3 Making spending on aid more effective
Aid effectiveness
35. Speaking at the Carnegie Foundation soon after
taking office, the Secretary of State announced
Ours is a new agenda, one of value for money; accountability;
transparency and empowerment [...] People want to see British
aid money saving lives and educating children in the world's poorest
countries [...] Today I send a clear signal: value for money
will be our top priority for aid.[48]
36. The Government has established three main mechanisms
for improving value for money, namely the establishment of:
- reviews of bilateral, multilateral
and humanitarian aid;
- an Aid Transparency Guarantee, and
- an aid watchdog (the ICAI).
Reviews of bilateral, multilateral
and humanitarian aid
37. DFID has initiated reviews of its bilateral,
multilateral and humanitarian aid programmes. These reviews are
intended to produce the evidence from which the Department will
make decisions about future aid allocations. The November 2010
Business Plan states that savings made from reducing lower priority
spending and waste will be re-directed to priority countries and
programmes where the impact will be greater.[49]
We will comment on the Bilateral Aid Review in our Report on India,
the Multilateral Aid Review in our Report on the World Bank and
the Humanitarian and Emergency Response Review in our Report on
the Humanitarian Response to the Pakistan Floods. We
welcome the Government's reviews of bilateral, multilateral and
humanitarian aid programmes and trust that they will lead to a
switch of spending to organisations and programmes which offer
better value for money.
The Aid Transparency Guarantee
38. There is to be a new UK Aid Transparency Guarantee
which will mean that information about all DFID's spending over
the value of £500 will be published on the departmental website
and will therefore be available to the people who benefit from
aid funding:
The UK Aid Transparency Guarantee will also help
to create a million independent aid watchdogs—people around
the world who can see where aid money is supposed to be going—and
shout if it doesn't get there.[50]
39. The Department added:
One of the things that's really important is that
we make available information that is comprehensible and people
can make some use of, so over the last three or four months, we've
been redesigning the way we do our project documentation to make
it clearer and simpler—not to lose the rigour of analysis,
but to set it out in a single document in a clearer way, so that
when we start to publish our project documents in January we're
putting up something which may not feel like an easy read to everyone,
but will be considerably easier and clearer than would have been
the case previously [..] We're also going to translate the summaries
of core project documents into local languages, so that this isn't
just for an English-speaking audience, but in our partner countries
we make available summary information on our activities.[51]
40. The Aid Transparency Guarantee should also help
improve the ability of people in developing countries evaluate
projects and enable them to take more responsibility for evaluating
the impact of donor policies.
41. DFID intends to play a significant role in pushing
forward transparency at the global level through the International
Aid Transparency Initiative (IATI) especially in the run-up to
the Korea High Level Forum on Aid Effectiveness to be held at
the end of 2011.[52]
42. Most NGOs have welcomed "the commitments
made by the Secretary of State for International Development to
make information on all DFID programmes readily available online
and elsewhere."[53]
Owen Barder from the NGO Development Initiatives observed
that:
Information about aid funding and programmes empowers
the intended beneficiaries, affording them greater political leverage
and enabling them to put pressure on donor organisations [...]When
taxpayers are able to see directly how their aid is being used
[...] it will be the basis of a new social contract between taxpayers
in industrialised countries and the aid system.[54]
43. We
support the establishment of the Aid Transparency Guarantee. This
will help increase the effectiveness of spending on aid and empower
aid recipients in developing countries.
The Independent Aid Watchdog
44. The Government has also decided to set up an
independent watchdog, the Independent Commission on Aid Impact
(ICAI), to oversee aid spending. Announcing the establishment
of the body, the Secretary of State said:
We need a fundamental change of direction—we
need to focus on results and outcomes, not just inputs. Aid spending
decisions should be made on the basis of evidence, not guesswork.
That is why we have taken the first steps towards creating a new
independent aid watchdog.[55]
45. The main purpose of the watchdog, which replaces
the Independent Advisory Committee on Development impact (IACDI)
which was set up three years ago, is to be responsible for the
production of impartial and objective evaluations of the UK's
aid projects and programmes. At present the IACI is a shadow body.
A Chief Commissioner, Mr Graham Ward, has been appointed, following
a pre-appointment hearing before this Committee. The appointment
of three other commissioners is expected in early 2011. The functions
of the organisation and lines of accountability are described
in the appendices to our report on Mr Ward's appointment. The
key points are that the ICAI will:
- commission evaluations from
a consortium which successfully bids to provide them;
- be accountable to Parliament through our Committee,
sending us copies of evaluations;[56]
- have oversight of all UK ODA, not just that spent
by DFID, and
- be fully functional by June 2011.
46. A major problem the ICAI faces is that effective
evaluation is only possible if DFID programmes are designed in
such a way that they can be evaluated.[57]
The NAO further suggests that DFID is making slow progress at
collecting reliable data from international and national authorities
on key targets which may hamper effective assessment of projects.[58]
Ideally, this would mean as far as possible the collection of
base-line data, the use of some form of control and minimising
changes to the programme once established. Otherwise, there is
a danger that evaluation amounts to little more than asking people
for their subjective opinions. However, designing programmes in
this way is not easy and presents its own dangers if not done
sensitively.
47. A number of submissions commented on the ICAI.
Most welcomed its establishment in principle but raised concerns
about how the evaluations would be undertaken. The NGO coalition,
BOND, pointed to potential pitfalls, in particular the
need to consider the long term:
As well as some areas where obvious outcomes can
be measured, international development also involves complex,
long-term processes that are not always measurable or straightforward
to analyse, or to establish attribution or direct cause and effect.
In the desire to demonstrate greater development impact it seems
that DFID will look to increasingly fund NGO work that focuses
on 'measurable deliverables'. This may provide immediate results
in the short term. However, it could also mean less impact on
the longer term, more complex processes of social, economic and
political change that are known to affect poverty.[59]
48. Issues such as good governance are vital to development
but results from spending in this area are unlikely to be seen
in the short term. The IDS warned that the watchdog must use a
variety of approaches to evaluation:
The issue has to drive the methods. And it is not
only tools that need to be pluralistic, it is the defining and
framing of the issues. Different groups have different priorities
and different definitions of success.[60]
49. In
our pre-appointment hearing with the Chief Commissioner in October,
we questioned him on these issues.
50. We welcome
the establishment of the Independent Commission on Aid Impact
to undertake independent evaluations of ODA spending. The Commission
will report to us and we will examine its programme of work, propose
subjects for evaluation and take evidence in respect of some of
the evaluations from the Permanent Secretary, the Commissioners
and those who undertook them. We will not take evidence on all
the evaluations since this would detract from our own core functions
and work.
51. We note
that the Commission will only be effective if:
- DFID designs
programmes in such a way that they can be evaluated;
- Evaluations are undertaken sensitively,
taking account of the fact that the effectiveness of some programmes,
for example those relating to governance, will only become apparent
in the long term;
- Evaluations are designed to
be effective but do not impose unnecessary burdens on staff in
the field - they should not involve excessive bureaucracy and
form-filling for staff, and
- DFID ensures that it has mechanisms
in place to learn from the evaluations.
48 http://www.dfid.gov.uk/Media-Room/Speeches-and-articles/2010/Placing-women-at-the-heart-of-development/ Back
49
DFID, Business Plan 2011-2015 Back
50
http://www.dfid.gov.uk/Media-Room/News-Stories/2010/Mitchell-Full-transparency-and-new-independent-watchdog-will-give-UK-taxpayers-value-for-money-in-aid/ Back
51
Q 55 Back
52
DFID Business Plan, 2011-15 Back
53
Ev w13 Back
54
Owen Barder, open think tank 2010, Better Aid: Spotlight on
Transparency, April 2010 Back
55
http://www.dfid.gov.uk/Media-Room/News-Stories/2010/Mitchell-Full-transparency-and-new-independent-watchdog-will-give-UK-taxpayers-value-for-money-in-aid/ Back
56
The Committee undertook a pre-appointment hearing with the proposed
head of ICAI, Graham Ward ( International Development Committee,
First Report of Session 2010-11,Appointment of the Chief Commissioner
of the Independent Commission for Aid Impact, HC 551 Back
57
Q 44-47 Back
58
NAO, The work of the Department for International Development,
p 13 Back
59
Ev w13 Back
60
Ev w37 Back
| 
