Examination of Witnesses (Questions 1160
- 1175)
MONDAY 23 JUNE 2008
Dawn Primarolo and Gillian Merron
Q1160 Lord Desai:
One of the things we were told was that TB testing facilities
were some miles from HIV testing facilities. Very often, even
if you knew that this person had it, it took a long time before
the person went off. At country level you need a lot of joined
up thinking or whatever it is.
Gillian Merron: You do. What that illustrates
is that of course the testing facility needs to be in the right
place. It may well be the case that there have been some health
systems that exist but that is not our preferred option and it
is not our policy and it is not where we are working. I hope it
will be helpful to the Committee that we can give some good examples
of very positive working but please be assured—you will
find it fundamentally in the updated HIV and AIDS strategy—the
coordination with TB services is very central. I think our commitment
to the Global Fund shows that, so not just intent but action and
resources.
Q1161 Lord Howarth of Newport:
I would like to ask you how we are making sure that the bilateral
funding that our Government provides is used to best effect. We
were told by DFID officials, "In many countries, such as
Tanzania, Uganda, Malawi, we are providing substantial resources
into the budget or health budget of the country to enable the
government to deliver on its priorities as reflected in the national
plan. In essence, we are putting money into the government's systems,
so how governments spend that is of great interest to us."
How can you be sure, and how can the taxpayer be sure, that the
very significant sums of money that have been provided to developing
countries are being used properly and efficiently, that they are
being targeted where they will do most good and that the money
is not staying in the capital cities but is getting out to the
people who need it most? For example, Gillian Merron, you have
talked of problems of political will in countries, and that is
clearly a factor. There are problems perhaps also of limited administrative
capacity, problems of corruption, problems of tribalism. What
do we do to make sure that our bilateral funding gets past those
kinds of possible difficulties and is really used most efficiently?
Gillian Merron: First of all, it is crucial
to all that we do that money is used properly and gets to where
it is needed and it is used to tackle poverty, that is the first
point. When we provide budget support as aid direct to governments,
it is one of a range of mechanisms that we will use and we will
only use it. It is a preferred option, ultimately, in that it
is the way to build up the systems that we have just been speaking
of, which are government services, but we use it where we believe
it will have more impact by going directly to a government than
other ways. We do identify with our partner governments what we
expect for that, and we monitor progress to make sure it is going
to the right place. If I could be specific about what we do to
make sure that money gets where it should. I do believe that is
a very fair question from taxpayers in the UK which I am always
willing to answer. The first thing is we assess the risk before
we commit ourselves to budget support and we audit the use of
the funds afterwards. The main assessment is the fiduciary risk
assessment, a very detailed investigation and analysis of the
public financial management and accountability system of the partner
government. It assesses the risk, it makes sure that funds will
be used for the intended purposes, that they will be accounted
for and that they will achieve value for money. Then we use a
whole variety of mechanisms to check on the use of funds during
project implementations. We do not just give the money and go
away, we are constantly working. Audits are undertaken by the
partner government, international agencies and directly by DFID,
including by the UK National Audit Office, and the audits are
supplemented by public expenditure tracking surveys and other
surveys which identify exactly how funds are used to ensure the
money is getting there. For example, tracking through government
systems to make sure the salary payment is made or the item is
procured, whatever the judgment is. I would agree, Lord Howarth,
that the question of capacity is crucial, and that is why part
of our work often is about building capacity, as I mentioned earlier,
within governments, not after the event but before the event.
Our job, as I say, is to assess risk, to monitor and review progress
with all the partners and we have all of those systems in place.
It is probably also worth assuring the Committee that we take
action if funds are not used properly. In 2007-08 we did reduce
budget support to three countries—Sierra Leone, Ghana and
Rwanda—because of issues that were related to public financial
management and we also delayed budget support to Malawi and Sierra
Leone pending receipt of audit reports. I feel we have very robust
and responsive measures and a good assessment of risk before we
start. However, it is the result that we are looking for and I
think probably what I should express to the Committee is that
each country is different. There is a statement in the House now
about Zimbabwe, which is a very different situation to Malawi—to
use two extremes. It is right to use that as an illustration of
what we would do. In Zimbabwe we do not give money to the government,
obviously, but I think it is important to state that because people
are not aware of that. We do it through the most effective mechanisms.
I should say, also, we only use budget support where there is
a commitment by the partner government to reduce poverty, respect
human rights, improve their financial management and their good
governance, and that we are convinced it will be the greatest
impact.
Q1162 Lord Howarth of Newport:
From that answer, I am encouraged that you are clearly using all
the bureaucratic means at your disposal and applying what would
seem to be appropriate criteria. Can I just ask you about a particular
case in point, of which I was personally aware? This goes back
to 2005 and I should be comforted to be told that the situation
has greatly improved. I visited Uganda, one of the countries mentioned
by your officials in the paper to us, and there we were indeed
providing a very substantial proportion of our assistance through
budget support. I went up to northern Uganda, where there has
been a substantial and appalling humanitarian crisis for a very
long period. We found there was a morass of UN agencies and NGOs
operating with huge energy and goodwill, but disappointing lack
of effectiveness. The British Government's, the British taxpayer's,
contribution was going to the Government in Kampala. There was
a great deal of evidence that the Government in Kampala was not
the least interested in ensuring that the humanitarian crisis
in northern Uganda was relieved or that the civil war was finished.
The Acholi people do not vote for President Museveni. In addition,
there were some serious problems of corruption in the Ugandan
administration and yet we had taken a decision that we would trust
this regime and the money was going to them. Obviously, I cannot
expect you to know the particular circumstances that applied at
that time but it left me very worried. I would just like to press
you a little bit more about your systems of monitoring and your
systems of evaluating the effectiveness of budget support provided
by our own Government to countries that are in that kind of difficulty.
Gillian Merron: There are two points, perhaps,
I can make in response to Lord Howarth's points. If there is something
that happens which brings into doubt the arrangement that we have,
then we reassess if budget support is appropriate. I feel what
I must say to the Committee is flexibility—flexibility is
perhaps not the right word—responsiveness to situations
is for me very important. If necessary, we will reduce or suspend
aid or deliver it in a different way appropriate to the situation.
That will be one point that I would make. Also, the National Audit
Office did conduct a study about budget support and they did report
that, through the right sort of budget support, and taking into
account all of the financial safeguards that I have mentioned,
we did increase the capacity of partner governments to deliver,
we did result in partner governments providing more services and
it often enabled partner governments to increase their own expenditure
on priority areas, which I think is also important. On the particular
issue, again if it would be helpful, I would be very happy to
come back to the Committee with details on how we responded to
that particular situation that Lord Howarth refers to.
Q1163 Lord Howarth of Newport:
To be fair, there had been some small reduction in budget support
because the Government was unhappy about the political situation
within Uganda at that time. I recognise these are very, very difficult
judgments.
Gillian Merron: Yes.
Q1164 Lord Howarth of Newport:
Just how you apply these criteria and how you apply your systems
would be helpful to know more about.
Gillian Merron: At the end of it all, it is
the poorest people in the countries we are talking about who must
not be left to suffer twice.
Q1165 Lord Geddes:
To an extent you have answered a lot of the question. I have just
two points. You have twice prayed in aid—if I can use that
expression—the National Audit Office. We have had evidence,
also, that the National Audit Office is not all sweetness and
light as far as DFID is concerned. They did highlight some weaknesses
with DFID's performance, as indeed did the Common's International
Development Committee. I just wonder if you can update us on that.
The other thing is really more a statement than a question. We
have, if you like, a working title, if I can call it that, at
the moment, which is "Controlling the global spread of infectious
diseases", but in point of fact what this Committee is doing
is looking at the value for money that the United Kingdom Government
is getting out of its investment in IGOs and NGOs. That is key
to our entire inquiry. When we see evidence from the National
Audit Office or whatever which says there are weaknesses, what
have you done and are you doing to address those?
Gillian Merron: We are working hard to improve
our assessment of multilateral effectiveness, first of all to
provide the evidence that is necessary to have the discussions
with multilaterals on their performance and also to inform our
own decisions about where we allocate our own aid. There are three
strands to our work that I would like to highlight, which I am
reiterating, in fact, which are strengthening the evidence, so
that we can have informed discussions and promoting agency reforms,
as we discussed at a corporate level but also at a country level.
The new point, perhaps, I can mention for the benefit of the Committee,
which I have not mentioned earlier, is that we are developing
a common approach to multilateral effectiveness with ten other
donors through a network called MOPAN. We are developing a set
of indicators and we will be piloting it at the end of the year.
It is expected to replace some of our previous work to make it
more effective, so I am hopeful—not just hopeful—I
am fully aware of our efforts to improve our situation in terms
of making sure we do have the effectiveness that we are always
seeking. On the issue of IGOs tackling communicable diseases,
I would say that perhaps a corner stone in the Global Fund model
is that it is actively measuring its grant performance based on
sets of nationally proposed and owned indicators. I think we are
seeing improvements in terms of assessments and, indeed, I have
a number of figures which the Committee are very welcome to see,
which show—although the Committee may already be aware of
it—for example as of December 2007 Global Fund support meant
that we had 1.4 million people on ARV treatment, 3.3 million on
TB treatment and 46 million insecticide-treated bed nets being
distributed. So there are very clear indicators of what is coming
out of the efforts rather than just what is going in. I do think
that is important. It is true to say, though, that although we
have got the efforts of IGOs such as the Global Fund, on measuring
their performance, it is not yet possible, desirable though it
is, to assess the impact on development of multilateral organisations.
Some of that is because it is difficult to attribute who, what
and why is responsible for a change, and that is just a fact of
the matter. We do need, and we are clear on the need for agencies
to be improving the quality of their evaluation and the rigour
and consistency with which they are reporting results. I happen
to think that is not only just important to us as a Government,
it is important to UK taxpayers, because we are putting money
into multilateral organisations and people do want to know. I
want to be able to say, and this is if not directly the UK but
in supporting this, this is the change we have made. That is the
way in which we are working to improve the situation in a way,
rightly, you are raising with me.
Q1166 Lord Geddes:
You mentioned ten other donors, are they national or international?
That was a fascinating remark.
Gillian Merron: Other donors such as ourselves.
Q1167 Lord Geddes:
You said "ten other donors".
Gillian Merron: I can let you have the list
of countries.
Q1168 Baroness Whitaker:
WHO funding. Less than a quarter of the funding available to WHO
for 2008-09 falls within its core budget, out of which they have
to fund their operating costs and programmes which they consider
to be a high priority. This budget comes in the form of voluntary
contributions, as of course you know, which are largely earmarked
by their donors for particular purposes. In Geneva WHO have told
us that this leaves them with little room for manoeuvre to invest
in global health programmes, such as the ones that were mentioned,
building up disease surveillance capabilities in developing countries.
We would like to know what the Government's view of this is and
whether you think their funding systems need to be modified and,
if so, how.
Dawn Primarolo: Yes. We are sympathetic to the
problem that the WHO identifies. I think as you pointed out, over
the last ten years earmarked funds from Member States have steadily
increased. I think, first of all, we can understand why there
has been a tendency to earmark, which is to be able to set priorities,
to have that accountability of the money, but it does produce
the sort of challenges that you have identified. The WHO cannot
be confident of what their core budget might be. Clearly what
we want, and we recognise this as Member States, we recognise
that WHO has limited monies and has to set priorities but we need
to have confidence in the framework that they go about setting
those priorities and, picking up very much on the points that
Gillian was making, about accountability of taxpayers' money.
The UK is currently discussing with them how we can most effectively
ensure that our performance management arrangements, being able
to account to Parliament for the monies we have given and how
it has been used, can be arranged in a way that also provides
the greater flexibility in funding that they are requesting. That
is where the Institutional Strategy comes in, which is jointly
managed by DFID, the Department of Health and the Foreign and
Commonwealth Office, because what we are proposing to do is to
indicate and support the mutual goals and objectives and, therefore,
be able to demonstrate or ensure value for money. This over-arching
framework, a sort of contract agreement with the WHO, would then
be the basis for our funding. I have just received the figures
for 2006 and 2007, and the UK paid the second largest subscription,
£54.7 million in voluntary, which is quite difficult to breakdown
between earmarked and not, £303.5m. The sort of things we
will be looking at are how can we ensure there is an improvement
in the work at a country level, working effectively with other
multilateral actors, the points we touched on in earlier questions,
trying to make sure they are using the synergies without the duplication,
making sure there is a clear division of labour, delivery of health,
advice and support to governments, effective support in the development
and implementation of the national plans on health, and this might
include closer integration with WHO's own planning instruments,
making sure that they have the right mix and quality of staff—again
coming back to the point Lord Geddes was referring to earlier
on—that the quality of staff at country level is there,
that there is a transparency of process and recruitment of staff,
and also looking to make sure that the right incentives are in
place, to ensure that their staff are engaged in the UN reform
programme and co-operating, and, finally, to make sure the framework
cuts across, so we have indications and indicators of what the
main goals will be, particularly on the communicable diseases:
Malaria, Polio, TB, HIV. In that way, seeking to establish a framework
that is transparent for the UK, hopefully a model for others,
in terms of accountability of resources, able to detect value
for money, to demonstrate value for money, pursuing objectives
which are our objectives but providing it in a way that gives
the WHO the flexibility they need for that longer planning and
being able to do some of the things which this Committee has rightly
touched on as being necessary in developing countries.
Q1169 Chairman:
Can I ask you if the international community is convinced of the
importance of the WHO as a central player, `conductor of the orchestra'
as somebody has put it, in international health, why is it so
difficult to increase the amount of compulsory contributions?
And is that an objective of the Government or not?
Dawn Primarolo: Why it is difficult is because
all Member States that are contributing want to say specifically
what they expect to be done, and this is the huge challenge for
the WHO, be accountable to its members and respond, have strategic
priorities and make sure that they are in line with the objectives
of the donor countries. What we are trying to do is provide a
model, certainly we believe it will work for us, that hopefully
then will work for other contributors so that they can clearly
see the accountability of their money. The wider political debate
about why it is important for all countries to engage with the
WHO is still one which needs to be addressed and does take us
back to the Global Health Strategy and indeed the Global Security
Strategy, in terms of recognising what the challenges are. I think
there is some movement there. Whether it will end up with countries
agreeing to making block grants, well that has not been the history
in a number of multilateral organisations. I think that, if we
have got transparency for ourselves, strategic objectives, we
can give the flexibility to the WHO that they require but we can
still see progress on what we consider and agree are the challenges.
I think that is a good base to be on.
Q1170 Lord Desai:
This is about vertical and horizontal investments. Obviously the
vertical ones are business-specific, and it partly goes back to
what we were saying about value for money. If you want to show
value for money, you go for a specific vertical investment rather
than a horizontal. We also know, however, that disease is due
to poverty and water supply and so on, so horizontal investment
is needed. It has been put to us that maybe the World Bank should
be much more into horizontal investment in health. Are you urging
the World Bank to do more for health investment rather than just
building more dams?
Gillian Merron: Yes, is the simple answer, Lord
Desai. To make the important point, of course, horizontal investment
is about the building blocks of health systems, so that is the
workforce and the drug procurement systems, the whole infrastructure,
and without the building blocks being in place then you cannot
get value for money from the vertical funding because there is
nothing to root it in. We do need to find ways to increase funding
for horizontal investment and we are pursuing several channels
in addition to the World Bank. We are also pursing the European
Commission, GAVI and the Global Fund as well. There is a bit of
an issue that the Committee might be aware of, which is that the
World Bank's main funding is through the International Development
Association and, of course, Ministries of Finance who see large
grants for health coming from other places are a bit reluctant
to use that World Bank funding because they see that infrastructure
is even harder to fund. We are working with the World Bank to
remedy the situation and we do want to create incentives with
the Bank to use IDA resources for health. There is the role, of
course, of the African Development Bank who do have a very strong
specialist role in terms of infrastructure. It is probably a very
good example of a more joined-up approach on the international
stage to make sure that funding is getting to all of the right
places. But, yes, I would certainly share your view that the World
Bank does need to up its game, and we are seeking to assist.
Q1171 Lord Jay of Ewelme:
A word about prevention and treatment, another of the great dilemmas.
We have noticed that the Government said in its AIDS Strategy
document that "prevention is far more cost-effective than
treatment, largely because of the high price of medicines, but
also because the disease is not curable—so treatment is
for life". Dawn Primarolo has already said earlier, in answer
to a question from Lord Geddes, that as far as influenza is concerned
again prevention is the best way of nipping the disease in the
bud. We have also had some suggestion that the emphasis of the
international community still tends to be too much more on treatment,
for example, particularly antiretroviral treatment for HIV/AIDS
rather than on prevention. I suppose this is also a case partly
caused by the need to be able to show, and you can show, results
more clearly in terms of treatment than you can in prevention.
But I just wonder whether you thought we have got the balance
right between treatment and prevention or whether, in our own
aid programmes or in the pressure we put on international organisations,
we should be arguing for more emphasis on prevention than treatment
and, in particular, stressing the need for better information
systems, better for disease surveillance systems, so that we are
better able to know what is going on and can thereby put the prevention
in place. I would be interested to hear your views on that.
Dawn Primarolo: I think, Lord Jay, as you acknowledge,
it is not an either/or, it is getting the balance right. But we
are absolutely clear, through own Achieving Universal Access
and the UK Strategy for halting and reversing the spread of HIV
in the developing world, we recognise absolutely that, unless
more is done on prevention, the epidemic will continue to grow
faster than our efforts to control it and the cost of treatment
for care and support will continue to escalate. We see that on
a much smaller scale, tiny scale, in comparison in the UK. Our
efforts are on prevention and commitments to intensify those efforts
particularly, as Gillian touched on earlier, mother-to-child transmission,
family planning and harm reduction. We recognise nonetheless that
there is still a need for a greater effort but it has to be set
within a universal access. HMG was the third largest provider
of contraceptives and commodities to the developing countries
in the period 1996 to 2004, so we are pushing ahead on that. But
also, as you said, we have to have evidence on a sound understanding
of the local epidemic. We saw this recently in reports from the
UN Conference in New York, the importance of knowing your epidemic,
if I can put it that way, understanding what is driving it, the
social, cultural and economic forces, including gender inequality,
and how people's behaviour is influenced in order to increase
people's ability to make the healthy choices. There clearly needs
to be more done internationally on that in recognising and being
able to deal with the growing epidemic. That is certainly the
approach that we have taken. That is why, if you come back domestically
and you look at what are the priorities for Britain—for
England I should say—for England's health service but equally
true for Scotland, Wales and Northern Ireland, we are focused
very much on understanding the epidemic and how we get to prevention,
including screening, and we are pushing that very hard in our
international strategies as well. We have a lot of people to convince
though.
Q1172 Lord Geddes:
Yet another dilemma—medicines. In your opinion, how can
we get the right balance between encouraging the pharmaceutical
companies, normally from developed countries, to research into
medicines and, on the other hand, the affordability of the results
of that research in countries that need them which are normally
developing countries? We have had a lot of evidence on this and
it is a real nightmare. I would be fascinated to hear your views
on such initiatives as the International Finance Facility for
Immunisation and Advance Market Commitments. Do you see any role
for the Medicines Transparency Alliance?
Gillian Merron: Yes, very much so.
Q1173 Lord Geddes:
Good.
Gillian Merron: You are right that these are
tricky questions that we are dealing with. Certainly on MeTA,
I am very optimistic about it. We are funding it in seven countries,
to improve transparency and accountability for price, quality
availability and the promotion of medicines. What it will do is
it will help countries to identify and address the inefficiencies
which are currently leading to higher prices and limited availability.
On the basis that, as we know, the price of medicines can be very
important, and it is affected by a number of factors, (including
manufacturer, level of competition, the cost of passing things
through the delivery chain) all of these things are affecting
services to the consumer, and that is why I believe that MeTA
will make a good contribution. On the other points which are raised,
we have been a prominent supporter, as the Committee will be aware,
of what we believe to be new and very innovative forms of financing
and incentive mechanisms because financing and incentives are
absolutely crucial, and that does include the IFFIm and Advance
Market Commitments, because they are increasing confidence that
there will be viable markets, which mean that pharmaceutical companies
will be prepared to invest their own resources to develop products
at affordable prices for the poorest people in the world. It is
about acknowledging the reality of the market whilst seeking to
serve the poorest. As a Government, we do both through DFID and
the Medical Research Council make very direct and significant
investment into research and development that meets the needs
of developing countries. Access to medicines is absolutely crucial;
it is part of the horizontal work that we are talking about. It
is the building blocks of the health care system.
Q1174 Lord Geddes:
Could you let us know who the seven countries are—not now,
but you are going to give us other information, so if you would
send that, that would be helpful.
Gillian Merron: Of course.
Q1175 Chairman:
I think we are one of the most substantial contributors to Pneumo-ADIP
which is the single example of the Advance Market Commitment which
is actually coming into operation. Does the Government see that
particular mechanism as being applicable to any other forms of
development of vaccines or other medications?
Gillian Merron: I cannot really comment about
the broader application but to say that what we are trying to
do is to encourage an environment where companies are prepared
to invest, research and develop with the confidence to the future
to deliver and whilst balancing that in a fair and free market.
If that can work elsewhere, then we will be interested.
Chairman: Ministers, you have been very
full in your answers and we thank you most warmly, not only for
that but for the further information which you have agreed to
provide. Thank you very much for your help.
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