Effectiveness of UK aid: potential impact of FCO/DFID merger Contents

4Scrutiny arrangements

Ensuring oversight of the totality of ODA spending

Select committee oversight

92.With a budget in 2019 of £15.2 billion, comprehensive and timely parliamentary oversight of the UK’s aid spending is essential. The creation of the new Foreign, Commonwealth and Development Office raises questions concerning the form of future scrutiny arrangements. In letters to the Chairs of the Foreign Affairs and International Development Committees on 16 June, the Government said,

“The Government’s view is that Select Committees in the House of Commons should generally mirror Government departments. We would therefore expect that the International Development Committee will not continue and the remit of the Foreign Affairs Committee will change to reflect the new department’s roles and responsibilities”.145

However, in proceedings following an Urgent Question in the House on 18 June, the Foreign Secretary acknowledged that select committee arrangements are a matter for the House.146

93.Since 1979, select committees have mirrored Whitehall departments, with at least every department having its own committee. In common with other departmental select committees, the remit of the International Development Committee is to scrutinise the spending, administration and policies of the Department for International Development. In addition, some committees have a cross-departmental remit, allowing scrutiny of cross-cutting policy areas and spending (for example, the Environmental Audit Committee and the Public Accounts Committee).147

94.Arrangements exist for various types of cross-departmental scrutiny in recognition that, very often, one department’s activity will affect one or more others. This may include ‘guesting’, where members of one committee are invited to participate in other committees from time to time, and formal concurrent working between one or more committees, such as the model of the Committee on Arms Export Controls.

95.In the last Parliament, the International Development Committee secured acknowledgement within the Liaison Committee that it would take on responsibility for scrutiny of ODA spending across government (whilst also encouraging individual committees to examine their departments’ ODA expenditure). There has been some limited scrutiny of UK ODA spending by other select committees, for example the Public Accounts Committee’s 2019 report into the Effectiveness of Official Development Assistance spending.148 Additionally, the International Development Committee traditionally appoints a sub-committee to examine the work of the Independent Commission for Aid Impact, receiving its reports and conducting further scrutiny.149

96.Development experts have highlighted the importance of a standalone development-focused select committee for promoting accountability and understanding of aid spending. The Overseas Development Institute’s Nilima Gulrajani said “By its very existence, it [the International Development Committee] enhances transparency, public understanding and awareness of UK work on development.”150 In her paper on merging development agencies, she states,

“It [a committee on development] can become a channel of communication linking the public, the government and the development agency in ways that ensures bipartisan political engagement and accountability of the merged institution.”151

97.Elsewhere in the world, parliamentary scrutiny of development policy is undertaken by committees with broader remits, in which development is just one element of competing scrutiny demands. In Australia, oversight of ODA and development policy is undertaken through the Foreign Affairs and Aid Sub-Committee of the Parliament of Australia’s Joint Standing Committee on Foreign Affairs, Defence and Trade.152153 In Canada, aid scrutiny falls under the remit of the Standing Committee on Foreign Affairs and Development154 and, in Norway, development is covered by the Standing Committee on Foreign Affairs and Defence.155

98.We are concerned that without a specific ODA focused committee, the UK risks falling into a similar trap, with time and resources for scrutiny of development competing against other areas of international policy. The Center for Global Development’s Ian Mitchell suggested that,

“the government should create a cross-cutting committee, like a public accounts committee, to focus on questions of aid value for money. This would provide visibility and reassurance to taxpayers and Parliament alike on aid spending, and enable the Foreign Affairs and Development Committee to focus on policy”.156

The Overseas Development Institute’s Nilima Gulrajani agrees with the principle of a cross-cutting committee, and suggests that,

“Given that the UK already has examples of select committees transcending departmental boundaries, including the Public Accounts and Environmental Audit Committees, this may be an opportune moment to assess the value of a similar cross-departmental committee focused on development”.157

Furthermore, the Secretary of State told us,

“it [the FCDO] will be a big, chunky Department, there will need to be a very substantial parliamentary oversight Committee, or Committees, to make sure that Parliament has the level of involvement and transparency that we would all expect”.158

Independent Commission for Aid Impact

99.The Independent Commission for Aid Impact (ICAI) is the independent body responsible for scrutiny of UK aid spending, established in 2011 and given a soft statutory basis in the 2015 International Development (Official Development Assistance Target) Act. Since the 2015 UK Aid Strategy, ICAI has undertaken around 40 reviews of ODA spending across Whitehall, assessing areas including procurement, fiduciary risk management, oversight, value for money, governance and management.159 These reviews are submitted to our sub-committee for consideration. ICAI fulfils the Government’s statutory duty to,

“make arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”.160

100.Retaining ICAI will be essential to ensuring thorough scrutiny of UK aid spending, both within the new FCDO and across Whitehall more broadly, and in fostering greater cohesion in the UK’s approach to development spending. The Institute of Development Studies argues that “ICAI plays a crucial role” and that,

“in the context of the Integrated Review, ICAI’s reports and analysis play an important role in providing evidence to inform how DFID, the FCO and Defence can complement each other.”161

Ian Mitchell from the Center for Global Development suggests ICAI “should automatically move to the merged department” as a simple means of satisfying the legal requirement placed upon the Secretary of State to ensure independent evaluation of UK aid spending.162 ICAI say,

“If the UK is to maintain its reputation for aid excellence and its global standing as a development superpower, it needs to invest in maintaining the high standards of UK aid. Independent scrutiny is an essential part of this, as recognised in the 0.7% spending target legislation. It is also key to maintaining public confidence in and support for a large aid programme.

“ … Independent scrutiny is all the more important during a period of rapid change in the UK aid architecture, when risks to the integrity, effectiveness and value for money of UK aid are heightened”.163

101.There is international precedence for maintaining an independent ICAI-style body. In Sweden, the Expert Group for Aid Studies (EBA) evaluates and analyses the governance and implementation of ODA164 and in Germany the German Institute for Development Evaluation (DEval) provides evaluation of German development work.165 In Australia the Office of Development Effectiveness is a less independent version of ICAI, which is overseen by an Independent Evaluation Committee. Based upon the ICAI model, France is legislating to introduce an independent scrutiny body.166

102.In 2019, the UK aid budget totalled £15.2 billion. Given the size and complexity of this budget, thorough parliamentary scrutiny of UK aid spending is essential. This is best performed by a dedicated select committee which is able to take a holistic overview of UK ODA, ensuring that aid is spent in a strategic and transparent manner on high-quality interventions. Therefore, we recommend the creation of a House of Commons Select Committee on Official Development Assistance (ODA), with a remit for scrutiny of the totality of the UK’s ODA spending.

103.Through its close work with us, and our sub-committee, the Independent Commission for Aid Impact (ICAI) is a crucial part of the robust scrutiny architecture which ensures the aid budget is well spent. ICAI’s expert reviews identify areas of good practice as well as areas for improvement, helping the UK to maintain its reputation as an international development superpower. It also satisfies the statutory requirement set out in the International Development (Official Development Assistance Target) Act 2015 for independent scrutiny of UK aid spending. There is simply no reason to change these arrangements. We recommend that the Government retains ICAI in its current form in order to provide thorough and independent scrutiny of the UK’s aid budget.

104.Drawing upon the highly effective model of cooperation between the National Audit Office and Public Accounts Committee, the new ODA Committee should have responsibility for receiving and considering ICAI’s reviews. It should also have responsibility for the other aspects of cooperation and coordination with ICAI in which we currently participate, including recruitment of the Chief Commissioner and other commissioners; agreement of the forward work programme and commissioning work.

146 HC Deb, 18 June 2020, col 947 [Commons Chamber]

147 The Public Accounts Committee examines the value for money of Government projects, programmes and service delivery, drawing on the work of the National Audit Office, to check the efficiency and effectiveness of public spending. (Public Accounts Committee homepage, accessed 22 June 2020)

148 Committee of Public Accounts, One Hundred and Seventeenth Report of Session 2017–19, “The effectiveness of Official Development Assistance expenditure”, HC 2048

149 For example, our sub-committee recently published a report on the Department for Business, Energy and Industrial Strategy (BEIS)-funded Newton Fund—International Development Committee, 3rd Report of Session 2019–21, “The Newton Fund review: report of the Sub-Committee on the work of ICAI”, HC 260

150 Nilima Gulrajani, Tweet, 15 June 2020

151 Nilima Gulrajani, “Merging development agencies: Making the right choice”, Overseas Development Institute, January 2018, para 5.3

152 Parliament of Australia, Joint Standing Committee on Foreign Affairs, Defence and Trade, accessed 20 June 2020

153 For example, the Australian Parliament’s Joint Standing Committee’s more recent development-specific report was its ‘Inquiry into the strategic effectiveness and outcomes of Australia’s aid program in the Indo Pacific and its role in supporting our regional interests’, launched in 2018. This lapsed in April 2019 due to the general election. In February 2020, the Committee launched an inquiry into “Strengthening Australia’s relationships with countries in the Pacific region”

154 House of Commons Canada, Standing Committee on Foreign Affairs and International Development, accessed 24 June 2020

155 Institute of Development Studies, (EUA0078)

158 Oral evidence taken as part of the Humanitarian crises monitoring: impact of coronavirus inquiry, HC 292, Q176

159 Independent Commission for Aid Impact (EUA0028)

160 International Development (Official Development Assistance Target) Act 2015, section 5

161 Institute of Development Studies (EUA0013) paras 4.2 and 4.5

163 Independent Commission for Aid Impact (EUA0028)

164 Expertgruppen for Bistandsanalys, accessed 22 June 2020

165 ‘About Us’, German Institute for Development Evaluation, accessed 22 June 2020

166 Written evidence submitted to the Foreign Affairs Committee, The FCO and the Integrated Review, Independent Commission for Aid Impact (INR0072)

Published: 16 July 2020