UK aid: allocation of resources Contents

3The development reviews

A comprehensive review of UK aid

38.DFID first conducted a full review of its bilateral and multilateral spending in 2011, through the Bilateral Aid Review (BAR)75 and the Multilateral Aid Review (MAR),76 and the MAR was subsequently updated in 2014.77 In 2015, DFID began its second full review, part of which was designed to coincide with the Spending Review78 (and also the Strategic Defence and Security Review,79 which was published at the same time). This time, the review would consist not just of a BAR and a MAR, but also a Civil Society Partnership Review (CSPR) and a Research Review.

Delays to the development reviews

39.We were initially told in 2015 that the Research Review would be published shortly after the summer, that the CSPR would be published shortly before the Spending Review, and that the bilateral and multilateral reviews would be published before the end of the year. The development reviews, as they were eventually branded, underwent several significant delays. By the end of 2015 we were being told that the reviews would be published in the spring;80 something we continued to be told until the end of spring in 2016. We were then told that the reviews would be published after the referendum on the UK’s membership of the European Union; an event which led to a Cabinet reshuffle and a further delay for the reviews to be reconsidered by the new Secretary of State. The Research Review was published on 26 October,81 the CSPR on 4 November,82 and the Bilateral and Multilateral Development Reviews were published on 1 December.83 All four documents were shorter and contained much less detail, in terms of methodology, results and implications, than we had expected.

40.We heard evidence of the serious effects that these delays, and the associated uncertainty, have had, especially on civil society organisations (CSOs) which rely on DFID funding. Martha Mackenzie of Save the Children told us that, for smaller organisations, the “adaptation process [from pre-CSPR funding streams] has been much harder without knowing what was coming.” Other representatives, from Civicus and Action for Global Health, echoed this, telling us that the uncertainty had led to restructuring, the loss of jobs, and the downsizing of programmes.84 One small CSO, Progressio, has even had to close completely after 75 years of work; this was due in part to being unable to replace its pre-CSPR funding.85 In response, DFID argued that it provided “18 months’ notice of the fact that the PPA system [the core pre-CSPR funding stream] would not be sustained”, which was “a lot of notice for people.”86 However, the evidence that we heard indicates that the uncertainty created by the absence of detailed information on a successor programme to PPAs has had a damaging effect. As we discuss further in para 64, it remains unclear whether replacement funding mechanisms will maintain the pre-CSPR level of long-term funding to CSOs.

41.As the development reviews are evidence-based processes, and that evidence was gathered in late 2015 and early 2016, we have not heard any indication that the results were substantially changed through the delays. In fact, we understand that multilateral organisations had their indicative results from the Multilateral Development Review (MDR) relatively early in 2016. This was definitely true by early November, a month before the MDR was published, when Alice Albright of the Global Partnership for Education confirmed as much.87 In September, the Secretary of State told us that DFID is “in constant contact with all the institutions and organisations, and so we are very fluid in our ways of working and discussions with them. It is an open discussion that we have with them, so they are very much part of the process, it is fair to say.”88 In practice, any changes which have been made to the reviews during the delays have been thematic and as a result of the new Secretary of State’s approach. Martha Mackenzie told us that “What we have heard is that the MAR is likely to look quite different, and that is actually an area that the new administration had thoughts on and wanted to be propositional about.”89 The Secretary of State also told us that the changes “are much more reflective of my approach and my way of working and of the engagement that I have had with countries and organisations.”90

42.The numerous delays to the development reviews have undoubtedly had grave effects on a number of organisations and, we fear, on the quality of some programming. The low level of detail in the reviews does not justify such substantial delays. We understand that the effects of the EU referendum result and the different approach of a new Secretary of State necessitated some changes. However, uncertainty surrounding the EU referendum was potentially foreseeable and should have motivated DFID to do everything it could to publish the reviews prior to the referendum. The fact that it did not is deeply regrettable and caused problems for some civil society organisations. We have not seen any evidence that the delays after the referendum were related to any detailed thinking about the implications of the referendum result for the UK development agenda.

Coherence between the reviews

43.Due to the process of carrying out the development reviews together, they all went through a ‘coherence phase’ centrally in DFID. The purpose of this process was to reconcile the reviews and DFID’s overarching strategy with the lower-level and more specific assessments which had been made in the reviews.91 Sir Mark Lowcock, Permanent Secretary at DFID, told us that success would involve “a set of allocations through which we can demonstrate, to you and everyone else that the Government have allocated resources to achieve all of their manifesto objectives, which are set out in the aid strategy.”92

44.ICAI told us in December 2015 that the coherence phase “is the most important but least clear part of the process”.93 Despite asking questions to the Secretary of State and Permanent Secretary about this, we are still unclear on what exactly was done during the coherence phase, or what the results of it were. This is an important aspect which lacked detail in the development reviews. We were particularly shocked that the CSPR did not mention the Sustainable Development Goals, which we would have expected to be used to tie the reviews together. We recommended in our interim Report that “DFID should set out clearly what criteria it uses to determine the balance between multilateral and bilateral spending, and how these criteria are then used to decide the balance.”94 We can only assume that DFID did compare its multilateral and bilateral spending against each other during the coherence phase to come up with allocations. The Secretary of State told us:

We take a holistic and integrated approach. The other point to make is that the Department constantly has to review the resource allocation. It is not just country by country. It is based on the big challenges that we see around the world, whether it is fragile states or things of that nature. It is probably more integrated than the publication of singular reviews may lend itself to demonstrate.95

45.We are concerned that, in the development reviews, DFID has not displayed whether it is thinking strategically in terms of allocations between bilateral and multilateral budgets. We are left to assume that this was done during the coherence phase, but in the absence of evidence to the contrary we can only conclude that the balance between bilateral and multilateral spending in DFID is arbitrary. We strongly reiterate our previous recommendation that we need much more detail from DFID as to how it strategically sets the balance between bilateral and multilateral spending. We would also like to see its assessment of the respective effectiveness of different methods of delivery and the criteria that it uses to make case-by-case judgements.

The Research Review

46.The Research Review “sets out how DFID will invest an average of £390 million per year over the next 4 years”.96 Considering it was delayed for around a year, we were struck by the scarcity of detail in the review. The result of the review, as far as we are able to determine from the short published document, is that there will be no change in DFID’s research spending. The review states that it “carried out a rigorous analysis of the opportunities to maximise the impact of development research investments.” It would have been helpful for some of this analysis to have been presented in the published review.

Bilateral Development Review (BDR)

47.The BDR97 looks at DFID’s bilateral programming—programming in countries which is run by (or contracted out by) DFID itself, either through its country offices or centrally—which amounted to £7.7 billion in 2015.98 As a strategy for its bilateral work, the BDR is largely lacking in detail. The majority of the document is dedicated to a restatement of DFID’s thematic priorities and focuses—tackling global challenges in the national interest (including a brief and welcome section on the Sustainable Development Goals), boosting prosperity and economic development, investing in basic services and marginalised groups, tackling humanitarian crises, and achieving value for money through transparency and accountability. Very little of the information in the BDR is new. It does not mark a shift in DFID’s approach; all of these issues were already issues on which DFID was focused and which we have previously supported. These chapters therefore give very little hint of how DFID will be allocating resources accordingly. This was in contrast to the last Bilateral Aid Review which contained a clear statement of DFID’s priority countries and planned spending.99 We asked for an updated version of this table but were not provided with it100 and have been reliant on planned spending tables for the next two years in the back of DFID’s most recent Annual Report.101

48.Disappointingly, the documents and detailed analyses which appear to be driving DFID’s allocation decisions have not been published. The technical note to the BDR states that it “looked at where DFID previously operated and assessed what role we should play and how in the years ahead.”102 To do this, DFID “prepared draft strategies”, based on refreshed Country Poverty Reduction Diagnostics—which assess and plan out a strategy for how DFID can best support a country’s exit from poverty—and Inclusive Growth Diagnostics—to plan economic development efforts. The only indication that the technical note gives as to how allocation decisions are made is a brief explanation of the principles on which aid is allocated (present need, aid effectiveness, future need, and ability to self-finance). For the vast majority of the countries in which DFID works, it has not published these documents, and all of its existing published country operational plans have now expired. Sir Mark Lowcock told us that revised plans would be published early in 2017, but this has still not happened.103

49.The highest density of detail in the BDR is in the chapter on “Where we will work”.104 The chapter begins by saying “The geography of poverty is changing”, before stating that “As a result of the Bilateral Development Review we will: focus our support where it is most needed [ … ] intensify our efforts to help countries transition from aid [ … ] take a more complete and comprehensive approach to each country”. It is unclear that any of this marks a change to what had already been announced in the UK aid strategy or how DFID was already working. The only specific details that are given are commitments to:

However, when we asked the Secretary of State about what DFID would specifically be doing in the Sahel—whether this commitment means an increased focus on DFID’s existing bilateral programmes in the region or new bilateral programmes in countries like Chad, Niger and Mali—she did not give a clear response.105

50.The lack of detail in the Bilateral Development Review is disappointing. Even where DFID has committed to specific actions, it is unclear how it plans to take this forward. While DFID’s thematic priorities are now well-stated, it is difficult to come to a conclusion on how well it is making bilateral allocation decisions, without better information on how it is actually making those decisions. We are concerned that this displays a lack of strategy in how DFID is doing so and that DFID is now providing less information than it has in the past about its spending decisions, priorities and plans.

51.DFID should always tend towards complete openness and publication of as many documents as possible. The non-publication of new country operational plans, the country poverty reduction diagnostics, and inclusive growth diagnostics runs counter to this principle. DFID should publish as many of these documents as possible for its country programmes by the start of the summer parliamentary recess. If necessary, for confidentiality reasons, it should redact any sensitive material but produce substantial versions which can be published. DFID should also publish an updated list of its priority countries, with long-term spending plans for each.

52.As part of the BDR process, and to coincide with the publication of the 2015 UK aid strategy, DFID revised its definition of fragile states and published an updated list.106 We looked at this issue extensively in the early part of this inquiry. In our interim Report we asked for more information on how DFID determined its list and how that list would inform allocation decisions.107 While DFID agreed to this in its response to our Report,108 this information has not been forthcoming and all that DFID has told us is that it combines scores from a number of data sources (which it has listed, but it gave no indication as to the weighting or method of combination). We also recommended that DFID should consider the OECD’s new multidimensional fragility framework. That framework has now been published, presenting a much more considered and complex definition and conceptualisation of fragility than that which appears to be being used by DFID, and with a much clearer methodology. The framework “links fragility with a combination of risks and coping capacities rather than focusing primarily on weak governance”, and is based upon the five dimensions of fragility (economic, environmental, political, security and societal).109

53.We reiterate our previous recommendation that DFID should publish more complete details of its definition of fragility and specific information about how its list of fragile states and regions has been determined, including details of how the different categories of fragility will inform allocation decisions. We expect this information to be forthcoming and stress that a statement that DFID combines scores from a number of data sources is not a statement of methodology nor is it the information we are asking for and were promised. Considering the clear, publicly available and considered methodology behind the OECD’s fragility framework, we see no reason why DFID should not align with other donors and use it.

Multilateral Development Review (MDR)

54.In its 2015 review of ‘How DFID works with multilateral agencies to achieve impact’, the Independent Commission for Aid Impact (ICAI) found that “DFID’s choice of multilaterals as a delivery partner is not always evidence based” and that “DFID lacks a clear strategy for its engagement” with multilaterals.110 DFID rejected ICAI’s recommendation that it “should have a strategy for its engagement with the multilateral system as a whole at the global level”, on the basis that its strategic approach “is set out in the Multilateral Aid Review (MAR) and will be updated through the MAR process later this year as planned.”111 In our interim Report in this inquiry we concluded that “Whether or not the Multilateral Aid Review suffices as a standalone strategy, rather than an assessment and diagnostic tool, remains to be seen and we intend to return to this topic.”112

55.In contrast to the BDR, the MDR113 provides more detail of its methodology and results, including one page summaries of DFID’s assessments of its multilateral partners.114 These assessments were based on each organisation’s match with UK priorities, including achievement of the Sustainable Development Goals, and its organisational strengths. The MDR also gives detail of “DFID’s future approach to multilaterals”, including the changes in the multilateral system which it will advocate for at the international level. The review finally gives details of how DFID plans to achieve value for money from its multilateral partners, by “linking funding to performance”. The MDR therefore goes somewhat further than the 2011 MAR did to spell out DFID’s strategy towards multilaterals, including how it will attempt to achieve change.

56.The MDR still does not provide clear detail of how and why DFID chooses to use multilaterals, though, or what effects the results of the review will have on funding. ICAI concluded in 2015 that “DFID does not always consider alternatives to multilaterals in-country, making it hard to ensure transparency and value for money”, and therefore recommended that “DFID needs clear objectives for its work with the multilateral system in its country-level strategies.”115 As a result, we stated in our interim Report that “We trust that the Multilateral Aid Review will include analysis of the performance and capacity of multilaterals in-country.”116 The MDR comes close to doing this, with an assessment of each multilateral’s performance in fragile states forming part of the grading for how it matches with UK priorities.117 We expect the new country operational plans to include objectives for DFID’s work with the multilateral system in each country.

57.The 2011 MAR did not appear to have a clear effect on funding allocations. It led to four poorly performing organisations losing all funding.118 Danny Sriskandarajah of Civicus pointed out to us that “the Commonwealth Secretariat, which had one of the worst MAR scorecards apparently [received] more funding, presumably because of political reasons.”119 Only one of the poorest performers in the MDR, the Global Facility for Disaster Reduction and Recovery, has had its funding cease.120 UNESCO has performed poorly in the MDR, having also performed poorly in the 2011 MAR.121 Media reports have suggested that the Secretary of State’s attempts to stop funding to UNESCO as a result were rebuffed by the Prime Minister for political reasons.122 When appearing before us, the Secretary of State told us that the approach DFID has taken “means a change of approach in terms of being much more open from UNESCO’s perspective, working with not just DFID but other Government Departments, to ensure that we can set new standards and new targets. DFID is now leading on this, and we will work with UNESCO to make sure that it can drive performance and change within its organisation.”123 On the basis of this statement, as with the MAR, we do not believe that the MDR will have a clear effect on funding allocations for most of the poorly performing multilaterals, including UNESCO.

58.Alongside the release of the MDR, UNESCO published a statement strongly criticising it as “flawed” and rejecting its conclusions.124 Together with criticism that the review lacked a “consultative process and in-depth research in line with professional standards”, UNESCO’s fundamental criticism was that the MDR “method does not deal well with agencies that have a normative or standard-setting function”. It alleges that the review favours short-term and more easily measurable results. This is a criticism which our predecessor Committee also levelled at the 2011 MAR, in its 2013 Report on that process, and which led it to recommend that the 2015 review “should make a much clearer distinction between different organisations’ mandates.”125 It is also a long-running concern, which ICAI has also identified,126 that DFID favours easily measurable and short-term results. We have not been able to determine how well the MDR deals with measuring normative results, and UNESCO’s performance has both been criticised and supported in evidence to our inquiry into DFID’s work on education: Leaving no one behind?.127

59.Performance Agreements with multilaterals are one of the specific measures which DFID indicated it will use to achieve change, improvement and value for money through the multilateral system.128 So far, it has agreed a Performance Agreement with the Global Fund, which links some funding to the Fund’s achievement of specified results and reforms.129 This includes a requirement for the Global Fund to utilise Payment by Results in its investments. This is despite us raising in our interim Report that the evidence base on Payment by Results is weak, and some evidence suggests it can create perverse incentives and have negative consequences.130 The Secretary of State told us that Performance Agreements will be used “where we know that multilateral organisations, or some of them, are not performing in the way in which we would like them to perform”,131 although the use of such an agreement with the high-performing Global Fund132 indicates that they will be used somewhat more widely.

60.We have heard some cautious optimism about the use of Performance Agreements. Kathleen Spencer Chapman of Bond told us:

Obviously, we are very interested in the overall good performance of multilaterals, and making sure that they are really doing the best possible job in tackling poverty. If those sorts of performance agreements contribute to achieving that then that can certainly be useful.133

Martha Mackenzie of Save the Children also expressed the potential:

The UK has a good track record of using its leverage positively. If we see more of that through the MAR, and more ambition to do that through the MAR, that is a good thing, and it is a recognition of the role that the 0.7% commitment gives us on the international stage as a global player, as someone who can deploy soft power effectively and really tackle some of these big, global challenges.134

61.EU agencies were ranked highly in the MDR. There remain unanswered questions on how this key multilateral relationship will develop after the UK exits the EU. We will examine this issue further in our inquiry into The Future of UK-EU development cooperation.135

62.We welcome the improvements that have been made to the multilateral review process after the 2011 Multilateral Aid Review, although we would have appreciated more detail on how the review will influence spending decisions. At present, we are not convinced that DFID is strategic in how it decides which multilaterals to use and how. We also remain concerned about whether the Multilateral Development Review is able to take full account of the standard-setting and more qualitative functions of multilateral partners. In its response to this Report, DFID should lay out in detail how it decides when and where to put money through multilaterals, including between different multilaterals, and how this process is informed by the results of the Multilateral Development Review.

63.The use of Performance Agreements has the great potential to drive improvements in DFID’s multilateral partners and the multilateral system as a whole. Performance Agreements need to be used carefully, though, so as not to impose practices like Payment by Results, which might create perverse outcomes, on multilateral agencies. In particular, DFID should not require multilateral partners to implement or increase their usage of Payment by Results without a stronger evidence base that it leads to better development outcomes.

Civil Society Partnership Review (CSPR)

64.The CSPR136 examined DFID’s relationship with civil society organisations (CSOs). As with the Research Review, the CSPR’s length (14 pages, of which only 7 are the review findings and outcome) and its level of detail (the outline of the review, including methodology, only takes up half a page) are both very disappointing. Kathleen Spencer Chapman of Bond told us that “There are a lot of areas where there is not a huge amount of detail.”137 This has made analysing whether or not its findings and outcomes are positive a challenging task. In particular, there is a lack of detail around how the new UK Aid Connect funding stream, which is focused on supporting coalitions of organisations “to help find solutions to current complex situations whilst tackling tomorrow’s challenges”, will work in practice. The CSPR also has no information about the amounts of funding which will be available through its different streams, or if the amount of funding which will be available to civil society will be changed from pre-CSPR levels.

65.Some of the statements in the CSPR, especially around supporting smaller CSOs and CSOs based in developing countries, are welcome but need to be turned into practical and detailed proposals. On our recent visit to Uganda, as part of our inquiry into DFID’s work on education: Leaving no one behind?, we saw some good examples of how DFID could better support smaller and more local CSOs. Through its centrally-managed Amplify programme, an innovation challenge fund worth £10 million over 5 years and implemented by an organisation called, DFID is piloting an approach that allows it to disburse small amounts of money “to address smaller, localised challenges across any sector in a more nimble fashion”.138 The Secretary of State recently announced plans for a Small Charities Challenge Fund, directing funding specifically to UK-based charities with an annual income of less than £250,000, as well as additional support to small charities from a partnership with the Charity Commission.139 We welcome DFID’s announcement of a Small Charities Challenge Fund, following previous recommendations by this Committee.140 We look forward to seeing how it goes about providing further support to small charities. We also support the approach that DFID is taking through the Amplify programme, and strongly urge it to consider how it might adapt and use this model to support smaller local CSOs for programming at country office level.

66.Of particular surprise to us was the lack of any mention of the Sustainable Development Goals (SDGs) in the CSPR. In our Report on UK implementation of the Sustainable Development Goals we highlighted that CSOs “have a vital part to play in the achievement of the SDGs, through communicating and implementing the Goals, and holding governments to account on progress.” We therefore expressed our hope that “the crucial role of civil society in achieving the Goals will be recognised by the Government in the upcoming Civil Society Partnership Review”.141 Hayley Cull of UNICEF told us that:

[UNICEF was] quite surprised to see that SDGs were not part of the framing. It is something that we have heard repeatedly in previous conversations and we have made the point repeatedly to DFID. It certainly felt like quite a big omission to not have that in the framing.142

Despite the Secretary of State’s assertion to us that the Department lives and breathes the SDGs so does “not need, through reviews, to restate that point”,143 this was still a serious omission.

67.Some CSOs have expressed their concern over the language surrounding civil society in the CSPR. Danny Sriskandarajah of Civicus told us that the partnership between DFID and civil society seems to be changing:

There are words like “supplier” used with much greater frequency, at DFID. Gone are the days when civil society seems to be seen as an equal and important partner in the development project. We are into a scenario that is unfortunately sweeping across the donor world. This will have serious and long-term damaging impacts on the health of British civil society, and indeed Britain’s standing in the development world, if indeed the CSPR leads to more of that approach.144

He went on to explain the benefits of a partnership, rather than a ‘supplier’ relationship:

The role of civil society is not simply to spend Government money, or indeed just to deliver services. Many of the organisations represented around this table bring with them a whole range of other assets. They have memberships that can be deployed here in solidarity or in support. [ … ] If we are talking about long-term social transformation, indeed, as the CSPR does on supporting civic space and local civil society, then we are looking at a much more sophisticated and complex landscape. That cannot be captured simply by a supplier relationship or contracting relationship. One of the things that has stood out in the British Government’s approach, over a couple of decades, I would argue, has been this insistence on the multifaceted role of civil society in development.145

68.The lack of detail in the Civil Society Partnership Review (CSPR) is very disappointing, and particularly surprising given the numerous delays to its publication. As a result, whether it translates into an improved relationship between DFID and civil society cannot be judged from this document. The CSPR acknowledges the unique role and diversity of civil society in development. It is therefore important for DFID to take this forward into its day-to-day relationship with civil society and avoid allowing that relationship to become one of a consumer and suppliers; this would lose a lot of the nuance in the relationship and therefore the value that civil society brings in its diversity.

69.The omission of any explicit mention of the Sustainable Development Goals (SDGs) from the Civil Society Partnership Review is a serious one. It risks creating an impression that DFID is not focused on the SDGs; given that the Goals are still at an early stage of implementation, the Department’s commitment to them cannot be restated enough. As the framework for development post-2015, the SDGs should have been used to frame both the CSPR and DFID’s relationship with civil society organisations.

Programme Partnership Arrangements (PPAs)

70.While not explicitly laid out in the CSPR, one of the largest changes for CSOs coinciding with the review was the abolition of PPAs. PPAs were “longer-term agreements with civil society organisations”, which provided unrestricted core funding to those organisations for three years at a time. DFID’s own website states that “They achieved real results in terms of poverty reduction and provided good value for money (demonstrated through competitive selection).”146 ICAI reviewed PPAs in 2013, giving DFID a Green/Amber score and concluded that:

PPAs are helping to drive innovation in the recipient organisations. In particular, they are improving the quality of performance management and accountability for results. We think it is likely that these changes will lead to improved results for intended beneficiaries, not just from PPA funding but across the CSOs’ full range of activities.147

ICAI did, however, identify some flaws in how DFID was carrying out the arrangements, and recommended improvements for the next round of PPAs.

71.On 2 July 2015, the then Secretary of State Rt Hon Justine Greening MP gave a speech at the Overseas Development Institute (ODI), in which she announced the CSPR. As part of that speech, she said, “I recognise that for those of you who currently get PPA funding this transitional period will create uncertainty. In recognition of this I have agreed to extend PPA funding and grants to the Think Tanks IDS, ODI, IIED and the Centre for Global Development by 9 months to end of next year.”148 She also stated that “This review will take place over the next 5 months” and that the extension “will give us the time we need to work out where we are going and be able to smoothly transition.” Shortly after that speech, she wrote to the heads of all organisations which received PPAs, making a similar announcement—although DFID did not tell us when we asked how much detail that letter went into, such as whether the decision was final or what alternatives were being considered.149 As we noted earlier, in both written and oral evidence DFID has asserted that this amounted to giving CSOs 18 months’ notice that PPAs were ending as a funding mechanism.150

72.Despite DFID’s claim that it gave CSOs a lot of notice, there was plenty of ambiguity in the statement, and uncertainty around the future of PPAs continued for some time. In December 2015, Ben Jackson, the CEO of Bond, wrote an article in the Guardian in which he said that “DFID is looking at whether such funding [PPAs] should continue and if it does, how it should change.”151 In January 2016, in oral evidence to us, Girish Menon, the Chief Executive of ActionAid UK, told us that “we also understand that the PPA may not be part of the DFID mechanism for supporting the civil society after the Civil Society Partnership Review. That is what we understand; it is not a confirmed decision.”152 He had earlier said that this was being done “without [us] understanding what is driving the potential decision to move away from that”,153 and he urged any successor mechanism to be long-term, strategic and flexible. In DFID’s own FAQ on the CSPR, designed for CSOs and published online in January 2016, in response to the question “Is DFID going to stop strategic (unrestricted) funding?” it said “We can’t pre-empt the findings of the review. The review will consider the value and future of strategic funding alongside other funding mechanisms and partnerships.”154

73.Over the course of 2016 it became more apparent that the decision to end PPAs completely had been taken, but uncertainty over whether they would be replaced with a new mechanism for unrestricted core funding continued. We were told repeatedly by DFID that any successor mechanisms would be set out “clearly as part of the publication of the Civil Society Partnership Review.”155 The CSPR does not contain a clear statement of any successor, perhaps due to its brevity and lack of detail, and DFID has not been able to answer our questions about whether the overall amount of money going to and through CSOs would be changing.156

74.We have not been reassured that DFID gave proper support to CSOs during this period of uncertainty. Sir Mark Lowcock, DFID’s Permanent Secretary, told us that “At the same time [as the CSPR], the other major schemes were continuing and open for bidding. Then the Secretary of State, when she came in, took the decision that we needed to open a new different kind of scheme—the DFID Connect scheme—in order to promote collaboration and better collective effort to tackle certain neglected issues, some of which the Secretary of State has already talked about.”157 However, it is apparent from the previous Secretary of State’s speech in July 2015 that the extension of PPAs was intended to cover CSOs until the funding streams to be announced in the CSPR had come on-line. As we noted earlier, at least one small CSO, Progressio, has had to close (after 75 years of operations) due to the loss of PPA funding and their inability to replace it.158

75.We have also not been given a clear rationale for why DFID has chosen to end PPAs (and unrestricted core funding more generally), something which we would have expected in the CSPR. The Secretary of State told us that it had been set out by her predecessor, but added that “we need new funding instruments that better reflect how the world is changing, how civil society is changing, but also how we work with organisations on delivering results and priorities.” Therefore, she said that “There is an element of opening up the system, encouraging more competition and working in a much broader sense within civil society to encourage others to enter this space, whereas previously many of them felt excluded or not able to engage with us.”159 The Permanent Secretary followed up by saying that “That is the core point. The PPAs were basically going to a small number of bigger organisations, and even for them in most cases the PPA resource was not most of what they were getting from the Department. They were getting a lot more money through the other schemes.”160

76.Programme Partnership Arrangements (PPAs) were strategic, flexible and encouraged innovation; there is plenty of evidence of their effectiveness including a positive ICAI review. We have still not heard a compelling explanation from DFID as to why it has chosen to end PPAs entirely and to not replace them with any alternative mechanism for unrestricted core funding. We are convinced that smaller civil society organisations can still be engaged by DFID alongside the provision of unrestricted core funding to others. The loss of PPAs is likely to stifle innovation and to simply cause CSOs to cover their overheads through their bids to other funding streams. While we do not have the detail at this time to make a complete judgement, it is of the utmost importance that DFID’s other funding streams, whilst maintaining accountability, are able to cover the sorts of activities which PPAs allowed and encouraged. DFID must provide a clear and detailed explanation of why it feels that unrestricted core funding, and PPAs more specifically, is no longer an effective means of development. While it is doing that, we would strongly urge it to reconsider its decision on this matter.

77.The manner in which the ending of Programme Partnership Arrangements (PPAs) was carried out by DFID was poor, characterised by uncertainty and evasiveness. The fact that no additional cover or support was provided to civil society when severe and unjustified delays to the CSPR occurred has caused problems for civil society organisations.

75 Department for International Development, Bilateral Aid Review: Technical Report, March 2011

76 Department for International Development, Multilateral Aid Review, March 2011

77 Department for International Development, Multilateral Aid Review Update, December 2013

78 HM Treasury, Spending Review and Autumn Statement 2015, Cm 9162, November 2015

79 HM Government, National Security Strategy and Strategic Defence and Security Review 2015, Cm 9161, November 2015

80 Q3

81 Department for International Development, DFID Research Review, October 2016

82 Department for International Development, Civil Society Partnership Review, November 2016

83 Department for International Development, Rising to the challenge of ending poverty: the Bilateral Development Review 2016, December 2016, and Department for International Development, Raising the standard: the Multilateral Development Review 2016, December 2016

84 Q242

85 Progressio, ‘Progressio to close after 75 years’, accessed 27 February 2017

86 Qs 276–277

87 Oral evidence taken on 1 November 2016, HC 639, Q13

88 Oral evidence taken on 14 September 2016, HC 661, Q52

89 Q264

90 Q275

91 Independent Commission for Aid Impact, The 2015 ODA allocation process (December 2015), para 4.20

92 Q4

93 Independent Commission for Aid Impact, The 2015 ODA allocation process (December 2015), para 4.20

94 International Development Committee, Third Report of Session 2015–16, UK aid: allocation of resources: interim report, HC 927, incorporating HC 533, para 28

95 Q279

96 Department for International Development, DFID Research Review, October 2016

97 Department for International Development, Rising to the challenge of ending poverty: the Bilateral Development Review 2016, December 2016

98 Department for International Development, Statistics on International Development 2016, November 2016, p 12

99 Department for International Development, Bilateral Aid Review: Technical Report, March 2011, Annex F

101 Department for International Development, Annual Report and Accounts 2015–16, HC 329, Annex B

102 Department for International Development, Bilateral Development Review: technical note, December 2016, p 2

103 Q307

104 Department for International Development, Rising to the challenge of ending poverty: the Bilateral Development Review 2016, December 2016, p 51

105 Q302

106 Department for International Development (ACH33) Annex A

107 International Development Committee, Third Report of Session 2015–16, UK aid: allocation of resources: interim report, HC 927, incorporating HC 533, para 20

108 International Development Committee, First Special Report of Session 2016–17, UK aid: allocation of resources: interim report: Government Response to the Committee’s Third Report of Session 2015–16, HC 256, p 3

110 Independent Commission for Aid Impact, How DFID works with multilateral agencies to achieve impact (June 2015)

112 International Development Committee, Third Report of Session 2015–16, UK aid: allocation of resources: interim report, HC 927, incorporating HC 533, para 27

113 Department for International Development, Raising the standard: the Multilateral Development Review 2016, December 2016

114 Department for International Development, ‘Raising the standard: the Multilateral Development Review 2016’, accessed 10 March 2017

115 Independent Commission for Aid Impact, How DFID works with multilateral agencies to achieve impact (June 2015), para 3.20

116 International Development Committee, Third Report of Session 2015–16, UK aid: allocation of resources: interim report, HC 927, incorporating HC 533, para 27

117 Department for International Development, Raising the standard: the Multilateral Development Review 2016, December 2016, p 14

118 Ibid, p 32

119 Q266

120 Department for International Development, Raising the standard: the Multilateral Development Review 2016, December 2016, p 37

121 Department for International Development, Multilateral Aid Review, March 2011, p 98

123 Q325

125 International Development Committee, Fourth Report of Session 2013–14, Multilateral Aid Review, HC 349, para 45

126 Independent Commission for Aid Impact, DFID’s approach to delivering impact (June 2015), Management Summary

127 Oral evidence taken on 11 January 2017, HC 639, Q59 [Kevin Watkins] cf. Oral evidence taken on 26 January 2017, HC 639, Q93 [Gordon Brown]

128 Department for International Development, Raising the standard: the Multilateral Development Review 2016, December 2016, p 32

130 International Development Committee, Third Report of Session 2015–16, UK aid: allocation of resources: interim report, HC 927, incorporating HC 533, para 59

131 Q327

132 Department for International Development, Raising the standard: the Multilateral Development Review 2016, December 2016, p 16

133 Q267 [Kathleen Spencer Chapman]

134 Q267 [Martha Mackenzie]

135 International Development Committee, ‘The future of UK-EU development cooperation inquiry’, accessed 21 March 2017

136 Department for International Development, Civil Society Partnership Review, November 2016

137 Q240

138 Department for International Development, Business Case and Summary—Amplify Open Innovation for development (February 2016)

139 Department for International Development, ‘New support to boost grassroots British charities’, accessed 21 March 2017

140 For example, see International Development Committee, Twelfth Report of Session 2014–15, Jobs and Livelihoods, HC 685, para 112, International Development Committee, Thirteenth Report of Session 2014–15, Department for International Development’s Performance in 2013–14: the Departmental Annual Report 2013–14, HC 750, para 105, and International Development Committee, Second Report of Session 2015–16, Ebola: Responses to a public health emergency, HC 338, para 22

141 International Development Committee, First Report of Session 2016–17, UK implementation of the Sustainable Development Goals, HC 103, para 56

142 Q243

143 Q284

144 Q242

145 Q244

146 Department for International Development, ‘Programme Partnership Arrangements (PPAs)’, accessed 10 March 2017

148 Department for International Development, ‘Changing world, changing aid: Where international development needs to go next’, accessed 10 March 2017

149 Department for International Development written evidence to the International Development Committee on The work of the Department for International Development (WOR01) HC 661, p 3

150 Q277

152 Q94

153 Q88

154 Department for International Development, ‘Civil Society Partnership Review—FAQs’, accessed 10 March 2017

155 See Department for International Development written evidence to the International Development Committee on The work of the Department for International Development (WOR01) HC 661, p 4, and House of Commons, Overseas Aid, Written question 43015, answered 21 July 2015

156 Qs 296–297

157 Q276

158 Progressio, ‘Progressio to close after 75 years’, accessed 27 February 2017

159 Q289 [Priti Patel]

160 Q289 [Mark Lowcock]

27 March 2017