Privatised Probation System

Debate between Rory Stewart and Roberta Blackman-Woods

Monday 4th March 2019 Commons Chamber

[Rory Stewart]

It is great to have an opportunity to pay tribute to the work of our probation hostels. Some of the people who work in them are incredibly dedicated public servants, and they often have to work with very challenged individuals. They often have enormous success in changing lives and protecting the public.

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

I have three prisons in my constituency, and it is really tragic to see what has happened to the probation service in recent years. It is now fragmented and under-resourced, and, critically, it is not reducing reoffending. Given the indictment of the service by the National Audit Office report, is it not now time to call a halt to this privatisation experiment, return the service to the public sector and resource it properly so that it can really bring about the genuine rehabilitation of prisoners and others?

[Rory Stewart]

I absolutely agree that we need to resource the service properly, and I absolutely agree that we need to focus this mixed market on getting the quality of delivery, but respectfully, I disagree with the idea that the answer is simply to bring it back into the public sector. I think it needs to be a mixed market, but it needs to be a mixed market that is unified and that really focuses on reducing reoffending.

Draft International Development Association (Multilateral Debt Relief Initiative) (Amendment) Order 2017 Draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2017 Draft International Development Association (Eighteenth Replenishment) Order 2017

Debate between Rory Stewart and Roberta Blackman-Woods

Monday 20th November 2017 General Committees

[Rory Stewart]

The hon. Lady raised three specific questions: first, on the multilateral debt relief to the IDA; secondly, on the multilateral debt relief to the African Development Bank; and thirdly, on leverage of, and improvements to, the IDA. I very much welcome the decision not to divide the Committee. For 15 or 20 years, this has been a cross-party, consensual issue on which we have worked together. It is a rarity in politics when both sides of the House agree on what we are trying to do—in this case, to tackle challenges in some of the poorest and most fragile countries in the world. Although we may occasionally have discussions about how best to achieve that end, I think we agree on the end, and broadly agree that the World Bank, with which we are generally proud to be partnered, is a good partner in an imperfect world.

On the first question, about how we set the amount of money that goes into the IDA through the MDRI, that calculation was made at the G7 summit in Gleneagles in 2005. The UK agreed to a 13.82% imputed burden share on the total amount of debt that was owed to the International Development Association. The variation that the Opposition have noted in the statutory instrument represents an attempt to calculate shifts in the exchange rate and shifts in interest rates, but there will be no change—and there has been no change since 2005—to the UK’s 13.82% imputed burden share.

The second question was about improvements to the African Development Bank. We absolutely agree that there are some challenges within the African Development Bank; our multilateral development review pointed that out. Those challenges will perhaps be more relevant to the next Statutory Instrument Committee, in which we will talk about the replenishment of the bank, rather than the debt—the more technical process of simply wiping off past debt that these heavily indebted poor countries ran up.

It is true that we have identified particular problems in moving from Tunis to Abidjan, which has affected recruitment. That is why, when we come to that statutory instrument, the Opposition will discover that we are not putting the same amount of money into the African Development Bank that we did in the last replenishment; we will in fact be reducing it by 25%. That is one of the ways in which we are attempting to reflect some of our concerns around its performance. Provided it meets the performance indicators, we hope that we will be able to increase that funding in future years, but there is a reduction, representing the fact that we feel that there have been some challenges recently.

That brings us to the IDA. We are absolutely focused on making sure that the IDA focuses on the world’s very poorest. Generally speaking, the IDA has a good record on that. In answer to the question of my hon. Friend the Member for Congleton, it is true that alongside Pakistan, Bangladesh, Nigeria and Ethiopia, which I mentioned as major recipients, there is an outlier: Vietnam. We expect increasingly to take money out of lower-middle-income countries and put it towards the poorest countries in the world. That is a very good challenge for us.

Our current leverage in the bank’s structure is about 1:8—in other words, we put in about 15% of the total 100%. The £1 to £3 market borrowing will be a small, experimental part of the IDA’s innovative funding. Obviously, in so far as we can crowd in private sector money, that is a good idea, but as the shadow Minister pointed out, that cannot be at the cost of the bank’s mission. The point of the IDA is concessional lending to the world’s poorest people. If the money can come in purely from the private sector, there is no point to the IDA at all, and we cannot allow an attempt to drag in private sector money to distort the bank’s objectives towards what the private sector would be doing in the first place. We are very focused on global public goods—in particular, bringing them more firmly into the poorest countries of the world—and on fragile and conflict-affected states and reform that focuses more on economic development.

[Dr Blackman-Woods]

I have one, brief follow-up question for the Minister. Will he keep the House updated on leverage, how it is working and the outcome of that leveraged income? That would be helpful.

[Rory Stewart]

We would be absolutely delighted to do that, and the shadow Minister put her finger on a critical issue: we have to make absolutely sure that any additional leveraged money fulfils our global public goods purposes, and does not distort the prime objective of the fund.

Question put and agreed to.

DRAFT AFRICAN DEVELOPMENT FUND (MULTILATERAL DEBT RELIEF INITIATIVE) (AMENDMENT) ORDER 2017

Resolved,

That the Committee has considered the draft African Development Fund (Multilateral Debt Relief Initiative) (Amendment) Order 2017.—(Mr Rory Stewart.)

DRAFT INTERNATIONAL DEVELOPMENT ASSOCIATION (EIGHTEENTH REPLENISHMENT) ORDER 2017

Resolved,

That the Committee has considered the draft International Development Association (Eighteenth Replenishment) Order 2017.—(Mr Rory Stewart.)

Draft African Development Bank (Fourteenth Replenishment of the African Development Fund) Order 2017 Draft Asian Development Bank (Eleventh Replenishment of the Asian Development Fund) Order 2017 Draft Caribbean Development Bank (Ninth Replenishment of the Unified Special Development Fund) Order 2017

Debate between Rory Stewart and Roberta Blackman-Woods

Monday 20th November 2017 General Committees

[Rory Stewart]

That is a very good challenge. It is absolutely right that there is always a tension in the work of multilateral development banks between their traditional primary focus of infrastructure and economic growth, and making sure at the same time that we leave no one behind. That is something DFID has been doing since the hon. Member for Harrow West was a Minister in the Department; it has been leading on ensuring that we focus on the very poorest people, on rural communities and on equality. That is now central to the missions of the multilateral development banks, but it remains a challenge and it is something that we have to keep challenging them on again and again.

Of the three banks we are discussing in these statutory instruments, perhaps it is with the Asian Development Bank that we have had some of the most difficult conversations about ensuring that its successful track record on infrastructure investment focuses on the people at the very poorest levels of society who need it, rather than simply benefiting urban dwellers.

I will respond to the individual speeches made, starting with my right hon. Friend the Member for East Devon, who began with the question of administration costs. The administration costs are perhaps less of a challenge in multilateral development banks; it is a good question, but it would probably be more of a challenge if we were talking about non-government organisations. Most of the multilateral development banks have rather large equity portfolios, so their administration costs are relatively small. The target we are focused on, taking the African Development Bank as an example, is about 2.5% administration against equity, which we believe is reasonably competitive. It is roughly in line with where DFID itself sits in its ratio of staff to portfolio.

The second question was on flexibility, particularly relating to Zimbabwe. There is another challenge there, to be honest. The banks tend to make very long-term investments. Big road infrastructure and energy projects can take eight to 10 years to come to fruition, and by their very nature, it is difficult to suddenly shift money, in two weeks, from one place to another. If we are looking for rapid response to an emerging situation such as Zimbabwe, it is not to the multilateral development banks that we would look. However, my right hon. Friend’s question is absolutely bang on the money, because we are hoping that the situation in Zimbabwe could be an extraordinary opportunity.

That opportunity is not only about Commonwealth membership and the United Nations, but about all the instruments that the international community can bring to help the Zimbabwean people, if the reform comes through and we go into a transition where there are free, fair and credible elections. For that, there needs to be an independent electoral commission, and we need to ensure there is proper voter registration, as there are currently one million “ghost voters”. We must ensure that Zimbabweans outside the country get their constitutional right to vote. If those things come into place, there is a great deal that we ought to be able to do, one aspect of which relates to multilateral institutions and ensuring that IMF loans are able to come in to save the Zimbabwean economy, which is in a difficult situation at the moment.

My right hon. Friend’s final question was about British business, and he is absolutely right that certain sectors where DFID invests, particularly green energy, financial services and insurance, are sectors where British companies can have a competitive advantage. The City of London has a strong advantage in financial services. Edinburgh, for example, also has strong advantages in financial services and insurance, and we have some impressive and innovative companies in green energy and city development.

Our aid is, of course, not tied, so it is about allowing British companies to compete fairly against other international companies for those contracts. The greatest thing that we can do for British companies is the longer term work of economic development. The reality in Africa at the moment is that there are only 17 million people who earn over £200 a month. That means that the middle class consumer population of Africa is currently about the size of Belgium, in a continent that is 100 times the size of Belgium and with considerably more externalities. The real opportunity for British business will only come when we really get the economic development off the ground and we can build that consumer base.

That brings me to the specific questions on the three banks raised by the shadow Minister, the hon. Member for City of Durham, and then I will conclude with the questions of my predecessor, the hon. Member for Harrow West. To go through the banks one by one, regarding the African Development Bank, the answer is that we have set very detailed performance indicators. Each one of these priorities that we have set around recruitment, value for money, efficiency and anti-corruption then breaks down into sub-performance indicators.

To give an example, we are not simply talking about recruitment. We have set a number: we are demanding that they recruit an additional 298 people by March. That would be an example of a recruitment indicator. I am not going to go through every one of the performance indicators, but I would be very happy to share them with the shadow Minister. In delivery and values, we are focusing on ensuring that 90% of the performance completion reports are completed in a year, and we will monitor that. In relation to countries in transition, we are making sure that all the 16 country offices are fully staffed.

We do have leverage over this. It is not just the nuclear option, which as I said is that 25% of this will not be disbursed immediately; 75% will be disbursed, but 25% will be held back. That is the nuclear option, but apart from that we are about to enter 2018 general capital negotiations, and if we find that it is not meeting the performance indicators, that will affect the general capital contribution we make. In the next statutory instrument, which I hope we will both have the pleasure of debating here in three years’ time, we will perhaps have an opportunity to set exactly the kind of performance rewards that we have set for the Caribbean Development Bank. However, we do not think that we need to do that yet with the African Development Bank; we think that the performance indicator framework is the correct way to approach it.

There were two questions in relation to the Asian Development Bank. The first question was, is it enough money? The answer is yes, it is enough money. The Asian Development Bank is a smaller bank than the World Bank. While the International Development Association is disbursing about £75 billion a year, the Asian Development Bank will disburse only about £3.3 billion. As the shadow Minister pointed out, it now self-finances its concessional lending, which means that the amount of money it needs from us is reduced, and we are now in a situation in which the AIDB, the Asian Infrastructure Development Bank, is now stepping in to some of the areas in which the Asian Development Bank used to operate. The merger of its balance sheet has also given it much more flexibility in the way that it deals with moneys—it has merged the concessional and non-concessional parts of its balance sheet.

That brings me to the Caribbean Development Bank. The question was, is it correct that the amount of money that we have given it has been reduced from £33 million last time to £18 million this time? It is absolutely correct: we have reduced the amount of money that we are giving the Caribbean Development Bank by 50%. That is directly because in the multilateral development review we found that there were a number of serious problems in the way that the Caribbean Development Bank operated. Our view as Ministers—I am sure this would be the same on the other Benches—is that if we find there are serious performance problems, that has to have consequences.

We cannot be comfortable saying that there are serious performance problems and simply signing off the same amount of money, so we have halved the amount of money that we are giving. However, as the shadow Minister pointed out, there are still key tasks that the Caribbean Development Bank, and only the Caribbean Development Bank, can perform, particularly in the light of the hurricane. That is particularly its speciality in small island states and is why, notwithstanding our problems, we will, in a very carefully monitored way, be providing some money to it for that, but holding back £4.5 million for a performance bonus if it manages to meet the targets that we have provided. We will be looking in particular at ensuring that it delivers education. We have set this education target of 100,000 children in school, and we will be looking at that very carefully.

That brings me to the comments of the hon. Member for Harrow West. He began with the question of corruption and fraud, which is a big issue. It is a big issue because the countries in which one is operating are particularly fragile, conflict-affected states. It is extremely difficult in Afghanistan or Somalia—in somewhere like Mogadishu, people can barely leave the airport—to have a direct idea of what is happening on the ground.

We have an increasing number of sophisticated methods to try to ensure we do monitoring and evaluation in an imperfect world. For example, when it comes to humanitarian delivery, we are relying on people using mobile telephones, so that we can track where the trucks are going and have photographs of beneficiaries receiving deliveries. An increasing amount of money goes into employing local monitoring and evaluation partners, who are completely independent of the projects. They go out to visit the projects, produce documentation and challenge directly what is being done on the ground.

We found in the multilateral development review that, in fact, these organisations are among the best for controlling fraud. They probably perform better, on average, than general NGOs in terms of their financial management systems and the fraud mechanisms they have in place. However, we supplement that with our own auditors and with new DFID approaches, where we go all the way down the chain, through every beneficiary and sub-beneficiary, to the ground. If we visit a DFID country office now, that entire map, which is often very complex, is up from the ground. That is supplemented by the work of the National Audit Office, the Independent Commission for Aid Impact and the International Development Committee.

We are never complacent about this problem, and if we find any cases of fraud and corruption, we come down on it very firmly and will take our money back. There was a case recently where we had to be reimbursed because we discovered that something of that sort had happened; it was not with these banks, but another NGO implementing partner.

That brings me to the final question from the hon. Member for Harrow West, which was about what happens after we leave the European Union. It is absolutely correct that as we leave the EU, there will probably and potentially be more development money to spend. I say probably and potentially because it is still an open question as to whether we might continue to put money through European institutions after we leave the EU. That is something for the Brexit negotiators to determine.

Some of these European institutions are highly professional and very competent. In particular, ECHO—the Directorate-General for European Civil Protection and Humanitarian Aid Operations—does an enormous amount of good work in the humanitarian sphere. We may be tempted to look at this on a case-by-case basis and continue to partner with them, but that is above my pay grade; it is a question for the negotiators.

If we were to reduce the amount of money we put through European institutions and had money coming back, my instinct is that it would be worth looking at the question raised by the hon. Member for Harrow West. That is to say, we may want to increase the number of our staff. We may want to look at the possibility of having larger footprints, because as we worry more and more about risk and implementation, we may need to get more people into the field and into schools and those clinics to check what they are doing. Those people need to be able to speak local languages well and they need to understand the context well.

We need to be able to ensure that when we are spending money in a country, we have highly expert professional British civil servants on the ground to monitor those projects. My instinct—again, this is a broader discussion within the Department that would have to take place after Brexit—is that we would, as the hon. Gentleman implies, need more staff on the ground to ensure that implementation happened.

[Dr Blackman-Woods]

Before the Minister concludes, I want to say that I agree with him; I hope we are all still here in three years’ time, but I hope our roles are reversed. I thank him for his response, but it would be really helpful if he could tell us where to find the key performance indicators, what the timescale is, how they will be measured, who will measure them and so on.

[Rory Stewart]

I hope I am not going to get stabbed by my officials. The key performance indicators certainly exist. I have read most of them. I therefore hope they are not some classified document that I am not in a position to share. If they are a public document, as I hope they are and as they should be, we will of course be delighted to share all the KPIs with all the dates and timelines, so that the hon. Lady can monitor them, along with us, to ensure that they are met.

I commend these three orders to the Committee.

Question put and agreed to.

Resolved,

That the Committee has considered the draft African Development Bank (Fourteenth Replenishment of the African Development Fund) Order 2017.

Draft Asian Development Bank (Eleventh Replenishment of the Asian Development Fund) Order 2017

Resolved,

That the Committee has considered the draft Asian Development Bank (Eleventh Replenishment of the Asian Development Fund) Order 2017.

Draft Caribbean Development Bank (Ninth Replenishment of the Unified Special Development Fund) Order 2017

Resolved,

That the Committee has considered the draft Caribbean Development Bank (Ninth Replenishment of the Unified Special Development Fund) Order 2017.

Future of Town Centres and High Streets

Debate between Rory Stewart and Roberta Blackman-Woods

Tuesday 17th January 2012 Commons Chamber

[Roberta Blackman-Woods]

My hon. Friend makes a good point, and I will turn to empty shops in a moment.

Void rates are another real issue, especially in secondary shopping areas, but the most recent wave of closures and the downsizing and retrenching of the retail sector are clearly causing a problem even in primary shopping areas.

There is a set of challenges for the high street, and that is not to mention the difficulties caused by the rise in internet shopping and by out-of-town centres.

[Rory Stewart]

Does the shadow Minister acknowledge, however, that internet shopping can be immensely beneficial to small, high-street shops? For example, in our constituency, the John Norris fishing supplies shop makes £12 million of sales over the internet but only £1 million through the door—and that allows it to keep going.

[Roberta Blackman-Woods]

I do accept that point, which my hon. Friend the Member for Stockport (Ann Coffey) made very well earlier. Nevertheless, the internet is, I think, an additional challenge for high streets and town centres.

I say all that not to talk down our high streets, however, because, as several hon. Members have said, the town centre or high street in their constituency is weathering the economic storm. I say it to demonstrate the extent of the problem, because not all town centres are thriving and we have to be clear about the action that needs to be taken.

In government, we had a strong “town centre first” policy, but even with that policy there was recognition that more needed to be done to revitalise high streets, so there is a particular challenge for this Government. They need to do more to bolster consumer confidence, as their austerity programme—cutting too far and too fast—coupled with their VAT hike last January has squeezed incomes, reduced consumer confidence and led to further job losses on the high street. In a YouGov poll last year, four fifths of retailers said that the VAT increase would undermine sales.

The Government have so far also ignored the recommendations for a stronger “town centre first” policy, and they need to think about amending the draft national planning policy framework to reintroduce the sequential tests for town centres, because we really need that to encourage more town centre development.