44.The Secretary of State for International Development made a speech on 12 April 2018 setting out her ‘Mission for Global Britain’, and stated that “whoever spends [ODA] needs to spend ODA really well and the public should always know what, where, how and why”.45 With increasing amounts of ODA administered by government departments other than DFID, we have examined concerns relating to ODA systems and processes, notably relating to coherence and transparency, which might hamper the effectiveness of ODA administered by other government departments and damage the UK aid brand as a whole.
45.As part of the 2015 Spending Review, HM Treasury allocated ODA budgets to departments across Whitehall and cross-government funds for each year from 2016–17 to 2020–21. During this process, departments were asked to consider whether any existing activities could be classed as ODA and whether they could increase the amount of their ODA expenditure. They were also asked to submit bids for new ODA eligible activities.46
46.HM Treasury received 61 bids with a value of £18 billion, some of which were for existing activities not previously classified as ODA. £7billion worth of bids were accepted.47 A ‘Challenge Panel’ comprising of HM Treasury, DFID and the Major Projects Authority considered these bids.48 We found it extraordinary that during the bidding process, departments were not routinely asked for details of their capacity or capability to implement their proposed projects or their plans for monitoring and evaluation of the projects’ outcomes, nor to consider how the bid contributed to the objectives of the UK Aid Strategy. However, when this information was proactively presented by other government departments it was considered.49
47.We are concerned that the current bidding process enables departments to bid for ODA without due regard being made of their capability to administer these programmes effectively. Consequently, we recommend that the bidding process is amended to include an evaluation of a department’s staffing, systems and knowledge capacity to administer ODA. We also recommend that departments detail their plans for monitoring and evaluation of projects, including how the Independent Commission for Aid Impact (ICAI)50 will have access to this information.
48.The movement of increasing amounts of ODA to other government departments places new demands upon these departments to administer ODA spending effectively. There are considerations to applying ODA that do not apply to domestic expenditure. Under the UK Aid Strategy, all departments spending ODA are required to:
put in place a clear plan to ensure that their programme design, quality assurance, approval, contracting and procurement, monitoring, reporting and evaluation processes represent international best practice.51
49.In a report of July 2017, the National Audit Office identified that departments had “taken positive steps to build their capacity to spend larger ODA budgets” including expanding teams and adopting learning from DFID on monitoring and measuring impact. However, progress across programmes was deemed to be variable.52 Written evidence to our inquiry also expressed concern about the capability of other government departments to swiftly adapt internal processes and systems to the demands of administering ODA especially in relation to transparency.53
50.Increasing the amount of ODA spent by departments other than DFID will necessitate an increase in capacity (both in staffing levels and in departmental knowledge), combined with the refinement of internal systems, in order to ensure that ODA is administered effectively and that the impact of this expenditure can be demonstrated.
51.DFID has taken the lead in providing support and guidance to other government departments on administering ODA, supported by HM Treasury. The Secretary of State for International Development has expressed her eagerness for DFID to develop capacity across Whitehall, telling us,
My Department is where the real expertise in development sits, and we need to get out and enable other Government Departments to have that expertise.54
52.This support has included workshops, technical support and training to other government departments on how to compile their ODA returns as well as broader advice on programme management. DFID has expanded its central ODA team to increase its capacity to advise other government departments. The National Audit Office told the Committee that DFID had “provided a lot of support to Departments that had more of an uplift in their ODA spending” especially in considering ODA eligibility and managing development programmes.55 DFID has also recently published a ‘UK ODA: Value for Money Guidance’ document, a handbook which outlines best practice in administering and spending ODA. These actions suggest that DFID is keen to take the lead in developing ODA administration capacity across Whitehall and promote a ‘tightening up’ of ODA processes.
53.HM Treasury also publishes guidance documents for use by ODA-administering departments. It provides written guidance to other government departments through its ‘Managing Public Money’ document which sets out the responsibilities of departments and accounting officers in ensuring effective and proper handling of funds (each department remains responsible for meeting its requirements).56 HMT also provides guidance and advice in supporting the appraisal and development of spending proposals.
54.HMT told us that it had worked together with DFID to centralise guidance documents, signposting ODA-administering other government departments to broader guidance such as the UK Aid Strategy and DFID’s Smart Rules.57 However, we have not been able to ascertain how evenly this support has been applied across other government departments and how receptive they have been to this advice.
55.DFID has a crucial role to play in ensuring that all other government departments understand how to administer ODA programmes effectively and efficiently, including programme management and reporting, and highlighting when required administration standards are not being met. DFID is willing and able to perform this leading role, but our key concern is whether other government departments are willing or able to absorb it.
56.DFID should play the leading role in developing the capacity of ODA-administering departments across Whitehall, driving consistently high standards for ODA administration and tightening up practices. It should continue to second staff to other government departments, developing skills and promoting a poverty reduction-focused culture in ODA programmes across Whitehall. Recognising the burden this places upon DFID, the Government must ensure that DFID receives adequate resources to cover backfill within DFID.
57.Whilst individual departments retain responsibility for their ODA spends, HMG has established three main groups to oversee ODA across Whitehall; the Cross-Ministerial Group, the Senior Officials Group and the new Ministerial Committee for the Cross-Government Funds (established in April 2018).
58.The Cross-Ministerial Group, co-chaired by the Chief Secretary to the Treasury and the Secretary of State for International Development, focuses on value for money and ODA delivery. In addition, the Secretary of State told the Committee that “Ministers have regular bilateral discussions with Ministers from other ODA spending departments on specific issues”.58
59.The Senior Officials Group on ODA is a Director-level cross Whitehall group co-chaired by HMT and DFID. The group’s principal objective is to monitor progress towards the 0.7% target, whilst also improving collaboration and promoting value for money in the delivery of ODA programmes.59 HMT told the Committee that it meets on a regular basis (4 times in 2017).60 Additionally, both DFID and HMT stated in written evidence that they are in daily contact on ODA delivery and policy issues.
60.The National Security Capability Review, published in late March 2018, announced the creation of a Ministerial Committee to oversee governance of the cross-government funds to be chaired by the Minister for the Cabinet Office. The Committee will be attended by Ministers from ODA-spending departments and the first meeting will be held in June 2018. The Cabinet Office told us that the Committee will prioritise requests for funding and provide final approval for any ODA allocations. It will also complement the work of the cross-government Ministerial ODA Group.61
61.There are a number of other mechanisms at fund or thematic level promoting coherence, many of which have fostered a joined-up approach to ODA delivery, resulting in tangible benefits to ODA programmes. For example, during the outbreak of the Zika virus, information gathered by International Forward Look (a weekly briefing for relevant departments and agencies) was used to inform decisions on accelerating use of the DFID-Wellcome Trust partnership to fund research on the impact of the outbreak.62 We believe that this collaborative approach is an example of cross-department ODA at its best, using skills and experience from across Whitehall nimbly to deliver benefits for global health.
62.The Secretary of State has acknowledged that the current mechanisms leave the potential for gaps in coherence, stating that:
In terms of what we do, where we do it and why, I think we need to create better mechanisms63
In practice, the actions of these groups are largely limited to determining whether activities meet the criteria defined in the DAC’s ODA definition, and assessing levels of spending. DFID and HM Treasury monitor overall other government department expenditure but each individual department retains responsibility for ensuring value for money of its ODA. Furthermore, there is no single document which maps out this division of responsibility. Therefore, no one part of government has responsibility for overseeing implementation of the UK Aid Strategy, nor for monitoring the overall effectiveness, quality and coherence of ODA expenditure as a whole.64
63.We received a variety of views on who should ultimately have oversight of the totality of the UK’s ODA. The Overseas Development Institute suggested one option could be the creation of a separate arms length body based within a central agency such as HM Treasury or Cabinet Office “that has the resources to oversee operations, demands transparency and hold line ministries to account”, and that such a body could “play a real role in both monitoring policy achievements, overseeing resource allocation and ensuring coherence and coordination of development policy.”65
64.Much other evidence suggested that this oversight role would be best performed by DFID. For example, the Institute of Development Studies said:
DFID should fundamentally be responsible for UK aid spending. It is more capable of ensuring that all UK aid is effective, coherent and efficient. This does not mean that there is not a role for other departments and funds who bring their own expertise and value to development. But rather that coherence, and thus impact, of UK aid could be strengthened by introducing more coherence across government.
Given that DfID has the most significant expertise on development, the SDGs and aid effectiveness standards across Government we urge the Government to give DFID more powers to scrutinise/promote the effectiveness of aid managed across Government. This should include mandating DFID to set more detailed and more robust effectiveness guidance for all Departments/Funds, quality assuring programme compliance with this guidance and some form of co-implementation role across all major aid programmes and Funds to ensure these standards are being met.
65.When asked whether DFID should regain responsibility for administering the entirety of the UK’s ODA budget, the Secretary of State felt this would not be effective:
I think that just hoovering money back into my Department is not necessarily going to be the best way of doing it. We need to ensure that anyone who spends ODA money in the future is equipped to do it well, that we are very strategic in how we are allocating those budgets and that across Government we have complete coherence about what it is we are trying to do, the understanding of where Britain can make a difference and that we are being consistent in how we are operating ODA with other countries.66
66.Strong and effective cross-government mechanisms should form the bedrock of an effective system of cross-government ODA. The current arrangements leave opportunities for gaps in coherence and ambiguity in where oversight of ODA lies across Whitehall. This creates a risk of duplication, overlap or conflicting priorities in programmes. Without a single person responsible, this also means that there is no single check on the overall coherence or quality of UK ODA as a whole and no central point for capturing examples of added value. There is a conundrum in any joined-up or cross-government working, which is the balance between the opportunity of benefitting from different views and new skills and expertise and the risks of strategic incoherence, duplication and other unintended consequences.
67.The existing coordination and oversight groups - notably the cross-Ministerial and Senior Officials Groups - must be more proactive in targeting their activities explicitly towards poverty reduction and the SDGs to give greater focus across Whitehall. The Government should set out a process for capturing the added value gained as a result of greater cross-Whitehall working.
68.The Government should publish a clear statement outlining individual departmental responsibilities in delivering, overseeing, monitoring and coordinating ODA, including how they correspond to the aims of the UK Aid Strategy. This should also state explicitly that the International Development Committee may perform oversight of any ODA spending across Whitehall, including via partnership with other select committees as appropriate.
69.The Secretary of State for International Development should have ultimate responsibility for oversight of the UK’s ODA and the Department should have final sign off of all ODA.
70.Just as DFID commissions agencies to conduct work on the ground or pays into multi-lateral funds, whilst retaining oversight of UK ODA and ensuring quality control of ODA spending, the Government should consider whether other government departments should only receive ODA money if it has come via DFID so that they have oversight and ensure that the money ‘cannot be better spent’.
71.Following the spending review in November 2015, the UK Government increased its funding for international development research, from approximately £400m in 2015 to an expected level of £1.29bn by 2020–21.67 Accordingly, a number of cross-government ODA funds were launched, including the Global Challenges Research Fund (GCRF), the Newton Fund and the Ross Fund.
72.These funds can contribute to building improved research capacity in ODA recipient countries, potentially supporting better systems for generating and analysing data on development activities. As we have suggested in our previous inquiry into DFID’s Work on Education,68 an improved evidence base is crucial to support better programme development and monitoring. Partnerships with UK institutions can help develop this research capacity in ODA recipient states, as well as improving context-specific knowledge on the part of UK based researchers. The greatest gains are likely to be made in low income countries, where research capacity is likely to be lower.
73.The Strategic Coherence of ODA-funded Research (SCOR) Board was formed in November 2017 to provide a mechanism for promoting coherence in UK development science and research. The SCOR Board aims to build coherence across all significant government funded development science and research and to maximise impact, identifying opportunities for joint working, identifying strategic gaps and reducing duplication.69
74.Alongside CSOs and universities, the UK development community includes a number of specialist development research institutes such as the Institute for Development Studies and the Overseas Development Institute which provide an evidence base for development activities. Written evidence has raised concerns about the ramifications of increased administration of ODA by other government departments for engagement with research institutions and civil society, and a potential negative knock-on effect upon the quality of development interventions. For example, the Institute for Development Studies wrote that:
Through DFID, the UK has an international reputation for research and evidence-based policy making for development. It is vitally important that this is not diluted or lost as more ODA is spent by other government departments.70
75.The close relationship between DFID, research and civil society organisations has facilitated a holistic approach to crises. For example, during the Ebola crisis, DFID was able to draw upon the research experience of the Institute for Development Studies to ensure a culturally sensitive approach to the crisis, incorporating knowledge of local burial practices into planning alongside the immediate medical response.71
76.The UK is respected worldwide for the quality of its ODA research base and the consequent benefits it affords in enabling context-sensitive and targeted aid interventions. This strong base, building upon established relationships, must not be jeopardised by a shift of ODA away from DFID.
77.In the 2015 UK Aid Strategy, the Government committed to all UK ODA-spending government departments improving the quality and quantity of the data they publish relating to their ODA spending by attaining a ranking of ‘good’ or ‘very good’ in the Aid Transparency Index within the next five years. After the 2014 Aid Transparency Index, the eligibility criteria to appear on the Index were amended and consequently only DFID has been eligible to appear on the 2015 and 2016 indexes.
78.DFID received praise in evidence for the quality and timeliness of its data, described by the Overseas Development Institute as having “world-leading standards on data disaggregation and transparency”. DFID scores consistently well, achieving an IATI rating of ‘very good’ and ranked fourth amongst all global development agencies.72
79.By comparison, most ODA from other government departments and cross government funds received criticism, with considerable variance in the quality and quantity of data made public. In the 2014 IATI, the FCO scored ‘poor’ (ranked 35th) and the MoD scored ‘very poor’ (ranked 60th).73 In evidence, Development Initiatives states that “At present, only four departments–DFID, FCO, MOD and DECC (BEIS)–are currently publishing to IATI in a meaningful way”.74 In written evidence, Publish What You Fund state that most other government departments are unlikely to meet the criteria for inclusion in the 2020 Index.75
80.We found that it was difficult to get a full picture of how UK ODA is spent in an individual country. To take an example, BEIS spends ODA in China (an estimated total spend of £26.3m in 201676) but it is hard to understand where funding is spent and through which funds (e.g. Newton Fund, International Climate Fund). Details of individual projects are contained within a sub table of the Statistics on International Development; however, the table does not state which fund the project is allocated to, and hence which fund project spending will be recorded against. Similarly with the FCO’s ODA spend in China, some FCO data is more readily available than that of other departments (for example, the FCO publishes a breakdown of its Prosperity Fund project spending), but the granularity of spends is not easily accessible.
81.Given the level of spending involved, we are concerned that departments are not publishing fuller details of their ODA spending as this lack of clarity clouds the public’s ability to see good and bad spending. The Government must outline how it intends to measure progress towards the commitment to publish data to IATI standards by 2020, providing regular milestones to track progress towards this target.
82.The cross-government funds received particular criticism for their lack of transparency, especially given the considerable level of spending involved (£601m of ODA in 201677). The situation is further complicated by the CSSF’s blend of ODA and non-ODA activities which has resulted in the redaction of large tranches of information for national security reasons, making it difficult to assess the quality of significant elements of programming. In their recent Review of the CSSF, ICAI stated that:
Sometimes sensitivity and confidentiality are used as arguments for the decision not to share information … Although this may be valid in specific circumstances, our evidence indicates that this justification is over-used … we found that different people classified CSSF documents in different ways, with some restricting access as the default option, and others not.78
83.We took evidence from Melinda Simmons and Christian Dennys from the Joint Funds Unit, the administrative hub for the funds. They stated that “[There] is a presumption to publish. That is the starting point”.79 However, they also acknowledged an issue with transparency of the funds and they committed to
making sure that our own internal resource is being most efficiently used to run the processes of what we publish, where we publish and how we publish. We are also looking at driving some further efficiencies in the training offer we provide across our staff and network.80
84.The redaction of large tranches of CSSF information makes it difficult to assess the effectiveness of programmes. Without access to this information, the taxpayer cannot see examples of well-spent money on well targeted programmes, nor identify poorly targeted programmes. This lack of clarity undermines trust in the fund.
85.The Joint Committee on the National Security Strategy’s report into the CSSF identified a number of practical ways in which the CSSF could improve its transparency. In oral evidence to this inquiry, Melinda Simmons said:
We have come an awfully long way in the last year. When the JCNSS was conducting its inquiry, we had not yet begun to publish. In the last year, the CSSF has published its first annual report. It has put out project documents. It has put out annual summaries. It has a live webpage on gov.uk. Sitting where we are now, compared to a year ago, it feels like a really different place.81
86.The Joint Funds Unit employs 29 staff to ensure compliance with transparency commitments and results management. However, the JCNSS’ recommendations have only partially been met. For example, only selected individual case studies are provided on the website rather than detailed information on programmes and projects in each region. As Christian Aid told us:
“positive outcomes on poverty reduction cannot be assumed in a context of very low levels of transparency”.82
87.The cross-government funds must improve significantly their transparency levels as a matter of urgency to reverse the damaging lack of confidence in the quality of the funds’ interventions. Without transparency it is impossible to assess the effectiveness of the cross-government funds and consider whether they are creating the benefits espoused by the government. CSSF programmes must publish programme information as a matter of course unless a clear national security reason is cited for redaction.
88.In light of widespread concerns about the Funds, including from the JCNSS, we recommend that ICAI should be given responsibility to scrutinise the totality of the cross-government funds, as well as other blended ODA/non-ODA programmes.
89.The UK’s ODA output must be underpinned by strong administrative systems and processes to ensure that all ODA activities are as effective, transparent and joined-up as possible. We urge DFID to develop more detailed and robust guidance for all departments and funds managing ODA on how to meet effectiveness standards, ODA legislation and rules and other cross-Government development commitments. We are concerned that the movement of ODA from DFID to other government departments appears to have been started before adequate systems and standards were in place, and further capacity building is required across Whitehall to achieve the necessary standards required. The Government must ensure that UK ODA is delivered to a consistently high standard, regardless of whether it is delivered by DFID or another government department. Accordingly, DFID should take the lead in promoting excellence in ODA administration across Whitehall.
90.If the increase of ODA via other government departments is aimed at benefitting from individual departments’ skills and knowledge then the Government must now establish the means to monitor and report to Parliament on the added value of this additional expertise when balanced against the dilution of control by DFID.
45 Speech by the Secretary of State for International Development, The Mission for Global Britain. Delivered 12 April 2018
46 National Audit Office, Managing the Official Development Assistance Target – a report on progress. 2017 para 1.21
48 Ibid 1.22
49 Ibid 1.23
50 ICAI scrutinises UK aid spending, operating independently of government and reporting to Parliament.
51 HM Treasury and Department for International Development UK Aid: Tackling Global Challenges in the National Interest (November 2015) para 4.6
52 Ibid Summary para 22
53 For example, ICAI: “The Foreign and Commonwealth Office manages a large share of expenditure under both the Prosperity Fund and the CSSF. Past ICAI reviews have found that the FCO’s financial management system is not well suited to supporting the management of complex aid programmes”.
62 ICAI, The UK Aid Response to Global Health Threats, January 2018, Box 13
64 Ibid 2.15 and Figure 2, Independent Commission for Aid Impact ODA0031 para 3.5
68 See our report DFID’s Work on Education: Leaving No-one Behind?
69 Ibid paras 14 and 15
71 Ibid para 4.2
73 Publish What You Fund, 2014 Aid Transparency Index. Accessed 1 May 2017
76 Department for International Development Statistics on International Development 2017, Data underlying the SIDs
77 Department for International Development, Statistics on International Development: Provisional UK Aid Spend 2017 (April 2018)
78 ICAI (2018) The Conflict, Security and Stability Fund’s Aid Spending. March 2018 para 4.96
Published: 5 June 2018