International Development (Official Development Assistance Target) Bill
The Committee consisted of the following Members:
Kate Emms, Committee Clerk
† attended the Committee
The Chair: Should we still be debating the Bill at 11 am, I will suspend the sitting in order that those who wish to observe two minutes’ silence to mark Armistice day may do so. I understand that the Division bells will be rung at the beginning and end of the two minutes.
That the Resolution of the Committee of 4 November be amended by adding, at the end, the words “, except that the Committee shall not meet on Tuesday 18 November and shall meet on Tuesday 25 November at 2 pm”.
The Minister of State, Department for International Development (Mr Desmond Swayne): I will ask the Committee to do three things in this short debate: to vote against clause 5; to vote against the schedule; and to vote in favour of new clause 2.
I made it absolutely clear on Second Reading that I have grave reservations about clause 5. We currently have robust arrangements for holding the Government to account in the form of questions, written, oral and private notice—urgent questions in newspeak—and a robust Select Committee. The Independent Commission for Aid Impact is also working well. Whenever I make decisions, it is proper that I must always consider how to defend them at questions, how to justify them to the Select Committee and how they will be examined by the ICAI. We should therefore look to strengthen those arrangements, rather than to provide an additional layer on top. We do not do ourselves any good by continually passing our proper responsibilities to other bodies. The whole thrust of this Parliament’s policy has to be to bear down on the creation of new statutory bodies. This Parliament passed the Public Bodies Act 2011, and we seek to eliminate what have been called quangos and other such bodies. It is proper that we should do so by avoiding that in this Bill.
With the hon. Member for Aldershot being absent this morning, I believe that we are all of one purpose in that we are keen to see the Bill reach the statute book. It is not, however, sufficient to deliver an overwhelming parliamentary majority in favour of such a Bill, which we deployed on Second Reading to secure a closure and then the Second Reading, as the Bill must also be considered on Report, at which we will again have to marshal that overwhelming majority. That is more difficult to do on Report, because the majority has to be deployed for a number of different groups of amendments. The key to the success of a private Member’s Bill is not only the parliamentary majority, but the scope of the Bill. Keeping a lid on its scope reduces the potential number of groups of amendments and significantly contributes to the ease with which passage might be secured on Report.
Clause 5 opens up the scope of the Bill widely. Indeed, were the clause to remain, I would have to table a whole raft of amendments on Report to define and design the organisation that is referred to in the schedule, but is not defined or confined properly. We will do significant damage, perhaps dealing a fatal blow, to the Bill if we leave clause 5 in it, because the clause opens up the scope to further amendments by any number of those who are opposed to the passage of the Bill and want to delay it on Report.
With the help of my right hon. Friend the Member for Berwickshire, Roxburgh and Selkirk, we have come up with a new clause that does what was intended in the clause, but without any of the disadvantages with respect to policy on public bodies or to any opening up of the scope of the Bill. The new clause does exactly what it says on the tin. It places a duty on the Secretary of the State to seek independent confirmation and then a duty on her to report exactly how she has done that to the House. Doing it that way is consistent with the way in which we have been doing things recently.
For example, when we dealt with the private Member’s Bill of my hon. Friend the Member for Stone (Sir William Cash), we placed exactly such a duty on the Secretary of State with respect to gender issues—exactly as we have designed it in the new clause. With the International Development Act 2002 and the International Development (Gender Equality) Act 2014, we have a duty placed on the Secretary of State in exactly the same way as in the International Development (Reporting and Transparency) Act 2006 a duty is placed on the Secretary of State with respect to the millennium development goals. That is a proper way to limit the scope of the Bill, but to provide exactly what was intended.
I reiterate that I am asking the Committee to vote against the clause and the schedule standing part of the Bill, and instead to vote in favour of new clause 2, so that it is added to and then stands part of the Bill.
Michael Moore: I support the changes to the Bill outlined by the Minister. At the previous sitting, we rehearsed the importance of the principal measure in the Bill, namely committing this and future Governments to maintain 0.7% of our gross national income as spending on official development assistance. That sets the context for today’s discussion.
That independent verification and focus on efficient and effective spending of ODA expenditure are an essential corollary to the overall principle. In our constituencies up and down the country, regardless of party affiliation, we are all conscious of the need not only to make the argument for international development, but to reassure constituents that when we commit such a large amount of public money to ODA it is spent not only appropriately, but effectively and efficiently.
In drafting the Bill, I drew on previous draft Bills, going as far back as the time of the previous Labour Government. I said on Second Reading that I thought the independent international development office proposed to fulfil the important function set out in the Bill was a good model, but that I was open to suggestions as to how it might be improved. I listened very carefully to what the Minister said on Second Reading, and he and I have discussed that in the interim. I am grateful to him and his officials for their patience. I accept, within the other constraints that he referred to, the replacement of a specific commitment to the IIDO with this new requirement and duty on the Secretary of State to get an independent evaluation. I think that we will meet the spirit of that requirement, and I hope that colleagues will feel able to support it.
The Minister rightly stressed that the first duty for independent scrutiny lies with the House. He pointed to his accountability on the Floor of the House, be it at questions or in other debates, and the excellent work of the International Development Committee. At least two of its members are here today. Under the stewardship of my right hon. Friend the Member for Gordon (Sir Malcolm Bruce), that Committee does a lot of important work, as does the existing mechanism—the Independent Commission for Aid Impact, which was set up by the previous Secretary of State for International Development. Over the course of this Parliament, it has really begun to get its teeth into the issue of how we spend our development assistance. The Minister did not refer specifically to ICAI in his opening comments but I hope that he would welcome the work that it has done, as I do. I hope that we will get support for the spirit of ICAI from across the Committee, if not for the legislation itself. We need to ensure that our aid is spent effectively and efficiently. I hope that colleagues will support us in altering the particular way in which we do that, while clearly maintaining the spirit and intent of the Bill.
Mr Stephen O'Brien (Eddisbury) (Con): I rise to lend my wholehearted support to the Minister’s proposal. He has obviously had helpful and constructive discussions with the promoter of this private Member’s Bill. He laid out the narrow focus in terms of the procedure and that is unquestionably the right approach to take, particularly when dealing with a private Member’s Bill, which carries so many aspirations and hopes right across the House. Limiting the scope to precisely what we intend to achieve in declaratory legislation seems absolutely right, without overcomplicating it. It is welcome on those grounds. We are very grateful to the Minister, who has had such a long and distinguished career in the Whips Office that he understands these issues and their minutiae. I think that many of us were missing him last night.
In terms of the approach that has been taken, a number of us have been in discussions with the promoter of the Bill and we have slight misgivings about the establishment of the IIDO—not because it was a bad thing in itself, but because it was another level of bureaucracy and the duplication that it implied was not needed. I ask Committee members to cast their minds back to 2010, when I was part of the ministerial team at the Department for International Development. We worked long and hard on how to meet the promise that we should have total independent scrutiny and evaluation of international development expenditure.
We came up with the ICAI, and we have been extremely pleased with the members who have served on it under an expert chairmanship. They were able to make their own selection of the projects they wanted to examine, after looking at a menu of options. None of that was steered by or in any way discussed with Ministers or the Department. It was entirely an opportunity for ICAI to make its own judgment; indeed, that is precisely what it has done over the years. I think everyone would agree that that has had a good and beneficial effect, in terms of scrutiny and ensuring real accountability for the massive aspirations that are tied to this public money reaching the intended destinations and public goods. ICAI now has a track record.
It is therefore also right that ICAI is not specifically referred to in the new clause. Who knows what might happen in future? The point is that new clause 2(1) establishes the principle that there should be independent evaluation of the Secretary of State’s duty to report on what has happened, based not just on the definition of ODA, but on the value for money aspect, so that we get that wrapped in at the same time. That plays to the independent evaluation of the extent to which ODA, as defined, is met and used to reach its intended purpose. That is better and more robust. I therefore agree that new clause 2 has huge merit and is to be supported, because it is robust and will survive any changes to future definitions of the administrative arrangements for such independent evaluation, because the Secretary of State of the day will always be able to rely upon whatever process has led to that and that helps to meet that duty.
The key point, which neither the Minister nor the promoter of the Bill have yet mentioned, but which I think is important in underpinning why new clause 2 works, is this. The design of ICAI—which at the moment is the best proxy we have for the potential office that will carry out the evaluation over the coming months and years will be like—means that it does not report to Ministers; rather, it reports directly to the Select Committee on International Development. As the promoter of the Bill quite rightly said, the first point of independence is the House of Commons.
That was precisely the thinking behind ensuring that ICAI reported direct to the Select Committee: because it reports an independent evaluation straight into the independent assessment and accountability of a Select Committee of this House, not to Ministers. As Ministers, we knew at the time that we were creating a rod for our own backs, which was somewhat novel. That indeed proved to be the case, not least in the case of TradeMark Southern Africa—one of the programmes I
Of course, I look back with great concern and some humility about why I, as Minister, had not spotted that. In truth, it turns out that there was no way I could have, because the information necessary to do so was not available to me, even though it might be argued that it should have been. That said, that was ICAI operating exactly as it was intended to: not giving Ministers a comfortable ride, but giving the Select Committee, with cross-party representation from across the House, the information to make a judgment on whether the Department was making its selections and decisions and dispensing public money to the very best effect to achieve the intended goals.
For those reasons, this measure is a huge improvement to what is already a Bill that has enormous merit and meets our aspirations. I therefore hope that the Committee feels that the three requests that the Minister has set out this morning should be met wholeheartedly.
We support the strategy of voting against clause 5 and the schedule, and allowing new clause 2 to be added to the Bill, for the clear and simple reason that we are committed to this Bill passing in this Session of Parliament. We believe it will be much better if we get on and do that today. Having said that, there are a number of areas within the scope of the new clause that I need briefly to probe. With your permission, Mr Crausby, I will refer to some of the amendments tabled by my predecessor in this role, my hon. Friend the Member for Wirral South (Alison McGovern), by way of introducing those points.
My hon. Friend’s amendments 3 and 5 were about whether members would have true independence, rather than only apparent independence, based on a record of salaries, pensions and allowances, and also potential conflicts of interest. Can the Minister say something about that, given the limited pool that the new body has to fish from, in terms of its make-up? Amendment 4 says:
Our concern with new clause 2 is primarily to ensure that the language is robust enough not to cause further difficulties on Report. While we maintain an interest and reserve the right to move amendments on Report, my hope is that the Minister’s answers today will be sufficient for us to avoid doing that.
However, my primary concern is with the term “value for money” in new clause 2. “Value for money” is obviously a moveable feast. The risk is that it will mean one thing to one person and something entirely different to another. I would like the Minister to place on record his view of what “value for money” means and, in particular, given the statutory duty being created, whether it is analogous to any other area of current statute. That will be vital in ensuring an easy passage for the Bill.
I do not want to detract from the welcome cross-party consensus on the Bill. Indeed, on the Friday that it received its Second Reading, the majority of Members present who voted for the Bill were from my party. We certainly hope to continue with that, but at the same time I want to clear up this “value for money” issue, so that there is a broad approach that looks at aid in the round and not just in terms of individual projects. It is a critique I have made before: that there are two ways of doing development—one where we treat it as the charitable arm of the UK Government and another, where it is allied to genuine political leadership that gets change in the institutions that enforce inequality and poverty in the first place.
Mr O'Brien: The shadow Minister makes an important point. I am sure the Minister will want to address the question he has asked. However, the advantage of “value for money” is that if it was purely a matter of certifying the assessment of ODA-qualifying money and what percentage had been achieved against GNI, there is a danger—a suspicion even, particularly among those who are not as comfortable with this approach to legislative provision as we are—that, in order to meet that aspiration, money might be thrown out of the door. Therefore, the “value for money” definition is a crucial part of this. It shows that this work is not done just on a project-by-project basis, but that we actually have a well designed 0.7%, rather than simply meeting that as an arbitrary number, good though we believe it to be.
Gavin Shuker: I absolutely agree with the right hon. Gentleman. All of us who believe in the power of the UK to take global leadership and make a difference around the world need to constantly make the case about the value to the UK taxpayer in doing so, but we also need to look at the projects going on around the world to see whether they represent value for the communities being served. My primary concern is with the definition of that value and who makes the judgment. At the moment, there is no clear definition in the legislation, which we would support, of what that may mean. Although I do not disagree with the general intended direction of travel, I would appreciate clarity from the Minister so that we might reserve judgment on how best to strengthen that; indeed, his words may be sufficient to do so.
There is an issue around new clause 2 and the deletion of clause 5, and a concern about the duty of the Secretary of State. We completely agree that the Secretary
Finally, we support the strategy of trying to simplify the Bill and ensuring that it goes through by removing clause 5 and the schedule, and agreeing to new clause 2, but we want the tightest possible language in place to ensure the accountability required so that we can ensure smooth passage on Report.
Fiona Bruce (Congleton) (Con): I would like to take a few minutes, as a member of the International Development Committee and its Sub-Committee, to which ICAI reports, to make a few remarks about the work of ICAI in the context of supporting the Minister’s proposals. ICAI, which is a non-departmental public body that was established in May 2011 and is responsible for the independent scrutiny of UK aid spending, is focusing increasingly effectively. Its main focus is on maximising the impact and effectiveness of the UK aid budget for beneficiaries, and on delivering value for money for the UK taxpayer.
The words “independent” and “value for money” increasingly signify the work of ICAI. Interestingly, DFID spends £200 million a year on self-evaluation. ICAI costs the taxpayer £3 million and produces 10 to 12 reports a year. Those figures alone indicate how much ICAI’s work provides value for money. It is not only my colleagues in the International Development Committee who are finding that work increasingly useful; the Cabinet Office’s mandated triennial review of ICAI recently found that it performs a vital role and “should be retained”.
I have a few points on the body of expertise and the learning curve that ICAI has gone through since 2011, which is so valuable. The International Development Committee called the commissioner of ICAI as a witness for expert opinion on its investigation into Burma and democracy there. In fact, the IDC does not just meet ICAI informally when it produces its reports, but, as of December last year, all our Committee hearings are held in public and broadcast. We have formal witness sessions, which are proving increasingly effective in connecting with the public and the wider development world. It is interesting that ICAI took note of the IDC suggestion to have thematic reviews, not just reviews of work on individual countries, although they have been effective.
We have recently seen a report from ICAI on how DFID learns about how different countries learn from best practice and how in-country groups share learning
We have also seen some sharp advice and lessons to be learnt in the recent private sector development report, produced by ICAI. That showed that there is much that needs to be done to transform the work of DFID in that regard. It is a similar case in specific countries. We saw a stark example recently of ICAI highlighting the work among school pupils in Nigeria, which did not compare well with that of a private charitable body there. I believe that ICAI is really doing its job as an independent body and increasingly connecting with the public.
Mr O'Brien: It might be helpful to ensure that we add that it is not unique to ICAI to have an independent ability to evaluate those expenditures on international development. That is why the generic drafting is helpful. For instance, on value for money, and those increasingly thematic approaches to evaluation, the Public Accounts Committee did an evaluation on the expenditures on malaria control, which was extraordinarily valuable. That Committee then took a very active interest in those findings and, as a result, was able to improve what was already a well-established and well-positioned series of projects to try to bring down the world burden of malaria. Unquestionably, we all greatly benefited from that independence and evaluation.
Fiona Bruce: I thank my right hon. Friend for that intervention. I entirely agree that the opportunities for independent review also provide opportunity for increased public engagement and for shared learning across the international development field. That is at the heart of making the most of the taxpayers’ funds. While all of us here want to see the 0.7% expended, we want to see it done effectively. That is why it is so important that we have those different methods of scrutiny and increase transparency and public engagement. That aids shared learning so it is commendable that ICAI has looked at how it can ensure that there is increasing public engagement. In the past year it has updated its website and improved it to include blogs—apparently it had just under 19,000 unique users from the period May 2013 to April 2014—and it has quite a following on Twitter. It seeks stakeholder engagement in formulating its own work plans and terms of reference, is committed to sharing learning at conferences and round table events and engaging with the media to build public awareness of the UK Government ODA expenditure through the evidence in its reports.
It is essential that we have independent scrutiny, but it is not right that we should endeavour to begin ab initio with a new structure, when the structures already in place are working well and effectively to develop and publish transparent, impartial and objective reports, balancing value for money, delivery and impact on the ground with the voice of intended beneficiaries of UK aid.
I thank my right hon. Friend the Member for Eddisbury for his analysis. Of course, he was there at the conception of the independent commission and I found his reflections particularly helpful. In response to the quite proper concerns of the hon. Member for Luton South about the make-up of the commissioners and the costs, and whether those could be part of the 0.7%, I believe that Government recruitment policy should be applied across the piece, rather than confined to specific Acts of Parliament. It is good to apply such policies across Government, rather than deal with specifics. For example, we have a Whitehall target of 50% for female appointments by the end of this Parliament.
There is, of course, a ministerial code for public appointments and I believe that we have to abide by that. It is perfectly proper that those codes should take into account the backgrounds and genders of the commissioners. This is an increasingly important agenda within international development, regarding the impact we make and the priorities regarding women and girls. Equally, the make-up of our own arrangements should be viewed as important.
Currently, the costs of the audit, or of arrangements under paragraph 7 of the schedule, are part of the 0.7%. Currently, within the definition of what counts as overseas development aid, all those functions, including the costs of ICAI, which my hon. Friend the Member for Congleton told us were £3.5 million, come within the 0.7%. She also mentioned the much larger sums that DFID spends in performing its audit function. I believe that those functions are important. If we were not investing in those functions as we do—they are regarded in the development world as the champagne or gold standard—we would have much greater difficulty in reassuring a sometimes sceptical public that the money was being spent correctly, properly and wisely. If we were suddenly to say, “We’re going to exclude the cost of paragraph 7 from our calculation of overseas development aid and the 0.7%,” that would raise a question of principle about why we were not doing so in respect of DFID’s own audit costs.
Gavin Shuker: The Minister is making a principled, sensible argument for the provisions in the amendment tabled by the hon. Member for Wirral South. Will he give a commitment, saying that the costs of the audit would be made public and available? Obviously, it would then be for other people to understand the relative costs of that evaluation, to ensure that those were not out of kilter with the rest of the budget.
Mr Swayne: I am happy to make that commitment. That is a sensible approach. We have endeavoured to be transparent as a Government; we have a website with a tracker tool, dealing with all expenditure down to £500.
If I were to accede to the requests made about audit costs being excluded from the calculation of the 0.7%, I would be making a commitment that the Chancellor would not allow me to make—namely, that there would have to be an increase in DFID’s budget to deal with something that is currently coming out of the 0.7%, but which would no longer. In order to pay for that, we
The hon. Gentleman asked for a definition of the term “value for money”. The independent commission defined value for money in its first report in November 2011. To paraphrase, it is the best use of money to deliver the impact intended for the beneficiaries. That is the current definition. I have had to tackle value for money a great deal in recent weeks. We are at that time of year when I must run a challenge meeting with every team in my portfolio before they present their operational plans. A fundamental part of each of those processes is a statement on value for money: namely, that the money that we are spending is being spent on the purpose for which it was intended and in the best way to achieve the impact.
I believe that paragraph 7 does not end at paragraph 7. A report is produced, which I expect to be picked over by hon. Members at DFID questions, in the Select Committee and elsewhere. I am confident that by being transparent and providing the information, we will get the level of scrutiny that the subject deserves.
Gavin Shuker: Just to jog the Minister’s memory, I also asked specifically about situations in which the body envisaged in new clause 2 would make recommendations, and what duty the Secretary of State would have to respond to those recommendations in terms of the value for money function.
Mr Swayne: I would expect the report to be made public, so I would expect the recommendations to be made public. That is certainly how ICAI works at the moment. Remember that ICAI reports to the Select Committee. If the report is made public, as it unquestionably would be, I do not doubt that the proper mechanism for ensuring that the Secretary of State either provides a very good reason for not abiding by the recommendations or shows how she intends to abide by them will be hearings before the Select Committee or debates in the House.
Mr O'Brien: The Minister is absolutely right. Harking back to when ICAI was created, it was clear in the view of the Minister at the time that ultimately, there should be no prescription as to what should then happen. That gave the power back to the House. Ultimately, it was all about the potential for political embarrassment. The target had either been hit or it had not, and the Government could expect the Opposition to be down their throat if it had not. Moreover, it gave the House the power to raise it in debate, with good evidence, in order to force Ministers to account. He is absolutely right: it is inconceivable that there should be any absence of reaction to recommendations. The intent was that it should be centred on the politics of this House rather than on a prescribed formulaic approach.
Mr Swayne: Yes. The hon. Member for Luton South missed our little exchange during the last sitting, in which I explained the difficulty of meeting some of the targets; I think I likened it to landing a helicopter on a handkerchief in a gale. Nevertheless, I hope that he received the correspondence that I sent to all Committee members on that.
The right hon. Member for Eddisbury has reminded me of his initial contribution and of what the proposer of the Bill said. I certainly intended no sleight of hand by failing to deal adequately with ICAI in my original remarks. I am a great fan of ICAI and enthusiastic about the preferred candidate for chairmanship, Dr Alison Evans; that is an important gender issue for me. I would say that at least one of the recent ICAI reports did not bear the interpretation placed on it by the press coverage, as is often the case with Government reports, but I am enthusiastic about the organisation, just as I am enthusiastic about the Bill. I remind hon. Members that I am asking them to oppose clause 5, to oppose the schedule and to vote in favour of new clause 2.
‘( ) This Act comes into force on 1 June 2015.”
This amendment sets the date for commencement.
Michael Moore: I hope that the amendments are relatively straightforward, dealing as they do with a deficiency in the original drafting, for which I take full responsibility and apologise to colleagues. It is proposed in amendment 7 that the commencement of the Bill should be two days before my 50th birthday, on 1 June 2015, and that the territorial extent of the legislation should be to the whole of the United Kingdom. I hope that colleagues will support both amendments.
Mr Swayne: I am not sure that I can add anything to that exposition. It is important that we state clearly when the Bill will commence. The commencement date will give time for the new commissioners to be in place, but will still allow plenty of time for the objectives of the Bill to be met in the next calendar year. With respect to the territorial extent of the Bill, international development is a reserved matter because it is done at scale and it is more effective if we can act in a united way across the kingdom.
‘( ) This Act extends to the whole of the United Kingdom.” —(Michael Moore.)
This is a drafting amendment which adds an express provision about territorial extent.
“(1) The Secretary of State must make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided.
(2) The Secretary of State must include in each annual report a statement as to how he or she has complied with the duty under subsection (1).”—(Michael Moore.)
This amendment requires the Secretary of State to ensure that the value for money of UK expenditure on official development assistance is subject to independent evaluation. It also requires her to include in each annual report (as defined in clause 1) information about how she has complied with this duty.
Michael Moore: On a point of order, Mr Crausby. I particularly thank you for your guidance over these two sittings. I am sure I will be joined wholeheartedly in especially thanking the Clerks and all our colleagues, including those who have taken a faithful record of what we have said. I thank Hansard and everyone else for their support.
I am particularly indebted to colleagues on the Committee who have given up lots of other important responsibilities to be here. It is a mark of the importance they place on the issue that they are here today, as they were last week. I belatedly welcome the hon. Member for Luton South to the Committee. Finally, I am grateful to all those outside this Committee who have supported us. I hope that their support will carry us through to Report and beyond.