International Aid Reviews: Conclusions

Baroness Verma Excerpts

Tuesday 1st March 2011 Lords Chamber

[Baroness Verma]

My Lords, with the leave of the House, I shall now repeat a Statement made in the other place. The Statement is as follows.

“Mr Speaker, with permission, I should like to make a Statement about the Government’s bilateral and multilateral aid reviews which are published today. The coalition Government’s decision to increase the UK’s aid budget to 0.7 per cent of national income from 2013 reflects the values that we hold as a nation. It is also firmly in Britain’s national interest. But this decision imposes on us a double duty to spend this money well.

On my first day in office, I took immediate steps to make our aid as focused and effective as possible. I commissioned reviews of DfID’s bilateral programmes in developing countries, and of the UK’s aid funding to international organisations. These reviews have been thorough, rigorous, evidence-based and scrutinised by independent development experts. They will fundamentally change the way that aid is allocated.

Recent events in north Africa and the wider Middle East have demonstrated why it is critical that the UK increases its focus on helping countries to build open and responsive political systems, tackle the root causes of fragility and empower citizens to hold their Governments to account. It is the best investment we can make to avoid violence and protect the poorest and most vulnerable in society.

The bilateral aid review considered where and how we should spend UK aid. Each DfID country team was asked to develop a ‘results offer’ setting out what it could achieve for poor people over the next four years. Each offer was underpinned by evidence, analysis of value for money and a focus on girls and women. The results offers were scrutinised by more than 100 internal technical reviewers and a panel of independent experts. Ministers then considered the whole picture deciding which results should be prioritised in each country. Consultation with civil society and other government departments was undertaken throughout.

As a result of the bilateral aid review, we will dramatically increase our focus on tackling ill health and killer diseases in poor countries, with a particular effort on immunisation, malaria, maternal and newborn health, extending choice to women and girls over when and whether they have children; and polio eradication. We will do more to tackle malnutrition, which stunts children’s development and destroys their life chances; and do more to get children—particularly girls—into school. We will put wealth creation at the heart of our efforts, with far more emphasis on giving poor people property rights and encouraging investment and trade in the poorest countries. We will deal with the root causes of conflict and help to build more stable societies, as people who live amidst violence have no chance of lifting themselves out of poverty, and we will help the poorest who will be hit first and hardest by the effects of climate change—floods, drought and extreme weather.

As a result of the review, we have decided to focus UK aid more tightly on the countries where the UK is well placed to have a significant long-term impact on poverty. By 2016, DfID will have closed significant bilateral programmes in 16 countries. This will be a phased process honouring our existing commitments and exiting responsibly. The countries are: China, Russia, Vietnam, Cambodia, Moldova, Bosnia, Cameroon, Lesotho, Niger, Kosovo, Angola, Burundi, the Gambia, Indonesia, Iraq and Serbia. This will allow us to focus our bilateral resources in the following 27 countries: Afghanistan, Bangladesh, Burma, Democratic Republic of Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, the Palestinian Occupied Territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, Sudan, Tajikistan, Tanzania, Uganda, Yemen, Zambia and Zimbabwe.

Together, these countries account for three quarters of global maternal mortality, nearly three quarters of global malaria deaths and almost two thirds of children out of school. Many of them are affected by fragility and conflict, so we will meet the commitment made through the strategic defence and security review to spend 30 per cent of UK aid to support fragile and conflict-affected states and to help some of the poorest countries in the world address the root causes of their problems. We will also have three regional programmes in Africa, Asia and the Caribbean, and an ongoing aid relationship with three aid-dependent overseas territories; namely, St Helena, the Pitcairn Islands and Montserrat.

The multilateral aid review took a hard look at the value for money offered by 43 international funds and organisations through which the UK spends aid. The review considered how effective each organisation was at tackling poverty. It provided a detailed evidence base upon which Ministers can take decisions about where to increase funding, where to press for reforms and improvements, and in some cases where to withdraw taxpayer funding altogether. The 43 multilateral agencies have fallen into four broad categories.

First, I am delighted to tell the House that nine organisations have been assessed as providing very good value for the British taxpayer. These include UNICEF, the Global Alliance for Vaccines and Immunisation, the Private Infrastructure Development Group, and the Global Fund to Fight AIDS, Tuberculosis and Malaria. We will increase funding to these organisations, because they have a proven track record of delivering excellent results for poor people. But of course there will always be room for improvement and we will still require strong commitments to continued reform and even better performance.

Funding for the next group of agencies—those rated as good or adequate value for money, such as the United Nations Development Programme and the World Health Organisation—will be accompanied by specific pressure from the UK for a series of reforms and improvements we expect to see in the coming years.

We are placing four organisations in special measures and demanding they improve their performance as a matter of urgency. These organisations are UNESCO, the Food and Agriculture Organisation, the development programmes of the Commonwealth Secretariat and the International Organisation for Migration. These organisations offer poor value for money for UK aid but have a potentially critical niche development or humanitarian role which is not well covered elsewhere in the international system or contribute to broader UK Government objectives. We expect to see serious reforms and improvements in performance. We will take stock within two years and DfID's core funding may be ceased if improvements are not made.

The review found that four agencies performed poorly or failed to demonstrate relevance to Britain’s development objectives. The review therefore concluded that it is no longer acceptable for taxpayers’ money from my department to continue to fund them centrally. So, I can tell the House today that the British Government will withdraw their membership of the United Nations Industrial Development Organisation and that DfID will stop voluntary core funding to UN-HABITAT, the International Labour Organisation and the UN International Strategy for Disaster Reduction. This will allow over £50 million of aid money to be redirected immediately to better performing agencies.

We are working closely with other countries to build a coalition for ambitious reform and improvement of all multilateral agencies. As a result of these reviews, over the next four years, UK aid will: secure schooling for 11 million children—more than we educate throughout the UK but at 2.5 per cent of the cost; vaccinate more children against preventable diseases than there are people in the whole of England; provide access to safe drinking water and improved sanitation to more people than there are in Scotland, Wales and Northern Ireland combined; save the lives of 50,000 women in pregnancy and childbirth; stop 250,000 new-born babies dying needlessly; support 13 countries to hold freer and fairer elections; and help 10 million women get access to modern family planning.

I believe that these results—which will transform the lives of millions of people across the world—will make everyone in this House and this country proud. They reflect our values as a nation: generosity, compassion and humanity. But these results are not only delivered from the British people; they are also for the British people. They contribute to building a safer, more stable and prosperous world, which, in turn, helps keep our country safe from instability, infectious disease and organised crime.

Aid can perform miracles but it must be well spent and properly targeted. The UK’s development programme has now been reshaped and refocused so that it can meet that challenge”.

I commend this Statement to the House.

--- Later in debate ---

[Baroness Verma]

First of all, I thank the noble Baroness for her opening comments. We all accept that DfID did some fantastic work when the Opposition were in government. However, the focus there was on inputs. We want to try to reshape the programmes and put the focus on outputs as well as inputs, so that we can measure the results and see that, where programmes are working, they are working well. The noble Baroness has asked a number of questions and I will try to answer as many of them as I can. Where I do not answer, I will of course write back to her.

A larger scale-up of aid for Burundi would have required us to show a significant impact on value for money and we believe that there are other comparative partners and donors in Burundi who will do far better than us. We would not have been able to achieve the sorts of results that we would have wanted by scaling up in the short term. We want to deliver value for money and results-based aid through larger existing programmes. From 2012, DfID will focus exclusively on supporting Burundi’s integration into the East African Community, as we believe that this is a critical factor in the country’s medium-term growth. All of DfID’s regional integration work will be managed by TradeMark East Africa, which has an established office. DfID will continue to support Burundi from Rwanda and Nairobi through those organisations.

The noble Baroness asked about UN Women's funding. We have agreed to support transitional costs but, when I spoke to Michelle Bachelet at the launch of UN Women, we made it clear to her that we wanted to see a strategic framework and, based on that framework, most major donors want to see what the priorities will be. She has readily accepted that and she has accepted that, if we are to be key donors to UN Women—the noble Baroness will be aware that we were through UNIFEM—we need to ensure that the money will be spent and directed through a strategic plan which will deliver the outcomes, as I am sure the noble Baroness would wish.

I noticed that the noble Baroness raised the Pope's visit again. I remind her that the funding for that was agreed to by her Government in March 2010; they agreed that different departments would pay for the visit. We also need to highlight the fact that the Catholic Church does a lot of genuinely good work across the globe and that it was right that his visit highlighted the excellent work undertaken by the Catholic Church. As her Government agreed to it, we honoured the undertaking.

On the Sudanese question, we agree that there are enormous needs there. It will take a lot of time and intervention but we will be very supportive of both sides in Sudan. We want to ensure that we build capacity for them. Noble Lords will understand that we shall be delivering in very difficult environments, but we shall continue to be responsive on the ground and see where we can deliver better and more.

[Baroness Falkner of Margravine]

My Lords, I broadly support my noble friend in describing the outcome of the two reviews. The Government should be congratulated on becoming, by 2014, the largest rich economy to attain the United Nations target of providing 0.7 per cent of GDP in aid, which in the light of our very straitened circumstances is noble indeed. Fourteen years since the establishment of DfID—I pay tribute to the Labour Government for having set up that department—it is right that there should be this level of comprehensive review to look at the focus of its expenditure. I particularly welcome the emphasis now on fragile and conflict states. It is right that we focus on those where the need is greatest.

I have two questions to put to the noble Baroness. One is on the bilateral review and concerns India. I am somewhat concerned that a country which is in the queue to become a permanent member of the UN Security Council, a country which has a £20 billion space programme and which gives aid to other countries, should still continue to be a recipient of hard-pressed aid which, as the noble Baroness, Lady Kinnock, pointed out, should be going to other organisations, such as UN Women. I look forward to hearing my noble friend's response to that. It leaves one slightly uncomfortable.

On multilateral aid—I declare an interest as a former employee of the Commonwealth Secretariat until 2003—I notice that the Statement suggests that those organisations in special measures will be given two years to show significant improvement. I wonder whether two years is too short a period and whether there have been any conversations with those organisations in special measures to see whether they believe that they can show significant improvement in just two years or whether they need longer.

[Baroness Verma]

I thank my noble friend for both her questions. I know she has some concerns about aid going to India. Perhaps I can point out to noble Lords that India has one-third of the world's population living on less than $1.25 a day. Last year, DfID spent 58p per poor person in India compared with £3.50 per poor person in sub-Saharan Africa. We shall have to shift our focus and, therefore, the Secretary of State has decided to shift it to three states in India—the poorest states—to ensure that we are able to maximise our aid there.

India’s space programme adds up to 0.1 per cent of the country’s overall budget, but the issue is not just about the space programme. From that programme, the Indians are able to use the technologies to deliver mobile technology to villages and particularly to women who are able to access information which they would not otherwise be able to access. The programme is not just about space but about using the technology for other things as well. I completely understand that the noble Baroness has concerns, but she would perhaps also agree that we have a special relationship with India. If we are to see the aid programme go down, we must be able to lift far more of the people of India out of poverty.

On the organisations in special measures, I respond to the noble Baroness by saying that two years may seem a short time, but the organisations are fully aware that they have to make some serious reforms. Of course we will keep in constant dialogue with the Commonwealth Secretariat to see where the improvements are taking place. The secretariat reaches out to places where we, as a single country, would not. It has special niches and therefore it is important to support it fully.

[Lord Harries of Pentregarth]

What the Minister has said is very encouraging indeed and, I am sure, will enjoy widespread support across the House. I have two brief questions. Will she say something about how this review is affecting non-governmental organisations such as Oxfam, Christian Aid and CAFOD? As she will be aware, they are sometimes able to provide the most sharply focused and effective forms of aid and they are often in receipt of government grants for their projects.

The second question follows up on India. As the noble Baroness knows, the poorest section of the Indian population is the Dalits, of whom there are 200 million in the world, most of whom are in India. They are not only desperately poor but are shunned and humiliated. Would she say something about how the Government will support the Dalits in raising them from the very bottom of Indian poverty?

[Baroness Verma]

I thank the noble and right reverend Lord. On the NGOs, the Secretary of State has made it very clear that much of our aid, particularly in countries where there is conflict, is delivered through NGOs, and we want to strengthen that ability. We recognise that there will be times when we will work in partnership with NGOs to ensure that we can reach a much wider population. The Secretary of State has made it clear, time and again, that the major NGOs are key to the success of development programmes at grass-roots level, and therefore we will work hand in hand with them to ensure that that is strengthened.

I accept what the noble and right reverend Lord says about the Dalits. Through the programmes, we will continuously see that monitoring is in place to ensure that all the poor benefit from our programmes and that no one who needs a beneficial response is excluded. I hope that he is reassured by that. I am very aware of the difficulties that the Dalit community faces, and I raise it constantly.

[Lord Judd]

I declare an interest as a former director of Oxfam and as a current trustee of Saferworld. There is a great deal of material in this Statement. Can the noble Baroness give us an assurance that we shall be able to have a proper and full debate on its implications at an early date?

Reference was made to the desire to see poor people being able to own property. Does that also envisage a stake in land and land reform to ensure that poor people can farm for themselves and engage in their own agricultural production? Can the Government also assure us that priority will continue to be given to the whole issue of security sector reform that we can see is essential for providing the context within which development can take place?

More specifically, does this Statement cover the immense needs that will now arrive among the impoverished homeless, in many cases in effect stateless refugees from Libya and elsewhere in north Africa? If there is concern about conflict resolution and areas of conflict, why is there no mention in the Statement of the north Caucasus?

[Baroness Verma]

On the noble Lord’s question about the debate, this is, as I have always said, in the hands of the usual channels. If he feels that a debate is required, we need to address that through them.

We have already distributed some humanitarian aid to Libya. We were already placed to ensure that refugees fleeing could have some humanitarian aid. The noble Lord is absolutely right that this will develop into looking after many thousands of people who are fleeing a very unstable place. We chartered an aircraft that left Dubai this morning with blankets for 36,000 people and 300 tents to shelter at least 1,500 people. This was in response to a request from the UNHCR. As of yesterday, at least 126,000 who have crossed international borders out of Libya, including Egypt and Tunisia, will we hope be helped by some of the humanitarian aid that we will be providing them.

As you know, this is a moving picture. A lot is going on, and it is very difficult to be able to comment further. We also need to be very mindful that whatever we say in this country is immediately responded to elsewhere. However, I reassure the noble Lord that humanitarian aid is at the forefront of our thinking.

[Baroness Morris of Bolton]

My Lords, I thank my noble friend for repeating the Statement. I declare an interest as a trustee of UNICEF UK. We very much welcome the announcement that the Government are doubling our core funding for the next two years because of the results that we have had in tackling child mortality, maternal health issues, HIV and AIDS. I pay tribute to UNICEF, NGOs and all our aid workers throughout the country who do amazing work in challenging circumstances.

I also welcome in the Statement the help that will be given to countries that are trying to build open and stable societies. Events are moving fast and furiously in the Middle East and north Africa. I therefore welcome the extra money that will be given to the occupied Palestinian territories. Over the last few years, DfID has been withdrawn from some countries in the Middle East. Will DfID be keeping an eye on this? Will it sometimes look at and review where the money can be spent, particularly to help countries that are doing their very best to open up their societies?

[Baroness Verma]

I thank my noble friend for her very warm words. I also pay tribute to UNICEF and many of the great NGOs that do incredible work often in very difficult circumstances. She raised some points about countries from which DfID money was withdrawn. We are going continuously to countries that will need our assistance. However, the infrastructure must be in place to be able to deliver it on the ground. If it is not, it is often difficult. I very much take on board what my noble friend has said and will take it back to the department for the Secretary of State.

[Lord Hannay of Chiswick]

My Lords, will the Minister accept a very warm welcome for the way in which the Government have withstood the slings and arrows of the tabloid press, who have asked them to cut our aid programme? How welcome it is that they are sustaining it, particularly given that, if you do a mathematical calculation, you will find that, because of the crisis, the 0.7 per cent of GNI will be worth less in 2013 than when it was pledged in 2005. These countries have already taken a hit. It is very good that the Government are standing up to that.

Does the noble Baroness recognise that seeking reforms to these multilateral organisations, which is entirely legitimate, depends crucially on getting allies in other countries who take the same view as us and press for the same reforms, otherwise it is just a concealed cutting operation? I hope she will be able to say that the Government put a lot of effort into that.

India, Brazil and China are now becoming aid donors. They are countries with a lot of working experience of how to lift people out of poverty. I hope that we will work closely with countries such as Brazil, India and China in future because we have both a lot to contribute and a lot of work to do with them.

[Baroness Verma]

I thank the noble Lord for all his comments. In fact there was very little that I could disagree with. As he is very well aware through his own experience, building good partnerships is very important. He is absolutely right; we will be working with China and Brazil and, hopefully not too far into the future, with India, too. We are having very constructive conversations with our other partners who provide donor aid. Many have shown a very keen interest in how we have gone through our review process and are looking very closely at what we have managed to do to ensure that their programmes are also going to be targeted and focused so that we all work toward the same end, which is getting people out of poverty.

[Lord Boateng]

My Lords, there is much to be welcomed in the outcome of this review, not least the new-found emphasis on agriculture, food production and wealth creation. Does the Minister recognise that there will be widespread concern in southern Africa, in particular, at the decision to end the bilateral programme in Lesotho, a small state that has been fragile in the past, and Angola, which is conflict ridden and has many millions of people who continue to live in grinding poverty?

Will the Minister assure the House that these two countries in particular will be the subject of concerted effort to improve donor co-ordination, particularly from the multilateral organisations that we fund, and will also be the beneficiaries of the southern African regional programme, within which region Angola and Lesotho quite clearly fall? Will she assure us that resources to that regional programme will be enhanced and will be delivered to those two countries?

[Baroness Verma]

The noble Lord maybe missed the part of the speech that said that the Secretary of State has committed to supporting regional programmes. As he absolutely rightly points out, some of the smaller countries will have greater responses from their regional areas than from bilateral programmes, which are smaller and less able to reach widely. We support the regional programmes very much.

I come back to the point about Burundi and Lesotho, which I keep pronouncing wrongly. We believe that they have comparative partners that are far better placed than us to deliver aid. Therefore, we will help them through the regional programmes.

In response to the noble Baroness, Lady Kinnock, I should say that our regional integration work, which is managed by TradeMark East Africa, which has an established office in Bujumbura, will provide support for Angola and Burundi, so that is covered well. We will not just leave them out there and we are not suddenly going to stop—the process will phase down by 2016.

The noble Lord is absolutely right that we have a keen focus on agriculture, which is really important for food security, not only for that area but for us, too. We have pledged from 2009, when the Opposition were in government, £1.1 billion over three years. We are therefore taking agriculture sustainability very seriously. We are committed to food security and agriculture and are working with the FAO as well as other multilaterals, including the International Fund for Agricultural Development and the World Food Programme, to ensure that we have a strong programme in place.

[The Lord Bishop of Chester]

My Lords, I press the Minister on an aspect of the Statement that has not featured in the questions so far—the point that,

“it is critical that the UK increases its focus on helping countries to build open and responsive political systems”.

In the conclusions there is simply a reference to holding “freer and fairer elections”, but building democracies is about more than just helping countries to hold elections; it is about helping to build institutions in a society that support democracy. Could the Minister say a bit more about that?

[Baroness Verma]

I thank the right reverend Prelate for that question. Of course this is about more than just fairer elections; it is about making sure that the institutions in countries where there has been corruption and where unstable Governments have held office are removed or strengthened. Therefore, DfID, through its programmes of technical support and assistance, can ensure that we help Governments who want our help to train people in place to be able to hold Governments and funded institutions to account. We will not tolerate corruption; we want corruption to be eradicated. Therefore, we take all allegations of corruption and of misappropriation of funds very seriously, and we will work very strongly with Governments to ensure, with their assistance, that we put in place stronger good governance in the political systems. However, this is not about freer and fairer elections—I understand that; it is about giving people at grass-roots level the ability to hold the politicians representing them to account.

We have also put into place a watchdog that will monitor all our aid—where it is spent, how it is spent and what the outcomes and results are—so that people across the world can just log on and see for themselves. If that aid is not reaching them, they have a place to come back to and ask for recourse.