DFID Responds to ICAI’s Low Rating for Effectiveness and Value for Money

Back in early August, we were fortunate to secure an interview with Les Campbell, Director, Value for Money at the Department for International Development (DFID). It had just released its ‘Payment by Results’ strategy of Results-Based Aid and Development Impact Bonds, whereby partners are paid on delivery of agreed development outcomes. It was developed as a new approach to the delivery of aid, intended to ‘help make the development budget go much further, bring more people out of poverty for good and ensure value for money for British taxpayers.’ In truth a procurement contract. You can read it here.

We said at the time that we would keep an eye to see how the process panned out. Since then, a couple of articles have appeared in both The Guardian and the BBC which say that DFID is still not doing enough to save the poor from corruption. And the Independent Commission for Aid Impact (ICAI), a public body which scrutinises UK aid spending, published a report acknowledging "the department’s awareness that everyday corruption is a critical challenge for development," but says it has neither developed “an approach equal to the challenge, nor … focused its efforts sufficiently on the poor.” The Guardian said "The UK’s DfID is failing to address the petty but widespread corruption that blights the daily lives of the world’s poorest people ..." and the BBC said it "has little understanding of what is and is not working."

Now, maybe there is clearly a lot more DFID needs to be doing, and ICAI sets out 5 recommendations to help it do that, but to be fair to DFID, there is a lot it has done (to some of which ICAI does pay hommage) which should not be overlooked. A spokeswoman said:

“ICAI’s report rightly highlights some of DFID’s work which reflects our zero tolerance approach to fraud and corruption. We have anti-corruption and counter fraud plans for each country that we give bilateral aid to."

“While these plans are tailored to the individual needs of each country, they are based on a common principle that tackles the root causes of corruption by building strong institutions and requiring good governance."

“Additionally, DFID funds UK police units and crime agencies to investigate the proceeds of corruption by foreign officials through the UK. Internationally, the UK is leading the drive to clamp down on corruption through the G20, World Bank and IMF programmes.”

Background

  • Domestically, DFID-funded UK police units investigate allegations of bribery by UK companies and nationals in developing countries and assets stolen from developing countries and laundered in the UK. This work recouped £120m and over 150 cases of overseas bribery have been investigated.
  • Internationally, DFID plays a leading role in putting the fight against corruption at the heart of the G20. As a result, the world’s largest economies have established the G20 Anti-Corruption Working Group which recently agreed a new 2015-16 Anti-Corruption Action Plan.
  • The UK has also led efforts to increase transparency in extractive industries which can drive large-scale corruption. Earlier this month, the UK became an Extractives Industries Transparency Initiative (EITI) candidate country.
  • In Nigeria, Our support to revenue management; reducing ghost workers and robust management of finances has released an additional £149m for the delivery of services in Nigerian states since 2009.

We have:

  • helped improved controls over payrolls, resulting in weeding out ghost workers – this saved £7 million in two Nigerian states in 2013;
  • supported better detection and enforcement: Nigerian anti-corruption agencies have recovered over £1.5bn worth of assets in total with DFID support. Last year alone, we supported investigations to 2670 corruption cases
  • On healthcare: DFID support has established 633 successful Facility Health Committees since 2009 to hold service providers account for the misuse of funds or services. This allows the poor to have access to healthcare without having to pay bribes and ensure DFID hears their feedback.

The questions being raised are: Do we keep increasing overseas aid spending, if the government department cannot spend it effectively? Is taxpayers' money being wasted? And, Is the Government ensuring value for money as it pledged? Wasn't that what the Payments by Results method was supposed to do?

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