International Development (Official Development Assistance Target) Bill

Lord Finkelstein Excerpts

Friday 6th February 2015 Lords Chamber

[Lord Forsyth of Drumlean]

It is true that there are a lot of amendments in the group but they are consequential on the concept of creating a five-year period. The noble Lord, Lord McConnell, and I are old sparring partners and old habits die hard for him. In response to his intervention, and at the risk of being accused of repetition—I note that the noble Countess, Lady Mar, is not present—I stress that the National Audit Office report said that DfID was having to,

“quickly add some activities to its 2013 plans but delay others set for 2014, making it more difficult to achieve value for money”.

What does that mean if not that it was not getting the best bang for the buck? The noble Lord said that 2013 was the first year for meeting the relevant target. He is absolutely right about that. However, the report goes on to say:

“The Department’s plans for delivering the 2015 ODA target require it to rapidly increase its investments, which could be difficult for it to achieve”.

If that is not saying loud and clear that we are unnecessarily putting the department in a straitjacket, I do not know what is. My amendment would prevent that and I hope that the noble Lord, Lord Purvis, will accept it.

The noble Lord opposite is clearly not persuaded by the National Audit Office report. My noble friend Lord Fowler was very unkind to Margaret Hodge, the chairman of the Public Accounts Committee, who I think in many respects has done a great job in chairing that committee. Indeed, she has said that it appeared that the cash has been “rushed out” to “meet the 0.7% target”.

She added:

“This raises questions about value for money which Parliament will be keen to look into”.

I do not think we can ignore that. Just to show that I am being balanced and fair, Sir Peter Luff, a very distinguished colleague, who many of us in this House remember with great affection, said:

“The committee must grill Dfid very carefully to make sure this money was spent wisely and well. This proves the folly of binding targets which set out how much you have to spend irrespective of need”.

Neither of these parliamentarians is noted for holding extreme views.

However, as the noble Lord is not happy with National Audit Office’s view, I turn to the International Development Committee, which was also concerned about the impact of the 0.7% target on the effectiveness of aid. It stated in its annual report of May 2014:

“2013 was an exceptional year. DFID’s expenditure increased rapidly as UK ODA rose from 0.56% to 0.7% of GNI. Nevertheless, it does seem surprising that DFID should spend over a quarter of its budget in December and almost 40% of its budget in November and December. DFID should provide the reassurance that its expenditure is rational and costeffective and not rushed out at the end of the year, which is the impression that can be given by its spending profile in 2013. We recommend that DFID carefully monitor its ability to meet the 0.7% target given uncertainties about both its own spending and that of other Departments and the GNI figure, which is itself subject to regular revision”.

As regards that latter point on regular revision, to which my noble friend Lord Howell referred, suddenly, it is decided that we need to take account of illegal drugs activity and prostitution and, as a result of that, we have to find an extra several hundred million pounds to spend on the aid budget. Does that make sense? It may be a bonus for the department, but it will certainly not be part of a planned approach.

I feel strongly about this issue as I was a member of the Economic Affairs Committee, under the splendid chairmanship of my noble friend Lord MacGregor, which took evidence on this issue. The evidence is there for people to see. It highlighted the problems, including that of wrongly prioritising the amount that is spent rather than the results that are achieved. Throughout the morning we have talked about how much is spent rather than how to get the best value for money from what is spent, as I said when we discussed the earlier amendment of my noble friend Lord MacGregor. We thought that a single-year target,

“makes the achievement of the spending target more important than the overall effectiveness of the programme”.

That was one of the conclusions of this House’s distinguished committee. We also said that,

“the speed of the planned increase risks reducing the quality, value for money and accountability of the aid programme”.

That is what we concluded a few years ago and that view is supported by the NAO and the International Development Committee.

A further point that has not been touched on this morning is that reaching the target increases the risk that aid will have a corrosive effect on other political systems by creating aid dependency. That, again, points to what DfID is doing very successfully—that is, looking at more targeted and sophisticated ways of providing aid and support and involving the private sector. I sense that the House has probably heard enough of this argument. I beg to move.

[Lord Finkelstein (Con)]

My Lords, unfortunately, I was not able to speak in the Second Reading debate, even though I was present, as I could not be certain that I could attend the whole debate. However, I assure the Committee that I intend to speak briefly and only to the amendment.

I write a football column each week for the Times, and have done for more than a decade. The column is concerned with the quality of football teams and helps readers to distinguish between noise and signal. A team that wins 50% of its games will not do so by regularly winning, then losing, winning then losing; it will do it in clusters. When statisticians assessed those clusters, they discovered that they are randomly distributed. In other words, a team will win a cluster but that may be just because it has a run of random results and then it will win, win, win, draw, draw, lose, lose in that cluster. There is a trophy that is awarded entirely for randomness: it is called the Barclays Manager of the Month. When a team’s cluster of wins coincides with a calendar month, its manager becomes Barclays Manager of the Month. In the following month, when that team loses its games, something occurs that is called regression to the mean, and the manager gets fired. This is a perfectly simple statistical concept that ought to be applied to the Bill.

It is not a very good idea to try to set a target in law, on which Parliament must report, that is attached to a single year’s variable data. It is much better to try to find a period that might represent some sort of significance over a long period of time. A single year cannot do that and five years can attempt to do that. Even five years is quite a short period but it is certainly a great deal better than a single year.

This is a technical objection to the Bill, even though others may think it goes to the heart of the argument for it, but the Bill would certainly be greatly improved if a simple concept of randomness was agreed so that we do not have a law for randomness in the same way that we have a cup for it.