4 Policy coherence for development |
27. Policy coherence for development (PCD) refers
to the integration of different aspects of international development
within policy-making. PCD is particularly relevant to a beyond
aid approach, which necessarily entails working on wider aspects
of development, across UK Government departments and with other
actors internationally. This chapter will assess the UK's current
performance regarding PCD.
Beyond Aid: UK policy and impact
28. While there was universal agreement that beyond
aid issues were important, there were different views about how
well DFID and HMG more generally performed in their handling of
these issues. Some were sceptical. For example, Nilima Gulrajani
of LSE said "Currently, there is a palpable sense that DFID's
advisory and advocacy roles at the heart of government have diminished."
Similarly, Owen Barder and Alex Evans argued that recently DFID
had lost its role as a global thought leader.
29. DFID, naturally, took a different position. Its
own evidence submission contained detailed accounts of effective
cross-Government working on such topics as trade, tax and transparency
(all highlighted at the 2013 G8 Summit at Lough Erne), as well
as the major UK Government initiative on female genital mutilation
(see Box 2), involving action both domestically and internationally.
We have witnessed examples of these policies at first hand. We
saw efforts to tackle FGM and other harmful practices such as
early marriage during our 2013 trip to Ethiopia. In Tanzania last
November we saw signs that DFID's longstanding efforts to boost
trade between east African countries are beginning to bear fruit,
with ships in Dar es Salaam port being loaded with surplus maize
bound for Mogadishu. We met an official representing the new joint
DFID-HMRC tax team in Tanzania, and were impressed by efforts
to drive domestic resource mobilisation in the country. The
Secretary of State was enthusiastic about continuing work on tax
agenda of trade, tax and transparency was slap bang in the middle
of a lot of what DFID has been doing, certainly in recent years.
Our ability to be part of that overall HMG team, making sure that
the agenda for the G8 was something that would deliver and could
work for developing countries as well, worked really effectively.
Now we are following up on all of that. We are seeing legislation
passing through on things like beneficial ownership. It can really
unlock our ability to complement that with the tax capability
work we are doing to start to help developing countries really
drive this domestic resource-mobilisation agenda, which is going
to be another big part of the beyond aid policy approach that
we all have.
30. Independent observers also cited successful examples.
The OECD DAC, in its five-yearly Peer Review of the UK, published
in December 2014, said
The UK has made public statements about the need
for coherence between policies to support development. It takes
a useful case-by-case approach to policy coherence for development,
bringing together different parts of government to work effectivelyat
home and abroadon issues of common interest. This has proven
an effective approach to anti-corruption, climate change and trade,
areas where the Cabinet has engaged strategically, and where DFID
has successfully promoted deeper joint efforts with other departments.
Choosing to focus these efforts on a limited number of policy
areas where there are win-win opportunities is strategic.
31. This generally positive assessment is endorsed
by the results of the annual ranking exercise of the Center for
Global Development, the Commitment to Development Index, published
in January 2015. This survey is open to debate but is broadly
a useful exercise. The UK ranks fourth out of 27 countries in
this Index, which covers performance on aid, trade, finance, migration,
environment, security and technology (Figure 3). The UK is the
only G7 country to appear among the top five.Figure
3: Commitment to Development Index (January 2015)
32. Witnesses informed us of practical examples of
joined-up work and collaboration, on such topics as health, science
and technology, and gender:
· On health: We note with approval the cross-Government
outcomes framework 'Health is Global' (although we observe that
this is due to expire in 2015).
The Wellcome Trust told us that "DFID plays a pivotal role
in facilitating partnership working and identifying synergies
between UK partners to maximise engagement in overseas activities.
It is effective in leveraging funding and expertise from other
funders and donors."
PATH confirmed that the UK has long supported innovations for
poverty-related and neglected diseases and conditions through
the Medical Research Council and DFID, as well as commercial investment
from UK-based companies. In fact, of all EU Member States, the
UK is the leading investor in global health research and development,
contributing 0.0049 percent of its gross domestic product.
For the past several years, the UK has consistently been one of
the top three funders of global health research in the world.
· As far as science and technology are concerned,
Research Councils UK said: "The total funding committed since
2005 to collaborative programmes including UK Research Councils
and DFID is nearly £390m. Taken together, these commitments
represent a major co-funding arrangement with a UK government
department for the Research Councils." In addition to collaboration
with DFID, the Research Councils are a key delivery partner in
the Newton Fund, a £375m investment of UK ODA through international
· With regard to women and girls, Plan UK
said: "Recent work on the Girl Summit between the Cabinet
Office, Home Office and DFID has shown a cross-departmental drive
to protect girls in the UK and globally from violence by ending
child marriage and FGM, an approach Plan UK strongly welcomes.
Cooperation with the Department for Health includes for example
the international emergency trauma register through which the
Department of Health is sending NHS experts to provide medical
support to the emergency response in Gaza."
33. These positive comments should not be taken as
implying that the UK scores a 'perfect ten' on all topics where
it decides to engage. Indeed, many witnesses focused on areas
where performance fell short of expectations. Witnesses argued
that there were weaknesses on issues as diverse as global finance,
tax, some aspects of trade (TRIPS, TTIP), human rights, drugs,
oceans, arms, and corruption. There were also many comments about
the links between development, humanitarian and security interventions.
NGOs and academics were particularly critical of the private sector.
· On global taxation, Action Aid said that,
as it stands, global processes on tax are led mostly by the Treasury
and BIS, and developing countries' concerns are not largely necessarily
addressed. ActionAid said that current wave of international tax
rules negotiations, the so-called BEPS (Base Erosion and Profit
Shifting) process does not include developing countries as equal
negotiation partners and does not address many developing countries'
concerns. For example, the BEPS process fails to deal with how
the tax base from multinational companies is shared out between
countriesresidence versus sources taxationeven though
this is of vital importance to many developing countries. In fact,
the BEPS Action Plan explicitly states that its actions "are
not directly aimed at changing the existing international standards
on the allocation of taxing rights on cross-border income."
· On trade, Stop Aids argued that the ongoing
Trans-Atlantic Trade and Investment Partnership (TTIP) is proposed
to contain a much broader range of TRIPs-plus termsdata
exclusivity, patent term extension and othersthat will
affect the UK's ability within the EU to access generic medicines,
which save the UK around £19 billion annually.,
 The Fair Trade
Foundation gave us another example of UK trade policy impacting
negatively upon developing countries. It highlighted that the
agreed reform to the Common Agricultural Policy's sugar policy
will end limits to EU sugar beet production in 2017. This will
make it much harder for the many sugar cane producers reliant
on the EU market to offer competitive prices. Further, the UK's
groceries and market regulation, overseen by the Competition and
Markets Authority, provides good protection for consumers but
has little or no mandate to address wider Government policy goals.
This lack of coherence, according to the Fair Trade Foundation,
is having a detrimental impact on achieving sustainability and
fairness in global supply chains.
· On human rights, Amnesty International
said that, whilst DFID contributes to the realisation of rights
through many elements of its programmes, such as its actions to
improve the lives of girls and women and its humanitarian responses
to crises, it does not embed human rights consistently across
its plans and strategies. It says this makes it difficult for
DFID to mainstream human rights across its strategic frameworks,
meaning policies neglect human rights, and risk being incoherent
with other UK Government work.
· On arms, the UK Aid Network said that
since 2008 the UK has approved arms export licences (including
both military and dual use) worth £51,133,673,291.
In 2013 the Committees on Arms Export Controls reported that the
UK had issued 3,000 export licences for military and intelligence
equipment worth £12.3bn to countries which are on its own
official list for human rights abuses.,
· On transparency and corruption, CAFOD
told us that DFID did not appear to have been at the forefront
of discussion on the development and implementation of the UN
Guiding Principles on Business and Human Rights, even though there
are clearly huge links to the impacts that corporate activities
can have on poor and marginalised communities.
The ONE Campaign said that that up to 3.6 million deaths could
be prevented each year in the world's poorest countries if action
was taken to end "the secrecy that allows corruption and
criminality to thrive, and if the recovered revenues were invested
in health systems."
It said that specific measures that could have a big impact would
· HMT committing to action to tackle secrecy
· FCO using its influence to press for public
registers of company ownership as well as trust transparency in
the UK's Overseas Territories and Crown Dependencies so that action
is co-ordinated and has the biggest impact.
· BIS ensuring that the regulations to transpose
the 4th EU Anti-Money Laundering Directive are fully consistent
with the Directive and enable citizens, NGOs and other stakeholders
to make complaints about companies who do not comply with the
requirements without political interference; and
· HMT, HMRC, FCO and other departments working
together to enable tax collectors from developing countries to
access information about off-shore bank accounts.
· Global Witness made a very strong statement
to us on this topic:
Britain is a haven for dirty money and the people
it belongs to. Many of the world's most corrupt people are free
to park the money they have stolen in London's high-end property
and respected banks. They use our lawyers to set up shell companies
to hide what they are doing, and send their children to our private
schools. They lead extravagant double-lives in one of the world's
great cities while the citizens they have stolen from continue
to live in dire poverty back home [
] There is also more
to do around the concept of 'denial of entry' to deny safe haven
to corrupt individuals.
· Finally, private sector development was
singled out as a sector subject to particularly weak PCD. The
Institute of Development Studies (IDS) noted the large volume
of cross-departmental work in this area, for example, DFID work:
with BIS on the UN Global Compact and the Extractive Industries
Transparency Initiative; and work on trade with UKTI and the Export
Credits Guarantee Department. However, the IDS was sceptical about
the degree to which proper co-ordination over private sector work
was taking place.
34. While there is some attempt to ensure coherence
in these different policy areas, it is not clear how trade-offs
between development objectives and other economic or political
interests are managed. While DFID is playing a leading role in
encouraging "pro-poor" economic development, how coordination
happens in those areas of government activity that either seek
to create more UK business activity or regulate harmful activities
is less apparent. Professor Melissa Leach, IDS Director, told
us that "sometimes the emphasis has been on more private
sector activity without necessarily asking questions about what
kind of private sector activity [
] We need to examine where
there are trade-offs."
35. As these comments illustrate, beyond aid issues
are complex. It is clear
that there might be trade-offs between domestic and international
priorities, as well as trade-offs between spending on poverty
reduction and on global public goods. For this reason, we think
it important to be clear about the overall PCD strategy. The UK
will be challenged in the coming year to make significant commitments
on PCD issues, including: global financial management, including
shocks caused by changes in oil prices; security, in and originating
from fragile states; climate change; and disease threats (illustrated
by Ebola). The new SDG framework will require action on these
both externally and in the UK.
36. Some commentators have been critical not just
about aspects of PCD in the UK but its general approach. We were
struck by the conclusion of the OECD/DAC Peer Review of the UK
that PCD is a weak aspect of HMG's approach:
The lack of a comprehensive approach to ensuring
its development efforts are not undermined by other government
policies means potential incoherence in other policy areas can
be overlooked. It also means opportunities might be missed for
stakeholders to provide evidence on and solutions to problems
of incoherence. For instance, little has been done to address
potential links between migration policy and development. In addition
to managing trade-offs, a more systematic approach would help
the UK to tap positive synergies across policy agendas, as it
has started to do with trade and development. The UK also does
not appear to be investing in building a knowledge base about
the impacts of UK policies on developing countries in order to
enable more informed decisions. In dialogue with developing country
partners, it could do more to increase understanding of the potential
effects of different UK policies on key barriers to development,
and to use the evidence acquired to raise awareness of the need
for greater coherence.
37. There are
many successful examples of policy coherence in the UK. The UK's
record is at the high end of international performance. However,
we also note witnesses' concerns over the UK's patchy record on
some aspects of PCD. We acknowledge that these are difficult issues,
with potential trade-offs between national and international priorities,
and between spending on poverty reduction and global public goods.
We also note the criticism of the OECD DAC Peer Review that the
UK lacks an over-arching strategy on PCD.
PCD is likely to grow in importance and it is therefore crucial
that the UK improves its efforts in this area.
Reporting policy coherence for
38. We are struck by the fact that it has not been
easy to assemble a coherent account of how Beyond Aid issues are
handled in the UK. There is a reporting requirement included within
the 2006 International Development (Reporting and Transparency)
Act, which requires the Secretary of State to report on policy
coherence within the context of MDG Goal 8 (Box 3). For the first
time in 2014, DFID included a specific section in its Annual Report
setting out its work on PCD (in previous years, sections have
taken a more general look at the UK's broader policy work). This
was incorporated in a chapter entitled 'Effective Development
Cooperation' and covered six topics:
1. Facilitating trade and knowledge transfer
2. Encouraging transparent and responsible business
(incl supply chains)
3. Helping (non-aid) finance flow for development
(incl international taxation)
4. Supporting peace-keeping and building resilience
(incl Conflict Pool/Conflict, Stability and Security Fund)
5. Producing and consuming sustainably (including
6. Bringing in talented people and sharing knowledge
(incl int'l migration)
39. This list does not map perfectly onto the targets
of MDG 8, nor to the wider list of topics covered in this inquiry.
Indeed, DFID's own written submission and the Secretary of State's
oral evidence covered other issues. For example, human rights,
corruption, the arms trade, debt management and international
finance are poorly covered in the 2014 Departmental Report.
40. Furthermore, it does not seem to us acceptable
that PCD issues should be reported in a free-standing section,
without being cross-referenced as major themes in DFID's overall
strategy or in sectoral or country-focused sections of the Departmental
41. Both the International Development Act 2002 and
the International Development (Reporting and Transparency Act)
2006 need updating. The 2002 Act has two problems. First, it is
principally concerned with 'development assistance', meaning aid.
Second, and more controversially, it has an exclusive focus on
poverty reduction, which is appropriate for traditional aid, but
may not be as suitable when it comes to funding global public
42. Only Article 4 of the 2002 Act, headed 'Supplementary
Powers' provides a somewhat ambiguous opening for non-aid activity
(Box 4). The 2006 International Development (Reporting and Transparency
Act) does open the door to report on policy coherence issues,
but is dated because it is tightly tied to the Millennium Development
Goals which expire in 2015 (Box 3).
43. The legislative
framework provided by the 2002 and 2006 International Development
Acts has been extremely important in preserving the purpose and
identity of the UK aid programme. We think it important that we
have legal protection for the objectives of development assistance.
In order to secure this, the aforementioned acts would need to
be updated. We conclude that both Acts
should be updated to reflect the wider purposes on the UK's international
development efforts. The poverty focus should not be sacrificed,
but the importance of global pubic goods should be reflected in
the legislation. The new framework of Sustainable Development
Goals will also need to be used as the foundation of legislation.
The whole-of-Government responsibilities should also be reflected
in updated legislation.
44. We asked the Secretary of State whether current
reporting on PCD is sufficient. She told us that PCD would in
future "need to become a bigger part of that annual report
] because it is now a much bigger part of what we do."
Policy coherence is increasing in importance. We recommend
that DFID improve its reporting on PCD, in line with the
requirement under the 2006 International Development (Reporting
and Transparency) Act. Specifically, we recommend that the current
short section within DFID's Annual Report is expanded.
- We also note that the 2006 Act is based on
the MDG framework which will expire in 2015. The Act will need
to be amended or replaced once the new post-2015 Sustainable Development
framework has been agreed. The new framework will inevitably include
a much wider set of Beyond Aid goals and targets. We recommend
that the International Development (Reporting and Transparency)
Act 2006 be revised or replaced once the post-2015 Sustainable
Development Goals have been agreed.
30 Nilima Gulrajani submission Back
Owen Barder and Alex Evans submission Back
DFID submission Back
Q 176 Back
OECD DAC Peer Review of the UK (December 2014) Back
HM Government, Health is Global (2011-2015) Back
Wellcome Trust submission Back
Path written evidence. See https://s3.amazonaws.com/one.org/pdfs/Trillion_Dollar_Scandal_report_EN.pdf
Q 35 Back
RCUK submission Back
Plan UK submission Back
Research Councils UK submission Back
Stop Aids submission Back
Fairtrade Foundation submission Back
Amnesty International submission Back
UKAN submission Back
Committees on Arms Exports Controls, First Joint Report of the
Business, Innovation and Skills, Defence, Foreign Affairs, and
International Development Committees of Session 2013-14, Scrutiny
of Arms Exports and Arms Control, HC 205, 1 July 2013 Back
CAFOD submission Back
ONE submission Back
Economic Affairs Select Committee, The Economic Impact and
Effectiveness of Development Aid, March 2012, Chapter 6, Number
75 http://www.publications.parliament.uk/pa/ld201012/ldselect/ldeconaf/278/27802.htm Back
Global Witness submission Back
IDS submission Back
Q 35 Back
OECD DAC Peer Review of the UK (December 2014) Back
DFID, Annual Report and Accounts 2013-14 pp. 121-124 Back