Definition and administration of ODA Contents

Summary

Under the International Development (Official Development Assistance Target) Act 2015, the UK Government enshrined in law a commitment to spending 0.7% of Gross National Income (GNI) on Official Development Assistance (ODA). The UK Aid Strategy, also launched in 2015, included details of how the 0.7% target would be met, including through the movement of an increasing proportion of the UK’s Official Development Assistance (ODA) to departments other than the Department for International Development. Our inquiry considered questions relating to both the definition and administration of ODA.

The definition of ODA is determined by the OECD’s Development Assistance Committee, and specifically excludes any assistance to high-income countries. High-income countries or territories occasionally fall back into middle-income status, but there is no established procedure for re-admitting such countries or territories to ODA eligibility. Following pressure from the UK, the DAC has agreed to consider introducing a ‘reverse graduation’ mechanism–an idea which we support.

The ODA definition does not preclude the UK from providing humanitarian assistance wherever needed, including to high-income countries and territories: it simply prevents the Government from reporting such assistance as ODA. Following Hurricane Irma, the UK provided significant humanitarian assistance to the affected British Overseas Territories (including Anguilla, the British Virgin Islands and the Turks and Caicos Islands). Little of this assistance counted as ODA because almost all of the territories affected are classed as high-income. We recommend that the UK continue to provide humanitarian assistance where appropriate, irrespective of the ODA eligibility status of the recipient countries and territories. In particular, the UK should continue to provide whatever assistance is needed to its Overseas Territories.

The Conservative Party’s 2017 election manifesto included a commitment to seek changes in the ODA definition and–if unsuccessful–to use a UK-specific definition instead. However, we believe unilateral action by the UK to develop and use its own ODA definition would be an own goal. The UK’s reputation as a leading development actor stems from its expertise and professionalism, its commitment to multilateralism and the international system and its commitment to, and delivery against, the 0.7% target. All three of these ‘assets’ would be damaged by trying to manipulate the shared understanding of what aid is.

The movement of ODA outside of DFID provides opportunities to harness skills and networks from across Whitehall to enhance the quality of ODA. However, moving increasing amounts of ODA outside of DFID also creates inherent risk in three areas; coherence, transparency and focus upon poverty reduction. Without effectiveness in these areas, the quality of the UK’s ODA output will suffer.

DFID is an experienced administrator of ODA and should play the leading role in equipping other government departments with the skills required to ensure consistently excellent levels of ODA administration, from transparency in reporting to poverty reduction driven programming. With ODA spread across Whitehall, there is a risk of duplicate or contradictory programming. Furthermore, with no central point for oversight, the overall story of UK ODA spend risks being lost amongst the outputs of different Whitehall departments. Clear and strong oversight mechanisms are essential to ensure that accurate accounts of UK ODA spending are recorded and to prevent misdirected spending from occurring. The Secretary of State for International Development should have ultimate responsibility for oversight of UK ODA.

The increasingly prominent role played by the cross-government funds raises particular concern given their shortcomings in focus upon poverty reduction and transparency. We found that, in practice, many Prosperity Fund projects showed very weak targeting at their primary objective, with negligible targeting towards helping the poorest and most vulnerable. We also received contradictory reports in evidence about the approach of the CSSF towards redacting programme information; the Joint Funds Unit told us that there was a presumption to publish all data, whereas other evidence suggested that information was routinely redacted in programmes that contain a mixture of ODA and non ODA-eligible components on national security grounds. This lack of clarity risks undermining faith in the UK aid brand.

DFID has the experience and know-how to administer ODA in a targeted, effective and transparent way, and should continue to play the central role in the delivery of the UK’s ODA. To ensure the primacy of poverty reduction as an objective for all UK ODA, we recommend that all ODA, including that administered outside of DFID, should conform in practice with this requirement. Poverty reduction should underpin all of the UK’s ODA, helping the poorest and more vulnerable and ensuring that no-one is left behind.





Published: 5 June 2018