Department for International Development Annual Report & Resource Accounts 2009-10 - International Development Committee Contents

1  Introduction

I can also confirm that this coalition Government will be the first British government in history, and the first major country in the world, to honour the United Nations commitment on international aid. The Department for International Development's budget will rise to £11.5 billion over the next four years. Overseas development will reach 0.7% of national income in 2013 (The Chancellor of the Exchequer, October 2010).[1]

1. In the 2010 Comprehensive Spending Review (CSR) the Chancellor of the Exchequer made the key announcement that the UK would meet its international commitment to provide 0.7% of Gross National Income (GNI) as Official Development Assistance (ODA) by 2013.[2] This commitment enjoys the support of the three main political parties. In 2004, before the 2005 Gleneagles Summit, the last Government announced its intention to meet the target by 2013 and in 2010 published a draft Bill.[3] The Coalition Government has now promised to legislate.[4]

2. The increase in spending on ODA can, according to the Secretary of State, only be justified if it is possible "to ensure that future allocations represent maximum value for money."[5] As part of this process, the CSR announced reductions in the Department for International Development's (DFID's) running costs from 4% to 2% of the total budget. The Secretary of State has also instituted a number of reviews of UK aid programmes, is setting up a 'watchdog', the Independent Commission for Aid Impact (ICAI), to undertake evaluations of DFID's programmes and has established an Aid Transparency Guarantee. In view of these important developments we decided that our regular annual scrutiny of DFID's Annual Report should focus on the increase in expenditure, the attempts to ensure value for money, the proposals for reducing the share of the budget allocated to running costs and the possible risks of doing this while increasing the overall budget.[6]

3. We received written submissions from 16 external organisations and individuals and took oral evidence from the Permanent Secretary and other DFID officials on 16 November 2010. The National Audit Office (NAO) produced a briefing for us on The work of DFID in 2009-10 and its priorities for reform which we have drawn on.[7] We are grateful to all those who contributed to our inquiry and in particular to the Department for responding to our supplementary questions.

4. The next chapter looks at areas of increased expenditure and new priorities. Chapter Three considers DFID's proposals for improving value for money, which seek to ensure that DFID is "achieving value for every pound of taxpayers' money that we spend on development."[8] Chapter Four examines changes in running and administration costs and assesses the potential risks of these changes. The final chapter sets out our conclusions.

1   Spending Review Statement, Chancellor of the Exchequer, Rt Hon George Osborne MP, 20 October 2010 Back

2   In 1970 the UN General Assembly endorsed a target that rich countries would provide 0.7% of GNI on ODA. To date only five donors have achieved this: Denmark, Luxembourg, the Netherlands, Norway and Sweden. Back

3   Draft International Development (ODA Target) Bill, 15 January 2010 Back

4   DFID, Business Plan 2011-2015, November 2010. Back

5   Ev 20  Back

6   This year, the Government has issued two separate publications. DFID's Annual Report for 2009-10 which was published in July 2010. It is shorter and presented differently from previous annual reports, basing its structure around a country-by-country survey of progress against the Millennium Development Goals (MDGs) rather than thematic chapters as before. The Resource Accounts are published as a separate volume. In addition, a Structural Reform Plan was published in July which was updated after the Comprehensive Spending Review (CSR) in the Department's Business Plan in November 2010 for the period 2011-2015 (DFID, Business Plan 2011-2015). Back

7   NAO, The work of the Department for International Development in 2009-10 and its priorities for reform, Briefing for the House of Commons International Development Committee, November 2010. Back

8   DFID, DFID Vision Plan - Vision, 10 November 2010, Back

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Prepared 3 February 2011