Written evidence submitted by the Department
for International Development
The following questions (in italics) were
sent to the Department for International Development for answer
on 25 August 2010. The Department answered on 11 October 2010
(in bold).
2009-10 RESOURCE
ACCOUNTS
Q1. The Analysis of Net Resource Outturn in
the Resource Accounts shows that expenditure related to Conflict
Prevention and Stabilisation was £16.7 million in 2009-10
compared with £41.8 million in the previous year (p52). Furthermore,
there was an under-spend (compared with the Estimate) in this
area of £4.5 million "reflecting the difficulties in
operating in conflict areas and hostile environments" (paragraph
5.6.5).
Q1a) What are the underlying reasons for this
reduction in expenditure?
This includes spending in geographical areas in
which DFID operates in a joint decision making capacity with the
MoD and FCO. In 2009-10 DFID had an original Conflict Pool budget
of £49 million in the 09-10 Main Estimate but made transfers
to FCO of £26 million and MoD of £2 million during the
Winter Supplementary Estimate and Spring Supplementary Estimate
stages. FCO and MoD then spent these funds on agreed conflict
prevention projects.
Q1b) Could the Department expand on the difficulties
related to operating in conflict areas and hostile environments
which led to an under-spend in this area?
The under-spend of £4.5 million is spread
over several fragile states. The challenge in operating in such
settings is considerable. The two most significant explanations
for a programme underspend relate to staff safety and security
and the underlying capacity of implementing partners. Both of
these factors increase programme risk and uncertainty which in
turn can lead to programme underspending.
Q2. The Resource DEL budget shows that Central
Departments expenditure related to "eliminating poverty"
increased from £239.3 million in 2008-09 to £315.0 million
in 2009-10 (p89). However, in 2010-11 it is planned that it will
reduce to £161.5 million. Is this change due simply to the
reclassification of different budgets or are there other reasons
behind it?
Central department expenditure includes costs
associated with centrally maintained assets and liabilities which
are used in general administration and delivery of strategic objectives.
Examples of this include fixed assets and loans issued by DFID.
In addition to this there were grants issued by corporate departments
which did not solely meet one specific objective. As a result
these were classed within central department expenditure under
a general aim of eliminating poverty. For 2010-11 we have ensured
that all grants have specific objectives that enable them to be
allocated directly and therefore not included within central department
expenditure.
Q3. Table A2 of the Resource Accounts indicates
that expenditure on procurement fell by £200 million between
2008-09 and 2009-10 but is set to more than double this year—planned
expenditure is £1.1 billion in 2010-11 compared with an outturn
of £474.2 million in 2009-10. Can you explain the reasons
for these variations?
A reclassification of codes contributed to the
variation between 2008-09 and 2009-10. The 2010-11 planned expenditure
on procurement is estimated to be £778 million. Further work
is being undertaken by Procurement Department to validate this
figure which will then allow a more detailed comparison with earlier
years.
2070 SPENDING REVIEW,
ADMINISTRATIVE BUDGETS
AND MULTILATERAL
EXPENDITURE
Q4. What consultation mechanisms is DFID using
to inform its reassessment of priorities ahead of the 2010 Spending
Review?
The Department is currently reviewing all its
programmes to ensure that future allocations represent maximum
value for money. The Bilateral Aid Review, Multilateral Aid Review
and Emergency Response Review have been launched to achieve this.
Consultation within these reviews provides an
important opportunity to consult on future spending priorities.
The Department has already met with civil society organisations
to discuss their assessment of multilateral organisations; and
will meet to discuss the Bilateral Aid Review on a monthly basis
from September. The Bilateral Aid Review has also had frequent
consultation with other government departments, both in London
and overseas.
Additionally, consultation with the public has
been mediated through the Spending Challenge website (launched
by HM Treasury) and the DFID website which invited comments on
specific priorities in the Coalition Programme including the Poverty
Impact Fund, Malaria and Maternal Health.
Q5. Is the Department willing to comment on
the documents leaked to the press during August 2010 discussing
the possible abandonment of a number of international aid commitments?
All DFID programmes are currently under review
to ensure they have the greatest impact on global poverty as driven
by specific needs on the ground. The future direction of DFID's
programmes will be announced once these reviews conclude. We do
not comment on leaked documents.
Q6. Does the Department envisage that its
spending and work on conflict prevention and stabilisation will
be impacted by the Spending Review settlements of the FCO and
MoD?
Effective work on conflict prevention and stabilisation
requires Development, Foreign Policy and Defence approaches to
be brought together. The Strategic Defence and Security Review
(SDSR), which is closely linked to the spending review for FCO
and MOD, is currently considering how HMG's work on conflict prevention
and stabilisation can be better integrated and strengthened. The
results of the review will have implications for all Departments
involved.
FCO, MOD and DFID already work very closely to
jointly deliver UK objectives in key countries around the world,
but there is more we can do to capitalise on the resources and
expertise of our diplomats and defence and development experts
to ensure our contribution is greater than what could be achieved
by any department working alone. DFID, FCO and MoD are putting
forward a joint bid for funds for conflict, stabilisation and
peacekeeping as part of SR10.
Q7. Table AS of the Resource Account (p92)
splits DFID's administration costs between "Paybill"
and "Other". Can you provide figures for the main components
of "Other" administration expenditure over the period
2003-04 to 2010-11?
Table A5
ADMINISTRATION COSTS (EXCERPT)
| 2003-04
£'000
| 2004-05
£'000 | 2005-06
£'000
| 2006-07
£'000 | 2007-08
£'000
| 2008-09
£'000 | 2009-10
£'000
| 2010-11
£'000 |
| Operating lease rentals | 16,756
| 21,077 | 20,603 | 20,002
| 21,627 | 22,280 | 25,347*
| 23,510 |
| Non cash items—see note 10 on page 58 of Resource Accounts for details
| 30,758 | 26,672 | 24,744
| 49,188 | (6,381) | 17,240
| 17,025* | 15,795 |
| Other current expenditure | 80,858
| 86,139 | 86,063 | 89,861
| 106,625 | 47,439 | 42,770*
| 50,654 |
| Loss on disposal of assets | 767
| 292 | 388 | 1,704
| 1,196 | 834 | 1,685*
| 1,685 |
| Other admin costs—Rf R2 |
| 283 | 1,694 | 1,734
| 1,684 | 1,834 | 2,176*
| 3,906 |
* These items have been extracted from the disclosures in note
10 on page 58 of the Resource Accounts.
Other current expenditure includes items such as consultancy
payments, travel, training costs and other classes of expenditure
which individually are not greater than £2 million. Consultancy
payments for 2009-10 were £19.1 million (2008-09: £24.5
million), travel for 2009-10 was £12.3 million (2008-09:
£14.1 million), training costs represented £5.3 million
in 2009-10 (2008-09: £7.1 million) and other costs were £6.1
million (2008-09: £5.0 million). Further work in-year is
underway for 2010-11 allocations which will result in adjustments
to published figures.
Q8. Note 9 to the 2009-10 Resource Account (p56) explains
that the £32 million cost of overseas frontline staff was
reclassified during 2008-09 from administration to programme expenditure.
Have DFID and the Treasury now settled on a detailed definition
of what types of expenditure should be categorised as 'administration'
and, if so, can you provide the definition?
As part of the 2007 Comprehensive Spending Review, Treasury
agreed that the costs of DFID staff overseas working directly
towards our strategic priorities could be charged to programme
expenditure. This treatment was set for that period only. For
SR07 where an overseas employee spends greater than 50% of their
working time on programme activities they count as Programme Funded
Administration and are then classified as Programme. DFID and
Treasury are currently discussing how these staff should be treated
for the SR10 period.
Q9. In 2009-10 DFID spent £2.5 billion (38%) of its
programme expenditure through multilateral organisations, up 8%
on the previous year (p82). Will the reduction in DFID's administrative
budgets mean that more money will be disbursed directly to multilateral
organisations? How much of DFID's programme expenditure do you
plan to disburse through multilateral channels in 2010-11?
(i) DFID has launched reviews of all its programmes to inform
future allocations. The relative spend through multilateral and
bilateral channels will be determined by the results of these
reviews and the government's priorities. We are working with Treasury
to ensure that we have sufficient front line delivery staff to
manage programmes effectively and to deliver value for money for
the programme spend.
(ii) DFID plans to spend £3.4 billion of programme spend
through multilateral channels in 2010-11, compared to a figure
of £2.5 billion in 2009-10. The increase on the 2009-10 spend
mainly relates to the following increases:
| International Development Association
| £350 million
|
| European Development Fund
| £100 million
|
| Global Funds |
£200 million |
| (including Fast Track Initiative £150 million)
|
| Climate Investment Fund
| £100 million
|
Q10. Is DFID getting a sufficient quality of data on results
from each of its multilateral partners to assess value for money?
To what extent has DFID directed increases in funding to those
multilateral it assesses as best-placed to monitor and report
results?
The Multilateral Aid Review, which was launched in June 2010,
is conducting a comprehensive assessment of value for money from
DFID's contributions to its multilateral partners. These assessments
cover a range of indicators, including strategic fit, partnership
behaviour, delivery of results, and cost control. The extent to
which multilateral monitor and report results is an important
factor in this assessment. The findings of the review will determine
how DFID funds the multilateral organisations.
Q11. Following the OGCs[1]
procurement capability review of DFID in 2008, the Department
has undertaken a Procurement Capability Review self-assessment.[2]
(a) What were the findings of the self-assessment?
The findings were very positive. The Department has made good
progress with the establishment of a more commercial culture throughout
the organisation, restructuring its professional procurement cadre,
and promoting a new organisational model to improve the Department's
procurement capability. The assessment was independently verified,
and endorsed by the OGC.
(b) Why has the self-assessment not been published on the
OGCs website?
OGC did not publish assessments that concluded around the time
of the 2010 election.
(c) What are the main actions the Department has taken,
or is taking, in response?
The main actions were to maintain the momentum on better commercial
understanding throughout the Department, use management data to
inform commercial decisions, and to develop effective
engagement with key suppliers and external business partners.
STAFFING
Q12. How will DFID's 33% administrative savings
translate into headcount reductions? How will the reductions be
split between:
(a) back office/support functions
(b) HQ functions
(c) UK staff based overseas
(d) locally engaged staff based overseas?
DFIDs administrative cuts are challenging and
savings plans are being prepared that drive greater efficiency
in back office functions both in the UK and Overseas through redesigning
business process and management restructuring. We are making the
same administration cuts as other Departments across Whitehall.
The impact of the administrative costs reduction
on overall headcount will be affected by agreements with the Treasury
on the costs of additional frontline delivery staff required to
deliver a growing programme spend. Both the reduction in administration
posts and potential growth of frontline posts will have a bearing
on redeployment, severance and recruitment. These will be derived
from the Business Planning process which will follow on from the
Spending Review announcement in October.
Q13. A 2006 Report by the NAO found that of
28 central government bodies, DFID spent the most on consultants.
Can you detail the Department's expenditure (both within and outside
the UK) on consultants over each of the last five years by company,
nature of support, policy area and programme? Could you do the
same for the current forecast for 2010-11?
DFID applies the central government definition
of consultancy which is "the provision of advice and / or
guidance on the strategy, structure, management or operations
of an organisation in pursuit of its purpose and objectives".
This change was implemented in 2007, after publication of the
NAO report.
DFID spending on consultancy for the past three
years is as follows:
| Year | Expenditure (£000)
|
| 2007-08 | 21,200 |
| 2008-09 | 24,500 |
| 2009-10 | 19,100 |
Supplier services on behalf of and for the benefit of developing
countries are reported separately. DFID engages the wider supplier
market as technical experts to deliver development projects and
programmes and to help country governments and other partners
to reduce poverty. Suppliers do valid work for DFID, including
humanitarian relief operations, advising governments, improving
health and education services and delivering real improvements
for people in developing countries.
DFID has recently introduced a new management information system
that is going through a transition period of implementation. At
this stage, the new system can provide details of all payments
made to suppliers, but cannot yet isolate the payments relating
specifically to the relatively new OGC definition of consultancy.
Work is ongoing to provide this level of detail over the coming
year.
Q14. Will the reduction of in-house staff numbers lead
to an increased requirement for temporary and contract staff within
the Department? If not, why not?
We will reassess overall staffing plans following the outcome
of the Spending Review and our Bilateral Aid, Multilateral Aid
and Emergency Response Reviews. In the meantime, following the
June emergency budget, there is a freeze on recruiting staff (including
temporary and contract staff) from outside the Civil Service in
all but exceptional circumstances. We continue to redeploy staff
internally to work on priority business.
Q15. How do the results achieved by consultants, employed
by DFID to provide technical co-operation overseas, compare with
the results of other DFID projects? What are the reasons for any
variations?
DFID does not compare performance in this way. Technical cooperation
funded work is contracted on behalf of development recipients,
usually as part of a programme of integrated inputs, and the results
are assessed in terms of development outcomes.
Q16. The Department plans to increase employment of staff
locally in-country. Presumably, such staff will be subject to
country specific employment law and rights (including pensions
provisions), and local pay-rates. What kind of savings do you
envisage will be made from such a policy?
In general, staff costs of employees recruited in-country are
significantly less than the costs of deploying Home Civil Servants
overseas. Changes to the number of locally recruited employees
in each overseas office will be decided after the Spending Review
and our Bilateral Aid, Multilateral Aid and Emergency Response
Reviews. It is therefore not possible to forecast savings at this
time.
Q17. What criteria will you use to decide in which locations
to increase engagement of local staff?
Changes to staffing plans, including the number of Staff Appointed
in Country, will be reviewed following the outcome of the Spending
Review and our Bilateral Aid, Multilateral Aid and Emergency Response
Reviews. The mix and source of staff in DFID overseas offices
is influenced by the nature of DFID activities in each country
and the local labour market.
2009 WHITE PAPER
Q18. The publication DFID in 2009-10 makes no mention of
the 2009 DFID White Paper. This White Paper signalled a notable
shift in aid and development policy by DFID, refocusing resources
on to fragile countries and treating security and justice as a
basic service alongside health, education, water and sanitation.
In terms of the commitments made, does DFID still plan to:
(a) provide a sum equivalent to 5% of budget support
for building governance and accountability of aid disbursals?
DFID's Structural Reform Plan includes an action to "develop
and publish new guidance on implementing the commitment that up
to 5% of all budget support should go to accountability institutions"
DFID will use the aid budget to support the development of local
democratic institutions, civil society groups, the media and enterprise.
(b) disburse 50% of new bilateral funding to fragile countries?
DFID's bilateral funding is the subject of the current Bilateral
Aid Review. This process will determine DFID's future financial
commitments to all of our priority partner countries, including
those which are classified as fragile.
(c) double its central support to civil society organisations
to £300 million a year by 2013?
The level of DFID's support to civil society over the SR10
period will be determined by the on-going Bilateral Aid, Multilateral
Aid and Emergency Response reviews. In parallel a new centrally
supported Poverty Impact Fund and a new round of Programme Partnership
Arrangements are being launched.
DFID's review of its work with civil society (2010) shows that
there is scope to be more strategic, results focused and get better
value for money when working through civil society organisations
(CSOs). This review showed that bilateral expenditure through
CSOs in 2008-09 was approximately £515 million—comprising
£273 million through country offices and £242 million
through central funding schemes.
EFFICIENCY SAVINGS
Q19. In 2009-10 DFID completed a review to streamline and
cut-out unnecessary process and procedures.[3]
What are the estimated future savings as a result of this review?
We regularly review the effectiveness of processes and look
for ways to reduce the costs of our existing procedures and processes.
There has been no attempt to separately estimate the level of
future savings as a result of that specific review. The savings
resulting from changes to our procedures have helped ensure the
department is meeting its overall efficiency savings within the
administration budget.
Q20. Is the Department on track to deliver overall VfM
savings of £647 million by the end of 2010-11? What are the
specific efficiency savings now being sought in 2010-11?
The Department is well on track to achieve its efficiency savings
target of £647 million by the end of 2010-11. In 2010-11
we plan to make efficiency savings by:
- allocating the bilateral programme to countries where the
poverty impact will be greater—£127.5 million;
- allocating the multilateral programme to institutions where
the poverty impact will be greater—£158.5 million;
- improving the performance of our projects and programmes—£24
million;
- making communications savings—£10 million; and
- making further operational efficiencies—£4 million.
Q21. The Secretary of State in July mentioned "£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..." (Q8). Could you
provide us with more details of the £150 million of work
that is not performing well, the performance criteria used and
the plans the Department has for this work?
DFID reviewed projects and programmes for their consistency
with Ministerial priorities and their continued relevance, performance,
and expected future value for money. Using these criteria, the
Department identified those that could be closed and have funds
reallocated during fiscal year 2010-11. In taking these decisions,
the Department took account of developmental and reputational
impacts of early closure.
Decisions on where to reallocate the funds will be taken once
the Bilateral and Multilateral aid reviews report in the Autumn.
This will ensure that the funds are spent in line with new Government
priorities.
AID EFFECTIVENESS
Q22. The Secretary of State outlined plans for a comprehensive
review of all DFID bilateral and multilateral programmes to the
Committee in July. The Secretary of State stated that one of the
drivers of this review was to "... get more value out of
every British development pound spent in each county" (Q1).
Although the results of the reviews will not be published until
early 2011 (Q56), can the Department indicate any initial findings
of the review process to date?
Since the Secretary of State launched the Bilateral Aid Review
(BAR) at the end of June we have been reviewing all aspects of
our bilateral programme to ensure that the objectives of the UK
aid programme are achieved in the most cost-effective manner possible
and based on a solid understanding of what works and what does
not. We have asked all country and regional teams to outline:
the results that they could achieve over the next four years;
how much this would cost and how this would deliver value for
money; the evidence underlying their plans; and how they will
address women and children. We are currently reviewing these "offers"
internally and with an external scrutiny panel to steer the development
of country business plans.
DFID institutional teams will assess the performance of the
multilateral organisations, taking into account the evidence of
in country reviews, and the submissions of evidence received from
the multilaterals, other government departments and civil society.
Two external reviewers, Alison Evans, Director of the Overseas
Development Institute, and Lawrence Haddad, Director of the Institute
of Development Studies, will challenge and quality assure the
resulting assessments.
It is too early for initial findings at this time. As we progress
both reviews we would be interested in receiving the views of
the IDC on the priorities for our multilateral and bilateral programme
and on the initial findings when they are published.
RISK AND
FRAUD
Q23. How do you think the outcome of the Spending Review
and any savings or efficiencies required will impact on the department's
ability to mitigate risk, particularly in country offices, as
outlined in the Resource Accounts' Statement on Internal Control?
As with all government departments, DFID was asked to reduce
administrative costs by one third by 2014-15. We plan to deliver
a significant element of administration cost savings through changes
to our travel policy, changes to overseas allowances, renting
out more office space in Palace Street and reforming DFID's corporate
centre. We are working with Treasury to ensure that we have sufficient
front line delivery staff to manage programmes effectively, including
effective action to mitigate risk. Risk Management will continue
to feature strongly in our Business Planning Process which will
follow the spending review announcement.
We are enhancing our approach to risk management throughout
DFID as a result of recommendations made in a recent internal
review.
Q24. DFID is exposed to a significant degree of risk because
of the nature of its operations. Can DFID provide details of all
incidence of fraud investigated in 2009-10 and total losses incurred
as a result of such fraud?
DFID is committed to ensuring that the UK's overseas aid is
well spent. Any allegations or suspicions of misuse of DFID funds
are reported to DFID's Head of Internal Audit, and are looked
into by the Department's Counter Fraud Unit (CFU).
Fraud, corruption or any other misuse or abuse of DFID funds,
interests or activities are not tolerated, and DFID will take
the strongest action possible where such abuse is proven. This
action includes disciplinary action, criminal prosecution, recovering
funds lost or misused, and withholding funds where arrangements
for preventing future losses are not satisfactory. In addition,
the CFU proactively uses the information gathered from allegations
and from its own audits and investigations to strengthen
DFID's systems and controls to reduce the risk of future losses.
By their nature, fraud, corruption and other abuse
are often hidden, and so DFID is not able to make a reliable estimate
of total losses through the development activities which it funds.
Losses which have been detected and reported are logged centrally
by the CFU, and these are summarised for 2009-10 in the table
below.
| Allegations Reported
| Misuse
Proven | Gross
DFID
Losses
(£'000)
| Amounts
Recovered
(FOOO) |
Net DFID
Losses
(£'000) |
Payments
Stopped
(£'000) |
| 97 | 25 | 459 |
199 | 260 | 847 |
Procurement fraud, payment fraud and theft of assets and cash
together accounted for the majority of detected misuse in the
last year. From an analysis of detected and reported incidents,
the risk of fraud and abuse lies in most part with DFID's external
partners rather than within DFID itself, and DFID is working actively
with these partners to ensure they have adequate controls in place
to manage UK aid effectively, as well as strengthening its own
counter-measures.
Q25. How does DFID plan to mitigate fraud risks as it increases
its use of partners to deliver projects in fragile states?
DFID applies its rigorous anti-fraud practices in every country,
whether fragile or more stable. Aid instruments are chosen based
on context and appropriateness in the individual country and aid
may be delivered through the state, with the state or outside
the state even in fragile contexts. So in situations where the
state is increasingly poverty focussed or risks are decreasing,
instruments such as budget support may be used subject to normal
fiduciary risk assessments. Donors often use pooled funding in
fragile contexts to help manage risks.
DFID is working actively to combat fraud and corruption both
internally and with our partners. We take a robust approach to
addressing allegations involving our funds, including through
disciplinary sanctions, criminal prosecutions and the suspension
of aid where appropriate. We have oversight of the counter-fraud
systems of our multilateral partners through our representation
on management boards and audit committees. We also work closely
with the audit and integrity functions of our major partners and
we review and monitor the controls partners have in place, for
example the financial management capacity of civil society organisations.
DFID applies a range of controls and procedures to minimise
the risk of fraud and corruption. We carry out Fiduciary Risk
Assessments, conducted against international benchmarks and subject
to independent scrutiny. Financial aid is only provided where
there is a credible programme to address weaknesses in public
financial management (PFM). Where financial systems of partner
governments are improving but do not yet represent best practice,
we attach high priority to strengthening them, for example by
improving the effectiveness of budget planning, financial management
information systems, and countries' supreme audit institutions.
Public expenditure tracking surveys and extra short-term safeguards
are used while PFM systems are being strengthened.
DFID also undertakes wider risk assessments of its country
programmes and of individual projects. Project management systems
have a wide range of controls to prevent risks materialising including
payment authorisation and procurement requirements, project monitoring,
performance reviews and independent evaluations. These processes
draw on expert advice, including on PFM and counter-fraud. All
organisations in receipt of funding from DFID are required to
provide audited financial statements to give independent assurance
that funds are used for intended purposes.
Oversight is provided by the National Audit Office, which scrutinises
DFID's accounts and financial management systems and conducts
specific value for money studies, and by DFID's Internal Audit
Department (IAD) which reviews and provides independent and objective
assurance to management on the effectiveness of DFID's controls,
risk management and governance systems. IAD's work is overseen
by an independent Audit Committee, which also receives reports
from the NAO.
CDC GROUP PLC
Q26. Regarding CDC's 2009 Annual Development Report:
(a) How does the Department feel it compares with the
findings of the first Development Report (for 2008)?
The 2009 Report builds on and deepens the analysis contained
in the 2008 Report as well as focussing on a different range of
sectors. Most importantly, the 2009 Report includes the results
of the independent evaluation of a number of CDC funds, which
was not a feature of the 2008 Report.
(b) Does it better reflect the correlation between CDC's
investments and pro-poor development outcomes, including their
social, environmental and governance impacts?
DFID considers that this report reflects the links better—and
that the evidence will build as data are collected over time.
38% of Funds will have been evaluated by 2010. CDC is investing
more in poor countries in Asia and sub-Saharan Africa. The total
invested has increased from £829 million in 2008 to £1.2
billion in 2009. In terms of development outcomes, 85% of funds
evaluated (17 out of 20) in 2009 were rated as satisfactory or
better and 16 of the 20 funds evaluated (80%) performed satisfactorily
or better on environment, social and governance (ESG) matters.
(c) Is DFID satisfied that the latest report was sufficiently
independent and provided a balanced assessment of the development
impacts of CDC's investment?
The report represents a step in the right direction. Seven
of the 20 fund evaluations carried out in 2009 were outsourced
by CDC to an external party (Triple Value) following a competitive
tender. From 2010 onwards, CDC intends to have approximately half
of its evaluations outsourced. This is in line with international
best practice, taken as the IFC's Independent Evaluation Group.
DFID is working with CDC to improve the tatter's ability to assess
the indirect impact of its investments with a view to including
more on this subject in future reports.
Q27. Could you provide details of the CDC CEO's total remuneration
package in 2009-10?
The CEO received a total remuneration package in 2009 worth
£489,060. Remuneration consists of three elements: basic
salary, Short-Term Incentive Plan (STIP) payments, which are paid
annually and which are dependent on CDC annual business performance,
and Long-Term Incentive Plan (LTIP) payments, which are dependent
upon CDC's rolling three year financial returns and its development
impact performance. A summary of the CEO's remuneration for 2007
to 2009 is shown in the table below.
| Base salary (£) | STIP (£)
| LTIP (£) | Total (£)
|
| 2009: 225,000 | 2009: waived
| 2009: 264,060 | 2009: 489,060
|
| 2008: 225,000 | 2008: 0 |
2008: 347,000 | 2008: 572,000 |
| 2007: 220,000 | 2007: 275,000
| 2007:470,712 | 2007: 970,000
|
The framework within which CDC's remuneration operates was
agreed by the last Government and is designed to keep CDC's total
pay award lower than the market average for its comparator group
and to link executive pay to the delivery of DFID's objectives.
The CDC Board is responsible for the implementation of the framework.
FUTURE REPORTING
OF DEPARTMENTAL
PERFORMANCE
Q28. In its 2008-09 annual report DFID reported that its
achievement against PSA targets for the 2003-05 and 2006-08 periods
would be monitored until final outturn data was available. But
the 2009-10 report omits this. Will DFID be accounting for what
it achieved against PSA targets in these periods?
DFID provided an update of its achievement against PSA targets
for the 2003-05 and 2006-08 in its 2009 Autumn Performance Report.
The only targets where final out-turn data were not available
were those relating to MDG delivery in partner countries. No new
data on these targets had emerged prior to publication of the
2009-10 reports. DFID will continue to report progress of MDG
delivery both globally and in partner countries. More details
will be set out in its forthcoming business plan.
11 October 2010
WINTER SUPPLEMENTARY
ESTIMATE 2010-11
1. Introduction
The Department for International Development Winter Supplementary
Estimate for 2010-11 seeks the necessary resources and cash to
support the functions of the Department. These are continuing
functions from previous years and no new functions have been added.
The purpose of this memorandum is to provide the select committee
with an explanation of how the resources and cash sought in the
Winter Supplementary Estimate will be applied to achieve the departmental
Structural Reform Plan. This includes information on comparisons
with the resources provided in earlier years in Estimates and
departmental budgets, and may also refer to future financial plans.
The net increase in provision sought in this Supplementary Estimate
relates primarily to:
- £9,643,000 take up of Departmental Unallocated Provision
(DUP).
- £200,000,000 increase in capital grants (IDA replenishment
within CDEL budget but on resource side of Estimate (voted) offset
within CDEL by Global Trade Liquidity (GTL) loan receipts (non
voted) to be paid to the Consolidated Fund as Extra Receipts (CFER).
An explanation of key terms used in the memorandum is provided
as an annex.
2. Summary of the main spending control figures contained
in the Estimate
Voted provision
The Supplementary Estimate provides for a 3.05% increase in voted
resource:
- Increase in the Net Resource Requirement (NRR) of £209,643,000;
RfR1 increase of £208,296,000 RfR2 increase of £1,347,000
RfR2 increase of £1,347,000
- Increase in the Net Cash Requirement (NCR) of £209,643,000.
Budgetary data
The changes to key budgetary figures are:
Resource Departmental Expenditure Limit reduces by £74,730,000
Of which:
- Near-cash - reduction of—£74,730,000
- Administration budget—nil
The net reduction in Resource DEL is due to transfers to other
government departments.
Capital Departmental Expenditure Limit increases by £265,000
The net reduction in Capital DEL is due to transfers from other
government departments.
Annually Managed Expenditure is unchanged.
3. Detailed explanation of changes in provision sought
in the Supplementary Estimate, and implications for budgets
- (a) Movements in provision related to DEL
£nil Net change in DEL
- (b) Movements in provision neutral in budgets
RfR1: Eliminating poverty in poorer countries
OTHER CHANGES IN DEL SPENDING
| +£200,000,000 | IDA replenishment funded in CDEL by GTL loan receipts which will be CFERed. (RfR1: subhead D3).
|
| +£20,000,000 | Increase in capital expenditure in the form of a short term loan fully offset by capital loan receipts (RfR1 : subhead C7)
|
| -£20,000,000 | Increase in capital receipts in the form of short term loan repayments fully offset by capital expenditure (RfR1 : subhead C8)
|
TAKE UP OF DEPARTMENTAL UNALLOCATED PROVISION
| +£9,643,000 | Allocated to programme DEL budgets (RfR1 : subhead B3)
|
RESOURCE TRANSFERS TO / FROM ANOTHER REQUEST FOR RESOURCES
|
-£1,347,000 | Transfer resources to RfR2 (RfR1: subhead B2).
|
RESOURCE TRANSFERS WITHIN THE REQUEST FOR RESOURCES
| Nil | Re-allocation of administration costs to align Estimate with internal budgets, reflecting various changes made during 2010-11 (RfR1, subheads A to F, section 1).
|
| Nil | Re-allocation of funds for capital grants to align Estimate with internal budgets, reflecting various changes made during 2010-11 (RfR1, subheads A, B, C, D, section 3).
|
| Nil | Re-allocation of programme funds to align Estimate with internal budgets, reflecting various changes made during 2010-11 (RfR1, subheads A to F, sections 2 to 3).
|
RfR2: Conflict Prevention
RESOURCE TRANSFERS TO / FROM ANOTHER REQUEST FOR RESOURCES
| +£1,347,000 | Transfer resources from RfR1 (RfR2: subhead A2).
|
| £209,943,000 | Net change in voted resources from take up of DUP and transfers to voted resources
|
Of which:
| £6,642,000 | Net change in voted resource DEL
|
| -£6,642,000 | Net change in non-voted resource DEL
|
| £203,001,000 | Net change in voted capital DEL
|
| -£203,001,000 | Net change in non-voted capital DEL
|
4. DEPARTMENTAL EXPENDITURE
LIMIT
This Supplementary Estimate will result in an overall reduction
in Resource DEL of £74,730,000 and increase in Capital DEL
of £265,000. Details of DEL in Estimates are:
| £'000 | Voted
| Non-voted | Total
|
| Resource DEL |
| |
|
| Main Estimate | 5,016,569
| 1,067,000 | 6,083,569
|
| Winter Supplementary Estimate
| 5,023,211 | 985,628
| 6,008,839 |
|
| |
|
| Capital DEL |
| |
|
| Main Estimate | 1,534,000
| 22,000 | 1,556,000
|
| Winter Supplementary Estimate
| 1,737,001 | -180,736
| 1,556,265 |
|
| |
|
| Revised total DEL* |
6,739,212 | 804,892
| 7,544,104 |
*Depreciation of £21 m, which forms part of RDEL,
is excluded from total DEL since CDEL includes capital spending
and to include depreciation of those assets would lead to double
counting.
Significant movements in DEL, other than those explained in section
3 above, are:
- -£40,000,000 transfer to Foreign and Commonwealth Office
in relation to British Council ODA
- -£16,467,000 transfer to Foreign and Commonwealth Office
in relation to the Conflict Prevention Pool
- -£16,033,000 transfer to the Ministry of Defence in relation
to the Conflict Prevention Pool
- -£1,850,000 transfer to Foreign and Commonwealth Office
in relation to the papal visit
- -£200,000 transfer to Foreign and Commonwealth Office
in relation to police training in Tanzania
- £-180,000 transfer to Foreign and Commonwealth Office
in relation to visas for Chernobyl victims
- £265,000 capital transfer from Foreign and Commonwealth
Office in relation to the Juba office (Sudan)
The table below compares outturn from 2007-08 onwards with planned
DEL for the previous and current years:
| Plans
| |
|
| £ million | Voted
| Non-voted | Total
| Outturn | Variance
|
| Year |
| |
| |
|
| Resource |
| |
| |
|
| 2007-08 | 3,853
| 711 | 4,564
| 4,478 | -1.9%
|
| 2008-09 | 3,998
| 840 | 4,838
| 4,783 | -1.1%
|
| 2009-10 | 4,543
| 836 | 5,379
| 5,348 | -0.5%
|
| 2010-11 | 5,023
| 986 | 6,008
| |
|
|
| |
| |
|
| Capital |
| |
| |
|
| 2007-08 | 731
| - | 731
| 739 | 1.1%
|
| 2008-09 | 891
| - | 891
| 876 | -1.7%
|
| 2009-10 | 1,366
| - | 1,366
| 1,353 | -1.0%
|
| 2010-11 | 1,737
| -181 | 1,556
| |
|
Note: Plans and outturn are shown as originally reported, figures
have not been restated for effects of reclassifications between
resource and capital, as plans are not adjusted retrospectively.
5. DEL END YEAR
FLEXIBILITY (EYF)
The 2010-11 EYF stock for the Department for International Development
was reported in the Public Expenditure Outturn White Paper (PEOWP)
2009-10 (Cm 7911) and is shown in the table below. There have
been no changes since then.
| £'000 | Admin
| Other Resource | Total Resource
| of which: | Capital
|
|
| |
| Depreciation and impairments
| |
| PEOWP (July 2010) | 18,310
| 224,703 | 243,013
| 12,145 | 27,934
|
| Balance of EYF at 31 March 2010
| 18,310 | 224,703
| 243,013 | 12,145
| 27,934 |
EYF balances have arisen as a result of small cumulative underspends
in previous years.
The remaining Resource EYF has not been utilised during 2010-11.
6. ADMINISTRATION BUDGET
The Supplementary Estimate will have no impact on the administration
budget. A comparison with earlier years (outturn) and plans is
set out below.
| Administration budget (previous years) Restated to reflect classification changes
| Plans | Outturn
|
| 2007-08 | 167,010
| 155,170 |
| 2008-09 | 162,950
| 162,727 |
| 2009-10 | 159,950
| 159,048 |
| 2010-11 | 157,644
| |
There are no changes to the current year's administration budget.
DFID's administration budget has been reduced by 5% per annum
in real terms from 2007-08 for the remainder of the CSR07 period.
7. APPROVAL OF
MEMORANDUM
This memorandum has been prepared with reference to guidance in
the Estimates Manual provided by HM Treasury and that found on
the House of Commons, Scrutiny Unit website. The information in
this memorandum has been approved by the Director, Value for Money.
Liz Ditchburn
Director, Value for Money
16 November 2010
GLOSSARY OF
KEY TERMS
Annually Managed Expenditure - a Treasury budgetary control
for spending that is generally difficult to control, large as
a proportion of the department's budget, and volatile in nature.
Consolidated Fund Extra Receipts (CFER) - Income, or related
cash, that may not be appropriated in aid of an Estimate (for
example if income is of a nature which cannot be retained or if
income exceeds expenditure in that section of the Estimate) and
is surrendered to the Consolidated Fund.
Departmental Expenditure Limit - a Treasury budgetary control
for spending that is within the department's direct control and
which can therefore be planned over an extended (Spending Review)
period (such as the costs of its own administration, payments
to third parties, etc).
Request for Resources (RfR) - a function based description
of the organisational level of the department. These can vary
between one or more RfR and should be objective- based, referring
to the purpose for which the functions being carried out by the
department are intended to meet.
22 November 2010
1
Now part of the Efficiency and Reform Group in the Cabinet Office Back
2
http://www.ogc.gov.uk/procurement_capability_reviews_procurement_capability_reviews_wave_two_self-assessment.asp. Back
3
DFID in 2009-10, paragraph 4.22 Back
| 
