International Development Committee - Minutes of EvidenceHC 1557

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Oral Evidence

Taken before the International Development Committee

on Tuesday 8 November 2011

Members present

Malcolm Bruce (Chair)

Hugh Bayley

Mr Sam Gyimah

Pauline Latham

Jeremy Lefroy

Mr Michael McCann

Chris White

________________

Examination of Witnesses

Witnesses: Jeff Raikes, Chief Executive, and Laurie Lee, Deputy Director, The Bill and Melinda Gates Foundation, gave evidence.

Q55 Chair: Thank you, good morning and welcome. First of all, just for the record, will you introduce yourselves? Then we will get into the main business.

Jeff Raikes: Thank you very much. My name is Jeff Raikes; I am the Chief Executive Officer of the Bill and Melinda Gates Foundation.

Laurie Lee: I am Laurie Lee, Deputy Director of our European office, here in London.

Q56 Chair: Welcome and thank you. You will appreciate that we are looking into the role of private foundations and how they interact with donors and other providers of aid, development assistance and so forth. Obviously, the Bill and Melinda Gates Foundation is on a scale of its own, which makes it a major player. In that context, the Committee had the pleasure of meeting Bill Gates about a year ago and had a useful exchange of views with him. He was passing through here on his way to Cannes last week. One or two Committee members attended his session there. But in the context of Cannes, he gave his report to the G20 Summit. What is the role and relevance of a major private development foundation such as that in the context of global development policy and influencing world leaders? Perhaps you will also tell us what, specifically, Bill Gates was telling them. What recommendations did he make? Given that we are all facing a pretty major crisis, what was the response?

Jeff Raikes: Bill Gates was certainly honoured to have been invited by President Sarkozy to submit a report to the G20 leaders that would help develop the thinking regarding the importance and role of aid, official development assistance, as well as innovative approaches that could encourage the appropriate funding of that aid. So Bill took the request as a very important responsibility. He assembled many members of our team as well as others outside the foundation to think through what the important elements of official development assistance were and how they could be funded.

I will just make two quick points, and then I will be glad to answer further questions regarding his report. The first thing that Bill emphasised was the importance of us all understanding the positive impact of official development assistance, whether it is children’s lives saved through the miracle or magic of vaccines, or improved food security through better agricultural techniques. I think that, sometimes, with all the issues we are facing we lose sight of the important impact of these investments.

The second thing that Bill did in the report was to suggest certain creative ways that Government leaders could look at to be able to continue the important role of aid. He emphasised the importance of innovation-investing in innovation-and the importance of recipient countries using their own resources in conjunction with official assistance to improve their results and to have the desired impact. He looked at other important impacts, like the Solidarity Tobacco Contribution, an effective taxation programme that has significantly reduced the use of tobacco and increased the potential of human health. He really took on those two key issues: the role and positive impact of official development assistance and the various ways that they continue to be funded.

You also asked about why it is Bill and about the appropriate role. As you know, given your direct contact with him and our foundation, we put a lot of intellectual energy into these issues. I think Bill was called upon because they felt that he could provide great insights from his experience and the experience of the work of our foundation.

Q57 Chair: I am sure that my colleagues will want to follow these questions up in more detail, so the only thing I would say is that, from what you have said, his approach was entirely one of complementarity: in other words, there is a role for aid and development and for foundations, and the essence is how you partner them. In the present climate, one might worry that some donors would say that it is great to have Bill and Melinda Gates and great to have Warren Buffett topping it all up, so that lets us off the hook or takes the pressure off. There may be great virtue in quality, but not in volume if private foundations simply take up what Governments do not want to do. Am I right to say there was a very definitive approach that said. "We’re doing what we’re doing, you must do what you’re doing, and the two need to be of importance"?

Jeff Raikes: Yes, I think that is largely correct, Chair. It is important to understand that foundations play a very diverse role-foundations are very different-and it is unique compared with what the public and private sectors do. That certainly is a strong part of our vision for the Gates Foundation. We have a role to focus on innovation, both in the upstream and the downstream, and if we can take appropriate risks and prove interventions that can really make a difference, and show the private and/or public sector the evidence, then you can then lead to a sustainable, scalable impact through scaling up by the public and/or private sector.

We see a unique role and a three-legged stool for what we call catalytic philanthropy. It would be a mistake to believe that the way to handle these challenging times is to expect philanthropy to fill in the gap. In fact, philanthropy is generally a small percentage of the overall need. For example, the Gates Foundation would spend about $600 million annually on US education, but the US budget for that is $600 billion, so we are 0.1%. The only way that we can have a positive impact is if we think in a catalytic way and understand what our unique attributes are in being able to think to the long term and take the appropriate risks, learn from any mistakes or things that do not work well and share that learning, so that we can stimulate the field to better ideas that will make a longer-term impact.

Q58 Chair: Perhaps you can risk mistakes that the public sector would find difficult to explain.

Jeff Raikes: Well, in a sense that is part of our role. Let me give you an example, building on the model of the three-legged stool. We are big believers in the private sector. We think that the mechanism of capitalism, and the potential for profit, encourages private sector participants to take risk to produce better goods and services for society, and we think that has been a great attribute of the development of the world in the last few hundred years. On the other hand, if there is not a market opportunity, or what you might think of as a market failure, the private sector is not incented to invest. So you have to keep that in mind.

The public sector also produces goods and services that raise quality of life, but it has a unique role relative to the private sector and is less likely to take risk, because after all it is your tax dollars. We see the role of catalytic philanthropy as filling in that gap: to identify those areas of market failure that the private sector would not naturally invest in and to take the risk-the social risk-that the public sector might not naturally invest in. Then if we can fulfil that role as part of that three-legged stool, we are making a unique and valuable contribution that raises the humanitarian level of society. That is exactly how we think about it.

Q59 Mr McCann: Good morning, gentleman. To what extent do you believe that foundations like the Gates Foundation should be part of development agreements, such as the Paris Agenda?

Jeff Raikes: We looked at the Paris Agenda and participated in the dialogue. As a private foundation we were not invited to sign on to the Paris accords, but we thought that there were certain principles within those that are important. That is part of the important dialogue that occurs: that focus on results and on the responsibility of in-country programmes and in-country ownership. We thought those were some of the positive elements of the Paris accords, so even though we as a foundation are not a signatory, we focus in on and believe in some of those principles.

Keep in mind, again, that foundations are a bit of a different type of entity, so we do not typically have the same kind of operating model as Governments. For example, most private philanthropy goes towards funding NGOs, where of course a large percentage of Government funding and donor assistance would go to other Governments. I also think there are some distinctions there that may mean that, for a dialogue like the Paris accords, perhaps the concepts would have to be broadened. But in the end we believed it was an important intellectual dialogue about the principles that lead to aid effectiveness.

Q60 Mr McCann: Can I tease it out a bit further? Does that mean that you wait till the agreements are done and then comment on them afterwards, or do you believe that you are able to be part of the consultation process, where you have something to offer in respect of any final deal that is brokered?

Jeff Raikes: If you are asking specifically about our role in the Paris dialogue, I might turn to my colleague. It was before my time at the foundation.

Laurie Lee: We had staff at the meeting in Paris to discuss the Paris declaration and at that time it was not suggested that foundations-us or others-would sign it. But we were there for the discussions. We also attended the conference in 2008 in Accra and were part of those discussions. We will be sending staff to Busan this month, as well. So we are very much part of discussing this. So far the more concrete principles have been geared towards Government-to-Government donors, so they have not fitted us in respect of our saying, "We would behave exactly like that." But we have been part of the discussions and, as Jeff said, we believe in the principles and believe that we adhere to those principles of aligning with the priorities of the countries that we are working in.

Jeff Raikes: We think it is a good thing that we all share a vision of effective aid. We have unique roles, but being a part of that dialogue is important.

Q61 Mr McCann: Is Mr Gates planning to play a particular role in Busan? Are you looking for any particular outcomes from that event?

Jeff Raikes: We will have staff attending the discussions. Jeff Lamb, our Managing Director of Policy and Government Affairs, will be attending the Busan event, because we want to support the dialogue on aid effectiveness. We are following the preparations closely and looking to the advice from the other participants as to the most effective and constructive way for us to participate.

Q62 Mr Gyimah: Good morning. I am interested in this concept of catalytic philanthropy, which you outlined earlier, and I would like to probe it a little bit further. Can you give us an example of where your foundation’s objective to innovate and take risks has produced outstanding results? Along those lines, do you think innovation is always a good thing in development?

Jeff Raikes: Let me give you an example. I will refer to my notes to make sure. An important example to share with you has to do with meningitis. The largest meningitis epidemic in African history swept across sub-Saharan Africa from 1996 to 1997: there were 250,000 new cases of meningitis and 25,000 people died. Three years later the World Health Organisation held a technical consultation in Cairo with African health ministers and global health leaders to discuss meningitis and the development of a new vaccine. In May 2001, the Bill and Melinda Gates Foundation awarded a £70 million grant to launch the meningitis vaccine project-a joint project between the WHO, a non-profit group called PATH, the Programme for Appropriate Technology in Health, to develop the vaccine, as requested by the affected countries. The meningitis vaccine project is a great example of the kind of collaboration that can occur in a public-private philanthropic partnership-sort of a 4P.

The US Government Center for Biologics Evaluation and Research and a Dutch company, SynCo Bio Partners, came together to develop MenAfriVac. The Serum Institute of India manufactured it at a price that the African ministers of health indicated would be affordable-less than 50c a dose. The bottom line of this activity was that it was rolled out by GAVI, and the UK Government has been a fabulous supporter, given the impact of GAVI.

Three countries in the African meningitis belt, Burkina Faso, Mali and Niger, reported the lowest number of confirmed meningitis A cases ever recorded during an epidemic season. It is estimated that more than 1 million cases of illness and as much as $300 million will be freed up during the next decade.

This example is particularly telling in terms of public-private philanthropic partnership to take some risk, $70 million of our capital, to invest in an innovative approach-the magic of vaccines-to have a great health impact for a situation where the private sector would not naturally invest and the public sector would not naturally invest on its own. We were a catalyst to bring that together.

Q63 Mr Gyimah: Okay. Thank you. Am I right in assuming that you think that innovation is always a good thing in development?

Jeff Raikes: We are big believers in the idea that the biggest problems in the world will require innovative solutions. Of course, there are lots of different ways to define innovation. There is innovation in both the upstream and downstream. Let me explain that a little bit.

The upstream generally refers more to the science and discovery and basic product research end of the spectrum. The downstream is generally referred to as being close to the ultimate user-the last mile or the last 10 miles, if you will. We believe it is important to be innovative in both the upstream and the downstream, whether that is in relation to a new crop variety-a new variety of maize, or corn, that is more tolerant to stress, such as drought-or a farm management technique that will be able to more appropriately use that seed and/or prevent spoilage of the crop. We worked in Ethiopia, trying to innovate in respect of how frontline health workers can deliver a set of services that can raise the overall level of family health, particularly maternal/neonatal child health.

We believe that you can have innovative ideas in both the upstream and the downstream, and it will be important for us to think across that spectrum with integrated and innovative delivery to have the impact that we aspire to.

Q64 Mr Gyimah: Moving on from the private sector, would you like to see donors such as DFID innovate more? Where do you see that impact-in the upstream or the downstream, as you outlined it?

Jeff Raikes: We have great appreciation for DFID. We are impressed with the technical staff. A good example of that is that we have a mutual commitment to work together with other partners to eradicate polio from the world. We are 99% of the way there. That last 1% is tough. Our colleagues at DFID in the technical staff have been great participants in an intellectual dialogue, challenging the traditional approach that worked for the first 99% and stimulating new ideas about what we need to do in respect of that last 1%.

Our collaboration on polio and our crowd collaboration on agricultural development represent a strong partnership with DFID that involves us both in thinking of innovative ways to deal with these tough problems.

Q65 Mr Gyimah: Great. Finally, have donors’ risk-adverse development strategies led to your focus on innovation?

Jeff Raikes: A good part of it is our heritage. You may know that I started my career at Microsoft. I joined at 23 when there were 100 employees. I was a farm kid from Nebraska, but I believed in the power of computer technology-the innovation of software. So I took on the role of helping to lead the creation and ultimately the adoption of Microsoft Office. That was my career. I saw that first-hand. I worked with Bill and Melinda Gates on their vision of how innovative technologies could really change the world, through Microsoft. To put it directly, sir, I got addicted to the power of innovation and how it can change the world.

I see these tough problems that we face. I was doing the calculations in my head on the way here. A child dies every five seconds, typically of a preventable disease or some other preventable fatality. We can take new, innovative approaches to make a difference for those children. That is the kind of thing that motivates me at this point in my career. It is that heritage that puts an emphasis on innovation within our foundation and it is a part of our dialogue with organisations like DFID.

Mr Gyimah: I guess an addiction to innovation is a good addiction.

Jeff Raikes: Thank you.

Q66 Chris White: How did that thing with Microsoft go, by the way?

Jeff Raikes: Better than expected. I did software because I loved software. I was writing some farm accounting software to help my brother on our farm and I thought, "Wow, this has amazing potential." But if you said to me in 1981 when I joined-it will be 30 years on 13 November-that some day 750 million people would be using Microsoft Office applications, I might have thought you were addicted to something else.

Q67 Chris White: A good answer. Perhaps I can come back to the relationship with DFID and ask you to point to some of the key aspects: the most important parts of your relationship. Perhaps you can give examples of where you have influenced DFID’s programmes and where it has influenced yours.

Jeff Raikes: I want to emphasise what I said earlier to your colleague. We have a good relationship with DFID. It is a regular relationship, with regular interaction. Many of our staff will be in contact as regularly as weekly. The net result of that is a good dialogue. With a good intellectual dialogue, sometimes it is hard to say who influenced whom. It is that confluence of thinking that is important.

The essence of the relationship is, in my view, sir, that we are having a dialogue about the challenges that we see in the world and our common interests. We are challenging each other in our thinking-what will be the best way to take on a problem, for example. Sometimes we agree and sometimes we do not, but that diversity of thinking is what is really important.

In my business career I had a rule of thumb: the bigger the aspiration and the tougher the problem, the more important it was to have a rich, diverse intellectual dialogue. After all, if we really know what the answer is, I do not need that much dialogue: let’s just go get it done. But when you are trying to eradicate polio or malaria, those are such audacious goals, that I always tell our foundation staff that we have to have great intellectual dialogue among ourselves and with our partners. That is the same thing that I want with DFID. I want to ensure that we are having a rich intellectual dialogue, that we understand our different perspectives, that we see where we have common interests and shared goals, where we think that by coming together in complementary ways we may be able, more effectively, to deliver on the impact to which we aspire in respect of those common goals. That is the shaping that I think is important in our relationship with DFID.

Q68 Chris White: Thank you. Given where you have placed your European office, you are obviously also in contact with a range of other NGOs. Has your dialogue with them caused you to give more support or funding to others?

Jeff Raikes: We consciously chose to have a European office so that we could be closer to donor Governments, NGOs and DFID. It is a pretty convenient location for us here. But it really was because of the opportunity to be more a more robust participant in the dialogue here.

We think that has helped us shine a spotlight on some of the issues that are of common interest that we can work together on, so we are proud of the growth of our office here. We have 14 members of our office here. That has been a great investment for our organisation. We intend to continue to use that as a way to be a participant in the dialogue.

Q69 Hugh Bayley: From what you say, I hear forces pulling you in two different directions. On one hand, I hear a disciplined and focused innovator and businessman who wants value for money, and on the other-you have used the phrase "magic of vaccines" a couple of times-there is a soft-hearted human being who wants to save children’s lives. I am interested in teasing out which is the more important force in terms of the business decisions that are made within the foundation. How, for example, do you estimate the cost-effectiveness of vaccines?

Jeff Raikes: This is a terrific question. By the way, in my previous career I used to talk about the magic of software, so it is a nice extension of my experience set.

More seriously, I am emphasising that one of the values that we bring through our foundation is the benefit of the types of techniques and discipline that we learned in business and how that can help us think about investing in philanthropy in a way that has the greatest impact. Sometimes I like to use the metaphor of the heart and the mind. I cannot distinguish, sir, between one being more important than the other: I think they are both important. When I meet David and Lucy, dairy farmers in Kenya, who are living on three or four acres, and I understand what their issues are, I am learning-the mind is parsing information-but I also have the heart for the fact that they are figuring out a way to be more productive dairy farmers so that their daughter can go to college in Nairobi for a hospitality management degree. That combination is what is important.

When it comes to our choices, we look for the data and the evidence. We are very detailed. For example, I carry on my laptop a spreadsheet that takes the poorest countries in the world and looks at the burden of pneumonia and diarrhoea in those countries, compared with their birth cohort. We can go through and look at the cost of the vaccine delivery for pneumonia or rotavirus, or pentavalent, and make judgments about what will be the most cost-effective way to avert the death of a child. That combination of the heart and the mind is important in our work. We try to use that data and evidence to drive our thinking in a disciplined way.

Q70 Hugh Bayley: One of our Committee advisers is Simon Maxwell, who used to be the Director of the Overseas Development Institute, which Laurie will tell you is without doubt the first amongst equals of international development think-tanks in the UK. He gave us some figures that suggested that the cost per life saved, in respect of the money you are investing in vaccines, is more than £1,000 per life.

Chair: $1,000.

Hugh Bayley: $1,000 per life. He compares that, for instance, with the vitamin A programme, which saves a life for perhaps a quarter or a fifth of that amount. You have not seen those figures. But if we were to send them to you, would you get one of your research people to look at them and comment on them? I ask because development funding is a zero-sum game. If you put money into one intervention that saves lives at a rate of one per $1,000 as opposed to another intervention that saves lives at five times the rate per dollar spent, the opportunity cost of investing in a higher-cost intervention can be more children dying.

Jeff Raikes: Absolutely, not only will we look at that, we already do. We are one of the largest investors in an organisation called GAIN, the Global Alliance for Improved Nutrition, which focuses on those issues. To your point, sir, I have a chart here that you and I can go through after the hearing, if you would like. It is based on a paper on the cost-effectiveness of interventions related to high-burden diseases in low-and-middle-income countries. I am just looking at the cost-effectiveness ratio in terms of dollars per DALY averted. By the way, you mentioned dollars per death averted, which is an important metric. Some people like to choose DALYs-disability adjusted life years-and others like to choose death: like a lot of things in marketing, you choose whichever set of data best makes your point.

Q71 Hugh Bayley: There is a fair amount of overlap.

Jeff Raikes: Absolutely. Just going through this, there is diarrhoeal disease and hygiene promotion. That social technique is one of the most cost-effective interventions in terms of dollars per DALY.

Q72 Hugh Bayley: But do you and your board look at this chart and say, "Innovation and high-tech is something that is in our Microsoft bloodstream and DNA, but actually digging pit latrines would save more lives than developing a new vaccine." Or do you say, "There are other people who are good at low-tech; we are good at high-tech, even if it’s less cost-effective."

Jeff Raikes: Two things, sir. We are big believers that both are needed. We think that we have a particular core competency or comparative advantage in scientific and technologically based interventions, but we do believe in both and actually we fund both. You mentioned pit latrines. Believe it or not, we are funding pit latrines. We have a large sanitation programme, because sanitation is generally under-resourced compared with clean water. You perhaps know that 2.5 billion people do not have improved sanitation. Some 1.2 billion are practising open defecation and 1.4 billion have unimproved latrines.

Chair: We met a lot of them when we were in India earlier this year.

Jeff Raikes: We are investing in scaling up improved rural sanitation. We have a significant grant through the World Bank to WASH. In addition, we are looking at new technologies for urban and peri-urban sanitation, which I think will require some scientific investments. We announced an interesting programme last summer that has now become known as Toilet 2.0, because the world, frankly, will not be able to have safe sanitation for 9 billion people with the types of technologies that you and I are used to. There is not enough water in the world to do water-networked sanitation the way that we do it in the rich world, so we will have to have innovative approaches to sanitation. We are investing in both the upstream and the downstream of sanitation. In sanitation, you really want to know whether you are upstream or downstream.

Q73 Hugh Bayley: One last question, if I may. You have nevertheless decided to invest a large part of your resources in vaccines. You are focusing particularly on new vaccines rather than rolling out programmes using existing vaccines.

Jeff Raikes: That is not true.

Q74 Hugh Bayley: Okay. Please correct me.

Jeff Raikes: GAVI is largely about vaccines that are already available, particularly pentavalent. We play a role in trying to get the prices down, because if we can take an innovative approach with manufacturers to get the price cut in half, you can vaccinate twice as many kids. That is a big part of what we do. Pneumococcal vaccinations and rotavirus vaccines have existed in the developed world-the rich world-for our children for 10 years or more. We are taking those rich world interventions and delivering on health equity so that kids in the poor world can get the same vaccines that kids in the rich world get.

Q75 Hugh Bayley: I think we are talking about the same thing: adapting technology in the areas where there is not prevalent use in developing countries. But my question is this, how did your board take the decision to invest so many hundreds of millions of pounds in a particular vaccine-focused programme, at the expense of some of the other programmes that you have been talking about-sanitation, for example?

Jeff Raikes: I would not frame it as being at the expense of those. Again, we are investing in a wide range of interventions. The key is that Bill and Melinda Gates and I, with our leadership team at the foundation, go through the evidence and think through how we can really make a difference.

Many of these things that I think you are pointing to we invest in, but others invest in them as well. The Children’s Investment Fund Foundation is a terrific partner as well, and put a particular emphasis on child nutrition. We are respectful of the fact that it is not smart for us to try to do everything. We pick things where we can focus, where they may be under-resourced relative to other opportunities and where we can bring our unique capabilities to bear.

We make a set of judgment calls, looking at the evidence of impact combined with what we and our partners can do. In fact, for each of our 25 strategy areas we have a theory of change: a description of the systemic leverage points that will lead to great impact. There is a difference between the theory of change and the action plan. The action plan is what we will do and the delta is what we will work with our partners on doing. We very much take a partner mindset to each of these issues and we try to take the data and make a judgment on our capabilities to contribute as part of deciding what our action plan will be.

Q76 Hugh Bayley: I am grateful. I hope we can exchange these documents.

Jeff Raikes: Sure. I brought a whole chapter from the book for you.

Chair: You might have guessed and should be warned that Mr Bayley has a background in health economics.

Jeff Raikes: Great.

Q77 Jeremy Lefroy: The Gates Foundation has put a huge amount of money into malaria-both research and practical applications on the ground. What effect has your participation in the fight against malaria had, as opposed to everybody else’s?

Jeff Raikes: As opposed to?

Q78 Jeremy Lefroy: As opposed to the funding provided by other people. Where do you think the Gates Foundation’s contribution has been a game changer?

Jeff Raikes: There are two things that are really important for me to emphasise. First, there has been great progress on malaria in the last 10 years. Deaths are down about 20% and there is an aspiration to significantly reduce deaths even further during the next five to 10 years. That is a collective effort that involves the use of bed nets, including better, long-lasting, insecticide-treated bed nets. That is an example of something that the Gates Foundation has helped to fund.

A very easy example for me is our decision in the early part of the last decade to fund the RTS,S vaccine candidate. GSK had great technology for that and it illustrates what I was saying earlier to the Chair about catalytic philanthropy and market failure. GSK did not really see a real market opportunity for a malaria vaccine, because it largely affects poor populations that cannot afford it. But with our stepping in and helping to underwrite the R and D, we now have not just the first phase 3 malaria vaccine candidate but the first phase 3 vaccine candidate trial results. The results showed a 50% efficacy.

There is still more research to do-we have to understand to what extent that efficacy maintains over time-but it is a great milestone in terms of a potential scientific innovation that will be a part of the toolkit for eradicating malaria. I emphasise that it is part of the toolkit, because it would be a huge mistake for people to think that this vaccine candidate is a silver bullet that will ultimately wipe out malaria. It is going to require continued investment.

We have made a real contribution to the malaria eradication effort that is not very visible today. There is a real problem with the effectiveness of the malaria parasite to continually evolve, particularly the P-falciparum parasite. Historically, the parasite has often tended, for reasons we do not know, to evolve its resistance to the latest drug treatments in South-East Asia, particularly on the Thai-Cambodian border.

Today, the primary drug regimen to treat malaria is known as artemisinin-combination therapy. We are starting to see resistance to artemisinin in South-East Asia on the Thai-Cambodian border; that is incredibly dangerous for the world. There is no new drug available in the pipeline to treat malaria. We are investing in those drugs. I was in Geneva yesterday, meeting one of our product development partners, the Medicines for Malaria Venture, but we are very much on top of working with the WHO to contain that malaria parasite resistance. That is an example of a contribution that most people would not see, but it is hugely important in the world. If we lost ACT as a treatment for malaria-if that resistance spread in sub-Saharan Africa-it would be a huge, horrific problem.

We invest in a lot of different ways, going back to Mr Bayley’s question. We are looking at a lot of different ways to make a contribution. Yesterday I was with Margaret Chan, the Director of the WHO, and she personally called out that contribution.

Q79 Jeremy Lefroy: Thank you. As a follow-up to that, if this vaccine proves to be as effective as we hope it will be, clearly there is the question of rolling it out and paying for its distribution. That may be beyond the resources of the health systems where it is most needed. Does your foundation have a role in that or would you say that your role in having brought the vaccine to that stage, by funding GSK, was sufficient?

Jeff Raikes: We play a role in trying to help the world think through the scale-up in sustainability of any types of interventions-agriculture, health, and so on. That was a part of our initial impetus: the $1 billion that we put in to jump-start or kick-start GAVI back in 2000. So we have played a role there. However, it is important to remember that our financial resources are a small percentage, so we have to be clever about how we can be a catalyst. We will have to work with DFID and others to think through what the cost of this vaccine is and the cost-benefit. Perhaps I shall enlist Mr Bayley, as a health economist, to help us think through these issues, because they have to be thought through. There may need to be trade-offs versus other types of interventions.

Today I cannot tell you what the answer is, but I do know the process that we have to undertake to get to an answer. We have to understand what the cost will be. GSK has made a marvellous offer; they will price the vaccine at 5% above manufacturing cost. They are committed to putting that 5% back into R and D for other neglected diseases. So we have a rough idea. I do not think we know the manufacturing cost yet. We do not know about the efficacy yet, in a way that would allow us to say that this is an intervention that needs to be taken to market.

That goes back to my earlier point to the Chair. We have to be willing to take some of these risks, develop the evidence and then make good judgment-in effect, good business-type decisions-on which of these innovations should be carried forward and which do not have the potential to have a substantial impact.

Q80 Pauline Latham: There has been criticism of focusing too strongly on single diseases: HIV/AIDs, malaria and others. Can you comment on your support to strengthening health systems? What percentage of your funding goes to this sort of effort?

Jeff Raikes: Having a strong underlying system to deliver these types of innovative interventions is critical. For example, GAVI had a programme called ISS, immunisation systems strengthening, which provided incentives to countries to build their health systems to facilitate routine immunisation. That is an example of a smart investment in strengthening health systems, because when you get in place the cold chain, the delivery mechanisms and the trained health workers for vaccines, you have cost-effective interventions.

There are other times when the health system-strengthening funds show less of the same kind of financial benefit. If the funds are channelled to tier three research or speciality hospitals in the richer cities in the poor world, we would be less inclined to be a part of that. We are trying to reach poor people with the systems that really help facilitate their access to interventions.

We are choosey about what aspects of health systems we get into. It is important to underscore that we are focused on specific diseases and on understanding the underlying delivery, because we do not get the impact unless you can get the vaccine or the malaria drug, or the improved diagnostic-or the better seed to the farmer. Delivery is important.

In fact, just last week I announced that I am bringing in a new president for global development. His name is Chris Elias and he has run the PATH organisation for the past 12 years. He has great experience in the developing world. He worked in South-East Asia, on the ground, for 10 years. As I said to my employees, we are going to raise our game in terms of innovative and integrated delivery. We believe that you should do that not only across the health interventions but across the spectrum of these interventions, including agriculture, nutrition, food security, water sanitation and hygiene, and financial services for the poor and in respect of financial inclusion. I want our foundation to take an integrated view of what we can do in terms of delivery of interventions.

Q81 Pauline Latham: You will be aware that the Executive Director of the UN population fund-I cannot pronounce his name, so I will not even try-

Jeff Raikes: Babatunde.

Pauline Latham: That’s it. He has a surname that I cannot do, either.

Jeff Raikes: We will just call him Mr Babatunde.

Pauline Latham: He said: "Efforts to expand family planning services in the developing world stalled for a decade while global health organisations turned their energies to fighting HIV/AIDS. We made a mistake. We disconnected HIV from reproductive health. We should never have done that because it is part and parcel." How would you comment on that?

Jeff Raikes: Two things. First, family planning interventions are an important contribution to the developing world. There are approximately 200 million women in the developing world who would like access to contraceptives but do not have access to them. We happen to be one of the largest funders of reproductive health, both on the science and delivery sides. I was in Nigeria last month, looking at some of our work in the urban reproductive health initiative there, where there is a serious need for improvement in access to contraceptives.

The second thing is it just points out the rich dialogue that has to occur. As I said right up front, there are a lot of ways in which assistance can go to improve the world. There are a lot of opinions. It is important to be a part of the dialogue about what the most effective interventions are. There will not be unanimous agreement on most, if any, of these ideas. But that is part of the richness of the dialogue: the diversity of thinking leads people to make investments that make a difference. We invest to make a difference, DFID does so and many other organisations, many of which you have heard here in this Committee, are doing exactly the same thing. It is important for us to have a dialogue on that.

Q82 Pauline Latham: Would you say that a health system in which they are vaccinating for malaria or giving out drugs would also need to do HIV/AIDS and a check for diarrhoea, instead of saying, "We need some drugs because it’s malaria"? Should it do all those things as well as reproductive health all in one place?

Jeff Raikes: That and more. For example, our initiative in Ethiopia is a project called L10K-the Last 10 Kilometres Project. We are working with the Ethiopian Government and other donors, including DFID, perhaps, although I cannot remember right now, on the 16,000 health posts and 32,000 frontline health workers in Ethiopia, who have approximately 16 to 20 different packages of interventions, spanning all the way from treatment of pneumonia, diarrhoea, routine immunisation treatment, testing and treatment of HIV, food, nutrition and agricultural support for food security, and water sanitation and hygiene. I love that project because it takes an integrated and innovative approach to delivery. We have underlined that innovative thinking and delivery, because we believe that the Ethiopian Government can scale that up. We are working in Bihar in India on a similar project called Ananya, which we intend to have a similar type of innovative and integrated approach to delivery. One interesting element of that project is that it includes a specific focus with the BBC World Service Trust on how to shape consumer demand or behaviour change to adopt these interventions.

A lot of innovative thinking can go into implementation research as well as science and product development research.

Q83 Pauline Latham: If you are funding the Government of Ethiopia to facilitate this, how convinced are you that the Government do not then reduce the amount of money they are putting in the health system?

Jeff Raikes: We are working in partnership with the Government but not funding them. We are funding an NGO that is doing the basic research. That, for us, is typically the way in which we do our work: we will fund NGOs that are doing the on-the-ground work and coming up with the approaches, but doing that in partnership with the Government so that they can be scaled up.

A great example of that is our work with Avahan in India. In 2005 there was a pending crisis in HIV infections in India-a worry that there would be a pandemic. We learned how to put in place a programme called Avahan, to scale up the best preventative interventions for HIV infections. We did that in conjunction with the India Government: the National AIDS Control Organisation. But we fund the NGOs, we work with the Indian Government and we are now in the process of transferring the responsibility for Avahan to the Indian Government. That is a good example of the catalytic approach that I was mentioning earlier.

We are doing a similar thing in China with TB control. You may know that about one third of China’s population has latent TB. They have many cases of active TB. TB control is a huge issue. We are, in that case, part of the Chinese health budget to deliver innovative approaches on TB control. So that is the exception to what I was saying earlier: in that case we are putting money in with the Government to drive the TB control programme.

Pauline Latham: Thanks.

Chair: We are running slightly out of time and the Minister is outside, but I do not want to stop the Committee getting the exchange of information that we want.

Q84 Jeremy Lefroy: On agriculture and microfinance, I am delighted that Gates put so much emphasis on agriculture at a time when many others were not doing so. I have to declare an interest in both these areas.

How do you assess the risk of displacing, by the work you do and the funds that you bring to these areas, the markets that are already functioning-maybe not perfectly-and are beginning to pick up both in agriculture and microfinance? Clearly, a lot of work is going on, particularly in microfinance and in cash crops in agriculture. How do you ensure that you do not intervene where, perhaps, there is no need to intervene on the scale in which you do?

Jeff Raikes: That is a great question and we think carefully about it, partly because of our heritage. We are big believers in market systems. The way to effectively scale up and sustain many great interventions is oftentimes going to be through a market system.

Let me go back to David and Lucy, the dairy farmers in Ol Kalou, Kenya, I mentioned earlier. We were part of a project with Heifer International and TechnoServe to put in place chilling plants that would be co-operatively owned by the farmers in those communities. I visited the chilling plant in Ol Kalou, where in just a few short years they were supporting between 3,000 and 4,000 farmers. I think they may be up to 4,000 to 5,000 farmers now.

That gave David, Lucy and those other farmers a predictable price for milk, which incented them to invest in better livestock technologies-basically, a better cow-feed, storage, access to artificial insemination services and transport for the milk. That chilling plant became a hub for those farmers and enabled them to invest. Those farmers ultimately come to own that chilling plant as part of their co-operative. That is a great catalytic example.

I saw a similar example in Uganda. Working with the Michael Neumann Foundation, we encouraged smallholder coffee farmers to improve their trees, with better inputs, improve their techniques-a better irrigation approach-and improve their processing. That makes them part of the value chain, so that they can sell premium robusta coffee at higher prices-as much as 50% to 100% higher than they would have been able to sell at previously-and provides access to the wet mill technology that provides for that higher quality. Those are examples of how, with cash crops, we can be catalytic. That provides a predictable market for these smallholder farmers to invest in.

I mentioned earlier that my family are farmers. I grew up in the middle of the United States-Nebraska-growing corn, soya beans and cattle. My dad started in 1932 with 240 acres. We ended up with 1,700 acres by the time he passed it on to my brother. When he saw a market opportunity, he invested. Farmers are like that-and they are like that in the developing world. If we can be a part of facilitating market access, we can encourage that investment.

We are shifting our agricultural strategy to put less emphasis on the cash crops, because we think others are doing that pretty well. Instead, we are trying to work on the staple crops that receive less in research and investment-for example, improved varieties of cassava. Livestock makes up 30% to 40% of the wealth or GDP for smallholder farmers in the developing world and it gets about 3% to 5% of the research. We are putting our dollars into the research, and we have a great partnership with DFID on GALVMED, the Global Alliance for Livestock Veterinary Medicines, because we collectively believe that you could make huge improvements in livestock support through this organisation.

Q85 Jeremy Lefroy: Just in passing, you are aware, of course, of cassava mosaic disease, which is causing a great deal of trouble in east and central Africa at the moment.

Jeff Raikes: Yes, I am not as aware of the detail as I would like to be, but I know that our team is working on that. We are working on wheat rust, which is a huge threat to the world’s wheat supply. We are working on plant resistance to striga, which is a parasitic weed that destroys crops-I was just seeing that work in Nigeria. There are a lot of challenges in agriculture. It is fun for the farm kid from Nebraska to get a chance to work on those.

Q86 Mr McCann: The foundation is currently an observer to the international aid transparency initiative. Is anything blocking you becoming fully compliant to IATI?

Jeff Raikes: Not that I am aware of. We think that the transparency is good-the IATI, that is. We think that sharing information is an important part of encouraging the dialogue. So we have chosen to publish our global health information in that format and we are working towards doing that with global development. It just takes a little bit of time to get the data, reformat it into the appropriate categories and taxonomy of the system. But we believe that is a good initiative for the world aid community.

Mr McCann: Excellent. Thanks, Jeff.

Chair: Thank you very much. In a sense, arguably, as a private foundation you do not have any obligation to be accountable to our Committee. First, we appreciate that you have engaged with us as you have done. On the other hand, you are partners with DFID in significant ways, and how dynamic that partnership is is clearly of legitimate interest to us. I think you have given us a big range of the activities that are involved, some of which impact directly and some of which act as a kind of catalyst or resource for DFID and other donors, which is insightful.

We are trying to get to the bottom of how all these different organisations could hit together, strike sparks off each other and add value to the whole process. Your enthusiasm is infectious.

Jeff Raikes: Great.

Chair: And we appreciate it. As it happens, tonight I am heading off to look at the GAVI programme in Bangladesh-

Jeff Raikes: Excellent.

Chair: -where they are just beginning to get geared up, particularly to look at pneumonia-World Pneumonia Day being on Saturday.

As a Committee, having raised the questions we have, we will watch that with interest. But all the other engagements that you have, directly and indirectly with DFID, will be of interest to us. Hugh Bayley has suggested that you might be able to give us some more follow-through information, which would be of interest.

Jeff Raikes: Certainly.

Q87 Chair: We would like to balance it out. Yes, it costs a lot, but there are ways of measuring it. Knowing how you come to that conclusion, given that you have helped persuade DFID to put money in, helps our understanding. Can I thank both of you?

Jeff Raikes: We thank you. As you said, we did not necessarily have a responsibility, yet we feel responsible because of the work with DFID. We are an American-based organisation, but we feel a part of the world community. As I was preparing for the Committee and what I could share, I reflected on a quote from Winston Churchill that I thought fitted in quite well, relative to what we are trying to do in partnership with you. He said that you can always count on Americans to do the right thing, after they’ve tried everything else. Perhaps that describes the innovative work that we are trying to do together.

Chair: Thank you for that. Of course, Laurie Lee, you are based here, so if at any time you wish to engage with the Committee, you know where we are.

Q88 Hugh Bayley: Winston Churchill was, of course, half American, so he tried at least half the wrong things first.

Jeff Raikes: Well, my family was from Yorkshire about 400 years ago. We do not know exactly what happened, but I might speculate that my ancestor was given a one-way ticket across the pond; I am just glad that it was not to the penal colony in Australia.

Chair: Thank you very much indeed.

Examination of Witnesses

Witnesses: Rt Hon Alan Duncan MP, Minister of State for International Development, Ian Curtis, Deputy Director, Global Partnerships and Chris Whitty, Chief Scientific Adviser and Director for Research and Evidence, DFID, gave evidence.

Q89 Chair: Good morning Minister, nice to see you. I am sorry to keep you waiting.

Mr Duncan: Not at all. No problem.

Chair: It was a somewhat enthusiastic session this morning. For the record, would you introduce your team?

Mr Duncan: Certainly. On my left is Ian Curtis, who is the head of the Global Partnerships department in DFID. On my right is Chris Whitty, who is our Chief Scientific Adviser and Director of Research.

Q90 Chair: Thank you. As you know, we are looking at the role of private foundations, which includes British and American ones. "Foundation" tends to be an American term, but I think we understand what we mean by it. Inevitably, the Gates Foundation is dominant, but we are interested in other foundations and their interactions as well, so we will look at them together.

The opening question is: the increasing activity of these private organisations clearly has an impact on donors such as DFID; do you regard it as positive, negative or a mixture of both?

Mr Duncan: Very strongly positive. It is difficult to find any negatives. We welcome finding willing partners in the same field who are prepared to be innovative and commit their own money-in the case of the Gates Foundation, and some others-on a scale that is really quite magnificent. It keeps us on our toes. They will, perhaps, try things that we would not have done, for various reasons-all of them good, I think.

It is a strong influence for good. We would encourage the concept and are happy to work with them, and I hope that we are doing so constructively.

Q91 Chair: That is a fair response. I made the point at the end that the Gates Foundation is a private foundation and has no obligation, in a sense, to engage with our Committee, but clearly is keen to do so, although we would argue that, because it is partnering with the likes of DFID, we have some entitlement to ask questions. There is not an issue. However, the point comes to mind: to what extent do private foundations need to be plugged into the various international co-ordination mechanisms? To what extent will they be involved in Busan and what would their role be, for example, in respect of the whole Paris Agenda? Such organisations are private and, in one sense, they do not have to engage, but they are having an impact. How should they engage and how does an organisation like DFID approach their participation in these events and with other organisations?

Mr Duncan: First, we want Busan to be as inclusive as possible. The draft outcome document aims to attract the interest of new players such as private foundations. We hope to see good participation by foundations there, but we have not seen a list of participants yet, but we can pretty well guess who is going to be there-they will be fully included.

In terms of co-ordination, if they are on a small scale, from DFID’s point of view we try to bind people in at the country level to try to ensure that there is no counterproductive replication or anything like that. Of course, if you are dealing with a massive benefactor, such as the Gates Foundation, there are global structures, which we can touch on if you wish, such as GAVI and the Global Fund. I think we are looking at complementarity. To have private individuals who have made a massive fortune doing such good for the world would put me seriously at odds with the Archbishop of York and his comments of the past few days. If we did not have these people, the world would be a poorer place.

In terms of co-ordination, we have a good working relationship, particularly with Gates, as do the main funds. The complementarity is 1+1=3, really: it is a good thing.

Chair: I wonder if we could perhaps break it up, looking first at the Gates Foundation, because it is so big, and then at other foundations, including smaller ones, and interactions with them.

Q92 Pauline Latham: Obviously, the Gates Foundation is your most significant engagement among private foundations. Do you think having one such close partner inevitably limits your relationships with smaller foundations, many of which carry out vital work?

Mr Duncan: No, I do not think it limits engagement with others at all. It is clear and downright obvious that the Gates Foundation is in a unique position because of its scale combined with the amazing dedication and knowledge of the foundation’s founders. They are able to do things in many areas at a global level. Few other organisations can, but they can do things on a scale at a country level. It is in the nature of private foundations that some of the focus of their work will be governed by the enthusiasm and passions of the people who are giving the money. I do not think there is any harm in that, as long as we do not end up bumping into each other in a counterproductive way. I can confidently say that I do not think we do that.

Gates is doing things and having an impact on malaria, polio, vaccines and the whole area of public health globally. It is quite an amazing story that one man can have such an effect on the commercial world and then such an amazing, similar, effect on the world of the poor.

Q93 Pauline Latham: They are completely opposite ends of the spectrum. Do you think there is a risk that people will not criticise the Gates Foundation because they might, at some point, be or hope to be funded by it?

Mr Duncan: If they were doing something directly that might be the case: it is true of anyone who holds the purse. But when they are working alongside us, of course, they have to commit to the same scrutiny and evaluation as us. If they are co-funding, they are up to our standards of quality, evaluation, transparency and all that, which, in the case of the Gates, it is inclined to do anyway. It is not as if we are ever having to drag them kicking and screaming to do what we would want them to do. There is a symbiotic partnership, which is all to the good.

In terms of other work that they might do through other vehicles, I simply do not know the answer to that. If people say, "Thank you, I’ll take your money," and then spend it unwisely, that is up to Gates to work out. But they have their own standards. After all, it is their money; it is not taxpayers’ money, which we have to look after. So, I do not think so. But even the variety that comes out of the occasional mistake can have good consequences.

Q94 Pauline Latham: Thanks. DFID has often joined projects for which the Gates Foundation has provided the initial start-up funding. Do you think that DFID places too much trust in the foundation’s ability to get results? Have your collaborations always paid off?

Mr Duncan: I do not know if all collaborations have paid off. I might turn to my officials to see if they can think of an example where it has not paid off. If they are doing something with us in a way that involves co-funding, the result is discipline comes from our disciplines as much as from theirs. They have to reach our bar if they are to co-fund. Whether or not we have gone into a collaboration that has completely bombed, I do not know. Can you think of one?

Chris Whitty: No.

Mr Duncan: I cannot think of one.

Ian Curtis: No, I cannot either.

Mr Duncan: I assure you this is not complacency. They would tell you if they could think of one.

Pauline Latham: Thank you.

Q95 Chair: Jeff Raikes mentioned drug-resistant malaria in South-East Asia. Would they have approached DFID to say, "There’s a problem here. Will you engage with us?" That is the implication.

Mr Duncan: I will turn to Chris in a second. Let us not drive away innovation. Often, if a private foundation can take a risk in an area that we, as DFID, would not, that is a good thing. If we were to sneer about that because not everything works, that would be a pity. He is the biggest risk-taker in the world and has made the biggest fortune in the world and is spending it on the poor. I think he is a guy who knows a bit about risk. I do not think we should pooh-pooh that. If there is a successful intervention that we can build on, let us all say, "Yippee."

Chris Whitty: That is a good example of our both bringing things to the table. For example, the big problem in artemisinin resistance that Mr Raikes was talking about is probably now in Burma, a country that is quite difficult for the US foundations to operate in, but in which we can. Symbiotically, they started things off and we are able to take on bits using our unique competence. The combination means that we have a better chance of slowing down the spread of artemisinin resistance.

Chair: A good example.

Q96 Hugh Bayley: Like Gates-

Mr Duncan: I hope I was not too rude to your Archbishop.

Hugh Bayley: I will be reporting back, of course. Some ecclesiastical court will deliberate, probably for 25 years.

You as well as Gates are big donors to GAVI. The conclusion of Simon Maxwell, who did some work to advise the Committee, is that the cost per life saved of investing in vaccines, particularly the new ones such as the rotavirus vaccine, is pretty high-more than $1,000 per life saved-and much higher than some other interventions, such as investing in nutrition or vitamin A supplements. Can you explain what cost-effectiveness analysis DFID has undertaken, on its own or with Gates, before deciding to put big money behind developing some of the new vaccines that are costly in terms of impact?

Mr Duncan: It is a fantastically important question, but I would be strongly critical of Mr Maxwell’s sweeping conclusion-very critical indeed. I think it is glib. The thing about vaccines in the impoverished world is that there is no market. No one is going to invest, easily, in finding a vaccine for millions of people who do not have two pennies to rub together to pay for it. To develop a vaccine it takes the amazing work of a foundation like Gates on research in the first place, because otherwise there would be market failure-this just would not happen. The intervention of a private foundation overcomes that market failure and gives the poorest people a chance to be vaccinated.

At the early stages you could easily work out a calculation that says it is a thousand quid per jab or something. But once you cover the millions, you are down to much smaller figures. What price do you put on the lives that are eventually saved?

Q97 Chair: In defence of Simon Maxwell, we asked him to give us some indication of what challenges you could put into this. So he has served us up something and you have answered it pretty robustly. Just to put the context.

Mr Duncan: Okay. I thought I was being a bit soft. My view is that the early costs can be said to be very high, but the fantastic story that runs behind GAVI and the research that comes from a private foundation like the Gates Foundation converts into the low-cost jab in the jungle, if you like, that saves millions of lives from vaccine-preventable diseases. It is a fantastically positive story.

Q98 Hugh Bayley: This is a turn-up for the books, isn’t it-me demanding cost-effectiveness and you telling the Committee that capitalism does not work?

Mr Duncan: Talking about market failure.

Q99 Hugh Bayley: But there you are. Things move on. Just so that we can look at the detail, perhaps we should send you the note that Simon Maxwell wrote for us, because we would welcome a techie response from your officials.

Mr Duncan: Certainly.

Hugh Bayley: Of course, it is not saying that immunisation costs $1,000 a jab, just that you give thousands of immunisations for each life you save.

Mr Duncan: Can I just point out the scale of what we think the last GAVI round achieved? It is going to vaccinate some 250 million children and we estimate that it will save 4 million children’s lives. Those are staggeringly strong statistics, in my view.

Q100 Hugh Bayley: How much do you draw on that when you are busy setting targets for your Department? You draw on the figures that you have quoted in respect of some of your targets. How would you tease out what the DFID contribution is in relation to the lives saved, compared with the other donors?

Mr Duncan: I might turn to Ian in a moment. The obvious answer, by a pretty straightforward calculation of burden share, is that in GAVI, for instance, you have a pretty defined product and series of outcomes, and a clear measure of who is putting what into the pot. At the last funding round earlier this year, which I think was a real triumph and a personal success for the Secretary of State in leading it, the calculations are pretty straightforward in the GAVI exercise.

Ian Curtis: That is absolutely right. We keep it quite simple. It is in proportion to our contribution to the pot.

Q101 Hugh Bayley: There has been some criticism that these vertical funds tend to finance things that are popular or sexy-perhaps eye-catching is the right word-diseases at the expense of investment in the general health provision in a developing country. How do you react to that?

Mr Duncan: Behind your question is the suggestion that by concentrating so much on this, perhaps we are neglecting broader programmable health projects in our countries, be it multilaterally or bilaterally. I have asked this question robustly in the Department and feel genuinely that what GAVI and Gates are doing complements and supplements and does not displace. We are still doing a lot in health and education. It is fair to say private foundations, on a scale, do not tend to focus as much on education as they do on measurable health interventions. But I do not think there is any displacement or consequent neglect. The demand out there is so massive that we struggle to meet it in terms of what we in the multilaterals do, particularly in an ever more turbulent world, with other demands on our resources.

But I think we have got the balance about right. One important element of the multilateral and bilateral review that we went through when first coming into government was not just to look at what works but the aggregate picture. The aggregated picture of what our bilateral and multilateral activities are, combined with the overall picture of who is doing what where it is needed, has ended up with a pretty balanced, sensible structure.

Q102 Jeremy Lefroy: On the welcome news about the new malaria vaccine from GSK, which is under trials at the moment that will conclude by 2014, would we have reached this stage without the Gates Foundation? When, hopefully, the trials are concluded and the vaccine can be rolled out, how do you anticipate that being funded in the countries that need it?

Mr Duncan: The malaria vaccine initiative has been all to the good. The great thing about the resources of the Gates Foundation is that it can go through frontiers that we cannot quite go through. In terms of funding, we do not fund research, as such, but we will buy and therefore will want to encourage the activities of UNITAID, for example, to ensure that the buying is as efficient and economical as possible. We are, in the end, a customer rather than a scientific researcher, but, again, the symbiosis here has been good. Perhaps I should talk to Chris, our scientific brains, about this. Note the plural.

Chris Whitty: The RTS,S vaccine is a great scientific advance, but we do not yet know what its role will be in public health. There are two things at least we do not know. We do not know how long it will last for. At the moment it has 50% efficacy. If it wanes quite fast, that will obviously make it a less attractive public health proposition. We do not know what the price will be. GSK has said that it will be costed at 5% above manufacturing, but how you cost manufacturing is an art as well as a science.

We will need to look seriously at how its cost-effectiveness, in addition to things like bed nets and treatment, stacks up. If it is in the range of a thing like an insecticide-treated bed net, we will want to invest in it. If it looks like it is less than that, that would give us reason to be more cautious.

Mr Duncan: Forgive me if I just add one thing. Within this there is the Drugs for Neglected Diseases Initiative, which probably would not be happening without this structure with Gates. It also addresses the question of whether we are just going for the easy hits and neglecting some areas that are a little bit more difficult to penetrate. Again, out of this partnership emerges a focus on some things that would otherwise be neglected.

Q103 Jeremy Lefroy: Just coming back to the first part of my question, would we have reached this stage-we are talking about the efficacy of private foundations-with the vaccine were it not for Gates?

Chris Whitty: No.

Q104 Jeremy Lefroy: Right. Thank you for that. DFID had advice provided by Gates’ technical experts for the development of the framework for results for malaria. Were they the main contributors or did you receive input from several sources?

Chris Whitty: We received inputs from multiple sources, including other foundations, including, for example, the Wellcome Trust. But we started off with a full evidence review, which we got externally peer-reviewed by leaders in the field from around the world. We got information from the WHO, Gates, Wellcome, and many other organisations. It was definitely not one foundation helping drive our policy.

Jeremy Lefroy: Thank you.

Q105 Hugh Bayley: I thought you made a very important point, Minister, about-

Mr Duncan: Oops.

Hugh Bayley: No apology needed. You are safe on this. Your important point was about how the private foundations have focused disproportionately on health and rather less on education. What is DFID doing to try to persuade private foundations to do more in the field of education, particularly girls’ education? Does the fact that there is more of an appetite for private foundation money to go to health rather than education have an impact on DFID’s spending resources? Do you spend more than you otherwise would on education because you are getting more funding from non-government sources for health?

Mr Duncan: It is undeniable that if billions were flowing in from another source, matching what we are spending, we could halve what we are spending, theoretically. Life is not like that. They are focusing on other areas, which is fine, as far as it goes. We have tried to encourage private foundations to look more at education. The Pearson Foundation is doing things through a global partnership with us.

You have to think about the structure as well. Primary education, in particular, tends to be one of the first services that any functioning Government will want to provide. You could equally say the same of health, but not necessarily in all the fields that GAVI and the Global Fund are working. They will be doing much more basic interventions. If you are looking at having to work with a Government, a ministry and the whole structure, that is not necessarily as easy for a private foundation to do as it is for a Government-backed Department like us, working as we do with Departments in other countries, and the UN and other institutions. Education is not as penetrable a sector as the areas in which the foundations are working. That does not mean that we will not want to encourage them, but there are more obstacles.

Ian Curtis: I am seeing a number of foundations now becoming increasingly engaged with education. There are Global Partnership for Education meetings over the next couple of days. Foundations have been engaging quite actively in that process. We will wait and see the level of commitment to education coming out of the GPE meetings. In the next one or two years it will be interesting to see whether there is a more significant move to education, beyond health.

Q106 Pauline Latham: Can you tell us a bit more about how the Nike Girl Hub works, both in the UK and in DFID offices in Ethiopia, Nigeria and Rwanda? What are the outputs of the project and in what ways has the involvement of a private foundation influenced them? Do you think the Nike Hub could be replicated in other sectors?

Mr Duncan: I should say at the outset that I do not lead on Africa, which is where most of this happens. I have done my homework on the foundation itself, but you will forgive me if I do not know the details of all our programmes on the continent.

The Girl Hub supported by Nike is a strong influence in shaping the entire DNA of DFID in all our partnerships, putting girls really high on the agenda. Its fizzy, energetic championing of girls’ needs is heartening. It is inspiring when you see it. The foundation is engaged in specialist consultation on the design of something we call the Girls’ Education Challenge.

Ian, perhaps you would like to add to what emanates from the Girl Hub in Palace Street, in terms of practical effect.

Ian Curtis: It is centred out of Palace Street, as you will know, with nodal points in a number of our country offices, including Bangladesh, South Sudan and Nigeria. It is interesting because it considers empowering girls in a number of ways, including their safety, education, economic opportunities and livelihoods, and works with them in-country in seeking to achieve outcomes in those areas. I see it as a significantly transformational programme.

Mr Duncan: It has been deeply involved in shaping our programmes in Kenya, particularly north Kenya and, as you mentioned, in Ethiopia. It is there as a real hub of expertise to help design the most effective programmes we can to affect girls in some challenging countries, where society and poverty keep them on the bottom rung.

Q107 Pauline Latham: You may not be able to answer this, but are there any plans for them to move into DRC, where girls’ and women’s lives in some areas are incredibly impoverished, because of all the raping and defiling of women and using them as a tool of war?

Mr Duncan: I do not know, but I am happy to write to the Committee on any detail. In my brief I have examples in Ethiopia, Kenya and Rwanda. I am sure the answer is yes, but exactly what the detail is I cannot say.

Q108 Chair: Can we arrange for the Committee to come and have a look?

Pauline Latham: We should go to see this, Chairman. We are allowed to travel, after all.

Chair: I think we can travel to Palace Street.

Mr Duncan: You can get down the side of the park.

Pauline Latham: It would be useful, as they are so close, not to have them here but to go and see them in situ.

Ian Curtis: I am sure that Ellen Wratten would be delighted.

Mr Duncan: Transparency is all. We worship at the altar of transparency.

Q109 Pauline Latham: DFID has said, "Girl Hub has supported DFID’s top management group in redesigning its gender strategy," which you alluded to, "to ensure that girls and women are a key priority for every country." The Secretary of State, Andrew Mitchell, said that about girls and women, but exactly which gender strategy are you referring to and who else has been involved in the consultation on this?

Mr Duncan: I think it is everything that was on your list there. Basically, it is as if there is a great big sign in every room in DFID saying, "Think girls." It is understood to be so important in the design of everything that it is absolutely there in our DNA. This can express itself in different ways, depending on the challenges of the country in which we are working. Every country has different challenges, but particularly in DRC and, I guess, Sudan, there are some pretty mucky challenges that we have to address at the moment. In terms of who we have consulted outside, we are always there sharing our expertise.

Ian Curtis: This is something that we have been prioritising for the last three, four or five-plus years, as I am sure you are aware. Actually, Mark Lowcock, our new Permanent Secretary, was the gender champion within DFID, so he is able to drive this now from-

Pauline Latham: From the top.

Ian Curtis: Precisely. We engage with others very widely on the issue of gender.

Mr Duncan: I do not know what percentage of our officials are women-I am totally guessing when I say this-but it certainly feels, in terms of me being told what to do, that it is well over 50%.

Q110 Pauline Latham: I suppose I could come back and say that, unfortunately, there are not many Ministers who are women.

Mr Duncan: No, but we have Baroness Northover in the House of Lords and Baroness Stowell. Okay, there are three men and only three Ministers, but what matters far more is how we think and what we do. There is absolutely no doubt whatsoever that gender is an important ingredient in everything we do.

Pauline Latham: Do not get me wrong. I would not want a token woman to be put in there just because she was a woman; it has to be the best person for the job.

Q111 Chris White: Some UK-based foundations have commented that it is difficult to access DFID at the Civil Service level. How would you respond to that criticism? How do you manage these relationships through the Department?

Mr Duncan: Ministerial time is precious, so just because someone is a foundation does not mean that they can say, "I demand to see the Minister." It has to be effective in terms of the work we are doing. Any foundation can have access to us and officials will always be available to talk to them, but as their scale gets larger so their importance for us will grow as well, along, of course, with their focus and aid impact. We are pretty open. But where a foundation has a particular enthusiasm focused only on one small part of one sector in one country, the right port of call for that foundation would be the country office, so that we can effectively insinuate and integrate them into the picture of what we are doing in that country as a whole.

We are not standoffish at all, but we have to rank them a bit and have an evaluation process in respect of how useful they are going to be. We welcome all philanthropic generosity that can be focused on what we are trying to do. But we have to have an eye on whether it is £100,000 a year or £1 billion.

Q112 Chris White: A fair point. Some UN agencies and bilateral donors have set up partnership offices. Would you consider that?

Mr Duncan: Meaning what, quite?

Q113 Chris White: Bilateral donors and organisations such as USAID have opened up partnership offices to facilitate the joint working between foundations.

Chair: An access point really.

Mr Duncan: You mean a department within DFID that would say, "Come via this portal and we’ll team you up." He is sitting on my left. Perhaps you would like to explain the access we offer to foundations.

Ian Curtis: Exactly. I am head of the global partnerships department. We have a particular responsibility for co-ordinating-I would not say managing-engagement with foundations, because the relationships are many and varied. We take a real-time view and once a year we have quite an in-depth review of how our engagement with partnerships is progressing.

I take the point on smaller foundations and recognise that might be an issue. We would be willing to make an offer if there is a group of smaller foundations that would like to come together and ask for a meeting; we would be happy to hold that annually, perhaps.

Chris White: A sort of a roundtable.

Ian Curtis: Exactly, in the same way that we do with smaller NGOs. Indeed, through BOND, as well, we have regular meetings with groups.

Mr Duncan: That is the sort of thing I as a Minister could or would happily attend.

Q114 Chair: I have a direct follow-up. We took evidence from the Wood Family Trust, a local connection that is Aberdeen-based, and they were complimentary about the engagement with the country programme in Tanzania and Rwanda and the DFID offices. That was not a point of concern. But Ian Wood, who is the principal and the chairman, said that they would like to do more with DFID, but, "Frankly, we could not marry that into the kind of structure that DFID works with." He said the trust "accepted the understandable regulations, restrictions and constraints that [DFID] work under as a Government body", but was frustrated they have not been able "to get that model" that would facilitate a funding partnership. They are relatively new, but they are business-orientated. Basically, he was saying, "My frustration is that what we’re doing and DFID are doing is complementary, but somehow we can’t get a working relationship." He was frank and also said that they want the flexibility and do not want to be bureaucratised out of existence by a partnership, but thinks that they can add value to DFID if the right working arrangements could be found. I do not know whether that needs to be explored better or whether there is a dynamic.

Mr Duncan: Perhaps I should declare an interest. I think they are the group that bought out my grandfather’s company a few decades ago in Scotland.

Chair: They have done well.

Mr Duncan: Not for very much, I would add. But never mind. It is in the nature of private foundations that, if they have their particular view of how they want to go about their philanthropy, they are fully entitled to do it in the way they choose because it is their money. But in as much as they are trying to join us in some kind of collaborative programme, we have to abide by our standards, which are strictly laid down, of course, in terms of auditing and things like that, and in terms of evaluation of impact and value for money, and that kind of thing. That does not mean that we are not flexible, but it is inevitable that, from time to time, we might appear to be so because we have a different methodology.

Motivated individuals who have built up a fortune and want to spend it on what they choose are fully entitled to do it in their own way, but if occasionally it does not match our way of doing things, we have to say, "So be it." It is not that we are unreceptive to any suggestions about changing, but that we would fall foul of something that was hinted at earlier, which is that if we said, "Thank you very much; you’ve got lots of money, therefore we are going to do what you tell us," we would be guilty of slipping away from the standards that we have set.

Q115 Chair: I accept that. To be fair, I think Ian Wood would accept that; that was in his quote. I think he would admit that they are new to it and are learning as well. They have titled their programme. "Make markets work for the poor". They feel that they have something that will help DFID achieve its private sector development objectives and that, somehow, they have not worked out a way of working together that unlocks the two things together.

They are small and are learning, and I do not think that is necessarily a criticism. However, many of us thought that if DFID is really going to get to grips with private sector development it will need to partner with entrepreneurial people with that kind of business background in a way that has not happened in the past.

Mr Duncan: All right. Now that you are talking about that, rather than longer term programmes, we are steadily moving much more to that kind of model than has ever been the case. Yes, we have set up the private sector department, but we also appreciate that some kind of innovative investments by philanthropists can pump-prime markets in a way that we, as DFID, might not do ourselves with our money.

If you are trying to kick-start little markets-an entrepreneur may know how to do that better than we do-we are moving closer to the point where we would consider some kind of collaborative venture than we ever have before.

Q116 Chair: Would there be a role in that for CDC in its new guise?

Mr Duncan: Possibly, yes. I do not know if the scale would suit. I do not know. We are thirsting if not for a new philosophy at least for an amended philosophy to try to bring private sector growth in development into other areas.

Q117 Chair: I think it is something that we, as a Committee, might want to help you tease out.

Mr Duncan: Yes. Certainly, if I was sitting at my ministerial desk and an official came to me, I would say, "Be open-minded about it. Let’s go exploring. Beware of the International Development Committee telling us we’ve wasted a lot of money, but take a few risks."

Q118 Hugh Bayley: In your submission to us you say, in relation to African foundations rather than the Western-based foundations, "DFID recognises that the new African Foundations are playing an increasing role in development." You go on to say that in the autumn you would be engaging in some programmes of work with them and with the African diaspora.

Mr Duncan: I guess that is autumn 2011.

Q119 Hugh Bayley: Yes, 2011, this autumn. Which foundations are you talking about and what activities are you engaging in or about to engage in?

Mr Duncan: A very good question to which Mr Curtis has the perfect answer.

Ian Curtis: I fear I do not have a particularly full answer on that one.

Mr Duncan: I do not know the answer.

Q120 Hugh Bayley: We are genuinely interested. Can you send the Chairman a letter spelling out the activities that lie behind paragraph 54?

Mr Duncan: I can say instinctively that we are looking at foundations that are pretty small, compared with some of the others, so they are quite infant. Of course, you also have to look a little bit at the origins of the money. We have to tread a little bit carefully. But yes, we will write to the Committee with a fuller explanation.

Q121 Hugh Bayley: Okay. We had evidence from Christian Aid that suggested-we touched on this slightly in earlier conversations-that DFID offices in developing countries ought to play a stronger liaison role with the private foundations. I think we are talking about the Gates’ and other Western-based foundations. Is there adequate co-ordination on the ground?

Mr Duncan: Co-ordination is never as adequate as you would like it to be. But it is fair to say that, in all the countries I have visited, DFID is in pole position to act as a ringmaster for development effort in the host country. In terms of gathering UN agencies, NGOs and private foundations-for instance, I was with the Aga Khan Foundation in Tajikistan two weeks ago-DFID is very effective. But we are not the boss. We can exhort and encourage and advise, but we cannot instruct.

In terms of trying to get the optimum co-ordination in any country, we do quite well. It is slightly off-beam here, but DFID’s co-ordinating role in earthquake-preparedness in Nepal has been supreme. I hope that we can have a similar effect in respect of the more practical poverty programmes in other countries.

Q122 Hugh Bayley: I mention in passing the example that the Christian Aid man gave to us from Liberia. He said that the Government of Liberia has set up a philanthropy secretariat that tries to co-ordinate with the philanthropic foundations. In respect of more general governance or capacity-building work that DFID does, that is something that Christian Aid would like you to look at and consider.

Mr Duncan: Yes, we have to show good manners in our host country. Where a country is capable of co-ordinating those who wish to help its people, who are we to say, "It’s us not them"? However, where they are not showing the capacity or will to do that, it is right that we should step in and try to exercise leadership. That is what any head of a DFID office would do as part of the basic job.

Q123 Hugh Bayley: Finally, DFID comes in for criticism in the UK, from time to time, for working in middle-income countries, such as India or China, which we no longer work in now. Is there an argument that such work should be taken on by the foundations, leaving official development agencies like DFID to focus on the poorest of the poor?

Mr Duncan: No, you cannot just segregate the world like that and delineate it in a way that says, "You’re middle income, so the foundations will do it." Who are we to say that the foundations have to, and who are they to say that they are definitely going to? I am sure that they will want to concentrate much more on the poorest. That is the brand image of their benevolence. If we are winding down in Vietnam over the next few years, because it has been a success and is pretty well now a middle-income country, as Indonesia is, we cannot just say, "We’re going. Here, Gates, you go and do it." The world is not like that. It will be much more effective in terms of impact and value for money for us to be working with them in the poorest areas, as we are. We cannot just tell people, whose own money is being channelled as they choose, to push off from the poor and to go to the middle-income countries. If anything, it should be the other way round.

Q124 Mr Gyimah: Minister, just a few questions on transparency and accountability. Currently, all that is required of foundations in the UK is the filing of annual reports and accounts to the Charity Commission. Foundation reports must demonstrate how they are carrying out their charitable objectives in providing public benefit. Are you happy with these relatively light-touch reporting requirements for UK-based private foundations? What are your thoughts on more stringent regulations-for example, the USA’s requirement that foundations pay at least 5% of the value of the endowment each year to charitable purposes.

Mr Duncan: You have two regimes: the foundation regime in the US and the charity regime in the UK. Of course, in the UK it has to be for certain purposes and they have to file accounts and we have our rules. In the US, instead of money just sitting there, they say that a certain amount has to be spent. These are equally valuable and valid sets of rules.

In terms of the transparency and everything in the development sector, we encourage foundations to join the International Aid Transparency Initiative, as the Hewlett Foundation has done. I am also confident that the Gates Foundation meets all those standards in what it does. But we cannot go to a charity in the UK and say, "Oh, because out of your benevolence and generosity you happen to have chosen the development sector, you are subject to a completely different set of rules." This is, after all, private money being spent on other people’s needs.

If, however, through the partnerships we are building up we can encourage them to share, meet and exercise our standards, that is a good thing. I think we are doing that. But it would be ill-advised to suddenly treat the development charity that works abroad differently from the health charity that works at home. Are they subject to all sorts of outcomes as well? We have to be careful not to be too haughty about this.

Q125 Mr Gyimah: On the IATI, you mentioned that the Hewlett Foundation is compliant, and that you are confident that the Gates Foundation would be. What specific progress has been made in that direction?

Mr Duncan: Their transparency standards are pretty high.

Ian Curtis: The Minister has more or less covered it. There are conversations going on at the moment. It is interesting that foundations talk to each other. Hewlett is highly influential and I can see that, over time, a number of foundations will be drawn into providing information to IATI as part of their transparency process.

Mr Duncan: It is also in their interests, and they will want to more and more, because they have their dignity. They are inextricably bound up in the reputation of the main funders, and they will want to meet the highest standards. They may disagree about how to go about it and they might have slightly different principles, but by and large we are all pushing in the same direction.

Q126 Mr Gyimah: I have a lot of sympathy with your view that it is their money and who are we to tell them what to do with it and impose onerous standards on them. What steps can we take to make aid flows from private foundations easier to track? Yes, it is their money, but is there something we can do-for example, giving the OECD development assistance committee a role in collecting those data?

Mr Duncan: Yes, we would encourage full transparency in what is given, particularly where it is done on a scale that has obvious impact in any country. I chaired a DAC donors’ conference the other day. We may talk about private foundations, but many countries do not meet the sort of transparency that we would like. In the Arab world there is an extraordinary generosity and direction of resources into many needs, but accounting it is not easy-but we are getting there. I hope there will be something clear about this at Busan. But in terms of the private foundations, I would sum up this entire session in a sentence: don’t look a gift horse in the mouth, but every now and then give it a purposeful prod.

Q127 Chair: I reassure you, Minister, that the purpose of this inquiry is not to come up with a gamut of recommendations on how we should regulate private foundations-we accept entirely that they are precisely that. It was really just to see how they play in the development scene, the interaction and interconnection, and whether more could be done to add even more value to them. That is what we are looking for. I want to reassure you that there is not a load of new regulations being recommended by the Committee.

On that, we have had evidence on venture philanthropy-philanthrocapitalism-saying that there are people out there who want to do more on this front and asking whether there is a role for co-ordinating and encouraging this, and, indeed, whether there is a role for DFID in doing so. I will come in a minute to a couple of suggestions that have been made. In terms of venture philanthropy, somebody has said that it is profit with a purpose, encouraging people to give money, focused on helping poor people, but in ways that will provide products that will serve their needs competitively and also create a profit-presumably a lower profit and maybe refinanced into it.

Mr Duncan: The answer to your question is an unequivocal yes. This will be a growing process by which philanthropy can have effective influence. If you just give a grant, people will say thanks and take the money, and you have not made any structural change. But if you are lending something that, initially, right from the start, is on some kind of business model-perhaps not as stringent and challenging a one as the normal investor might require-you can get things going that leave a legacy of a working market or an investment that is actually turning over.

This is sometimes called patient capitalism, meaning that they are patient rather than a patient. It is what I call the slow-burn return. The philanthropic investor will be prepared to wait longer and have a lower return, at least to start with, but will at least be getting something going.

Where you have poor access to markets, poor mobilisation of resources and are unable to make that initial investment to get something going that can generate a return, these guys come in, and I think they can have a massive impact. It absolutely ties in with our focus on private sector development and growth as being an essential engine of development.

Q128 Chair: Okay. Jeremy Lefroy has caught my eye, but I have a couple of suggestions. Matthew Bishop and Michael Green, in their session on philanthrocapitalism, had a number of recommendations. I want to pick out two. The 0.7% is obviously a public sector objective. Their argument is, why not have a 1% objective, which was the original one, but with the difference being encouraged to come from philanthropists? I know we have not got to the 0.7% yet, and you might argue that we should do that first, but is there any scope for that?

Mr Duncan: Do you know what? I would rather just get on with the 0.7% and try to get other countries to follow suit than end up having an argument about burden share. How do we know which countries will be able to generate the resources of a Gates or a Hewlett Packard, or whatever? You cannot fit that into a definable pattern. Is it all going to come from America, China or India? Many people across the world are enormously generous in their support for international development, and we encourage that, not just in respect of disasters, but regularly. If you try to demand that private generosity should be made to fit into an international straitjacket, that is not the best way of encouraging them.

Q129 Chair: Would your view be similar to the one that encourages, as some have suggested, an international philanthropy conference in London, where effectively the Buffetts and the Gateses come along and say, "We’re doing it, why don’t more of you?" In other words, it is not government, it is their initiative-but we are just saying, "Why don’t you do it?" What do you think of that?

Mr Duncan: The question is whether something like that can get traction. We are seeing, in America, the phenomenon of some of the very richest-

Chair: An awful lot of bankers ought to have a conference.

Mr Duncan: Absolutely. A different sort of traction for them, perhaps. You have the Buffetts and the Gateses, and people like that, saying, "Well, I’m going to give so much to my family, but the rest of it’s going to be in a foundation." There are not so many of those people in the world, but it is great when they crop up. But they may want to give to other causes than development.

Again, we are back to asking to what extent you can somehow call upon private generosity having to fit into our global model. I am cautious about that. I am far more grateful for what they do than I am insistent about what they should do.

Q130 Jeremy Lefroy: I am delighted to hear that. When I have looked at venture philanthropy, I have seen that some of what is going on with it in developing countries is more innovative than what is going on in this country or across the developed world. Do you think that there is a way in which lessons can be learned or there can be feedback from the rather innovative approaches, including those of DFID in some countries, to the Treasury to UK business and civil society? Sometimes, the world out there, in developing countries, is rather exciting, with new ways of doing business, and so on, but back here we are almost getting left behind. Does DFID have that kind of feedback into the UK mainstream?

Mr Duncan: Yes, it is difficult to think of how many examples would transfer from the developing world to the developed world.

Q131 Jeremy Lefroy: I am thinking particularly of these impact investments.

Mr Duncan: Yes, I am racking my brains for an example. Micro-finance is one example. Look at what we think about our banks at the moment and look at what we are doing with micro-finance in Bangladesh and India and other parts of the world. There probably is some read-across from which we can learn, rather than just telling them how to do it. The vehicle for that may be the philanthropic capitalist who says that he is prepared, with his own money, to do some good by taking the risk, which might completely crumble, but at least if it works well they will have done a lot of good to people in need.

We always have lessons to learn from other parts of the world, be they rich, poor, near or far. We are open-minded and will try to translate anything that we experience in our work that might have wider application.

Q132 Chair: There are some specifics. You mentioned Bangladesh. I happen to be going there tonight. Given the political difficulties of the founder of the Grameen bank, one wonders whether the organisation might be better focusing its activities outside Bangladesh more than it has done, because it has created quite an attraction. Or for that matter, DFID’s partnership with BRAC within Bangladesh could have wider implications. I understand that the Dutch Government have partnered with BRAC to do some poverty reduction projects in the Netherlands.

Mr Duncan: That is amazing. BRAC is, of course, doing things outside Bangladesh. I did not know that they were doing that one. They are a remarkable organisation that is doing things one would not expect, given their origins.

The Grameen case, as you well appreciate, was quite complicated and was so tied up in the difficult politics of Bangladesh. But as a model it was good. In India, there are some problems with micro-finance. At what point does it turn from helpful finance into loan sharks demanding their money back?

There are moments when micro-finance can go sour. It is important to ensure that it does not.

Q133 Chair: Okay. Thank you. I hope you will appreciate that this was a bit of a side-journey for the Committee, looking at something a bit different from the main stream of the Department, but we have learned a little.

A final question, because we are having difficulty getting people to come and talk to us. What about the role of high-profile advocates. They fall into two categories. You have the Bill Gateses and the ones that are qualified, motivated and resourced, and those who you might regard as celebrities, but who have a real audience out there that listens to them and might respond to them-whether it is the Annie Lennoxes or Bob Geldofs. From where you sit, how do you feel these interventions cut across what you are doing?

Mr Duncan: They have done more for aid awareness and development awareness than any DFID budget could ever have done. They have reached people in terms of the young and the otherwise uninterested who politicians could never have excited. When I first sat down with Bob Geldof, I was astonished at his depth of knowledge and the real intellectual calibre of his approach to development, which was truly impressive.

Of course, it is not just about persuading people here. When knocking on doors in African countries-no doubt Bob teaches African leaders some new and exciting adjectives-he is persuasive there, too. So let’s have more of them.

Q134 Chair: Does it not also help counteract the rather negative view of aid that is creeping in at the moment? For example, the idea that it is wasted. These people say, "Well, actually, it’s not wasted; we believe it’s the right thing"-whether they are the Gates Foundation or the Geldofs.

Mr Duncan: It does. Comic Relief has, although that is not for disaster relief, which people obviously support; it is for much more established continuing interventions, which they count-they say that 50,000 kids will be able to go to school, for example. That chimes with our philosophy. It has been good and I hope that the Committee will take stock of the polling this week, which has shown, pretty well, that 50% or so of people-I cannot remember the exact figures in the papers yesterday-fully support our spending on development. Curiously, a large percentage think we are spending some 50% of the entire Government budget on it. When you tell them it is only about 1%, they do not really have any grounds for complaint-at least, not in respect of the way that people have been complaining.

Q135 Chair: I think a lot depends on how you ask the questions-what your motives are.

Mr Duncan: A bit of ingenuity never goes wrong.

Chair: Thank you, Minister, and thanks to your team. I hope that you will find our report of some interest. Thank you for your effort.

Mr Duncan: Thank you.