Public Accounts Committee

Lord Johnson of Marylebone Excerpts

Thursday 16th December 2010 Commons Chamber

[Joseph Johnson (Orpington) (Con)]

I thank those hon. Members who have curtailed their speeches, and due to the severe time constraints, I will also limit myself to addressing just one theme. It is the theme we discussed in the recent hearing on the Department for International Development: supporting primary education around the world. That is a subject in which I take a particular interest.

That hearing contrasted with many of the other hearings the Committee has had, because DFID is not a repeat offender in the sense that it is not having to be forced to implement past PAC reports. It is a Department that is being reformed from top to bottom, very much in the spirit of the long line of PAC reports that have been critical of value for money within the Department.

The hearing provided us with a very good insight into the work of a Department that is of major importance to the coalition and will become of increasing importance as we meet our commitment to lift the share of aid spending to 0.7% of national income by 2013. Let there be no doubt as to my support for this commitment, which demonstrates the coalition’s determination to stand behind the poorest people around the world. However, at a time of severe retrenchment across unprotected Government Departments, it is all the more crucial that DFID continues the work that has been ongoing—since May, I would say—to do more to secure maximum value for money for the UK taxpayer and the greatest possible impact for those whom the Department is trying to help. The PAC hearing raised a number of concerns in this respect.

First, the primary education programme supported by DFID illustrates the way the Department has, until recently, made astonishingly little attempt to measure value for money in even its biggest programmes. DFID’s rationale for investing in education is that it brings wider benefits which support poverty reduction, but the National Audit Office report and then the PAC hearing clearly found that too much emphasis has been placed on measuring simply the numbers entering education and that DFID has been too quick to claim credit for increases in enrolment rates that are hard to link directly to its programmes. It is also clear that the Department has paid too little attention to how many children are actually attending and completing primary school education, along with the standard of literacy and numeracy they attain. Those are key areas where limited progress has been made. I am glad that, since May, value for money has been vigorously addressed by the new Secretary of State and his team. There is the clear objective of reorienting the entire aid programme to focus on results, not inputs.

That is all the more important in the context of a comprehensive spending review where DFID’s budget is being increased quite substantially, from £6.3 billion this year to £9.4 billion by 2014-15. That is the single biggest increase across all Departments and is an increase of 37% in real terms. By 2014-15, DFID will be bigger even than the Home Office and the Ministry of Justice. That is why I particularly appreciate the work that it is doing to set up the Independent Commission for Aid Impact, which will further emphasise the new value for money priority of the Department. A chief commissioner is in place and is starting work as we speak.

It is also worth pointing out that even though DFID’s budget is expanding, the Department is not losing its focus on administrative efficiency and value for money. That is another area where we can commend the way in which the Department is pre-emptively addressing the concerns that we were raising in the PAC hearing. Although DFID’s overall budget is increasing, administrative costs within the Department are to be reduced by 33% over the course of the comprehensive spending review period. There is certainly evidence to suggest that there is still fat to be cut. I find it surprising that, in an aid Department, there are civil servants earning £175,000, and I am not sure that that sets a great example to the pro bono sector in general.

Lastly, I return to where I started. Measuring outcomes accurately and demonstrating value for money will help to build public support and buy-in for the substantial expansion of the DFID budget that we are programming over the coming years. The PAC’s work in that respect will make a valuable contribution to the process.