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Department for International Development: The multilateral aid review

A report released today by the National Audit Office has welcomed steps taken by the Department for International Development to improve transparency over how aid it distributes via multilateral organisations is spent. The report found that the review is a significant step towards the Department being able to improve the value for money from its spending through these organisations which totalled £3.6 billion in 2011-12.

The Department’s 2011 review, which assessed 43 organisations, was a more thorough and comprehensive process than previous assessments. The review was valuable: both for providing accountability to UK taxpayers and for promoting reform in the multilateral organisations themselves. It enabled the Department to show international leadership.  Since the review, other countries have used elements of the Department's approach to assessing and rating multilateral performance. For example, Australia has used similar methods and the Netherlands has publicly reported its assessments for the first time.

The review rated nine organisations as ‘very good’ value for money for UK aid, 16 as ‘good’, nine as ‘adequate’ and nine as ‘poor’. The Department has already announced funding increases to those it rated as offering better value for money and that it will cease to fund four of those it rated as ‘poor’ value for money for UK aid. Funding to those organisations it rated as ‘good’ or ‘very good’ will increase from 74 per cent of the total in 2010-11 to 77 per cent in 2014-15.

However, international agreements limit the extent to which the Department can change its funding. It is important, therefore, that it has co-ordinated, up-to-date plans on how it will use the review to drive performance improvements in each organisation . 

The assessment framework used in the review was logical and covered key factors which are important to value for money.  While the assessment framework compared well with recognized models for assessing value for money in organisations, the guidance to assessors did not always ensure consistency and some organisations found it difficult to fulfil all the evidence requirements. Organisations rated as ‘very good’ did not need to meet a minimum set of standards and their cost-effectiveness was not always compared to alternative delivery methods.

The Department plans to update the review next year and it is important that any changes in the ratings are backed by adequate evidence.

Amyas Morse, head of the National Audit Office, said today:

"By conducting a review of the money it spends through multilateral agencies, the Department has taken a big step towards improving the value for money it gets from these funds.

"To maintain this progress, the Department needs to collaborate with other donor countries to encourage further consistently measurable performance improvements in multilateral organisations."

Notes for Editors

  1. Multilateral organisations, such as the United Nations, are usually set up by intergovernmental agreement to enable national governments to work together, including on development and humanitarian issues. The United Kingdom is one of many members who provide core funding to these organisations.
  2. The Department’s review focused on its core funding of multilateral organisatsions which totalled £3.6 billion in 2011-12. Core funding is not earmarked for a specific purpose and, instead, its use is determined by the management and Board of the multilateral organisation, within objectives agreed by all members. The Department also funds multilateral organisations to undertake programmes in a specific country or sector. This funding was not covered by the Department’s review. 
  3. The organisations rated by the Department as ‘very good’ value for money for UK aid were: the Asian Development Fund; the European Union’s Humanitarian Aid and Civil Protection; the European Development Fund; the GAVI Alliance; the Global Fund to Fight AIDS, Tuberculosis and Malaria; the International Committee of the Red Cross; the World Bank’s International Development Association; the Private Infrastructure Development Group; and the United Nations Children’s Fund. The organisations rated as ’poor’ value for money for UK aid were: the United Nations Industrial Development Organization; the United Nations Development Fund for Women; the International Organization for Migration; the International Labour Organization; Food and Agriculture Organization; the United Nations International Strategy for Disaster Reduction; United Nations Educational, Scientific and Cultural Organization; the United Nations Human Settlements Programme; and the Commonwealth Secretariat. 
  4. The Department notified four organisations that it would stop their core funding: the United Nations Human Settlement Programme; the United Nations International Strategy for Disaster Reduction; the International Labour Organization; and the United Nations Industrial Development Organization.       
  5. Press notices and reports are available from the date of publication on the NAO website, which is at www.nao.org.uk. Hard copies can be obtained from The Stationery Office on 0845 702 3474.

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