International Development (Official Development Assistance Target) Bill

Debate between Baroness Northover and Lord Lawson of Blaby

Friday 27th February 2015 Lords Chamber

[Baroness Northover]

My Lords, I thank the noble Lord, Lord Collins, for his support. I think that we all agree that independent evaluation of the value for money of our ODA is essential. That is why the Government have significantly strengthened external scrutiny and accountability mechanisms for UK aid, including establishing ICAI. I thank noble Lords for their tributes to it.

ICAI has a key role to play in evaluating the department’s work, and I emphasise that it is likely in practice to be the main body through which this part of the Bill is delivered—I agree here with my right honourable friend Desmond Swayne. However, we do not agree that tying the function of independent verification entirely to one particular organisation, and enshrining that organisation in statute, is the right step to take. We do not want to limit the current range of scrutiny options that are available.

ICAI is an independent scrutiny body that reports not to the DfID Secretary of State but to Parliament through the International Development Select Committee. The IDC has a specific sub-committee which is responsible for overseeing the work of ICAI, approving ICAI’s work plan and taking evidence in public hearings following the publication of each ICAI report. It holds an inquiry into ICAI’s annual report. Noble Lords have emphasised their respect for what ICAI is doing.

The Bill asks that the Secretary of State include in each DfID annual report a statement as to how he or she has complied with the duty to ensure that there is independent verification of development assistance. As I have said, it is likely that that would be done for ICAI. The annual report is subject to scrutiny by both the National Audit Office and the IDC. Clause 5 of the Bill thus ensures that the Secretary of State will be answerable, including to Parliament, through the IDC, on whether his or her choice was of an independent and suitable body. It also allows transparent reporting on the full range of independent evaluations, and allows for scrutiny of whether the spread of arrangements in place effectively examines value for money. We believe that Clause 5 strengthens the current framework in such a way that adds value, increases accountability for programmes and projects and ensures that the value for money of our work is independently evaluated, but it does not enshrine a new body in law.

The whole thrust of this Parliament’s policy has been to bear down on the creation—

[Lord Lawson of Blaby]

My Lords—

[Baroness Northover]

Perhaps I might complete what I am going to say.

The whole thrust of this Parliament’s policy has been to bear down on the creation of new statutory bodies, such as would be established by the IIDO amendment. This Parliament passed the Public Bodies Act 2011, and we seek to eliminate the creation in statute of what have been called quangos and other such bodies. Noble Lords will remember the blood on the carpet as we went through the then Public Bodies Bill. That is why we think that it is proper to avoid doing that in the Bill. A mechanism is there to ensure that independent scrutiny takes place. I reassure noble Lords that it is highly likely to be ICAI, given its track record, but there are scrutiny bodies which help to ensure that that is an effective route of scrutiny.

[Lord Lawson of Blaby]

I am grateful to my noble friend for giving way. The question of creating a new quango does not arise if the Government are prepared to accept the amendment proposed by the noble Lord, Lord Hollick, because ICAI already exists. There would be no new quango. There would be if the Michael Moore proposal incorporated in my amendment was agreed, that is true, but not if it is ICAI. My noble friend said that it will probably be ICAI. That is not good enough. We want a commitment that ICAI will be charged with that responsibility and that that will be written into the Bill. It is no good saying that there are other bodies such as Select Committees. Select Committees perform a completely different function—it is a very important one, but they are not under my noble friend’s department’s command. It is the Secretary of State’s responsibility to charge ICAI with this role. To say that it is very likely that it will be, but that it may not be, really is bad government.

[Baroness Northover]

My noble friend will have heard what the noble Lord said about respecting how ICAI is operating now. One would hope that that is the case in future.

I point out that ICAI is one part of a wider suite of scrutiny mechanisms. The National Audit Office has statutory responsibility for conducting value for money studies on DfID’s work, and it reports to the PAC, often critically, which also makes recommendations about DfID’s work. The Organisation for Economic Co-operation and Development’s Development Assistance Committee also examines the UK’s development assistance as part of a regular series of peer reviews of donor aid policies and programmes.

The structure in the Bill provides that the Secretary of State is held to account to ensure that there is proper independent scrutiny. As I said, it is highly likely that it will be ICAI, and I hope that noble Lords will take as our commitment to ensure that our aid is very thoroughly scrutinised the fact that ICAI was set up in the first place. It is not appropriate to specify it in the Bill, for the reasons that I have given. There are checks there to ensure that scrutiny. I make clear that we will oppose the amendment.

International Development (Official Development Assistance Target) Bill

Debate between Baroness Northover and Lord Lawson of Blaby

Friday 6th February 2015 Lords Chamber

[Baroness Northover]

I am sure that my noble friend Lord Purvis will address this issue. It is a Private Member’s Bill and the Government support it as it stands, unamended.

[Lord Lawson of Blaby]

I hope very much that my noble friend Lord Purvis will give a full and complete answer to the important question which my noble friend Lord Forsyth has just put. As to what the Minister said, I find myself wholly unconvinced. She did not seem to understand the purpose of these amendments.

Before I comment on that, I must respond to the impassioned interventions of the noble Lord, Lord Cashman. He was concerned about how the reluctance to pass the Bill, almost sight unseen, will be considered outside the House. He made an emotional speech. It is true, as I said, that the Bill is a triumph of gesture politics over good government. How it is seen outside the House I do not know, but I am not aware of overwhelming popular support in the country for the Bill. Indeed, my impression is that it has minority support. However, leaving aside the question of whether you believe gesture politics is more important than good government, our responsibility as a House is with good government and we should not be diverted from that. Whatever misleading remarks the noble Lord, Lord Cashman, may care to make, it is our responsibility to promote good government, and that is the purpose of these amendments.

International Development (Official Development Assistance Target) Bill

Debate between Baroness Northover and Lord Lawson of Blaby

Friday 6th February 2015 Lords Chamber

[Baroness Northover]

To start, I agree with noble Lords that the principle of independent evaluation is extremely important. It is important that ODA provided by the United Kingdom represents value for money. That is key to this legislation. Of course, the Independent Commission for Aid Impact is independent: it decides what it wishes to do. We heard some important criticisms from my noble friend Lord MacGregor of some of DfID’s work, which should reassure noble Lords that DfID will not go unscrutinised. However, the effect of the amendment could be to limit the current range of scrutiny options available, including the National Audit Office—which the noble Lord quoted extensively.

The Bill already asks the Secretary of State to include in each annual report a statement as to how he or she has complied with the duty under this clause. The annual report is already subject to scrutiny by both the National Audit Office and the International Development Committee in the House of Commons. The Independent Commission for Aid Impact also scrutinises what DfID does. Noble Lords are right that the duty to ensure independent evaluation is an important part of this legislation. However, we do not feel that tying that function to one particular agency is the answer.

As noble Lords will know, the IDC holds public hearings to take evidence—for example, on every ICAI report. In addition, it holds inquiries every year into ICAI’s annual reports, which again are held in public. The IDC’s recommendations are then published. Of course, the NAO has statutory responsibility for doing value for money studies on DfID’s work. The NAO reports to the PAC, which also makes recommendations about DfID’s work, in addition to ICAI.

[Lord Lawson of Blaby]

I was puzzled when my noble friend said she does not believe that there should be a particular organisation responsible for this. The Bill as originally published specifically set out an independent organisation to do this job. That is very important. When the amendment to remove that was discussed in the other place, at no time did my noble friend’s counterpart there say that the reason it was being removed was because they did not want just one body doing it. They said they did not want to set up an additional body. What we suggest is not an additional body but an existing one. Clearly the job needs to be done and it needs to be specified in the Bill how it is done.

--- Later in debate ---

[Lord Lawson of Blaby]

It is particularly relevant to what we are debating today, and I very much hope that the Minister will address it. I am opposed to the climate change policy of this Government because its purpose is to procure worldwide decarbonisation. That means getting the poor people in the developing world, whom we have been discussing, to move away from the cheapest form of energy and, instead, to embrace, at present and for the foreseeable future, much more expensive energy. In other words, it is a policy to impoverish poor people in the developing world. That is why I am opposed to it. It seems a bizarre and odd way in which to run a whelk stall having a Bill that is intended to relieve the poverty that we intend to create. I should be grateful if my noble friend can explain that.

[Baroness Northover]

I say to my noble friend Lord Tugendhat that I never expected anything other than full scrutiny of the Bill in this House. He can be assured that I made that extremely clear within my department, as I have done on other Bills in other departments in other instances.

The key issue here is that the Bill is about ensuring that the UK continues to meet its commitment on aid, which it has finally met. I am incredibly heartened by the cross-party agreement on this. As we heard at Second Reading, we know how much this is needed. However, underlying this debate is a sense that this is not the case and that there may not, therefore, be value for money. I emphasise that the Government have a clear commitment to ensuring value for money. I know that the Economic Affairs Committee in 2012 was concerned about the planned scale-up to meet the target because there was a significant increase in the budget. Clearly, the committee was right to raise that issue. However, we have now completed the scale-up to 0.7% and a number of external bodies have looked at this, including the December 2014 DAC external peer review, which said of our scale-up that our,

“Well planned … implementation was carefully monitored … and at the same time, strong efforts were made to avoid compromising the quality of the ODA programme, and progress towards results was regularly reviewed”.

In addition, we have strengthened the evidence base and procedures for project investment decisions. All proposals must have a business case, with proposals for projects of £40 million and above being subject to review through the department’s quality assurance unit. We have invested in strengthening programme management processes, capability and systems to transform the way in which we deliver programmes so that we are better able to tackle the underlying causes of poverty and conflict. We have introduced tighter spending controls. The threshold for ministerial approval of project business cases was reduced from £40 million to £5 million, with Ministers also approving supplier contracts worth more than £1 million. We have increased the use of payment by results. Under this approach, the department makes payments only after pre-agreed results are achieved, rather than up front. We have launched a development tracker online tool to provide more public information on UK development investment in projects. The department has also been commended for its openness. We have also talked in other amendments about the external scrutiny that occurs. I therefore hope that noble Lords are reassured about the level of scrutiny and what we have put in place within DfID.

There may be, at heart, disagreement here. Does the world still need this assistance or not? In terms of value for money, the assumption that because the budget has increased it would therefore be poor value for money needs to be challenged. As to the comments of my noble friend Lord Lawson, I am happy to engage on climate change, but perhaps not now.