DFID's work on education: Leaving no one behind Contents

2Financing global education

14.In 2015 the international community and industry leaders came together to form The International Commission for Global Education Opportunity (now known simply as the ‘Education Commission’). This was set up to build on the aspiration of the Sustainable Development Goals, and estimated that on current trends there would be a $1.8 trillion funding shortfall across middle and low income countries compared to the resources needed to be meeting SDG4 on education by 2030.28 Responsibility for providing this additional funding rests primarily with national governments. However, for many countries—particularly low-income countries—sources of external financing, such as international aid, remain vital for national public expenditure as well as specific projects and disaster relief.

UK aid to education

15.Recent figures show that there has been a clear decline in the proportion of international aid spending on education since 2011 and that, overall, international aid for education remains much lower than aid allocated, for instance, to government and civil society, health, and infrastructure (see chart 2). As the UN Special Envoy for Global Education, Gordon Brown, told the previous Committee, even if one takes all aid agencies together:

The average expenditure per child in low and middle-income countries on education through aid … is less than $10 per head per year.29

The Education Commission report stated that, “Education has not been a top priority for international actors, whether official donors, or charitable organizations”.30

Chart 2: Trends in sectoral ODA (Official Development Assistance)31

Trends in sectoral ODA

16.UK aid to education is spent through bilateral and multilateral channels and by other Government departments as well as DFID. For this reason, it can be difficult to discern exactly how much aid the UK is spending on global education at any particular time. Following a Westminster Hall debate in July 2017, Minister of State for International Development, Rory Stewart OBE MP, outlined the levels of spending from 2011 to 2015 (see table 1) in a letter. It is clear from these figures that, although levels of spending are inconsistent year-on-year, there has been an overall reduction in the percentage of ODA spent on education between 2011 and 2015. Spending in 2015 was particularly low at just 7.17% of all UK aid. In contrast, that same year the Government spent close to 13% of UK aid on health.32

Table 1: Breakdown of UK Net ODA spend on Education

UK ODA (£’000)	2011	2012	2013	2014	2015
UK Bilateral ODA—Total	5,259,832	5,559,707	6,720,865	6,822,491	7,664,216
UK Multilateral ODA—Total	3,368,791	3,242,212	4,717,853	4,877,981	4,593,232
UK ODA—Total	8,628,623	8,801,919	11,438,718	11,700,472	12,257,448
UK Bilateral ODA—Education	649,177	620,581	905,375	820,922	651,529
DFID Bilateral ODA—Education	572,733	498,894	797,042	698,845	508,540
Other Gov Departments Bilateral ODA -Education	76,444	121,687	108,333	122,076	142,989
UK Multilateral ODA—Education imputed shares	225,485	155,192	203,451	281,958	227,181
UK ODA—Education	874,662	775,773	1,108,826	1,102,880	878,710
as % of UK total ODA	10.14%	8.81%	9.69%	9.43%	7.17%

Source: Letter to the Chair of the International Development Committee from Rory Stewart OBE MP, Minister of State for International Development (8 August 2017)

17.Giving evidence to the previous Committee in March 2017 on education spend, the Minister responsible at the time, Lord Bates, cited the increasing pressures on DFID’s humanitarian budgets and the need—in light of this—“to look very carefully at everything we spend”.33 He did, however, state that spending “will be around the current level”.34

18.Minister Alistair Burt clarified these figures a little when we questioned him. According to the Minister, the lower spend on education in 2015 was due to the sequencing of payments to multilateral funds, and that when averaged over a period of time, this figure is “close to” 10%.35 Over the period between 2013 and 2015, we were told, the total amount spent on education through bilateral funding was “11% of total DFID ODA”.36 When asked if this spending would be cut, Minister Burt stated that he could not say that spending amounts would not vary year on year, but that education was “a priority”. In addressing what this spend would look like in future, Anna Wechsberg, Director of Policy and Global Partnerships at DFID, said that “I do not think we are expecting the 2015 figure to be the start of a trend downwards”.37 We accept that the 2015 figure seems to have been an anomaly due to funds not being spent in a linear manner, and are pleased to hear that this is not expected to be the start of a downwards trend. As a result, we expect to see a higher percentage in 2016 statistics released in November which bring the Government closer to a 10% figure of all UK ODA.

19.In recent years, however, the amount of aid spent by other Government departments on global education has almost doubled, increasing from £76m in 2011 to £143m in 2015 (see table 1). The majority of this increase happened between 2011 and 2012, when the amount spent by departments other than DFID on education increased from around 9% of UK ODA education spend in 2011 to around 15% in 2012. This percentage has remained relatively stable since 2012, when the Government ring-fenced the aid budget in order to meet the 0.7% GNI target.38 In three of the five years between 2011 and 2015 (2012, 2014 and 2015) an increase in education expenditure by other government departments coincided with a decrease in DFID’s bilateral education spending. A proportion of this spending is administered by the FCO and through cross-departmental funds such as the Conflict, Stability and Security Fund (CSSF) and the Prosperity Fund; a trend Lord Bates told us was likely to “gather pace”.39 In terms of what this money is spent on, a senior DFID official told us that it mainly went towards scholarships in the British Council and tertiary education.40

20.These cross-Government funds were described as having a very “different geography” to DFID; for example, the Prosperity Fund operates primarily in middle-income countries, such as India, China and Brazil, where DFID has phased out its programming.41 As one DFID official told the Committee, “We [DFID] are much more focused on the poorest places”.42 Minister Burt told us that DFID was working with other Departments to “instil best practice on ODA reporting, value for money and accountability”, and that DFID were available to help advise on education spend by these departments.43 He stated that he did not think that these cross-Whitehall funds were moving away from “general development principles”.44 However, each Government Department remains ultimately in charge of its own budget. We will be examining whether the spread of ODA spending across Government could divert vital education funding away from DFID, and in turn away from the UK’s commitment to the world’s poorest countries and most marginalised people.45 There were also legitimate concerns in evidence about the ability of other Government departments to spend ODA effectively, resulting in our predecessor Committee’s recommendation to have all UK aid spending overseen and coordinated by DFID.46 This raises questions about the efficacy of global education spending administered by Government departments other than DFID.

21.Evidence to the inquiry noted that the UK “has prioritized aid to education” and “should continue to set the example”.47 Amongst the wealthiest donors that make up the OECD Development Assistance Committee (DAC), the UK is the fourth largest bilateral donor to global education, behind Germany, France and the United States (see chart 3). This is particularly significant due to the sheer scale of the US aid budget (around $31 billion in 201548) and the fact that a large proportion of Germany and France’s contributions to global education are spent on scholarships to their own universities.49

Chart 3: Education-related aid by OECD DAC members50

Commitments, USD millions, constant 2014 prices for All 2015

22.However, the Global Campaign for Education highlighted that the UK could be doing more, whilst other organisations, including the Malala Fund, specified that the UK should be allocating 15% of all aid to education.51 The United Nations Special Envoy for Global Education told the Committee: “Britain is spending too little on [global] education, at 7% [as a percentage of total UK ODA] or around that. It is far too small, given the challenges we face.”52

23.Of course, it is not just a question of how much aid the Government allocates to global education, but how it ensures this is spent effectively to ensure more children and young people have access to inclusive, quality education. In evidence to the Committee, Minister Burt focused on results and how money was being spent, rather than giving us assurances on any maintenance or increase in education spend. He told us that “it is not just about numbers now; it is about what children are being taught”.53 The Minister would not give a percentage for future spend on education, but stated that “you will see us continually trying to ensure that we can justify what we are spending, and how it is best and most effectively used”.54

24.This is a commendable aim, and it is of course imperative that the Department get the best results from taxpayers’ money. To achieve the improvement in quality which the Minister rightly focused on in evidence to the Committee will require additional expenditure. In order to improve teacher retention, expand the quality of education for disabled children and teaching in rural areas, greater spend will be needed, alongside the effective implementation of this spend.

25.As outlined above, in order to achieve the wide aims of SDG4 more money needs to be spent overall, as well as being spent effectively. The evidence we received clearly highlighted a funding gap in education as a whole, as well as in specific areas of education. The Government now has a chance to prove its commitment to education and to achieving SDG4. Education is vital to lift people out of poverty, prepare them for future job markets, and as a safeguard against poor health and hygiene, yet the amount spent on education by the Department is far behind that on health, another vital priority. It seems right that aid to education be increased. DFID should be constantly striving to give better, as well as giving more.

26.Although it is asserted, and logical, that resources invested in education yield a return in terms of other targets, for instance for public health and for prosperity, DFID does not appear to have a means of quantifying this. If such a methodology was part of the department’s Value for Money framework it would provide an evidential basis for decisions over funding decisions between sectors (making them more transparent). For example, if an extra £1 is spent on educating a child, it is unclear to us how much added value this has in terms of a child’s health, chance of escaping poverty, or future career. The Department should consider how best it can assess this, and work towards a methodology as part of its Value for Money framework to ascertain the added value of investment in education. DFID does not appear to have an evidence-backed plan as to whether education spend should increase or decrease from year to year, from country to country or across the various channels at its disposal year on year. If education is a “priority” as Minister Burt told us,55 there should be some safeguards on how much will be spent each year, with a set minimum target in place.

27.This strategic weakness is complicated by the transfer of an increasing proportion of ODA spending on education, in particular to other Government departments. The programmes and funds administered by other Government departments do require DFID’s focus on the poorest and most marginalised.

28.The Committee recognises that in some circumstances it is right and necessary to allocate education-focused aid to middle-income countries, for example the considerable financial commitments made to Jordan and Lebanon to support the education of Syrian refugees. However, generally it is low and lower middle-income countries that require the most support for education. As the UK’s spending on support for global education is transferred to other Government departments with a different geographical focus and other priorities, the Government should ensure that resources are still being focused on those children and young people who most need it.

29.The Committee recognises DFID’s continuing commitment to education, and the fact that it has in the past prioritised aid to education in a way other donors have not. However, if SDG4 is to be achieved, all donors should considerably increase the amount of aid allocated to global education, which has lagged behind other sectors for many years. For this reason, the Committee would like to see the amount of UK ODA allocated to education increase over the course of the next spending review period. The Department is commendable in striving to improve the value for money of the amount it spends on education. However, in order to achieve the ambitions of SDG4, the total amount should be increased.

30.Between 2012–2015, the UK spent an annual average of £966 million on education.56 We expect to see a significant increase in this figure over the next spending review period. The specific amount should be determined by the new approach to DFID’s Value for Money framework that we recommend below.

31.DFID has not demonstrated a clear understanding of the inter-relationship of education spending with other sectors. If it is serious about achieving value for money on everything spent, it should work towards a better understanding of this area.

32.The Department should develop a clear and transparent methodology for determining and justifying the allocation of education funding in terms of its potential ‘added value’. This is likely to enable better informed decisions over the programmes it funds and the mechanism to which resources are committed.

Encouraging greater domestic spending

33.Currently, many countries across the world spend far less on education than they should, according to recognised international recommendations. For example, a key recommendation from the Education 2030 Framework for Action, which provides guidance from UNESCO to countries for the implementation of Sustainable Development Goal 4, was to allocate at least 4–6% of Gross Domestic Product (GDP) and 15%-20% of public expenditure to education. The UK currently sits behind many other OECD countries for public expenditure on education, although is higher than others (see chart 4 below). In 2014 (the latest available OECD figures), the UK spent 12.5% of public expenditure on education, allocating 4.8% of GDP.57 The Education 2030 Framework states that in 2012, countries allocated 13.7% of public expenditure to education on average, and the least developed countries needed to reach or exceed the upper end of this framework in order to achieve SDG targets.58

Chart 4: OECD public spending on education: Primary to tertiary, % of public spending (2015 or latest available)59

Public spending

34.Development aid will not therefore close the gap on its own. Increasing domestic spending by developing countries is essential to ensuring all children are able to attend school and learn. UN Special Envoy for Global Education, Gordon Brown told the Committee that:

Even if we increased overseas development aid spending and funding by other countries who do not, like Britain, meet the 0.7%, and even if we devoted 15% of all aid to education … there would still be a funding gap in education, such is the crisis we face.60

The Springfield Centre, which designs market systems approaches to development challenges and provides independent advice to DFID, similarly told the Committee:

ODA for education is significant, but not when compared to the task of educating well over 1bn young people. DAC countries spend 7.3% of total ODA on education. Developing countries spend an average of 4% of their budgets on education but that still means that ODA spending on education as a proportion of total spending on education in developing countries is less than 4%.61

35.Even in countries more money is being spent, Kevin Watkins, CEO of Save the Children, warned the Committee that, “…education financing in most low-income countries is very heavily skewed towards more advantaged children and away from less advantaged children”.62 He cited the example of Kenya, where he stated more money was being directed towards areas where children are in school and away from the more disadvantaged areas of the country in the north, where children drop out after two or three years.63

36.The Global Partnership for Education (GPE), in particular, works by creating incentives for developing country partners to: develop financially sustainable education sector plans; increase national budget allocations; and improve the quality of education expenditure outcomes. GPE’s results-based funding model, adopted in 2014, stipulates that in order to receive the first 70 percent of GPE grants, each developing country partner must meet several key requirements, including committing greater domestic resources to education.64 This partnership model was also recommended at a micro-level by education and training charity, Raise the Roof Kenya, who strongly advocated local cooperative arrangements to avoid “creating parallel systems which…are largely unsustainable”.65 According to GPE’s latest results report, 78% of GPE partner countries have maintained their education budget at or above 20% of public expenditure, or increased their education budget in 2015.66

37.The UK Government should, wherever possible, use its influence with partner countries to encourage greater domestic spending on education. It should also support countries in their efforts to target domestic spending towards the most marginalised and disadvantaged children.

Financing multilateral mechanisms for education

38.Alongside its bilateral aid programmes, the Government channels a portion of its ODA spend through multilateral bodies. In 2015, the UK provided £4,473 million in core contributions to multilaterals, amounting to 36.9% of UK ODA.67 These institutions present some key delivery channels for UK aid spend on education, and the key organisations are outlined below.

The Global Partnership for Education

39.The Global Partnership for Education (GPE), mentioned above, is a multi-stakeholder partnership and funding platform comprised of developing countries, donors, international organisations, civil society, teacher organisations, the private sector and foundations. It aims to strengthen education systems in developing countries and is the only multilateral organisation which focuses solely on education. It currently works in partnership with 65 developing countries and has a focus on strengthening education systems, particularly in fragile and conflict-affected states which receive around 50% of GPE’s annual disbursements of funding.68 The UK is currently GPE’s largest donor, having pledged £300 million to the organisation at its last replenishment.69 Of this £300 million, two tranches of £50 million were linked to performance and were only received on completion of a 15 indicator results framework.70 DFID also placed a cap on its funding to GPE to ensure that the UK would only provide a maximum of 15% of the total pledged by donor governments. We understand that the cap was intended to create an incentive for GPE to diversify its funding and to encourage other countries to contribute more. However, GPE did not manage to secure sufficient funding from other donors for DFID’s full £300 million offer to be drawn down. Therefore in this replenishment, DFID will have provided £210 million to GPE; £90 million short of its original pledge.71

40.Evidence to the inquiry demonstrated widespread support for GPE, recognising the important role that it plays in supporting governments to develop domestic education sector plans. DFID’s significant influence—as GPE’s largest contributor—also appears to have had a positive impact on the organisation, pushing forward necessary reforms to make the organisation more efficient and increasing its focus on fragile and conflict-affected states and gender equality.72 GPE received the highest score possible in last year’s Multilateral Development Review for its alignment with UK development objectives, and we recognise the important part GPE has to play in improving education systems around the world.

41.Ahead of the next replenishment in early 2018, civil society organisations, led by the Global Campaign for Education and the Send My Friend to School campaign, have called on the UK Government to pledge $500 million (£381 million) to GPE for the period 2018–2020,73 with a total replenishment target of $2 billion a year in 2020.74 GPE also expects to unlock a further $900 million through the use of a new ‘GPE Multiplier’ financing window to incentivise countries to leverage additional funding through external sources.75 In her recent letter to us, the former Secretary of State made it clear that DFID will take a similar approach to that followed the previous replenishment; linking the UK’s contribution to reform and results.76 However, she did not mention whether the UK would retain the 15% cap on its contributions.

42.We questioned Minister Burt on this, and he stated that DFID was “leading by example”77 and “wholly supports a successful replenishment for GPE”.78 He did not, however, provide us with details on when the Government would announce its contribution to GPE’s replenishment, or how much it would be giving, although he declared that the UK would be encouraging other donors to increase funding.79

43.The amount that GPE are asking for from DFID in the next replenishment round would mean a £81 million increase on the amount that the Department pledged in the last round, before inflation is taken into consideration.80 DFID’s funding to GPE is spread out over the four year replenishment period, so this would involve an extra £20.25 million each year for four years (covering 2019–2022), equivalent to 0.16% of UK ODA in 2015.

44.As recognised in the Multilateral Development Review 2016, GPE’s focus on fragile and conflict-affected states is well aligned with DFID priorities and we recognise DFID’s influence in ensuring and maintaining this.

45.Given that the Global Partnership for Education has improved its performance and has a unique approach to improving the education systems in developing countries, DFID should agree to the full financial contribution requested by GPE at the next replenishment. The UK should also announce its intentions early, to encourage other donors to step forward.

46.We expect DFID to link its contributions to performance conditions, which we believe is right. However, DFID should take all necessary steps to ensure that any cap on contributions, as a percentage of total commitments, is an effective tool to encourage other donors (rather than a barrier to GPE receiving the full financial amount promised). To act as an incentive to other donors, the UK’s commitment, and the percentage cap, should be announced as soon as possible.

The European Union

47.A substantial proportion of the UK’s multilateral ODA expenditure on education is spent through the European Union (EU). As DFID’s evidence to the Committee stated:

According to the latest available data, the UK’s core contribution to the EU in 2015 was circa $1.39 billion. About 4% ($55,023,708) was spent on Education.81

This will need to be considered well before the UK leaves the EU if levels of funding to global education are to be sustained. If it is no longer possible to deliver this funding through the EU post-Brexit, DFID should consider ways that the resources can be re-routed, either through different multilateral organisations or through UK bilateral funding streams. The UK’s departure from the EU should not result in funding being diverted away from key areas of development work, such as education.

Innovation: The International Financing Facility for Education

48.One of the key recommendations from the Education Commission’s Learning Generation report was to increase and improve financing for education. In order to achieve this, the report called for a “financing compact between developing countries and the international community.”82 The Education Commission expanded upon this in April 2017 with a proposal to create an International Financing Facility for Education (IFFEd), a partnership between developing countries, international financial institutions and public and private donors to mobilise new financial resources for low- and middle-income countries. The facility would create new funding streams by creating attractive, low-interest financing packages for lower-middle-income countries. Through private and public donors, it would pool donor funds to act as guarantees for multilateral banks to borrow more money from capital markets.83 By ‘buying down’ loans to middle- and lower-middle income countries, these effectively become credits or grants and as a result inject more capital into the World Bank.84 The Education Commission states that this initiative could mobilise over $13 billion annually in additional resources for education by 2020.85 This initiative is now endorsed by more than 30 international organisations and over 145,000 individuals around the world, including the UN Secretary General.86

49.IFFEd would help to fill the increasing finance gap in global education funding. As the Education Commission points out, even if ODA as a share of donor GDP increases from about 0.3 percent today to 0.5 percent, and if allocation of spending to education rises from 10 percent to 15 percent of total ODA spending, “there will still be an external financing gap in low—and middle-income countries of about $10 billion by 2020 and more than $20 billion by 2030”.87

50.DFID should support the new International Financing Facility for Education (IFFEd), as an additional mechanism for leveraging funding into the provision of global education.

28 The Education Commission, The Learning Generation: Investing in Education for a Changing World (2016) p. 21

29 Q81 HC639

30 The Education Commission, The Learning Generation: Investing in Education for a Changing World (2016) p. 110

31 The Education Commission, The Learning Generation: Investing in Education for a Changing World (2016) p. 22

32 Calculations made using UK Statistics on International Development 2016: Table A7: UK Bilateral ODA: by Sector & Table A9: Imputed UK Share of Multilateral Net ODA by Sector (17 November 2016)

33 Q222 HC639

34 Q221 HC639

35 Q3

36 Q3

37 Q8

38 Institute for Fiscal Studies, The IFS Green Budget: February 2012 (2012), Chapter 7

39 See Letter from Rory Stewart regarding education in Tunisia and development in North Africa (11 January 2017); ICAI, The Cross-Government Prosperity Fund: A rapid review (February 2017) p. i (objectives) & 12 (Concept notes submitted and approved by sector); HMG, Conflict, Stability and Security Fund Annual Report 2016/17 (July 2017) p. 18; Q223 HC639