Committee concerned by relative decline in bilateral aid spending

23 Mar 2015 11:14 AM

The UK’s spending on multilateral organisations and humanitarian assistance is coming at the expense of Department for International Development's (DFID) important and effective bilateral work with priority countries, say MPs. 

• Report: DFID's Performance in 2013-14: the Departmental Annual Report 2013-14
• Report: DFID's Performance in 2013-14: the Departmental Annual Report 2013-14 (PDF 755KB)
• Inquiry: DFID's Performance in 2013-14: the Departmental Annual Report 2013-14
• International Development Committee

Sir Malcolm Bruce MP, Chair of the Committee, said

"Meeting the 0.7% Official Development Assistance (ODA) target is a great achievement. The UK is the largest economy ever to do so, and the Committee welcomes this commitment to international development.

The Committee is concerned that spending by DFID’s country offices on bilateral programmes as a proportion of DFID’s spending has gone down. The Committee recommends that DFID increase the share of expenditure going to bilateral programmes, and to sub-Saharan Africa in particular. It also recommends DFID set a ceiling on humanitarian assistance, so that the UK’s respected humanitarian role does not come at the expense of long term development.

We are also concerned that the scale of the increase in spending in the time of restrictions on administrative costs has led DFID to overuse multilaterals and large suppliers at the expense of smaller specialists. The UK has become by some distance the largest provider of multilateral ODA in the world, and has promised funding which will not be spent for many years. This misses an opportunity to do more in DFID’s bilateral priority countries."

The Committee says

• Committee welcomes DFID’s work in achieving the UN target of spending 0.7% of gross national income (GNI) on Official Development Assistance. It is proud that the UK has become the first G7 country to meet the target. Though it notes that managing the huge increase (33%) in DFID spending from 2012-13 to 2013-14 has been a challenge.
• The Committee was concerned by DFID’s extensive use of multilateral organisations to achieve this growth, as well as increasing its spending on centrally managed programmes and humanitarian assistance. The UK has become the largest funder of multilaterals in the world – providing 50% more multilateral ODA than any other country in 2013. Due to how this is accounted for some of this funding will not be spent for a number of years. We are concerned that this potential overuse of multilaterals comes at the expense of DFID’s bilateral programme, and potentially squeezes out other opportunities. The Committee also recommends a ceiling on humanitarian spending.
• The Committee is concerned that spending by DFID’s priority country teams as a proportion of DFID’s spending has gone down, particularly the proportion going to Africa, and to DFID’s priority countries. The Committee recommends that DFID increase the share of expenditure going to bilateral programmes, and to sub-Saharan Africa in particular.
• We are also concerned by DFID’s spending patterns because of the way it has to manage ODA to a different year end to its departmental accounts. DFID’s autumn spending has risen to approximately half of ODA for the last three years. It reached 55.2% in 2013, and is likely to be even more in 2014. In simple terms, there is concern that DFID is more likely to respond to events in the autumn than the Spring.
• The Committee is concerned by the reduction in spending on reproductive health and calls for a significant increase.
• Our ‘Beyond Aid’ report highlighted the importance of DFID staff building up deep knowledge and influence of the countries they operate in. The Committee is concerned that DFID does not know how long staff stay in different posts in country offices, and has standard postings that are less than other donors. We recommend that DFID increased its standard posting from three years to four. We further recommend that DFID monitor and report on staff turnover and the average service period in country offices for each of its country offices so it gets a better grip on its level of staff turnover.
• DFID has increased the number of staff it employs, but the amount spent per member of staff has increased significantly. To use staff time efficiently DFID has a focus on large programmes, which are outsourced to multilaterals and large contractors to manage. The Committee calls for smaller, expert suppliers to be used more.

The UK’s leadership in providing Official Development Assistance brings many benefits to the UK, as well as around the world. The UK provided £11.46 billion in ODA in 2013, £6.75 billion bilateral and £4.71 multilateral ODA.

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