In June 2019, the Independent Commission for Aid Impact (ICAI) published a performance review of the Newton Fund, a £735 million research and innovation partnership fund with two purposes. The Fund’s primary purpose is to develop science and innovation partnerships to reduce poverty by generating and putting into use knowledge and technology. Its secondary purpose is to strengthen the UK’s wider prosperity and global influence by building ties with partner countries, promoting the UK as a global leader in development research and unlocking opportunities for collaboration and trade. It is administered by the Department for Business, Energy & Industrial Strategy (BEIS) and entirely funded by Official Development Assistance (ODA).
Using the Commission’s scoring system, ICAI awarded the Fund an Amber/Red score, meaning “unsatisfactory achievement in most areas, with some positive elements.” The review raised a number of substantial concerns around among other things; the matched funding model and untying of UK aid; the lack of adequate systems to measure impact and value for money; the delivery partners’ ability to understand what constitutes ODA-compliant projects; and the Fund’s undue focus on its secondary purpose. The Commission also found the Government’s response to its recommendations to be wanting.
As the International Development Committee and the Sub-Committee on the work of ICAI, we agree with ICAI’s assessment of the Fund’s performance and we endorse the review’s six recommendations. We hope the review will be used by BEIS as an opportunity to make substantial changes to the Fund’s design and governance, and apply the appropriate lessons to be learned to the Global Challenges Research Fund, the other dual-purpose ODA-supported fund for which it is responsible. As the second largest spender of ODA after the Department for International Development (DFID), BEIS has a particular responsibility to deliver value for money for all its UK aid spending in a transparent and accountable way. We agree with ICAI that to implement and demonstrate that commitment, the Department must rethink the design of the Fund to guarantee that its primary purpose is the top priority and its secondary purpose is subordinate. To achieve this, the development impact and ODA-eligibility must be far better understood, measured and reported by delivery partners.
Before any extension of the Fund within the next Spending Review process, BEIS should also make sure it is able to demonstrate that it is measuring impact and value for money across all its ODA spending from inception. We find that progress has been slow on addressing the governance issues that were first raised in 2016 and on completing the list of measures that BEIS committed to when it first responded to the review. We feel it is imperative for these issues to be addressed urgently and for them to be paired with an in-depth review of the use of the matched funding model and its impact on the Government’s clear policy for all UK aid to be ‘untied’. Finally, to facilitate public scrutiny of the increasingly large amounts of ODA being devolved to Departments other than DFID, it would be helpful if BEIS would report more data and publish additional information about projects that are funded via ODA.
Published: 15 June 2020