47.The CSSF funds programmes in countries that may become unstable or that are affected by conflict. Operating in such countries is risky. Dr Blair and Dr Rathmell told us that these risks include: physical harm to beneficiaries and to those delivering the programmes; the potential to make the situation worse; inadvertent complicity in human rights abuses; corruption; and damage to the reputation of the UK and of the Government. Dr Rathmell explained that
There are established ways of managing those risks, but a fund like this needs to be willing to have some appetite, unfortunately, to put up with a Daily Mail test, in that some of the funds will go missing or be linked to groups that may carry out human rights abuses, and it is for the Government to decide how far they are willing to accept the risk. If you completely remove the chance of that happening, you have much less effect.
48.Robert Chatterton Dickson and Melinda Simmons stated that CSSF spending is conducted in line with standard Government procedures for managing risk. However, human rights groups Reprieve and the Bahrain Institute for Rights and Democracy (BIRD) expressed concern about how risks to human rights are addressed in relation to CSSF-funded programmes. Reprieve stated:
The lack of clear accountability and ownership for CSSF projects inevitably complicates the task of reviewing those projects’ human rights risks, and of deciding whether these risks can be sufficiently mitigated such that it is safe and appropriate for the project to proceed. … This process is complicated by the CSSF’s Regional Board system, under which a series of Ministers, Departments and UK overseas posts may hold shared responsibility for a single assistance project.
49.Both Reprieve and BIRD highlighted how the CSSF was used to fund security and justice programmes in Bahrain in 2015–16. Reprieve stated:
… the FCO continues to fund an Ombudsman for the Bahraini prison system that has repeatedly failed to investigate torture allegations. The Ombudsman has declined to investigate several cases of prisoners whose forced ‘confessions’ led to them being handed the death penalty.
… These failures not only suggest extremely poor value for money for UK taxpayers—they also point to the use of CSSF funds to help Bahrain’s authorities draw a veil over their use of torture and other abuses.
Bahrain is a trusted ally of the UK. It poses no threat to the UK, and it is a source of neither refugees nor terrorists. The money allocated to the Ombudsman of the Bahraini prison system is small, but it is questionable whether this is a good use of CSSF funding.
50.When we put this example to the National Security Adviser, he said:
[Bahrain] is a country where there are some concerns about human rights and practices but at the same time where we believe that there is a political will to have a reform process.
… There is of course extensive engagement with human rights bodies across the Middle East region. … But this is a political and policy decision taken by the National Security Council: that we want to engage and help with reform. There will be occasions when the National Security Council decides that we should discontinue a programme. We did that with one of the prisons programmes in Saudi Arabia earlier this year, for instance. … we would not spend money in a way that we felt damaged our own national security. There may be different political views about whether particular programmes would do that or not, but that is a judgment that the Government make on individual cases.
51.We asked the NSA whether the UK should run projects in countries with relatively poor records on human rights. The NSA replied:
That rather depends on what the project is, its purpose and whether it will help to improve the rule of law and human rights in that particular country.
… I cite the example of Burundi … We had a project in which we supported NGOs in looking at accountability and evidence questions about human rights abuses by that Government. Indeed, it was the work which the CSSF funded that proved to be the basis for securing sanctions against them. That is an example of working in a country where there is a poor human rights record but where the fund was designed particularly to bring some of that to light.
52.We note that in January 2017 the Government issued updated guidance on managing the human rights risks involved in delivering security and justice assistance overseas. According to the Foreign Secretary, the revised guidance includes more detail on how to assess and mitigate risk “in complex situations, for instance when several Departments are working together on the same project”. This will have implications for how human rights risks are managed under the cross-government CSSF.
53.Running projects in fragile and conflict-affected states entails running risks. The Government must identify, assess and mitigate such risks before and during the implementation of CSSF programmes. As such, we welcome the Government’s recent guidance on how Departments can better work together in managing the human rights risks involved in CSSF security and justice programmes.
54.The delivery of some CSSF programmes and projects is outsourced to external suppliers. This often occurs via the dedicated procurement mechanism known as the CSSF Procurement Framework. The Framework was established in November 2015 specifically to create “a more streamlined and efficient procurement tool”. Only the 75 organisations already selected to be Framework Suppliers can bid for and win CSSF contracts through the Framework procurement process. In its written evidence, the Government states that the Procurement Framework has already improved commercial practice in comparison to the Conflict Pool.
55.Fourteen of the 75 CSSF Framework Suppliers have provided written or oral evidence, or both, to this inquiry. Many broadly welcome the transition from the Conflict Pool to the CSSF. Some identify considerable benefits to the new procurement process. One innovation is the pipeline of forthcoming CSSF programmes. Suppliers report that this enables them both to plan more efficiently and to better understand the Government’s needs. Suppliers also refer to the more competitive nature of bidding under the CSSF than under the Conflict Pool. Coffey International Development, an international professional services business, and G4S, an international public security company, observe that the CSSF has opened up the marketplace to a wider range of private-sector organisations and expertise. This creates the potential to “drive value for money for the tax payer”. Furthermore, the international peacebuilding organisation Search for Common Ground asserts that greater competition in bidding for CSSF contracts has improved the quality and efficiency of the programmes ultimately delivered.
56.Despite strong support for the Procurement Framework in principle, however, most of the Framework Suppliers that submitted written evidence are dissatisfied, to a greater or lesser extent, with their experiences of the procurement process so far. One point of contention is what peacebuilding organisation International Crisis Group describes as the “prohibitively short” timeframe between a tender being issued and the application deadline. In oral evidence provided to the Committee, Ruairi Nolan of Peace Direct said that there might be only 10 or 14 days in which to respond to an Invitation to Tender. He added that this can be particularly challenging for small and medium-sized organisations and especially for those that work with groups in the recipient country when designing projects. The Institute for War and Peace Reporting, an international network of charitable organisations, raises concerns in its written evidence that the CSSF procurement process consequently favours larger NGOs, which have more resources with which to respond rapidly to Calls for Proposals.
57.The most commonly cited cause of dissatisfaction, however, is what Coffey International Development calls a “patchy and inconsistent supplier experience”. This is due in large part to the sometimes considerable differences in the knowledge and procurement experience of the Departments, Embassy teams and Whitehall-based teams that are involved in the CSSF. For example, Rebecca Crozier told us that there is “a lack of understanding by some of the people we are dealing with [in Embassies] about how the whole thing works”. Conciliation Resources similarly observes “variable” knowledge among Embassy staff of the procurement options available under the CSSF. It also reports contradictions in the information supplied by Embassy staff and that by teams in London.
58.Other Framework Suppliers note an inconsistent approach to the procurement process, especially between Departments. Mercy Corps, a global aid organisation, points to the inconsistent and often insufficient detail provided in procurement documentation such as Calls for Proposals. International development consultancy DAI Europe, meanwhile, reports “confusion in some government departments over how to request the budgetary/financial information required to evaluate suppliers’ offers—particularly in those departments less familiar with commercial procurement mechanisms.” Coffey International Development concludes that “the scale of ambition comprised in BSOS, and NSC and SDSR exceeds the procurement and project management capability currently found across diplomatic missions around the world”. The FCO is singled out for its comparative lack of procurement expertise. In supplementary written evidence, Dr Rathmell cites this lack of FCO capacity as one of the two major challenges facing the CSSF in the longer term. This is not surprising, given that programme management is a relatively new part of the FCO’s remit. It is troubling, however, given that the FCO administers the majority of the CSSF programme budget.
59.In its written evidence, Aegis Defence Services, an international security and risk management company and CSSF Framework Supplier, suggests that the UK Government has “set up a valuable procurement process which is under-performing due to an inability to discard legacy views and arrangements”. These ‘legacy arrangements’ may well refer to the decision when the CSSF was first designed to maintain separate departmental and Embassy procurement mechanisms and teams. An alternative option was to establish a single procurement process that would apply regardless of the Department identified as the ‘lead’ or the value of the programme. This single process could have been run from the centre of Government by a team experienced in commercial procurement. The apparent consequences of the decision not to establish a single, centralised procurement process include: pressure on those Departments that are relatively new to commercial procurement quickly to develop the relevant skills; inconsistent supplier experiences of CSSF procurement depending on whether the FCO, DFID or an Embassy has responsibility for tendering the programme; and supplier confusion as to the ‘correct’ procurement procedure, including which of the two portals currently used for tendering CSSF programmes—one run by the FCO, the other by DFID—they should be using.
60.Aegis asks whether this under-performance is “early teething problems” or a “genetic disorder”. Some of the inconsistencies described by Framework Suppliers can likely be fixed quite easily and quickly through the use of templates for procurement documentation and the establishment of a single CSSF portal, for example. However, the issue of departmental culture, skills and expertise is a more fundamental challenge. Dr Blair observed that considerable “time and effort” has been devoted to improving the ability of staff to manage the Fund at regional or local level through training and the production of written guidance. Nevertheless, “it is still early days”.
61.CSSF Framework Suppliers told us that it is difficult to engage with the CSSF procurement process due to inconsistent processes and advice. The two procurement portals should be combined into a single procurement portal. And all NSC Departments and agencies should use common templates for procurement documentation such as the Invitation to Tender. The alignment of limited management resources with the funds available could be achieved by spending more money on fewer projects.
85 Qq2, 3 [Dr Stephanie Blair and Dr Andrew Rathmell]. The management of such risks becomes even more difficult where programmes must be managed remotely because the local situation is too dangerous. Q2 [Dr Andrew Rathmell]
86 Q3 [Dr Andrew Rathmell]
87 Q36 [Robert Chatterton Dickson]; Q37 [Melinda Simmons]
88 Reprieve (); Bahrain Institute for Rights and Democracy (). Until January 2017, the Government used the four-stage risk assessment and approvals process set out in its 2011 Overseas Security and Justice Assistance (OSJA) Guidance. For further information on this process, see Stabilisation Unit, , February 2014. In January 2017, the Government released updated guidance on this issue.
89 Reprieve () paras 17, 20
90 Reprieve () paras 33, 35
91 Qq25, 26, 36 [Sir Mark Lyall Grant]
92 Q36 [Sir Mark Lyall Grant]
93 [on Overseas Security and Justice Assistance], 26 January 2017
94 [on Overseas Security and Justice Assistance], 26 January 2017
95 HM Government () para 34. For further detail on the CSSF Procurement Framework and the Framework Suppliers, see Appendix 1, paragraphs 8–9.
96 Other organisations can partner with, or join a consortium led by, a CSSF Framework Supplier. See Appendix 1, paragraph 9.
97 HM Government () para 34
98 International Crisis Group () para 3; DAI Europe Ltd () para 3; Mercy Corps () para 2; Search for Common Ground () para 2; Agencia Consulting Ltd (); Adam Smith International () para 2.1; Coffey International Development, Ltd. () para 1; G4S () para 5; Aegis Defence Services Ltd () paras 6–9
99 Agencia Consulting Ltd () para 2; DAI Europe Ltd () para 8
100 Coffey International Development, Ltd. () para 1; G4S () para 8
101 Coffey International Development, Ltd. () para 1
102 Search for Common Ground () para 2
103 International Crisis Group () para 19; Conciliation Resources () para 15; Institute for War and Peace Reporting () para 5
104 Q15 [Ruairi Nolan]
105 Institute for War and Peace Reporting () para 5
106 Coffey International Development, Ltd. () para 2
108 Conciliation Resources () paras 13–14
109 Mercy Corps () paras 12, 16
110 DAI Europe Ltd () para 12
111 Coffey International Development, Ltd. () para 2
112 Q17; Mercy Corps () para 14; Coffey Development International () para 2
113 Dr Andrew Rathmell () para 2
114 According to the July 2016 Written Ministerial Statement, the regional and thematic programme budget in 2016–17 is £577.8 million. The FCO’s latest Annual Report suggests that the FCO expects to receive £348 million of this for ‘Conflict Prevention Programming’. See [on the Conflict, Stability and Security Fund 2015–16 and settlement for 2016–17], 21 July 2016; FCO, , July 2016, p. 125, Annex B, ‘Core Tables (unaudited)’
115 Aegis Defence Services Ltd () para 10
116 Agencia Consulting Ltd () para 4. In supplementary written evidence, Dr Rathmell also raises the question whether separate MOD, DFID and Home Office contracting and funding mechanisms will also proceed in parallel as these Departments increasingly undertake CSSF-funded activity. Dr Andrew Rathmell () para 2
117 Aegis Defence Services Ltd () para 10
118 Q7 [Dr Stephanie Blair]
6 February 2017