In a time of COVID-19, we need stability and should seek to avoid a potentially disruptive and costly machinery of government reorganisation that will impact on the effectiveness of aid.
This Committee advocates strongly for the retention of the current standalone Ministry of State model for international development, with a Cabinet level Minister. If the Government should decide to make significant changes to current systems and structures for administering UK aid, the Government should, as a minimum, present a statement to Parliament setting out an evidence-led rationale for any change; quantifying expected costs and how intended benefits justify the costs and showing how both will be measured and controlled.
1.The Committee welcomes the Government’s commitment to spending 0.7% of Gross National Income (GNI) on aid, keeping within the current international rules-based consensus of the OECD’s DAC definition, and preserving the primary focus of UK aid upon poverty reduction. (Paragraph 9)
2.The UK aid strategy sets out the priorities and principles against which UK aid spending should take place. The refreshed aid strategy will shape ODA expenditure beyond 2020 and should be an important building block in the Government’s forthcoming Comprehensive Spending Review (CSR). Therefore, it is crucial that the refreshed Strategy is in place before the next CSR so that the UK’s aid outputs are based on strategic planning rather than fitting around Whitehall budgets. (Paragraph 11)
3.In recent years, the UK aid budget’s focus has shifted towards middle-income countries that are primarily of interest to the UK from a security, climate change or economic perspective. This shift is driven by non-DFID UK aid spending. To ensure that UK aid is used as effectively as possible, the Government must direct ODA to countries where there is the greatest likelihood of reducing poverty. Accordingly, it should review the growth in ODA directed to middle income countries to ensure that these interventions are helping the world’s poorest and most vulnerable people. (Paragraph 19)
4.The shift in the increasing amounts of ODA administered outside DFID has created significant challenges for the management and oversight of ODA spending. More than one quarter of the UK aid budget is now spent outside DFID; and, as more bodies become responsible for aid spending, accountability for spending aid well appears to have been eroded. The Ministerial Group which reviews what everyone is doing with their ODA has not met since 2018. We are not convinced that all ODA programmes administered outside of DFID are adequately targeted towards poverty reduction or the most vulnerable. Furthermore, there is a significant risk that non-DFID government departments will rebadge day-to-day spending as aid and push the boundaries of what counts as aid. (Paragraph 27)
5.In this Committee’s view, stronger accountability and oversight is needed to help prevent distortions in the uses of development assistance and undermining the case for aid. For aid spending outside DFID, there should be clearer links to poverty reduction. The Government should put measures in place to ensure there is no return to tied aid. Finally, ministerial-led oversight of the ODA spending budget across Whitehall should be restored. (Paragraph 28)
6.The Committee agrees that it is important to review systems to make sure they are delivering value for money and meeting their strategic objectives. However, there are signs that key decisions regarding the future of DFID have already been made. In a time of COVID-19, now is not the time to take those decisions or make those changes. (Paragraph 39)
7.The Committee would caution against restructuring the way UK aid is administered that might potentially impair the effectiveness of aid, and advocates strongly for the retention of the current standalone Ministry of State model with a Cabinet level Minister. (Paragraph 40)
8.If the Government should decide to make significant changes to current systems and structures for administering UK aid, it should avoid takingsuch a decision in haste. The Government should, as a minimum, present a statement to Parliament setting out an evidence-led rationale for any change; quantifying expected costs and how intended benefits justify the costs; and showing how both will be measured and controlled. (Paragraph 41)
9.UK aid often seeks to create impact in challenging environments, where monitoring impact is difficult. However, this should not preclude departments administering ODA from setting objectives aligned to the UK Aid Strategy and seeking to monitor and evaluate change, in order to achieve the fullest picture possible of the totality of the UK’s aid spend and the impacts it is securing. (Paragraph 49)
10.The UK Aid Strategy set an ambition that all UK government departments that spend the ODA budget will be ranked as‘good’ or ‘ very good’ in the international Aid Transparency Index (ATI) by 2020. To date, only three departments—DFID, DHSC and BEIS—had met the target. Departments need to improve the transparency of their aid spending. The Government must set out how it intends to measure progress towards the commitment to publish data to global transparency standards, with milestones, and hold relevant Secretaries of State and departmental officials to account for failing to meet target dates. (Paragraph 55)
11.UK aid should be scrupulously monitored to help ensure it is fulfilling its remit to eradicate extreme poverty and delivering value for money for the taxpayer. The current independent scrutiny regime is one of the strengths of UK aid. These scrutiny arrangements should continue—particularly as ODA is increasingly disbursed across government departments. If DFID’s functions are absorbed into another government department, parliamentary scrutiny should continue under a standalone parliamentary committee that scrutinises UK ODA which ICAI should report to. (Paragraph 60)
Published: 9 June 2020