upper limit of 10% of official development assistance on responding to climate change impacts. I just want to clarify: are you maintaining that policy or not?

  Mr Mitchell: The particular debate around the 10% was in connection with the Fast Start money that had been agreed, and we have confirmed the figures for the Fast Start spending, all of which would in fact fall under the 10% on any basis. The last Government confirmed in a Parliamentary Answer at the fag end of the last Parliament that there was in fact no intention of bringing additional funding to bear; it would all come out of the DFID budget. In terms of long-term climate finance decisions, that is a matter really for the Comprehensive Spending Review, and I am in discussions with the Secretary of State for the Environment Department on such issues but I think it will be the result of the CSR which determine the future of the climate budget. In addition, Richard, it is worth saying that we strongly supported in opposition the then Government's aim of trying to ensure that we had new mechanisms internationally agreed to meet the costs of climate change adaptation and mitigation, and that of course remains our aim.

  Chair: I think you will get the support of the Committee on that. Richard Burden has obviously underlined a potential point of concern. A point well made.

  Q22  Jeremy Lefroy: Just on the 0.7%, Secretary of State, a couple of things: what is the Department's timetable for putting forward legislation to enshrine the 0.7% of GNI as ODA by 2013? I would like your personal views on top of that: is there a concern, or do you have a concern that the more we put Britain's aid giving through official channels, there might be a reaction of the general public that we are doing all we need to through official channels, therefore direct contributions through the aid agencies would come down? As you know, in the United States, which gives a much lower proportion officially as ODA in terms of GNI, private contributions through major charities are much higher than in the UK. Do you see a correlation between the two?

  Mr Mitchell: It is a very interesting point. I think the evidence is the reverse, because Comic Relief managed to raise even more money for these great causes which it supports from the British public this year, in the last year, with the very changed economic circumstances in Britain, than in the previous year. So I hope the evidence is the reverse of that. On the 0.7%, we are limited in the Coalition agreement to legislating during the course of this session. When the original Bill was published in draft, the Committee, I think, expressed some reservations about it and there were certainly reservations expressed by the NGO community, so we want to look carefully at the clauses in the Bill and we want to consider the best way of bringing it into legislation and I hope to reach agreement with colleagues in the near future about how we will do that.

  Q23  Hugh Bayley: One quick follow-up on James's question. As I understand it, it is UK ODA which is ring-fenced by the Government rather than the DFID spend. Hitherto 86% of ODA has been spent by DFID. You are going to be ramping up expenditure very fast to meet the 0.7% target, with a 50% increase to be made over the next three years. At the end of that period would you still expect 86% of ODA to be spent within DFID or will the proportion change?

  Mr Mitchell: I have no idea how much will be being spent directly through the Department and I think that it would be unhelpful to try and talk about a specific figure. What we want to do is to pursue the ODA objectives. The objectives set out quite clearly by the OECD DAC make clear what you can spend aid on and what you cannot, and we have confirmed repeatedly that those rules will remain absolutely in place. So I think we should focus on how to get the best possible value for money on behalf of the British taxpayer and those we are trying to help through the ODA budget and worry less about which Department is actually providing it. I underline the point I made earlier in answer to the Chairman of the Committee that we need to ensure that all this is spending is excellent spending which really does deliver value for money, and that is why the independent watchdog will follow ODA spending from whichever Department it comes.

  Q24  Pauline Latham: Good morning. There are additional challenges when operating in fragile states and a lower success rate for projects. Is there a point at which results in fragile states are so poor that aid will be discontinued or fundamentally reshaped before it can continue? In fragile states they have fragile borders, and internal conflicts, which you have talked about as being one of the fundamental problems, can easily have a knock-on effect on neighbouring countries, and this is clearly illustrated in the Great Lakes area of Rwanda, Uganda, Burundi and DRC. Can you see that DFID will be operating on a more regional basis in an area like that or do you think you will still retain it in country? If DRC continues with conflict and it affects Rwanda and Uganda, you might have bad results in DRC but good results in the others, so where do you see that going?

  Mr Mitchell: I think it is an absolutely essential question to pursue. I first went to the DRC some three years ago because I wanted to answer question why on earth is the British taxpayer spending, then, £70 million in the DRC—it is now more than that—and I found out: you will never have a peaceful Africa without having a peaceful DRC. A lot of the spend when I looked at it three years ago I thought was very good spend. Of course, you cannot go through the government; you have to find other mechanisms for delivering, and I think that underlines what I take to be the key point in your question, which is that we cannot and must not neglect these difficult areas because otherwise the people there who we are trying to help lose out twice over, firstly, because they are poor and secondly, because they live in difficult, conflict-ridden or very dysfunctional societies. So we have to make sure that we pursue our programmes and our interests and our support for conflict states and difficult countries with every bit as much vigour as we do for other countries. In looking at the work of the international aid watchdog we want to set up, the development community needs to be self-confident enough to recognise that you will not get the results in places like the DRC in terms of value for money that you will get in countries where you are doing development in a steady state, but that we must make sure that we have a drive for value for money and efficiency even in those most difficult states and we should never lose what I think is a sort of venture capital approach to development, where you do experiment and try things out in the hope that they will yield much better results and accept that from time to time they will go wrong. The development community must be self-confident enough, in my view, to take it on the chin when get it wrong, and put it right, because we are good at these things.

  Q25  Pauline Latham: You talked a lot about openness and transparency and recognising that we are looking at output. How in difficult countries are you going to actually measure those outcomes, and who will be doing all this measuring within the country, because we cannot just do it remotely?

  Mr Mitchell: Would you like me to say something, Chairman, about the work of the watchdog in that respect?

  Q26  Chair: I would rather you did not, because there are some questions coming up on that.

  Mr Mitchell: The Transparency Guarantee is about putting information into the public domain. It enables our own taxpayers to hold us to account but also putting this information into the public domain for poor countries increasingly enables the people we are trying to help to hold their own leaders to account for what they are doing, and that is an absolutely fundamental aspect of development, to build up civil society so that poor people in poor countries have access to this information increasingly. Rwanda is seeking to wire up the whole country to the Internet. If you land at Kigali airport now you see these children with their laptops up against the airport fence pulling down the wireless connection. Putting this information into the public domain, where it can increasingly be used in an edible fashion, is very important indeed for development and accountability.

  Q27  Ann McKechin: Secretary of State, you quite rightly emphasised the need to show value for money in the current debate. I just wonder if you could give us some idea of the timetable in terms of redesigning your aid programmes so that they are easier to evaluate. You have mentioned that you are going through a fundamental redesign. How soon do you think these new programmes will be available to be assessed by the new independent body and can you ensure that baseline data will be collected?

  Mr Mitchell: First of all, part of evaluation is to build into all project work from the beginning evaluatory mechanisms. That has not happened in the past and it is going to happen. We anticipate in January next year putting into the public domain all spending above £500. That is part of the Transparency Guarantee that I announced at the beginning of June. The Department will publish a specific plan—it is going to be launched by the Deputy Prime Minister when he visits my Department shortly—which will give specific timelines for these reviews and changes which we are going to introduce, and I think it will be in the first months of next year that we will have the conclusion of the bilateral review, with the multilateral agency review concluded one month later. Those are the sort of timelines that we are engaged in.

  Q28  Ann McKechin: That is very helpful. Clearly, the key issue when we are considering evaluation is actually what the question is because, if we use very crude criteria, we actually will not achieve what we all want to have, which is really effective aid. We could, for example, achieve the fact that we get people just above the absolute poverty line but they are still in a high state of vulnerability, so if there is any financial or economic crisis, they could easily fall back into absolute poverty. I am wondering to what extent you are going to try and take a long-term perspective in evaluation. You have mentioned the issue around fragile states and the risks that you have to take into account but in terms of that evaluation, how are you going to ensure that not only do we inform people in donor aid countries what we are doing but how do you make sure that their voice is heard in terms of how we set the criteria for that evaluation?

  Mr Mitchell: Would now be an appropriate moment to say something in answer to that question the structure of the independent watchdog?

  Q29  Chair: Richard Burden is coming to that immediately.

  Mr Mitchell: Would you like me to take both questions together?

  Chair: Yes, all right. Perhaps that would be helpful. I do not know whether you want to put a question in now, Richard, or respond to what the Secretary of State says.

  Q30  Richard Burden: I think if the Secretary of State is about to respond, maybe I will respond to the response because it was in that ball park I was going to ask anyway.

  Mr Mitchell: I do not want to weary the Committee—

  Q31  Chair: Not too structured, but we do want to hear from you as to how you will approach it.

  Mr Mitchell: The way in which the independent evaluation will work is as follows. We want to bring together two streams of activity. The first is the value for money, accountancy-based, NAO, bog-standard approach to what you are getting for the money you are spending, which I am sure all members of the Committee will recognise. We need to marry that together with the development expertise that resides in organisations like the ODI across the river and IDS down in Sussex and to bring those two strands of evaluatory expertise into one. We seek to do this not by putting lots of money into bricks and mortar and structures but into a contract-driven analysis programme, to be determined probably by four commissioners, a Chairman and three others, who will be independent of the Department and who, if this Committee agrees, would report to this Committee. It is the sort of promise you make in opposition and then rather regret in government, but we are absolutely clear, for the reasons I set out in my opening remarks, it is required to give the public confidence that they are really getting good value for money for their hard-pressed spending on aid. What the agency seek to evaluate would be for discussion, I hope with this Committee, amongst themselves, with my Department, with Ministers, but they would determine independently what they looked at. We would then have a report back from them. I do not want to put lots of money into a report that gets more and more expensive the bigger it gets; I want something that is intellectually and academically credible, that the Committee recognise is a strong piece of work but which can be expressed to the public in terms of traffic lights. You always have to have four traffic lights for these things, not three, otherwise everyone goes for the middle one, with red meaning this is seriously off track and we need radical action, red-yellow meaning that there are serious causes for concern, yellow-green meaning that this is largely OK but there are the following things which are not right, and green meaning this is absolutely first-class and we are getting 100 pence of value for every pound that we are spending. That is the sort of overall structure, and we would like very much to have the benefit of the advice of this Committee on that, but the principle that it should report to civil society, to Parliament to the legislature and not to the executive underwrites everything we are trying to do with this.

  Q32  Ann McKechin: Could I just come back to this issue about how we are going to ensure that the voices from the South are part of that evaluation process, because I think that really is a key element in making sure that our aid is as effective as possible and is actually answering the needs of individual communities.

  Mr Mitchell: I completely agree with that, and it will be up to the commissioners to determine the contract terms to ensure that that input takes place, and I agree with you that it is not possible to do this without taking account of that. I hope that both the transparency measures which we have taken, which underline your point as well, will be helpful. Obviously, much of the work we do is done with the grain of the Poverty Reduction Strategy, which has been agreed between the donor community and a poor country and we need to make sure obviously that as part of that Poverty Reduction Strategy there is clear feedback so that ordinary people have some ownership of it through whatever the relevant political structures are, and that we then in our evaluation can take account of that.

  Q33  Richard Burden: I am still struggling a little bit to understand how this is going to work. The objective of greater transparency, of accountability other than simply to the executive, I think there is a consensus around. One of the things we have found when we can only, by our own admission, often scrape the surface of inquiries that we do, is that you cannot actually understand the effectiveness or otherwise of different programmes unless you see things for yourself, and particularly if you are talking about—

  Mr Mitchell: You mean if the evaluator can go and see it.

  Q34  Richard Burden: I am just wondering. You say you are not going to spend a great deal of money on bricks and mortar, and I agree with that but are we effectively saying there is going to be a team of people travelling the globe, going and evaluating programmes and projects which already have a lot of evaluation, are going to be engaging with the South, spending a great deal of time and resource doing that? If so, if that budget is going to be coming out of the same budget you are looking for efficiencies in, I just wonder where the value on that is being added. If that is not the case, then is there not a real danger that this new body is going to be very remote, is going to sit at desks here in London, and not listen to the voices that Ann McKechin was talking about? I do not follow how this is going to work.

  Mr Mitchell: I disagree completely with that analysis and let me very briefly try and explain why. At the moment there is no independent evaluation. We got quite far, I think, in persuading Hilary Benn when he was Secretary of State of the need for this. I think that what then transpired was an in-house evaluation, and that is not good enough; it does not meet the criterion which I set out at the beginning, which is that you will never maintain public support for this budget unless you can demonstrate independently that it is really well spent. So this is a different form of evaluation; it is very results-focused and it is also internal to this extent, that we will enshrine in all the work the Department does these evaluatory indices from the beginning of the project work. In terms of cost, I am advised that the cost of doing what we want to achieve will not be significantly greater than what we are doing at the moment and re-allocating that expenditure.

  Q35  Richard Burden: Can you say what that is? When you say what you are doing at the moment, are you referring to the cost of the Independent Advisory Committee on Development Impact?

  Mr Mitchell: No. They are doing a lot of very good work but I do not believe that it is independent.

  Q36  Richard Burden: No, I am just saying what it is called. I am just giving its name.

  Mr Mitchell: I think it will be possible to re-allocate resources towards the independent agency and I am happy to write to the Committee in due course. I cannot quantify those costs at the moment but I do not think we are going to see a colossal increase in the evaluation budget overall if you take the current components to what is an internal form of evaluation and add them all together. That is one point about this. Secondly, the contracts we let will be on a competitive basis. We will require the points that Ann made to be included in those contracts and then we will go out to these two twin streams of expertise. It will be for them to decide how they put together their bid and we will let a contract on the basis of the best possible value for money. That will clearly involve them going and looking at the work that is being done. One of the contracts that I would like to see let and which I will be arguing for is to do a comparative study of the way in which we educate children in primary school in three or four countries in eastern Africa to see what lessons can be learned from the work that they are each doing and to see whether or not there are more effective ways we can bring to bear on that. That seems to me to be a very good way of getting evaluation to improve the quality of programmes on the ground as well as improving the value for money which the British taxpayer is receiving.

  Q37  Richard Burden: One of the things I am getting at is, when we paid a visit to Zimbabwe earlier in the year, one of the areas of representation that we received quite regularly from NGOs and others over there was that, whilst they were very appreciative of the way British development spending worked in Zimbabwe, in obviously very difficult circumstances, there was often the criticism that that seemed to be mediated through an intermediary body that had been appointed by the UK, and indeed other countries, whose job it was not just to disburse moneys but also to evaluate the effectiveness of that, and the argument was coming forward that actually, what we needed to do was to evaluate how effective evaluation was being done to contracts that we had effectively let. I just wonder if the danger is we are going to get into that rather circular problem again. Who is going to evaluate the evaluators, in other words?

  Mr Mitchell: I think Mr Burden underlines the fact that at the moment this is not a properly focused, sharp process and, once we have set up the independent evaluation, I have every confidence that the confused situation you describe that currently exists in Zimbabwe will be tackled.

  Q38  Anas Sarwar: From our own understanding from DFID, there were already going to be at least 40 independent evaluations over the next four years. What will this watchdog add to that, and would that be on top of those so-called independent evaluations, will they run alongside that, will they replace that? Also, coming on to the cost element, if it is going to be truly independent, there will be admin costs, there will be membership staff costs, there will be pay, there will be travel, there will be advisers. Is that not in effect increasing your admin costs and taking money away from DFID rather than, as you say, being more output-led rather than input-led?

  Mr Mitchell: Let us be clear on the reason for doing this. It is, as I said at the beginning, that it is essential, in my view, to have truly independent evaluation if we are going to maintain public support. I am doing something which is quite bracing: I am giving up the control over this to, arguably, this Committee and to the independent evaluator because I think that is right. The budget is, as I say, in terms of reallocating what is a rather confused and not external system of evaluation at the moment. The additional expense will not be very great but I will be able to quantify that for you in due course. All I can tell you is that the evaluation that is being done at the moment is not independent, does not mean meet the standards and criteria we need for true, independent evaluation and that is what we are going to do to replace it.

  Q39  Richard Harrington: Could we move on to the related issue of the Transparency Guarantee, and I for one thought what you said about it was very interesting and very commendable but I have a few questions to do with it. I can understand from the big picture point of view about transparency, disclosing exactly which countries, which projects within countries, but in very poor countries with very poor levels of infrastructure, to what depth do you intend it to go? For example, would it be a group of houses or a school that have been constructed by taxpayers money? Would it be the cost of that particular contract in that particular village and who that particular contract went to? Do you perceive that the transparency would drill down to that depth? Also, would you please comment on whether there are any extra costs involved with transparency.

  Mr Mitchell: In answer to the depth, first of all, the Transparency Guarantee makes it clear that from January any expenditure over £500 will be put in the public domain through website. That, if you like, is the issue of the depth of it. In terms of the scope of it, we are very concerned to make sure that it is in a usable form. If you just dump everything on to the website, that may or may not be usable. We want to get away from what sometimes happens, which is that you dump all this information in a relatively inedible form on to the website, and then, when people ring up with user questions, the system tends to say, "Well, all this stuff is on the website. Go and look for it yourself." We want to make sure that this is done in a user-friendly way so that it genuinely contributes to the way in which people hold us to account. By having issued this Transparency Guarantee and making clear that we will put all this information into the public domain, we hope that we are creating hundreds of thousands of little watchdogs, because the information will not only enable people in Britain, the NGOs, taxpayers, specific lobby groups and interest groups to hold us to account for the way the budget is being spent, but it will also enable, through some of the mechanisms which I mentioned in my response to Pauline Latham, poor people in poor countries to hold their own leaders to account for the way in which this money is being spent. So the Transparency Guarantee hopefully gives a rocket boost to accountability, not only in Britain but also in the countries which we are trying to help.

  Q40  Richard Harrington: Just as an example of what I mean, having visited a former Soviet Union country, with a private aid organisation but the same principle is there, we were shown development of houses funded by different humanitarian funds for old people who were completely homeless, and we were told quite clearly "If we get a local builder to do it, it would cost X, we have to pay, effectively, the local Mafia, all the international aid organisations do and it is four times as much. Of course, it is still a lot cheaper than building in London, ha ha." How would the Transparency Guarantee scheme work in something like that? Would it be quite clear how much per square metre the building had cost or is this far too great a detail?

  Mr Mitchell: We will leave that probably to the expertise which I described, first of all the value for money expertise and the development expertise, to work out how to address those sort of issues but I am quite confident they will be able to do so.

  Q41  Jeremy Lefroy: I want to touch on the role of in-country parliamentary scrutiny. We raised this in our Globalisation and Global Poverty Report a few years ago. We raised the role of local Public Accounts Committees in Parliaments in recipient countries and how we would hope that they would do some scrutiny, particularly of direct budgetary support in certain countries. I would just like you to comment on that and also if, as often happens, the reports of these often quite independent and robust Public Accounts Committees are fairly scathing in what they say about the use of public money, and I have seen several examples of that, and then seen governments do absolutely nothing about those reports, effectively putting them in the bin, what would you, as Secretary of State, do in response to that?

  Mr Mitchell: We have always said that we think that direct budget support is the best way of doing development if you can trust the people who are receiving the budget support, and that it meets the evaluation criteria which we have been talking about. It is the best way of doing it but the trouble is that under the last Government it went too far, and that is why we said that we would use it where we could when we were in opposition, and that we would allow up to 5% of the budget support to be used by civil society for monitoring the way it was spent, a proposal that the then Secretary of State took up in his White Paper last year. I have seen in action, as Mr Lefroy may have seen, the Public Accounts Committee in Ghana. I watched them on television holding a Minister to account for spending in ferocious terms. That incident seemed to me to be very telling in terms of accountability in Ghana, and when we have looked at Ghana, we have never had any qualms at all about the nature of direct budget support there, but we have to ensure that it meets the criteria that we are giving good value for money to our own taxpayers and the people we are trying to help. That is the lens through which we will look at budget support in the course of this review.

  Q42  Jeremy Lefroy: If I could just press you a little bit on that, let us take an unnamed country, and there was a Public Accounts Committee report from the Parliament of that country which was devastating in its critique—and there have been several of these that I have seen—of spending, including those departments directly supported by our direct budgetary support, what would you, as Secretary of State, do?

  Mr Mitchell: We will have a zero tolerance of corruption policy at the Department and we would immediately in such circumstance investigate and take the necessary action to protect the interests of our own taxpayers and the people we are trying to help in that country.

  Q43  Anas Sarwar: Moving on, Secretary of State, to the relationship DFID has within Whitehall and with other organisations like the FCO. The Conservative Green Paper on International Development said there were times when DFID came close to pursuing its own foreign policy agenda. Can you give us some examples of this?

  Mr Mitchell: I think the incidents I was probably referring to there have got a great deal better since that time, and we have always said that we think that DFID needs to be a good Whitehall citizen and perhaps be more integrated into Whitehall. I think that is true. Of course, one of the things that has happened as a result of the changes which the Prime Minister has introduced is that we now have a National Security Council upon which DFID sits, which I think is very good for the co-ordination of policy and the wiring together of defence, diplomacy and development. In terms of the role of the Foreign Office and the role of DFID, if I may take a positive example of this, if you look at a country like Zimbabwe, it is for the Foreign Office, leading for the Government, to determine at what point—and we all hope it will be sooner rather than later—Britain can re-engage more forcibly with the Government of Zimbabwe. That is a decision for the Foreign Office. How we then do that in development terms is a decision for my Department. I think on the whole development should be in the hands of those who understand and are most expert in development, and in Zimbabwe that might, for example, lead to Britain, through the Department, leading an international and a Commonwealth effort to bring development sharply into focus in Zimbabwe. For example, Zimbabwe used to have a very good education system, the 7,000 schools in Zimbabwe need to be refurbished and rehabilitated, the international community focusing on that in terms of putting money into the economy to help rebuild them, rewire the plumbing and so forth, would be a very good private sector development play. Those sorts of decision should be made by DFID in the lead and the decisions on when you can re-engage should be made by the Foreign Office. That is the right division of labour between the two Departments.

  Q44  Anas Sarwar: Are you suggesting that DFID pursued its own foreign policy agenda in Zimbabwe?

  Mr Mitchell: No, no. I was taking a positive answer to your question of looking at where the roles of the two Departments can be seen very clearly to best advantage.

  Q45  Anas Sarwar: But are there any examples of when DFID did pursue its own foreign policy agenda?

  Mr Mitchell: I think we got close to doing that in the past in some countries in Africa.

  Q46  Anas Sarwar: Any examples?

  Mr Mitchell: I am not going to weary the Committee with specific examples but I think there was a very strong feeling around Whitehall some five or six years ago that that was the case and I think it is a great deal better today

  Q47  Chair: But it is true, Secretary of State, we have been to some countries where in reality the UK's engagement with those countries is predominantly a development engagement. To be honest, we might not even be there if it were not for development.

  Mr Mitchell: Yes, and I think Rwanda is a very good example of that, where there is a brilliant British High Commissioner, who works seamlessly with the outstanding Head of Office that we have in Rwanda now and you get the best possible out of both Departments working closely together.

  Q48  Chris White: The Foreign Secretary has talked about moving foreign policy towards enhancing our engagement and promoting national interests. This is a little bit more to do with your previous answer but do you see DFID maintaining its independence or do you see a level of alignment between the two Departments and, if so, or not if so, do you see a commonality between best practice between the two Departments?

  Mr Mitchell: Yes. We must certainly make sure that we work incredibly closely together in every way that we can. For example, we must co-locate wherever we can, we must share back office costs wherever we can, we must drive with great vigour the administrative costs elimination agenda to get the best possible value for money, and we will do that. The Foreign Secretary and I have discussed these matters in great detail over the four or five years that we held these portfolios in opposition and we are completely agreed on the priority for that. In terms of the first part of your question, we have made it absolutely clear that the two Departments will remain separate and if you look at my example from Zimbabwe, I think you see the gains to be made from having the two Departments specialising in their different areas but working as closely together as possible. We do not want artificial barriers between the two Departments and turf wars that are completely unnecessary and we will stop them.

  Q49  Hugh Bayley: I just wanted to press the Secretary of State a little bit further on Zimbabwe. Robert Mugabe has always spoken more favourably about the Conservative Party than the Labour Party, I guess because Lancaster House took place under a Conservative Government and the failed Tiger and Fearless talks about Rhodesia's decolonisation took place under Labour Governments. You have talked a little bit on the aid front but do you believe there is scope for building a different foreign policy and development relationship with Zimbabwe to seek to move the politics of the country on?

  Mr Mitchell: On your first point, I think there is a widespread suspicion that Mr Mugabe sees the Conservative Party through his fond memories of Lord Whitelaw, Lord Carrington and Lord Soames. The Conservative Party has changed a bit since those days and we are a post-apartheid generation. Politics moves on. We have different priorities. There is no difference between the foreign policy of the last Government and the foreign policy of the Coalition in respect of Zimbabwe. We need to see progress on the implementation of the Global Political Agreement, the GPA, there and we would respond to that progress. When we see for ourselves a serious intent to move towards free and fair elections when they come, probably towards the end of next year, then we can re-engage but until that time we cannot. I went on Sunday to President Zuma's 1 Goal education conference and I was able at the margins of that to have discussions with Zimbabwe's extremely skilful Minister of Finance, Tendai Biti, and with Morgan Tsvangirai and there is a clear wish to make progress but we cannot make progress until we have seen the terms of the GPA implemented.

  Q50  Richard Burden: We have just explored a little bit the issue of the relationship between DFID and the Foreign Office. I wonder why could ask you to just address some of the issues about trying to bring the relationship closer between DFID and Defence, because you talked about there needing to be—and I have the quote here—"a step change in the effectiveness of British civil/military development effort". Given the fact that there have been a number of bodies, liaison bodies and so on, set up already to try to promote that, what would be the signs that you will be succeeding in that closer relationship?

  Mr Mitchell: You are talking specifically about Afghanistan, are you?

  Q51  Richard Burden: We can talk about Afghanistan as an example. I was talking more widely but Afghanistan is the obvious one.

  Mr Mitchell: Let me try and answer your question in respect of the wider relationship. The fact that the National Security Council brings together the Secretary of State for Defence, the Secretary of State for International Development and the Foreign Secretary, chaired by the Prime Minister, means, for example, that in terms of the Defence Review this time, which will be conducted by the National Security Council and not, as it has been previously, by the Ministry of Defence in conjunction with Downing Street, is a very big change and I think it is a very important one. At one level it means that, as we look at our national security and our defence requirements, it does not boil down to a discussion of the merits of tanks versus warships, or infantry versus fighter aircraft. You can actually have, I think, a much more interesting discussion about whether you get value for money out of more infantry or training the police in Afghanistan, whether addressing issues of governance in the Yemen or more warships would make us safer as a country. I do not think there is any metric which exists to do this but what is the addition to our national security, if you like, of educating another 200,000 girls in the Horn of Africa and beefing up some aspect of frontline defence? I do not have the answers to these questions but I do think that the Defence Review this time is likely to take a much more holistic view than perhaps it did in the past, where all too often it boiled down to tanks versus aircraft. That is my point about the wiring together of defence, diplomacy and development. If I can try and address the connection with Afghanistan, we have seen huge progress made, for example, in the work of the PRT in Helmand, the Provincial Reconstruction Team there, who are led currently by a DFID civilian. They are doing a great job, they are much more wired together, and they are much more effective as a result, and the Kabul Conference to which I am going this weekend—

  Q52  Richard Burden: But that was happening anyway.

  Mr Mitchell: That has got a lot better and we continue to make progress, and on my recent visit to Afghanistan I saw the way in which it was working, for example, in the progress that had been made in Nad-e Ali, where comparative peace has allowed the shops and the markets to reopen, the roads to be rebuilt, commerce to take place and people to go to school and the local hospital, and there is a degree of normality which did not exist before. The work that was done through the PRT there takes a lot of the credit for having achieved that, and at the Kabul Conference this weekend we will look at ways in which we can strengthen the output and the outcomes from the development money Britain is spending there in the areas which the cluster of Ministers and the Afghan Government and we think is most appropriate.

  Q53  Richard Burden: You see, what I am getting at there is that the PRTs have been in existence for a long time, years. They have learned things over time, they have perhaps got better in some ways and they have got things to learn in other ways. What I do not understand is what you are saying you are going to do, other than creating a National Security Council, that is going to make that more effective still, or are you simply re-branding a process that was going on anyway?

  Mr Mitchell: No, the National Security Council is a change in the machinery of government. What used to be done by a sub-committee of the Cabinet is now done through the National Security Council. It is a very big change, for reasons which the Committee will understand, and obviously the work that we are doing in Afghanistan comes together in the National Security Council for debate, discussion and analysis, and it is from there that the policy emerges, and it is a very good thing that that is the case because, as I say, it wires together defence, diplomacy and development in a much better way. The PRT, as you rightly say, is doing much better than it did in the past. It is an accepted view, I think, amongst all of us that the PRT had significant difficulties when it started and has improved greatly. My observation from my recent visit to Afghanistan, which is the first place I went to following my appointment, is that it has greatly improved. Before that I was last in Afghanistan two years ago and the effectiveness of the PRT was noticeable over that intervening time.

  Q54  Richard Burden: One last question: would you feel that one of the hallmarks of what you described as a step change in the effectiveness of British civil military development effort would make it more or less likely that the Defence Secretary would say that troops should not be in Afghanistan for the education policy in a broken 13th century country? Would it be more or less likely that that comment would be made if that step change had happened?

  Mr Mitchell: I think the Defence Secretary's comments were taken out of context but you will have seen that we are absolutely clear about the reasons why we are in Afghanistan. They are reasons of our national interest and equally the long-term future of Afghanistan's development will be central to that, and development done by the Government, by development agencies, by us, by leading international NGOs and so forth.

  Q55  Chair: Secretary of State, you are reviewing the relationship of the multilateral agencies, the assistance you are giving and the terms of that assistance. Can you give us any more information of who is doing that, what the timetable is and how you are going to pair that with the bilateral aid, how you are going to make a decision as to whether multilateral or bilateral aid is more effective?

  Mr Mitchell: Everything comes back in many ways to the bilateral review because it is true of the bilateral review that you look at the effectiveness of a programme in a country and you determine how you are going to achieve the best possible results. In every country where it is relevant we will embed two key factors. The first is the fight against malaria. We think it is outrageous, as I said in the Chamber the other day, that so many, particularly children, die from a disease which we absolutely have the power to prevent. So we want to embed in every bilateral programme the fight against malaria. We also want to embed in every programme the extension of choice to women over whether and when they have children. Issues of population are fundamental to development but this is also an issue about giving women the opportunity to choose when and whether they have children. If you are looking in the bilateral programme at how to do that in a particular country, we will examine very carefully whether we should be doing that bilaterally or whether we should be using the multilateral agencies, who may already be engaged in those countries. That is why I say it is from the bilateral review that these decisions will be made because that will focus specifically on the ground on what we are trying to achieve and how we achieve best value for money in that endeavour. It then follows from that that you look at the multilateral agencies and you make a judgment about whether they spend the money more effectively than the bilateral programme would spend it or the other mechanisms available to us, and that is why the multilateral agency review will finish and report a month after the bilateral review.

  Q56  Chair: Which is when?

  Mr Mitchell: I will correct myself. I think the bilateral review ends at the end of January next year and it is at the end of February that the multilateral review ends.

  Q57  Chair: Do I take it from that answer that you have not a predetermined view as to what the balance of the outcome should be? You are not starting out to say we should do more or less through multilateral or bilateral; it is an objective analysis and you will decide at the end of the process how the balance will fall?

  Mr Mitchell: No, it is absolutely an objective analysis. We are going to go where the firm evidence leads us on that.

  Q58  Chair: A follow-up to that is to what extent will the UK's ability to influence the reform, the governance and indeed the reform of the multilateral agencies come into play? I suppose from the Committee's point of view there is a particular interest in the World Bank, where the previous Government, and I do not think there is a fundamental difference in the Coalition Government, was strongly committed to persuading the World Bank to reform itself to be more representative of and accountable to the recipient countries, whilst recognising that shareholders must maintain control. Is that an agenda, and is there a belief that the Government has the capacity to engage with the World Bank to make a difference?

  Mr Mitchell: Yes. I had two lengthy meetings with Bob Zoellick when I was in Washington recently and I have had the opportunity of having meetings with the heads of the UN multilateral agency both since I was appointed and indeed in opposition when they used to drop in when they were passing through London for a chat. So we made clear long before we were privileged enough to win the election what our priorities would be were we to win. For example, with Helen Clark, who I think is making a big difference in the UNDP, there is clearly a huge reform agenda which she is seeking to advance. In terms of the World Bank, there was a difference in opposition, in that we were unclear whether the row over conditionality was well based or not or was slightly spurious, but on the issue of voice for the developing world, we are clear that that has a very important call on the reforms which we all agree should be made across the international multilateral architecture.

  Q59  Chair: I am sure you would be more diplomatic than the crude way I am about to express it but given that the next round of IDA is under active negotiation, to what extent is the World Bank itself aware that the UK Government might judge its contribution according to how reform-minded it thinks the World Bank is likely to be?

  Mr Mitchell: I think the World Bank is in no doubt at all about the nature of the way in which we will assess our contribution, and we will look both at the effectiveness of the work that is being done by the World Bank in development terms and also at what other countries are doing. Currently, we are out in front of all countries in terms of our support for IDA. We are at an early stage in the next IDA replenishment but I think it is right that there should be some sort of structure that determines what the contribution of leading countries should be in terms of IDA replenishment and not just a sticking up of a finger into the wind.

  Q60  Chair: A final point on that: I think Bob Zellick said on a personal basis that he thought he ought to be the last automatic American appointment to the World Bank—I think it was just a personal view—but the IMF have indicated that they will replace their present Chief Executive by open competition, with no pre-determined commitment for it to be a European. First of all, is it your understanding that that will be the case, or is it conditional on what the World Bank does, and what pressures can be brought to bear on the World Bank to follow a similar approach?

  Mr Mitchell: We touched on these points in my meetings with the World Bank and I also saw Dominique Strauss-Kahn at the IMF when I was there, and I think that is understood and agreed. We all want to see these appointments made on the basis of merit and not of geography, and that is something which we intend to pursue.

  Q61  Chair: But is it your understanding that the United States is at all likely to concede a change in the World Bank?

  Mr Mitchell: These are for ongoing discussion but I am clear that these appointments should be made on the basis of merit and not on the basis of geography.

  Q62  Mr Brown: Technically, in your opening remarks you did make reference to Gleneagles. The G8 outcomes did not include a reference to the 2005 Gleneagles promises on aid, which obviously have not yet been met. Did the UK Government press for the insertion of a clause on the Gleneagles promises on aid?

  Mr Mitchell: Certainly the Prime Minister was absolutely clear in the G8 discussions about the importance of people standing by their commitments and their promises. I think one can get too fixated on the precise words that come out of the communique at the end of these international summits. It is one thing to have a focus on the inputs, which Gleneagles is. I think it is another and more important point to focus on what you are actually going to achieve in development terms. The Prime Minister, as he reported to the House, was strong firstly on the need to intensify the effort to reach these MDGs, many of which are miles off track, and the focus of that will be at the Summit in New York in September, which is being attended by the Deputy Prime Minister because the Prime Minister's wife is having a baby that week, so he will be there and he will take forward the policy of the Coalition, which the Prime Minister eloquently underlined in his statement to the House and indeed at the G8 itself, and the particular focus of the Prime Minister, where Britain was undoubtedly the lead on this at the Summit in Canada, was on MDG5, on maternal health, where a huge amount more needs to be done and, as I said, the Prime Minister underlined that point. On the second point you make, it is a matter of regret that not everyone has stood by the commitments that they made at Gleneagles. I believe the Prime Minister at the time, Tony Blair, made sure these were signed on television in front of the world's press and the world's media and it is an irony, the Committee may feel, that in the case of Italy, Silvio Berlusconi is still in power today and was the person who signed those commitments at Gleneagles. All I would point out is that it is more difficult to hold to account leaders in developing countries who we think are letting down their own citizens by not standing by their promises if you have leaders of the G8 countries who solemnly signed up to promises in front of the world's press and then systematically go back on their word.

  Q63  Mr Brown: Can I come back on that very point, Secretary of State, because you are right; there are G8 members, there are our EU colleagues, who have just not stepped up to the plate as far as these commitments are concerned. What do you think our Government can do to actually force, or at least encourage as a starting point, these others who have not come up? We have an additional £25 billion per year that we promised to some of the poorest states in Africa. What can we actually do to try and lead these others to deliver on their promises?

  Mr Mitchell: First of all, we can do what the Prime Minister did at the G8 summit, which was to underline the importance of doing so, and again at the G20 he specifically focused on the importance of trade—none of us should forget the critical importance of not giving up on the Doha Round, which would have a huge benefit to the standards of living of poor people around the world were it to be successfully concluded. So continuing to make those points, as he did at both the G8 and the G20 is very important. I think one of the lessons from Make Poverty History actually is that civil society in developed countries is extremely important in holding government's feet to the fire in the same way that building up civil society and accountability in poor countries is. If you look back at the coalition that made the case for Make Poverty History, which was ahead of politicians, I think, at the time, one would like to see the same force brought to bear in some of those countries which are off track on their solemn commitments as well. I hope very much that civil society, for example, in Italy, will seek to make these points which you have made this morning with increasing force. It should also be acknowledged that a number of countries—we are not the only country on track but the Americans, Canadians and, I think, the Germans—are also moving firmly in the right direction.

  Q64  Anas Sarwar: If I can just pick up on that point, I think Britain has a very proud history in terms of pressing for Millennium Development Goals and I just wondered if the Secretary of State was disappointed that the Prime Minister had not fought for their inclusion in the communique; was that a source of disappointment for you?

  Mr Mitchell: I think the Prime Minister managed to get the commitment on MDG5 particularly and the underlining of a statement about the importance of the Summit in New York in September clearly into the bloodstream of the G8 and if you look at the press reports that came back, it is clear that our Prime Minister was in the lead in focusing both on the importance of these issues as well as the importance of people standing by their commitments.

  Q65  Hugh Bayley: What specific and measurable outcomes does the Government want to see from the MDG Summit, the UN Summit?

  Mr Mitchell: We want to see a proper agenda for action which underlines what we are going to do in the next five years to achieve these targets. We want to see people intensifying their effort to meet them, and I think we should have a form of annual audit of how we are doing, which countries have been seen in the past year to do well, what lessons there are to learn from that, which countries have been seen not to do well and to fail in the aims that they had set themselves, and then how the international community can help bolster best practice in trying to reach these aims. I would also hope to see in the Commonwealth, where many of the challenges to reaching the MDGs lie, intensify its own efforts as an organisation in this development area. Both the Foreign Secretary and I have spoken of the importance of increasing the role of the Commonwealth, and I very much hope that in this area of development the Commonwealth can play a greater role.

  Q66  Hugh Bayley: Should the Commonwealth be a development agency?

  Mr Mitchell: The Commonwealth is about much more than that. The Commonwealth is a brilliant South-South organisation as well as a North-South organisation. We are a family with a strong link of history and I think we should be able to do more together to take forward the cause of development.

  Q67  Hugh Bayley: To what extent does that agenda differ from the agenda of the previous Government? If you look back at recent DFID annual reports, you see an annual review of the MDGs, which of course were set in the performance goals for the Department and performance against them. What new could our Government take to the table in New York?

  Mr Mitchell: As I said right at the beginning, the fact that this is a British policy and an area of close agreement between us is a huge strength. There are perhaps shades of difference between the last Government and the Coalition. I think the importance which we attach to wealth creation, the role of the private sector in wealth creation, in helping poor people to lift themselves out of poverty, is something which we will prioritise perhaps a little more than the last Government did. I think the understanding that it is conflict in the end which determines to a very large extent the way in which people remain in poverty is something which we would emphasise more. I think that the people I have seen in refugee camps around the world who have been caught up in conflict, it does not matter how much access they have to the normal architecture of development, for as long as the conflict persists they are going to remain poor, miserable, dispossessed and frightened. I think that is a shade of difference. It is one of the reasons why we have asked the National Security Council to look at the work of the Stabilisation Unit to see if more can be done to promote conflict resolution, particularly upstream of these conflicts. On the central issue of the aid budget, we are all of us firmly committed to its increase, even in these very difficult circumstances, and I am immensely proud of the Coalition that we have made that commitment in such difficult economic circumstances but it is a commitment that is not just a Coalition commitment; it was a commitment of the last Government and I hope it will always be a strong commitment of all parties in the House of Commons.

  Q68  Hugh Bayley: I must say I am pleased to hear the Secretary of State stressing continuity rather than a step change in policy, because I think UK policy has led the world in relation to the MDGs in many areas but I would agree with him that policy should never stand still. Could I press him on something I raised in the debate in the House a couple of weeks ago? The World Bank, for all its strengths and weaknesses, is the world's biggest development agency and unless it is rises up to the mark in relation to the MDGs and the agenda set in New York in September, we know they will not be met. Other things need to be done too but the Bank has to make this a central focus of its IDA work. Given that the UK is such a big player in IDA, what lead will our Government be taking in New York by setting out its own proposals for the policies for IDA over the next three-year period leading up to 2015, its proposals for getting more efficiency out of the funds in IDA, and its proposal for increasing the UK commitment to IDA? What will the Government be laying out in New York and how will you be using it to catalyse commitments from other large donors to step up their programmes as well?

  Mr Mitchell: In a sense, Mr Bayley has set out the parameters of that agenda. It is moving forward at the moment and we will pursue all those points in the run-up to the Summit in New York. I am conscious, as I know Mr Bayley is, about the role of the World Bank. I was before I was a politician a banker, or at least a bit of a banker, in the past and I am conscious of the importance of the work of the World Bank, which I rubbed up against in the private sector, saw much of the great value of what the World Bank is doing, including the fact that the World Bank's evaluatory mechanisms are extremely strong. I went to Madagascar to look at a specific World Bank programme addressing issues of maternal health, and this was not classic World Bank stuff at the time but I thought that the sheer skill and ability of the World Bank personnel who were deployed there, coupled with the intrinsic acceptance of rigour in evaluation, was having a very significant effect in a country where, apart from the EU and the World Bank, there was very little other aid going in. So I am a respecter of the World Bank and a respecter of World Bank mechanisms and what the World Bank can do. Since in this position I am also a Governor of the World Bank, I am intending to exercise that role in perhaps a greater depth than some of my predecessors have chosen to do, for perfectly good reasons.

  Q69  Ann McKechin: Secretary of State, you have stated on the record that you want to ensure that women are at the heart of the agenda for international development. I am sure that is very welcome to the whole Committee. I wonder if today you could give me some specific example of how you will be changing policy or organisation within DFID to reflect that priority?

  Mr Mitchell: First of all, you cannot look at development for more than five minutes without appreciating that women, in the words of Hillary Clinton, are front and centre of development. I made a speech which, if pressed, I can send you, at the Carnegie Foundation in Washington about this issue and indeed at the United Nations two weeks ago. So I am in no doubt that when it comes to wealth creation, micro-finance, jobs, poverty alleviation, conflict, challenges in education, it is women who bear the brunt of this, and the specific way in which I would like to answer your question is through one of these two key ingredients which we require in every single bilateral programme, which is the importance of extending choice to women as to whether and when they have children. As I say, I think it is a scandal that only 23% of women in sub-Saharan Africa have access to contraception and we will seek to address that, not because we take a dogmatic or ideological view about these things but because we want to extend that choice and opportunity to women everywhere we possibly can. One of the first things I did when I became Secretary of State was to make sure that immediately a specific need on contraception was addressed in Uganda. In addition to that, let me just make a bigger point about the role of population in development. It is very challenging. The President of Rwanda made a speech in which he urged people to restrict the number of children they had to four. People took to the streets, and he told me that actually, what he really wanted to do was to encourage his fellow countrymen and women to restrict the number of children to two, so this is an ongoing debate, there are all sorts of cultural difficulties in addressing it but if you take a country like Niger—I gave specific figures on the floor of the House—you see the way in which the population is increasing. There is no hope of growth being able to bring economic advantage in that country however big the growth is if those projected figures on population actually transpire. This is a part of the world that is incredibly food-insecure, economically insecure and politically insecure. We must address issues of population, not only because it is right to do so, to extend this choice to women, but also because it is a major development issue which has got to be tackled.

  Q70  Ann McKechin: Can I perhaps just intervene because I think it is the way in which we frame this debate. I always caution men when they start talking about population growth, because it does actually sometimes set a tone which, as you mentioned, in other countries has been counter-productive. I wonder whether there should be more emphasis on the issues of getting more girls into secondary education, not just primary education, and the issue of marriage age, because obviously, one of the biggest problems and the reason why most women have more children in sub-Saharan Africa than other parts of the world is that they are starting to give birth at 13, 14 and 15 years of age rather than in their late teens and early twenties. I wonder whether there needs to be a bit more emphasis and priority about issues of the legal rights of women in many of these countries, where their births are not recorded, their deaths are not recorded, there is a culture of early marriage and partnership, and actually their legal rights of succession are entirely limited. I wonder whether we may be going about this argument in a way which is not necessarily the most effective in tackling some of these cultural problems.

  Mr Mitchell: First of all, I would wish to disagree with you on the point of how we go about the argument, because I am deeply conscious of the cultural issues that are embedded within it, and that is why I frame it entirely in terms of extending choice to women over whether and when they have children. I am not entering the ring on any basis of ideology. I want to extend choice to the 77% of women in southern Africa who do not have it at the moment. That is the way in which I think we should take forward this debate and embed it in every single one of our bilateral programmes. The other points you made I think are completely correct and I hope very much that you will make sure that you keep us up to the mark in the Department in recognising these things, and if ever you think we fall short on those points you will immediately say so—I am sure you will. These issues are, as I said, front and central to development. One of the reasons I went to the 1 Goal summit, which was called at very short notice by President Zuma—two days' notice effectively—was because I want to underline the importance of addressing the issue of 73 million children, many of them girls, who do not go to school today because they do not have a school to go to. The 1 Goal campaign, allied, as it has been, to the World Cup, has been a very good way of increasing public awareness on this extremely important issue, and it affects particularly girls.

  Q71  Richard Harrington: Could we move on quickly to the CDC, which I know you spoke of on the floor of the House a couple of weeks ago in the debate and you mentioned. Most people will be aware of the criticism in the 2008 NAO Report about salaries and other expenses of Executive Directors and I wondered if there had been any progress on that, and secondly, how you feel the Department's goals for where money is spent, in the case of poverty, etc, and how compatible that is with the CDC being quasi-independent although owned by a government venture capital fund.

  Mr Mitchell: As Mr Harrington so rightly says, CDC is now a fund of funds, and actually they have been in position in one of the most successful aspects of the market in the sector that they have been in. Since they were reformed £1 billion of ODA-compliant taxpayers' money has been turned into £2.5 billion. So we should not in any way gainsay the success in terms of development investment that they have achieved but they are a fund of funds. I hope the Committee will not press me too far on this today because there is a lot of detailed work going on and I am hoping to be able to come to Parliament in the Autumn with some very specific changes which I think will be widely welcomed. The question is, is there more that CDC could do to catalyse investment in poor countries, investment by the private sector, through co-financing, through acting with others to take forward an agenda of which all of us would approve? That is what I am looking at. Clearly, as you rightly said, there has been a lot of focus on some of the arrangements that were entered into. Frankly, I have to tell the Committee that some of the arrangements that were entered into I find absolutely astonishing but, if you will forgive me, Chairman, I would like to come back to Parliament in due course with the changes we wish to make in respect of the role of CDC and I hope the Committee will look at them and perhaps have a chance to discuss them.

  Chair: Indeed, the Committee has not looked at CDC since the Parliament before last, so I think it will be appropriate for us to do so but probably in the context of the proposals you bring forward.

  Q72  Mr Brown: Secretary of State, what assessment have you actually made of the merits of a distinct urban strategy or policy for the Department?

  Mr Mitchell: I am aware of a report which this Committee produced on urbanisation and I am very conscious of the fact that it was, I think, in the last year that the world tipped over into being a predominantly urban planet. I know, for example, that you have recommended that DFID write a new strategy paper to explain how it was addressing urban poverty, and I think this is something under the last Government—I am just consulting my notes on this point—that Ministers agreed that we would explore a measure for urban poverty with the World Bank and other development partners and look at the links to population trends with UN-HABITAT and the UN Population division. I think that is what the Committee requested, and that work is continuing. I am not intending to set up a separate Department to deal with urbanisation issues; I think they are covered in other parts of the existing structure, but I do recognise that urbanisation is bringing very specific challenges in many poor countries around the world and that those issues have got to be addressed.

  Q73  Mr Brown: Obviously, Nigeria would be a typical example of a country that is becoming rapidly urbanised. Would it be your intention to at least consider, if not reinstate the post of Urban Adviser which the Department previously had?

  Mr Mitchell: In Nigeria?

  Q74  Mr Brown: No, this was a departmental post of Urban Adviser.

  Mr Mitchell: In view of the fact that you raise it, I will certainly look at it and I will write to you accordingly. I should say that in opposition I had meetings both with the Local Government Association and the Commonwealth local government body, both of whom made, I thought, a pretty convincing case for looking at possible twinning work that might be done. I think this was a point that the Committee, if I remember rightly, picked up in their report about links with the local government domestic department here and I do think that is something that we should inquire into and I will be looking at that specifically.

  Chair: I think the Committee would be grateful for that. I would pay tribute to a former member of this Committee, John Battle, who had really persuaded the Committee to initiate this. I think the Committee was quite surprised at how significant urbanisation issues were, how different they were and how perhaps unresponsive the international community was to it. I think the Committee would really be grateful if you would look at it and look at our report, because we were surprised and I think the Department were surprised.

  Q75  Anas Sarwar: Secretary of State, I am sure the whole Committee would welcome many of the statements and comments you made in connection with malaria and I would like to press you further on that. How much new funding has the new Government allocated to combating malaria and what percentage of the Department's budget for health does this represent?

  Mr Mitchell: We said in opposition that an announcement made, I think in Uganda, by the then Shadow Chancellor of the Exchequer that this would be a priority for us and that we would look to spending up to £500 million a year on combating malaria. You will understand from my comments about results that this programme will be built up bilaterally in every single programme where it is relevant and we will seek first and foremost to try and tackle the areas of highest infection, because that is where you get the sharpest and most effective use of money and outcomes from it. We will also not neglect to narrow the footprint but you will appreciate that when you are dealing with areas of much lesser infection, actually eradicating them is extremely expensive in terms of the number of lives you save and people you stop getting infected, but we will take forward that agenda on the basis of what comes out of the bilateral review and that will build up to the figure for what it will cost, but our commitment is to spend up to £500 million on this programme.

  Q76  Mr Brown: Very briefly, what outcomes do you expect from that specific funding?

  Mr Mitchell: I will through the bilateral review establish the outcomes. What the bilateral review will of course do for the first time ever—it is a very big change—is that it will come up with a whole series of outcomes that Britain is going to seek to achieve through its development spend. It will not focus on the numbers or on the money; it will focus on the outcomes we are going to achieve and then cost them, and it is through that mechanism that we will be able to set out the results, the outcomes we intend to achieve from our work on malaria. I should say though I know that Mr Lefroy has very considerable expertise in malaria issues because I have had the opportunity of talking to him about it in the past and, of course, I have asked the Parliamentary Under-Secretary, Stephen O'Brien, who was the Chairman of the All Party Malaria Committee, as one of his very specific responsibilities to take responsibility for this work in the Department.

  Q77  Mr Clappison: Secretary of State, it is very warmly welcomed that you raised tackling malaria as a priority off your own back before you were actually asked by the Committee. Could you make it an early priority to highlight the work you are doing on this, and particularly, will you make sure that the public are aware of the successes which we hope will come out of this, because that is something which would really help to foster public support for our development effort?

  Mr Mitchell: I think Mr Clappison is absolutely right. My answer to both his questions is yes. I think also for people within the House of Commons there is considerable interest and expertise in the issues of malaria. I hope perhaps once the bilateral review and the multilateral review have reported and we can see what we are seeking to achieve, that we may have a chance to ventilate this in debates in the House of Commons.

  Q78  Pauline Latham: You have obviously until very recently been on the other side, in opposition, and you set up a very successful project in Rwanda, which I have been on with you. How would you say, looking from the other side, DFID was accessible to you and to other organisations? Were they just looking at governmental things or were they accessible to NGOs and civil society?

  Mr Mitchell: Thank you for your comments about Project Umubano, which was a social action project set up by the Conservative Party, and 100 people, from the Shadow Cabinet downwards, came last year and the year before to Rwanda and Sierra Leone. Indeed, Pauline Latham and I have taught English to English teachers in adjacent classes in Kigali. In the first year that we went I embedded myself in the Ministry of Finance and spent 10 days shadowing the Minister of Finance to see what it was like the other side of the table, which I think is part of what you are referring to. It was an extraordinarily valuable experience, because I saw that, as well as trying to run his country, or at least the finances of his country, he was also having to operate a meet-and-greet service for some 54 different donor parties and of course, the meeting and greeting function took a huge amount of his time and it was something which he could not resile from because if he did, the people who were offended that he did not give them his time would have produced the danger they might not produce money or at least such sums of money in future. So that was an enormously valuable experience. I have always found, over the four years I have been going to Rwanda on this annual project, that the relationship between DFID and the government and the international NGOs is a very strong one. I think there are issues about the Rwandan Government's relationships with NGOs which, in spite of some of the current press, are genuinely making progress, but certainly my observations about the role of DFID there and the way in which DFID was working with civil society and with the Government of Rwanda was that it was extremely strong.

  Q79  Chris White: Secretary of State, in terms of governance issues, when there are issues of governance, when the host country does not necessarily agree with your views on what would be best practice, how would you address that situation?

  Mr Mitchell: There are two aspects to that. The first is that it simply does not work to try and persuade a country in which you are working to work against the grain of what they want to do, and that is why these poverty reduction strategies are so important, that you get agreement between the donor community and the government of the host country as to how to proceed with the country and the donor community works with the grain of those policies. That is absolutely fundamental. I think the best example I can give of the dilemmas that present themselves in this area, for which there is no magic answer, is one which was apparent in Ethiopia after the previous election, when Meles Zenawi was elected as Prime Minister—not the recent one but the previous one—where there was a great deal of violence and a large number of students were shot and killed, and there was a very strong feeling amongst the donor community that a signal needed to be sent to the Ethiopian Government that this was completely unacceptable behaviour and that that signal could be sent through the use of the aid budget. The problem with that is that if you then reduce your aid to a country like Ethiopia, which spends our aid actually very well and it does get through specifically to where it is intended, you are not affecting the decision makers who allowed the violence to take place and who acted in bad faith towards their electorate; you are affecting the number of girls who get into school. That is the dilemma. If you take these actions and you make a big change to the amount of aid you are giving, in this example in Ethiopia, you do not do anything necessarily to affect the leaders but you do affect the very aims you are seeking to achieve. That is why it can be very difficult.

  Q80  Chris White: You would certainly see a situation where you were prepared to turn off the tap if the governance issues were in such a state that you could be worsening a situation by providing aid to a country?

  Mr Mitchell: In terms of worsening the situation, yes, but I would want to look very carefully at what the effect of turning off the tap would be. Often the right mechanism—and it is a mechanism which we have used in a number of countries, particularly in Africa—is to change the way in which you deliver aid and clearly, if, as we saw in some countries where there were particular scandals affecting the global fund, it seems to me the way you need to act is to find a different mechanism of addressing the original aims. Otherwise, as I said earlier in this session, the people you are trying to help lose out twice over.

  Q81  Hugh Bayley: Talking about turning off the tap, let us turn to Afghanistan and to those reports in the Wall Street Journal at the end of last month about cash being flown out from the airport in Kabul. What confidence does the Government have that UK funds being spent through the Government of Afghanistan are not simply being stolen, spirited away?

  Mr Mitchell: I looked in detail at those reports and I think the American aid effort is dependent on a resolution of those matters. I do not think it has been stopped. The reports are clearly a matter of concern generically but in terms of British aid and development support, where we go through the Government, we do so through the mechanism of a World Bank-administered trust fund and taxpayers' money is paid out on the basis of audited receipts, it is a reimbursement, and therefore we are confident that British taxpayers' money is not being abused in that way. Having said that, we need to be eternally vigilant to ensure that our money is correctly used. We take nothing for granted. We need strengthened mechanisms to ensure all around the world that we have a zero tolerance of corruption. I think independent evaluation will assist with that but, in respect of those specific reports, I am satisfied that the way in which British money is disbursed through this World Bank trust fund protects us from that sort of danger.

  Q82  Hugh Bayley: I have spent several years making the case for funding Government of Afghanistan projects given certain safeguards, because if the aid is badged as an Afghan initiative, it is more likely to win hearts and minds than if it is badged as a foreign country's gift. So I applaud the risk, if you like, that DFID has taken. The United States has a different approach. Would you persuade them to look at the safeguards the UK has employed—the World Bank trust fund and other safeguards—to encourage them to come back into the game and channel more of their aid through the Government of Afghanistan?

  Mr Mitchell: When I was in Washington I had the opportunity of spending some time with Rajiv Shah, the newly appointed USAID Administrator, and we did have exactly that debate. We must all approach these things through the mechanisms that we think are best suited to the aims we are seeking to achieve, but I think it is encouraging that there is a real debate amongst the donor community, which will intensify, I suspect, in Kabul early next week, about how to support the Afghan Government in the endeavours which particularly are being championed by the economic cluster of Ministers and which the Kabul Conference is designed to address. So I hope the points you have rightly made about the Afghan programme will continue to make progress at that time.

  Q83  Hugh Bayley: What development outcomes do you hope to achieve at the Kabul Conference?

  Mr Mitchell: We have some quite specific measures which we are discussing with the cluster of Ministers. In terms of supporting local governments and elected bodies, we have commissioned a report on policing in Afghanistan, which is clearly absolutely fundamental to progress being made. The issue there is not really an issue of money. The Americans have put $11 billion on the table towards policing training initiatives. We want to see if we can make it more sharply focused, and we have had an interim report back and the final report is arriving today on steps we can take to try and take forward that agenda. Secondly, we want to look very specifically at an approach which will boost growth and jobs. Thirdly, in the area of assisting the state to deliver, we again want to support that. The aim is to assist in the setting up of locally elected councils, to focus on procedures for grievance resolution, to try and get more girls into schools, more shops opening, and to assist with the infrastructure requirements. We want to see 80 key districts stabilised in the next two years. We want to see additional support for the community development programmes, which I hope will reach up to 10,000 communities. We want to assist the Government specifically with revenue raising, and we want to try and ensure that we give assistance to 300,000 Afghans who have missed out on schooling in terms of basic productive skills and address increasing technical and vocational training enrolment, which currently affects about 26,000 Afghans and we would like to get it up to 100,000 over the next three years. Those are the sort of specific outputs which we want to try and drive forward at the Kabul Conference and which we will be discussing with our partners and with the Afghan Government how best to help them achieve that.

  Q84  Chair: That was a fairly detailed response, and I have to say we wish you well with that. Can I say, Secretary of State, thank you very much for attending, and I want to thank my colleagues for their co-operation in ensuring we covered all the ground. If I can just pick up on a point that Hugh Bayley made, and that you made as well: this is a British endeavour, it is a cross-party endeavour. There is continuity and there is also a need for policy change in development, and you have identified a number of areas where you want to bring different approaches to bear. The Committee will absolutely want to engage in all of these as time goes by. We clearly look forward to more detail on your watchdog, including its name and the mechanisms associated with it, and the multilateral and bilateral review, the potential change for CDC, and indeed other areas which you have mentioned. This Committee has always done its work, as any Select Committee should do, by gathering evidence and basing its reports and recommendations on the basis of evidence gathered, and that will absolutely be the approach that we take, and I believe it will be the case that therefore our reports will be taken in that spirit by the Department. If we agree or disagree or make certain recommendations, it is because we believe we have had evidence that suggests that is the right thing to do. In one or two areas I hope you might look at the reports we have made in the last few years and consider whether or not our recommendations still stand and deserve to be taken on board. We value the relationship we have with the Department and we appreciate the fact that the Department values the relationship the Committee has. It is a new Committee, a different mix, several new Members of Parliament altogether, but I hope it is going to be one that is going to be constructive and that the relationship we have with you and the Department will be one that adds value to improve the quality of our aid and development and perhaps also demonstrate to the British public that this is actually value for money, which is in the national interest, and does reach the people that need it. That essentially is the task we have to achieve together. Thank you very much indeed for coming in today and giving us this opportunity to explore your proposals. We look forward to hearing more about them over the coming months and years.

  Mr Mitchell: Thank you very much indeed, Chairman, and thanks to the Committee. Perhaps I can just make two final points. The first is that in opposition we always used to devour your reports with the greatest possible interest, and there were times when we disagreed. I remember you and I had an interesting discussion about the China report, where we did not really agree with your conclusions, but I always felt it was an incredibly constructive engagement. The Committee positioned itself in a very sensible way to give expert advice to everyone, including the Government, and it was given in that spirit. I very much hope we can continue with that culture and arrangement. The other point is that clearly, the independent evaluation watchdog, whatever its name turns out to be finally, is very much dependent on the views of this Committee, since we want them to report to you and not to us. I hope in that spirit it may be of interest to the Committee possibly to have some Committee scrutiny of the proposed commissioners, either the head commissioner or indeed all of the commissioners to the shadow body. If that is agreeable to the Committee, we would hope, perhaps in discussions between my officials and the Clerk, to suggest a timeline for that.

  Q85  Chair: I think the Committee would appreciate that. We would think it was appropriate and right for us to do it. The only footnote I would say is the Committee's concern with all of this is to ensure that our engagement with the new watchdog is consistent with our overall workload. We have to work out how we do that. In other words, we do not want it to get in the way of what we want to do, but I am absolutely certain we can find a way of working that will achieve what you want which is also consistent with the Committee's way of working, and that would be a good start, to have a confirmation-type hearing from the commissioners.

  Mr Mitchell: I would be most grateful for that. Of course, in terms of the reports that the watchdog produces, it would be up to the Committee the extent to which they want to pass them through into the public domain or look at them in much greater detail. That would be entirely a matter for the Committee.

  Q86  Chair: I appreciate that. Thank you very much and we will obviously deliberate and work out a mechanism for dealing with that.

  Mr Mitchell: Thank you very much.

  Chair: Thank you very much.

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Prepared 25 October 2010