International Development (Official Development Assistance Target) Bill Debate
Full Debate: Read Full DebateBaroness Northover
Main Page: Baroness Northover (Liberal Democrat - Life peer)Department Debates - View all Baroness Northover's debates with the Department for International Development
(9 years, 10 months ago)
Lords ChamberMy Lords, as we are looking at page 2 of the Bill and the amendment of my noble friend Lord Astor, which seeks to add a further paragraph to the three issues listed in paragraphs (a), (b) and (c), one or more of which might lead the report to explain why the target has not been hit, may I ask a question of my noble friend Lord Purvis, or perhaps the Minister, about paragraph (c), which refers to,
“circumstances arising outside the United Kingdom”?
Would that include the views of the proposed recipient countries of overseas aid saying that they no longer want the aid? We had this situation with India recently, where India reviewed its relationship with Britain, felt that the relationship should mature and that far better outcomes for development and escaping from poverty would be achieved through other fiscal changes such as two-way investment flows, impact value investment and a whole range of new techniques, and therefore it did not want to go on receiving old-fashioned official aid because official aid, as a large part of the world has discovered—not, I fear, everybody in your Lordships’ House—is not the main instrument, or even the most effective instrument, for lifting people out of poverty, ending real suffering and accelerating economic growth. So if countries come forward and say, “We do not actually want this assistance”, would that be one of the,
“circumstances arising outside the United Kingdom”,
which might disembarrass the Secretary of State and enable him to explain why the target had not been hit?
My Lords, I shall respond to the questions put to me. I apologise to my noble friend Lord Astor if I did not adequately answer in my letter to him all the questions that he raised. We will get back to him with further answers.
The EU came up in discussion on earlier groups of amendments of multilateral organisations generally. I expect, or at least hope, that noble Lords will be aware that when we came into government, we undertook a bilateral aid review of every programme, which included what was then taken forward as far as India was concerned, and a multilateral aid review. We pulled back from those organisations that did not score well in the multilateral aid review. I know that the party opposite was concerned, for example, that we pulled back from the ILO on the basis of that, although it is aware that we are engaged with the ILO in Bangladesh. However, many multilateral organisations came out of the aid review extremely well, and so did the EU budget.
Earlier, noble Lords referred to what my noble friend Lord Patten of Barnes—Chris Patten—said many years ago, after which he took forward the most formidable reform programme of what EU aid did. Since then, others have built upon that, which has been extremely welcome and no doubt has brought us to the situation that we are in. I hope that I can reassure noble Lords that we remain closely engaged in trying to ensure that we get value for money from that and that all is scrutinised.
Long discussions and negotiations with the Indian Government came from the bilateral review. The aid programme in India continues to 2015. It continued over a long period and then moves to technical support. It is not something which suddenly happened. If anything, countries tend to say, “Please don’t go”, rather than “Do go”. I hope that I have reassured noble Lords in that regard.
My Lords, on that point about the use of multilateral organisations, does the Minister agree with the National Audit Office report? It states:
“The Department phased its contributions to 2 key multilateral organisations to increase 2013 ODA. The Department has used the flexibility it has over when it issues promissory notes to fund some multilateral organisations to help manage ODA. In line with OECD rules the notes count as ODA when they are issued, which is typically 2 years before they are cashed”.
I mentioned earlier the way in which the notes promising the assistance were carried through. Obviously, with something like the Global Fund, one might make the kind of commitment to which my noble friend Lord Fowler referred in a particular year, which then is programmed in. A programme is constructed, which we carefully monitor, to carry forward the spending of that. I would think that the noble Lord would welcome that strategic way of doing things.
I would like to make some progress. I am sure that the noble Lord will come back in again. I assure noble Lords that there is flexibility in DfID’s programming and budgeting. I should like to reassure my noble friend Lord Astor of that point. It is why at the end of 2013 it was possible to respond to a typhoon, which we had not anticipated any more than anyone else had, and to the unexpected level of displaced people coming from Syria who needed to be assisted over the winter. Part of the way in which DfID responds is to have that flexibility built in.
I am most grateful to my noble friend. I do not mean to harass her, but she did not really deal with the point that I was making. I am not making a point that the department does not give money to multilateral organisations, often for very good causes. I was asking her to confirm that the department uses multilateral organisations where the rules on what constitutes expenditure, which in this case was two years ahead of the programme being achieved, are driven by the need to balance the budget and not by the merits of the programme and that that arises because of the lack of the flexibility for which my noble friend’s amendment would provide.
I understand what my noble friend is saying. I can totally refute that. If the noble Lord were to look carefully at what the Global Fund manages to achieve, because it is a large-scale operation that is able to assist in the poorest of countries with the greatest need, or if he were to look at Gavi, which deals with vaccines and vaccine research, he would see that our supporting vaccinations directly through our bilateral programmes may not be the best way to go. Working with Gates and others in a very large enterprise brings down the prices, invests in research and takes forward vaccination, which has saved millions and millions of children’s lives.
Would my noble friend also agree that the Global Fund is probably one of the most cost-effective organisations in the world in bringing aid? That is value for money that the British taxpayer gets.
My Lords, I was not really intending to speak on this amendment, but I want to get to the bottom of this point. I entirely agree with my noble friend Lord Fowler about the importance of that programme and I pay tribute to the work that is done all over the globe in combating AIDS and to the organisations involved.
This is not about the merits of particular programmes; it is about the means by which the money is managed because of the lack of flexibility, which the amendment would provide for. Paragraph 15 on page 8 of the summary of the NAO report says:
“The need to increase spending was a factor the Department considered when it decided in autumn 2013 on the size of promissory notes it subsequently issued in December 2013 to the World Bank’s International Development Association and to the Global Fund to Fight AIDS, Tuberculosis and Malaria. The Department’s decision to issue more notes to both organisations in 2013 did not alter the total value of notes it planned to provide them and did not affect the content and timing of the programmes”.
So we are not talking about the programmes; we are talking about what happens as a result of having to find programmes in year where you have no flexibility. The advantage of going to multilateral organisations is that the expenditure counts towards the target when it is issued, even though it might not be incurred until two years down the line. That does not apply to bilateral programmes. Therefore, it creates a bias against bilateral programmes in circumstances where the budget needs to be managed. It is not about the merits of the programmes; it is about how the rules and the corset that is being imposed by the provisions in this Bill result in bad decisions potentially being made.
That was what I was refuting. The NAO report that the noble Lord quoted—I have read every word of it—found no evidence that the department had failed to follow its normal business processes. I can assure the noble Lord that business cases are put as to why DfID should support one thing rather than another. If the most cost-effective and effective way of supporting, let us say, the vaccination of children is to go through Gavi, it makes sense to do so. To have some artificial emphasis on bilateral programmes, which then reached fewer children, would be perverse. What I am saying to the noble Lord, and I hope that he will understand this, is that very thorough procedures are gone through before decisions are made. In many instances, depending on what DfID is trying to achieve, it may well be that a multilateral organisation can deliver more for the money that we put in and which we then lever also from others. I think that we have probably covered this matter sufficiently.
Before my noble friend sits down, perhaps I may get absolute clarity on this. The reports states, on page 8, paragraph 15:
“The need to increase spending was a factor the Department considered when it decided in autumn 2013 on the size of promissory notes it subsequently issued in December 2013 to the World Bank’s International Development Association and to the Global Fund to Fight AIDS, Tuberculosis and Malaria”.
Is she saying that that is not correct?
What I am saying—I hope that it is clear—is that DfID needs to decide how it is going to spend its money. It was always known from 2010 what the trajectory was of that DfID budget. I think that the noble Lord was a member of the Economic Affairs Committee that reported in 2012 and took its evidence in 2011. At that point, that escalation had not occurred and the committee rightly expressed concern about that. However, all the reports thereafter have looked very carefully at whether that escalation was effective and value for money. It has been found to be a rigorous process.
We are now at 0.7%. We are not into escalation, but these multilateral organisations, which were stress-tested through the multilateral aid review in 2010-11, were judged to be value for money for the reasons that I have given. Bilateral programmes can be very limited in a very limited number of countries. What Gavi can do in sourcing vaccines, investing in research and so on and in involvement in many different countries can be much more effective. That is why DfID is a strong supporter of such organisations.
My Lords, I thank my noble friend Lord Astor for his amendment, for being consistent with the points he raised at Second Reading and for the manner in which he did it. I am most grateful for that, and I will attempt very briefly to address his points. In so doing, I wish to put on record my appreciation for the points that the Minister made. There are two aspects to this: forward expenditure, which is part of wider plans in existence, and the possibility of other factors which mean that, outwith the scope of the responsibility of DfID, the international target would not have been met. I suspect that that gets to the core of my noble friend’s amendment.
On the first point, paragraph 15 of the NAO report has been cited. I am sure it was an oversight that paragraph 16 was not referred to. That states:
“Promissory notes accounted for 19% of the Department’s ODA in 2013, similar to the level in 2012”.
Given the NAO’s findings, I do not think that this is an issue that needs to take up much more of our time in Committee.
Let me address the point made by my noble friend. The question is whether elements of this Bill complement the International Development (Reporting and Transparency) Act 2006 and the existing mechanisms through which DfID, the Treasury and the ONS report on information to do with programme profiling, budget decisions and external factors and provide sufficient information to allow Parliament to understand why a target has not been met. With the mechanisms that we already have in place—including, importantly, Section 6 of the International Development (Reporting and Transparency) Act 2006 on the methods for transparency, where there is provision to specify future allocations of aid, in addition to all the other reporting mechanisms, the work of the Office for National Statistics and the external peer review by the OECD—I believe there is sufficient work within the programme on reporting, accountability and transparency to satisfy my noble friend.
My noble friend Lord Howell made a point about potential external factors and gave an interesting reason. The Minister responded very clearly with regard to that specific case. The Bill affords freedom for external impacts to be reported and then, through Parliament, to be scrutinised fully and for Parliament to determine the justification. On that basis, I respectfully ask my noble friend to withdraw his amendment.
My Lords, I am grateful to the noble Lord, Lord Purvis, for his response. Obviously I do not have Section 6 of the International Development Act at hand but I will look at it carefully and read what he said in Hansard. He certainly gave a considered response, for which I am grateful.
I am also grateful to the Minister. She said, importantly, that there was flexibility in the department, and we are all grateful for that. I would have been happier if she had been able to say that, should the Bill go through, there will still be flexibility in the department. That is the important thing that we all want and are trying to achieve.
I can assure my noble friend that that will still be the case: there will be flexibility.
I am pleased to hear that. It certainly satisfies one of my concerns. I still think that the department will have a difficult time with its two year ends. The working out will be one of the games for the accountants, if nothing else.
I am grateful to my noble friend Lord Forsyth for joining in the debate. He did something that even Lloyd George was not able to do for my great-grandfather, when he referred to me as a noble Earl as opposed to a mere Viscount. I am grateful for his support for that. I beg leave to withdraw the amendment.
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.
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.
When the Bill was introduced, there was considerable concern about duplication because ICAI existed. It is highly likely that ICAI will be the body that undertakes the reviews. My concern is simply to ensure that we do not exclude the operation of the other bodies that I mentioned—in particular, the NAO, which the noble Lord seems very much to appreciate.
I am most grateful to my noble friend, but what then does Clause 5(2) mean when it states:
“The Secretary of State must include in each annual report a statement as to how he or she has complied with the duty under subsection (1)”?
By the way, I do not know why we have “he or she”, because the rule is laid down that you do not need to provide for both genders in statutory legislation.
As a former Equalities Minister, perhaps we should take through some legislation saying that it is perfectly possible to have “he or she”.
I am just saying that the guidance given does not provide for that. If she wants to change the guidance, I would be very happy to support that; I am just making the point that it is not consistent with other legislation.
Very cleverly, my noble friend has diverted me from my main point—
Yes, very stupidly, I have diverted from my main point. As we are here discussing not equality legislation but overseas aid, can my noble friend explain why it is necessary for the Secretary of State in each annual report to include a statement about how the Secretary of State has complied with the duty under subsection (1)? Surely that duty should be complied with immediately, not subject to some annual review.
I think that we are talking about equality legislation here—greater equality between well-off and less well-off countries and, in particular, the position of women and girls.
That is a very important point, but can my noble friend answer my question, which is: why is it necessary to have in each annual report a statement as to how the Secretary of State has made,
“arrangements for the independent evaluation of the extent to which ODA provided by the United Kingdom represents value for money in relation to the purposes for which it is provided”?
Surely she should have those arrangements in place, or is the intention that they should go on for ever and never be completed?
Noble Lords can be totally reassured that DfID will continue to be fully scrutinised. My noble friend, who is the owner of the Bill, is about to explain that in detail.
My Lords, as I hope that the House will appreciate, the sponsors of the Bill are responsible for drafting. I know that my noble friends will have read the report of both Committee and Report in another place, where those points were raised and responded to. My right honourable friend Michael Moore was perfectly clear in another place when he said that when he first proposed the Bill and consulted on it, it was an open, public consultation. At that time, he said in another place:
“I said on Second Reading that I thought the independent international development office proposed to fulfil the important function set out in the Bill was a good model, but that I was open to suggestions as to how it might be improved”.—[Official Report, Commons, International Development (Official Development Assistance Target) Bill Committee, 11/11/14; col. 35.]
Far from it being either mysteriously changed or rushed, there was proper parliamentary scrutiny in another place at Second Reading, in Committee and on Report, where the Government did not accept the amendments proposed by Mr Nuttall, et cetera, because it was felt that there was a more effective way to answer the valid points that my noble friend Lord MacGregor has cited. Let me turn to them.
What is the fundamental question that the Bill is asking? In addition to the 2006 legislation, is there for the first time independent evaluation of the value for money of United Kingdom ODA? The Bill will afford that. It goes further. It states that there is a duty on the Government to come to Parliament to explain annually how that independent evaluation is being carried out. That answers the second question raised: not only is there provision for independent evaluation but Parliament will be receiving from government, on an annual basis, how that independent evaluation is carried out. Subsection (2) is a considerable safeguard to Parliament for effective scrutiny of the independent evaluation.
This means that we come to whether a new body is created or ICAI is put on a statutory footing. When we look at all the consideration of how this independent evaluation can be carried out, not necessarily but potentially by one body and informed by the National Audit Office or other bodies, I think it is right that the Bill simply states that the principle for that evaluation will be carried out with flexibility as to what body or bodies will carry out that function. It is important that Parliament should have the ability to scrutinise properly that independent evaluation and how it is carried out. As the sponsor in this place, I cannot accept the amendment but I understand why my noble friend spoke to it. I believe that the elements in the Bill afford that protection.
I am most grateful to the noble Lord for answering the question which the Minister did not answer in respect of Clause 5(2). He is saying that the Secretary of State will produce an annual report on how he or she is being evaluated. That is not independent scrutiny and reporting. What is needed is an independent body which looks at the department and reports to Parliament, not to the Secretary of State. It is very helpful that the noble Lord should have answered this point because he is saying that Clause 5 effectively says, “The Secretary of State will decide who is going to hold him or her accountable for the programme of overseas development aid, then the Secretary of State will on an annual basis report to Parliament on how well the people reporting on him are doing”. That is a nonsense.
Do noble Lords have the Bill here? Perhaps my noble friend might bear in mind that the Secretary of State already has to make an annual report to Parliament, under previous legislation. Clause 5(1) says that:
“The Secretary of State must make arrangements for … independent evaluation”,
which is what we have been talking about and is indeed extremely important. Clause 5(2) says that:
“The Secretary of State must include in each annual report”—
the annual report that the Secretary of State is giving to Parliament—
“a statement as to how he or she has complied with the duty under subsection (1)”;
in other words, that the independent scrutiny of ODA has been carried out and that it is 0.7%. I think that the noble Lord is missing the point about the annual report, which is already in legislation and which the Secretary of State must lay before Parliament.
I am most grateful to the Minister. She says that the Secretary of State has to make an annual report, which is correct, and that the annual report will enable people to look at how well they are complying with the 0.7% and the rest.
No, I am bringing my noble friend back to the fact that the Secretary of State makes an annual report to Parliament anyway, under the 2006 Act. That is an annual report not about how they have been independently scrutinised but about what DfID has done. I am sure that the noble Lord has seen those reports.
My Lords, it may seem a little odd, having been somewhat critical of how independent the Independent Commission for Aid Impact might be, to suggest that the Secretary of State should rely on that commission to set up an independent inquiry into independence, efficiency, and effectiveness. I do not wish to press this amendment; I am just seeking answers from the Minister.
In our Economic Affairs Committee report in March 2012—I accept that quite a lot could have changed since then—we were a bit concerned about the effectiveness of the Independent Commission for Aid Impact. It had only just been set up, so it was very early days, but I wanted to mention one or two of the points we made then, to enable the Minister to give us assurances that the concerns we had then should no longer be concerns.
We said that we were,
“concerned that the Commission is not in practice fulfilling the role which it has been given”.
That was largely based on the oral evidence that we received at the time in our inquiry, which failed to convince the committee that it was appropriately resourced for the work with which it was charged. That is a very important issue as regards our discussion on the previous amendment. How much the independent evaluating body is resourced is crucial. We went on to say that,
“it could be relied on adequately to fulfil its role. These are early days for ICAI, but we recommend that both Parliament and DFID monitor ICAI’s own effectiveness closely, and”—
this is the point—
“take steps necessary to ensure that both its work and its staffing are sufficient both in quality and in quantity for it effectively to discharge its duties”.
Therefore, the reason for tabling this amendment is to enable the Minister to reassure us on those points. I beg to move.
My Lords, I reassure my noble friends in relation to ICAI that it already reports to Parliament via the International Development Select Committee in the House of Commons. The International Development Committee scrutinises ICAI’s work; it holds a public hearing every year to consider ICAI’s annual report, and a special sub-committee has been set up to take evidence after the publication of each ICAI report. The committee also approves ICAI’s work plan. Noble Lords may also be aware—and this would have happened after my noble friend’s Select Committee reported—that a triennial review of ICAI was published in December 2013 and a further review is scheduled for 2016. Triennial reviews are designed to consider whether public bodies such as ICAI are meeting good standards of corporate governance, and so on, and whether they are still needed.
In addition to the above, the National Audit Office and International Development Committee can, of course, already review the independence, efficiency and effectiveness of ICAI if they wish to do so, and also provide regular assessments of value for money within DfID to the Public Accounts Committee of the House of Commons. I hear what my noble friend says about his previous concern being somewhat ameliorated, and I hope that this will give him further reassurance.
My Lords, I have nothing to add from the point of view of the sponsors of the Bill to the reassurances that the Minister has provided. They are satisfactory, and I request that my noble friend withdraw his amendment.
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.
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.
My Lords, I am grateful for the opportunity to respond to the points that have been made. I hope that my noble friend considers that there has been proper consideration of all these issues in Parliament and that he does not feel that some Members of this House have a greater right than others to take part in any of the proceedings—whether because of age, experience or anything else.
The Bill repeals only one section of the 2006 Act, which is why I was exploring the existing duty within that Act on Ministers to report. The section that would be repealed requires,
“each annual report to include an assessment of the year in which the 0.7% target is expected to be met”.
However, as I have said on a number of occasions today, because this Bill maintains the position that the target will be met, it will, in addition to the provisions in the 2006 Act, be the mechanism for reporting going forward. Therefore, is it appropriate to include the noble Lord’s amendment in the Bill, or are the provisions in the 2006 Act and in this Bill the correct mechanisms for reporting?
I believe that the mechanisms in the Bill, in addition to those already on the statute book, are appropriate and that the criteria on effectiveness, potential corruption, whether the ODA budget is meeting the UN development goals and all the undertakings that we have made to international organisations—and, indeed, on value for money—are already covered by the 2006 Act and the independent evaluation that will be provided in the relevant reports. On that basis, I invite the noble Lord to withdraw his amendment.