New Committee inquiry: is the FCDO getting bang for its buck?
19 November 2024
Today the International Development Committee has launched an inquiry into the Foreign, Commonwealth and Development Office’s (FCDO) approach to achieving Value for Money in its aid programmes.
Value for money
The Committee’s inquiry will consider how the FCDO defines Value for Money, how it is currently funding its projects, and whether its funding model is cost effective.
Value for Money has become more important to the FCDO in recent years, as other sources of funding have come under increasing pressure.
In 2011, the former Department for International Development (DfID) established that it saw ‘Value for Money’ as “maximising the impact of each pound spent to improve poor people’s lives”. However, since DfID was merged with the Foreign and Commonwealth Office in 2020, it has not been clear what Value for Money means to the new Department.
Meanwhile, in the 2024 Autumn Budget, the Government confirmed that Official Development Assistance would not return to 0.7% of Gross National Income until certain fiscal rules were met. The Office for Budget Responsibility confirmed that these fiscal rules are unlikely to be met during the current Parliament, likely leaving ODA at 0.5% for the foreseeable future.
As a result, the FCDO has increasingly turned to alternative forms of financing its aid work in recent years. These include acting as guarantor for loans from the World Bank to countries like Ukraine and a greater focus on British Investment Partnerships with private sector partners, like investors and pension funds.
Chair comment
Chair of the International Development Committee, Sarah Champion MP, said:
“In tough economic times, the FCDO must not lose sight of its responsibility to support some of the world’s most vulnerable people.
“As ODA feels the squeeze, it’s more important than ever to ensure that every penny of aid counts.
“The Committee’s new inquiry will explore exactly what Value for Money means to the FCDO, and what impact its funding model is having on the effectiveness of its work abroad.
“And as the FCDO increasingly relies on alternative funding sources, we will consider what form these take, and whether they are being used responsibly.”
Further information
Image: FCDO from Flicker