Britain’s Department for International Development (DfID) lacks a clear strategy for engaging with multilateral aid agencies and is not doing enough to let taxpayers know why it spends billions of pounds through the likes of the World Bank, the EU and the UN, the aid watchdog has warned.
According to a report from the Independent Commission for Aid Impact (Icai), published on Thursday, DfID spent nearly two-thirds of its budget (£6.32bn) through multilateral agencies between 2013 and 2014.
Although the department works with 47 multilateral agencies and has used its “significant influence” to promote reform and help them focus on cost effectiveness, Icai says it needs to do much more.
It acknowledges DfID’s push for greater transparency and accountability among multilaterals, but says the department needs to come up with a comprehensive, global strategy and dedicate a greater number of senior staff to managing its relationships with them.
“We are concerned that DfID lacks a clear strategy for overall engagement with multilaterals,” said Graham Ward, Icai chief commissioner.
“A strategy for engaging with the system as a whole would help guide the UK’s resource allocation and prioritise areas for further reform.”
While recognising that the department has to rely heavily on multilaterals to achieve results and work in difficult areas – as well as to reach its target of spending 0.7% of Britain’s gross national income on overseas aid – Icai says DfID should be more strategic, and more open about the support it gives.
In a nod to the controversy that surrounded the previous coalition government’s decision to enshrine the 0.7% commitment in law, Icai says DfID needs to remake its case for working with multilaterals “in an environment that is both critical of the aid agenda and largely distrustful of big global bureaucracies”.
It adds: “As the next wave of deficit reduction bites and the political controversy raises new questions as to the impact and value for money of aid expenditure, DfID can expect to face more pressure around its budget.”
On the basis of its findings, Icai has awarded DfID a green-amber rating for the impact of its multilateral work, which means that while the programme was performing relatively well overall, improvements needed to be made.
In a separate report, also published on Thursday, the watchdog looked at DfID’s efforts to ensure that the £32.8bn of aid it has spent since 2011 has had a long-term and transformative impact.
Icai says that while DfID has recognised the importance of demonstrating its results as the aid budget has expanded rapidly, its enthusiasm to show value for money and accountability has “tended to prioritise short-term economy and efficiency over long-term, sustainable impact”.
It also concludes that some of DfID’s tools and processes for measuring results have had the unintended effect of focusing attention on the quantity of results over their quality.
“The key message of this report is that it is time to take the results agenda to the next level – to ensure that it focuses not just on the cost-efficient delivery of UK aid but also on achieving genuine and lasting impact for the world’s poor,” it says.
Noting that 21 of DfID’s 28 priority countries are affected by conflict or political instability, Icai advises the department to be more modest in its objectives and give more attention “to long-term pathways out of fragility and how to get the right balance of risk and return across the portfolio”.
Diana Good, lead commissioner on the report, said DfID had to make sure that it listened to and consulted the people it was trying to help.
“If programming were firmly anchored in involving, as much as possible, beneficiaries right the way through the life of programming – from design, through implementation, monitoring, follow-up and evaluation – a great deal of the other issues would flow from that,” she said.
“It seems an obvious statement to say that an aid agency should have a clear line of sight at all times through to the people they exist to serve … but it is something that – and this is not peculiar to DfID – agencies and donors can lose sight of.”
DfID rejected the suggestion that it did not have a clear strategy on working with multilateral agencies, saying its 2011 multilateral aid review had assessed fully the strengths and weaknesses of its partners – and had been adopted by other countries such as Australia.
“The next review will go even further, pushing these organisations to follow our lead and be even more transparent,” a spokeswoman said.
She insisted that the department was absolutely right to focus on achieving results and value for taxpayers’ money.
“It would be a step backwards to stop doing this and taxpayers rightly expect to see results on the ground,” she said.
“It is simply wrong to say we have a short-term agenda. Our programmes build upon each other so a funding cycle should not be confused with our level of engagement and long term commitment in the countries where we work.”
