International Development (Official Development Assistance Target) Bill

Debate between Lord Lamont of Lerwick and Lord Purvis of Tweed

Friday 27th February 2015 Lords Chamber

[Lord Purvis of Tweed]

I am grateful and I have been listening very carefully to my noble friend. Perhaps he could clarify to the House what he means by “over the period” of five years. Is it that we would meet it once in every five years? Is it an average over five years? Is it rolling over five years or is it in each year of those five years? Will he clarify his understanding?

[Lord Lamont of Lerwick]

It is not intended to be each year of the five years but an average of or a rolling over the five years. That is what I suggest. Of course, we would be open to amending the amendment if my noble friend chooses to give us his support. The confusion which can be caused by the different outcomes of GNI is also recognised under Clause 2(2)(a), where,

“under section 1(4) of the 2006 Act”,

it is possible for the Secretary of State in a subsequent year—this could be years later if it proves that, because of revisions of GDP, the target it was thought had been met had not in fact been met—to make a subsequent statement, which would not refer to the current year but to years gone past. Of course, one might have a whole series of statements where one year it was thought that the target had been met and then the next year it was thought that the target in the previous year had not after all been met. You could go on contradicting yourself year after year because these statistics bob around on a very thin margin which could easily affect the 0.7% one way or another. That is why I say to the noble Lord, Lord McConnell, and others that the idea that the 0.7% gives certainty is somewhat fallacious and not very profound. Those are the external factors.

More importantly in terms of policy and what we are trying to achieve in debates around this issue, there may be factors other than external factors which affect whether the target was not met. These could be that projects were not ready or that there was not enough time to get them ready, However, if we want to place a premium on management, rather than just meeting the target on outcomes rather than input, again I suggest that that would be greater if we looked at this target not in one year but over several years. If we looked at it over several years, it would remove the incentive which came to light in Committee to hand over cash to multilateral institutions simply in order to meet the target. Although, as we learnt in Committee, it would take on average two years before the money handed over to a multilateral institution is spent, for the purpose of meeting the target it counts as though it was spent. Therefore, in any year, if you are not getting near to the 0.7%, there would be a tremendous incentive just to hand the money to a multilateral institution in order to say that the target has been met.

It also seems to me that the way in which the 0.7% works is that there will be a great incentive to spend money rather than to economise or to manage it efficiently. There is no way to claw back money in years in which there is an overspend. If the target is exceeded—if it is 0.8% of GDP—there is no way in which that money can be recouped. Therefore, the fear of the department will never be of overspending, it will always be the risk of underspending and, therefore, it will tend to overspend. For all those reasons, the amendment put forward by the noble Lord, Lord Lipsey, would be conducive to good management of the budget and thoroughly consistent with the aims of the Bill as put forward by its promoters.

--- Later in debate ---

[Lord Purvis of Tweed]

My Lords, Amendment 22 is in similar terms to an amendment tabled in Committee, and Amendments 24 and 27 are new. Noble Lords will recall that in Committee we debated an amendment—at that point Amendment 25, tabled by the noble Lords, Lord MacGregor of Pulham Market, Lord Hollick, Lord Lawson of Blaby and Lord Lamont of Lerwick—which called for an independent inquiry into the independence, efficiency and effectiveness of the Independent Commission for Aid Impact. We then debated their concerns about the operation, and we now return to their call for that to be the statutory body. I do not believe that they have made a strong case to reconcile the two aspects of it today, either.

Let me address the contribution of the noble Lord, Lord Hollick, because I actually agreed with a large amount of what he said about the need for proper scrutiny. The Minister responded to all those points. The purpose of the Bill, however, is to create a requirement not only that there is independent evaluation—it is important for that to be in the Bill anyway—but that it is the duty of the Secretary of State to report how that independent evaluation is being carried out. These are two very significant powers that the legislation will be providing. They strengthen the existing process for the 2006 Act, which is now on the statute book. We have seen a number of the annual reports presented under the basis of that Act; they will be even stronger.

As the Minister indicated, the mechanism that we wish to assume would be in place is ICAI. The question is whether ICAI can carry out its functions as an advisory NDPB, answerable to this specific sub-committee of the Commons International Development Committee, or whether it is required to be on a statutory footing for the exclusive purpose of this evaluation. From my own position, I believe that it is not flexibility but good governance which allows the structure in place to be taken forward—with of course the view, as the noble Lord, Lord Collins of Highbury, indicated, that there is sufficient scope in future to improve that process even more. That will of course have to take place anyway in May 2015 because the memorandum of understanding between the Department for International Development and the Independent Commission for Aid Impact is due to be renewed, as is the framework agreement under which it operates and is accountable to Parliament.

I think that I should highlight this, because it may address some of the points which I think have been erroneously cited about whether DfID is effectively being judge and jury when it comes to evaluating this. The memorandum of understanding states very clearly that under its principles, in paragraph 2.1, ICAI should:

“Ensure independence of staff, decision-making and the process of undertaking evaluations, reviews and investigations”.

Further, in paragraph 2.5, the memorandum says that DfID should:

“Respect the independence of ICAI staff, decision-making and reports”.

Any change to that would have to be brought to Parliament—to the Commons IDC—which I have no doubt would be scrutinising it, in addition to the very fact that the renewal of this memorandum and the framework will be brought to Parliament anyway.

[Lord Lamont of Lerwick]

We are listening to the noble Lord with great attention and he has made powerful points about ICAI. But is it not fundamentally very strange and unsatisfactory that the Bill should reach this stage with the status and role that ICAI is to play not being crystal clear and with the Minister simply saying that it is “highly likely” that it will perform this function? That assurance is in complete contradiction with her other remark that we do not want one agency to do it. Surely this ought to be clear.

[Lord Purvis of Tweed]

I understand the point that my noble friend makes but the purpose of the Bill, as I indicated to the noble Lord, Lord Hollick, is to require the duty for independent evaluation to be carried out and then for the Government to state how that is carried out. It is the role of the Government then to provide that—