The International Development Committee, chaired by Malcolm Bruce MP, held its first evidence session today with Andrew Mitchell, the new Secretary of State for the Department for International Development (DFID).
The Committee questioned Mitchell on his plans for DFID, including:
- DFID’s aid budget and aid effectiveness
- DFID’s role in Whitehall
- DFID’s role in the multilateral system
- Sectoral and bilateral programmes
The meeting started off with Mitchell making an opening statement, which the Committee doesn’t normally encourage but thought would prove helpful. Mitchell made four introductory points:
A British policy
Mitchell expressed that this is an area of policy which hugely benefits from the fact that it is seen as British and not particularly partisan. He stated that it is not a labour, conservative or liberal policy but a British policy. He went on to make the following statements:
- The Coalition Government has confirmed that DFID will remain as a separate department
- British aid will remain untied
- The cross-party commitment to reach 0.7% of the UK’s Gross National Income by 2013 will be enshrined in law
3 key ingredients to development
Mitchell outlined the following:
- Tackling conflict – conflict condemns people to remain poor
- Wealth creation and jobs lift people out of poverty
- Aid spent well works miracles
Mitchell expressed, in respect of the aid budget, that it will never be possible to maintain public support unless it is demonstrated to taxpayers that they are getting value for their money.
He proposed two key changes:
- To focus on very specific results (and less on inputs) – namely outputs and outcomes. For example, an output being what the aid money does, how many schools you build etc., and an outcome being how many children get quality education.
- Setting up an independent aid watchdog – Mitchell reaffirmed the need for a detached independent audit of what Britain’s aid budget is achieving.
Mitchell referred to the Bilateral Review which is being applied to every single country in which Britain is involved, in development terms. He said that each programme is being scrutinised and that this review informs and drives much of the other work happening in his department. For example:
- the Multilateral Review
- the Emergency Response Review chaired by Lord Ashdown
- the Poverty Impact Fund they want to set up to assist some NGOs and charities with funding – Mitchell argued that by doubling taxpayers money, it will double the outputs and outcomes they achieve
He welcomed the support and advice of the Committee and acknowledged its deep expertise.
Questions from members of the Committee
Bruce, Chair of the Committee, addressed Mitchell about the beginnings of a “noise-off” in terms of people asking the question, why should DFID’s budget be protected? He referred to the results of a European poll published in The Financial Times this week, which showed that the majority of people agreed deficit reduction was a priority but, felt it should start with overseas aid.
Bruce asked the following questions of Mitchell:
How do you defend the aid budget to a sceptical public? Given that not all aid goes through DFID, how can you be reassuring that all UK aid will be subjected to the same stringent degrees of transparency and accountability?
Mitchell stated that he sought to answer this key question to some extent in the debate on development in the House of Commons about a fortnight ago. He went on to talk about the Independent Evaluation Agency (a formal name has yet to be agreed) and explained that the agency will focus on all Overseas Development Aid (ODA) money. He confirmed that there is agreement across government that the agency will follow the ODA spend.
Mitchell also announced that DFID’s running cost will see a 33% reduction in the administrative spend. He emphasised the importance of ensuring staffing matches the requirements of the budget, and reaffirmed the need to make sure that the programmes are supported by the right level of staffing. He mentioned that discussions are taking place with the Treasury regarding this, and he hopes to reach agreement on it shortly.
In response to a comment made by Bruce that savings will have to be made somewhere, Mitchell outlined the approach for these administrative reductions, namely a Corporate Reform Programme that will save £40m by 2012/13. It will focus on:
- Making savings in the back office function
- A reduction in travel and accommodation costs
- Letting out DFID office space to get value for money
In reference to an earlier point made on the public view of the development budget, Mitchell stated:
I think there is a strong and broadly spread consensus that there are 2 key reasons why the development budget is right to be protected, to be ring-fenced and indeed to be increased. And they are first of all because they are morally right, and secondly they are in our national interest.
He referred to now as being development’s time and in terms of addressing points of difficulty that come out of the developing world, stated that:
Intervention upstream in trying to tackle the causes of these difficulties is much less expensive than having to tackle the symptoms downstream, and it’s not only of course migration, it’s a danger of disease spreading, it’s conflict and violence, small arms, and dysfunctional government. So tackling these issues is at the heart of development, and it’s very much in our national interest as well.
Jeremy Lefroy, Conservative MP, made reference to figures on efficiency savings that had been provided. In 2009, £155m in efficiency savings were made; this was believed to apply right across the department. He also highlighted an overall target of £647m in efficiency savings to be made by 2010/11.
Lefroy acknowledged the efficiency savings made within the department, but directed focus towards the money multilateral institutions are receiving from the aid budget.
He asked Mitchell:
What can be done to ensure that those multilateral institutions are being as effective in developing efficiency savings for the British tax payer?
Mitchell announced that £150m of work that is not performing well had been identified, and detailed proposals in respect of that were due.
Russell Brown, Labour MP, issued a word of caution with regards to the proposed savings Mitchell had mentioned earlier to the back office function. Brown commented strongly that the back office function is the vital element that ends up assisting front delivery work.
To view the live video coverage of the Committee meeting click here.
To find out more about the International Development Committee click here.
Blog posted on 15 July 2010.