International Development Committee
Oral evidence: DFID Allocation of Resources, HC 100
Tuesday 22 November 2016
Ordered by the House of Commons to be published on 22 November 2016.
Members present: Stephen Twigg (Chair); Fiona Bruce; Dr Lisa Cameron; Pauline Latham; Jeremy Lefroy; Wendy Morton; Paul Scully.
Questions 240-272
Witnesses
I: Kathleen Spencer Chapman, Bond, Dorcas Erskine, ActionAid, Martha Mackenzie, Save the Children, Danny Sriskandarajah, Civicus, Polly Gillingham, DAI Europe, Tonja Schmidt, Action for Global Health, Ruth Jackson, Oxfam, Hayley Cull, Unicef UK, Diana Good, Specialist Adviser, Simon Maxwell, Specialist Adviser.
Kathleen Spencer Chapman, Bond, Dorcas Erskine, ActionAid, Martha Mackenzie, Save the Children, Danny Sriskandarajah, Civicus, Polly Gillingham, DAI Europe, Tonja Schmidt, Action for Global Health, Ruth Jackson, Oxfam, Hayley Cull, Unicef UK, Diana Good, Specialist Adviser, Simon Maxwell, Specialist Adviser.
Q240 Chair: Can I welcome everyone, and in particular thank our stakeholders for joining this? We arranged this meeting some time ago in the hope that by this stage we would have all four of the Government’s reviews. We have two of them, and we have a new rumour of a possible date for the other two. What I want to do is broadly focus the discussion so that we start with the two reviews that we have, the CSPR—the Civil Society Partnership Review—and the research review. We will then move on to a bit of a discussion around the multilateral and bilateral reviews. Depending on time, because we will have to finish for 4.00, we will discuss some broader issues.
I suggest what we do is kick straight off. I am going to open up with a first question, and I just ask witnesses to put their hands up. I will bring other Committee members in as the discussion develops. I suggest that we start with the CSPR. Have some of you been at the DFID seminars? There have been two DFID seminars, so we are particularly keen to hear anything that is new and up to date. Can I invite one of you to kick off with what you can tell us about where we are with the CSPR, and anything that the Committee might want to focus on? Who would like to go first? When you speak first, perhaps introduce yourself.
Kathleen Spencer Chapman: I am Kathleen Spencer Chapman. I am from Bond. Obviously, we welcome that the CSPR is now out after the long delay since the process that we all took part in last year. That is really positive. There are a lot of positives to welcome. The overall tone the review takes around the role of civil society and the crucial role that we play in achieving development outcomes is very positive to hear. We are all pleased to see a recognition of the importance of tackling challenges around civil society space around the world and the importance of building Southern CSO capacity. That is all very welcome. The recognition of the importance of policy dialogue is also extremely welcome, and of course to have some further clarity on the funding instruments as well.
Having said all that, it is clearly a fairly short and top-line document. There are a lot of areas where there is not a huge amount of detail. The meeting this morning with DFID was very helpful and welcome in clarifying a little more of that detail and making clear that DFID sees the process over the coming months and year to work up more of that detail, for example, around the Aid Connect programme, where there is really not much information in the document itself. That was helpful, and I can perhaps reflect during the session a little more on what we heard there, if that is helpful.
From Bond, there are three broad areas we have heard where members were keen to engage in further discussion with DFID to understand a little more their vision, and work constructively together in developing further some of the funding instruments and the nature of the overall partnership. There is the question that people are very keen to engage in further, on what is the overall nature of the partnership and the overall relationship with civil society that DFID seeks to achieve.
The submissions that Bond and our members made last year envisaged a slightly more equal partnership than perhaps is reflected in the review document. The review document itself in some places suggests that there is a real commitment to a strategic partnership, and the value of real dialogue, which is very welcome. However, in other places it perhaps suggests a slightly more transactional relationship. We are very keen to engage further with DFID on fleshing out what the practicalities of that partnership really look like.
There are a few gaps in the document, like recognition of the very constructive partnership that NGOs have had with DFID for many years, for example in achieving the SDGs or other global agendas that we have shaped together. Obviously there have also been disagreement at times, which is an important part of that relationship as well, but it has broadly been very constructive.
The second area we are keen to understand more on is the relationship between the CSPR and DFID’s wider strategic vision, and of course we are waiting for the BAR and the MAR, which we understand will come out in a few weeks’ time. That will be very helpful. However, it is not terribly clear at the moment how that all fits together.
The third area is that there are quite a few issues that will need further fleshing out on the “what” and the “how” of the funding instruments. I mentioned UK Aid Connect in particular, but there have been in the past real positives that we have seen in the funding relationship, where DFID has really helped foster innovation, learning, the ability to adapt, and the ability to invest in better monitoring and evaluation of programme quality. These have not always been perfect, but they have been real positives. There are question marks over how far this set of funding instruments gives DFID the scope to ensure that civil society can continue to build on that success going forwards. It comes down to questions about how the relationship is managed and whether or not there will be scope to build on those positives going forward. Perhaps I will leave it there.
Q241 Chair: That is immensely helpful and a great overview. I want now to bring in some of my colleagues and your colleagues, but, just before that, because you have focused rightly on the substance of the CSPR, can you say anything about the effect of the delay on some of your member organisations?
Kathleen Spencer Chapman: Yes. Clearly, it has been disappointing, and it has really been a challenge for many organisations in terms of business planning and financial planning. It has also contributed to financial challenges in some organisations, and they need to really scale back because of the uncertainty it has caused. More broadly, it has undermined, to some extent, the relationship between DFID and civil society. Perhaps there has not always been the flow of information that there could have been. We understand that there have been political reasons for delays and so on, but there are areas where it could have been managed a little better, and it has had a real, tangible impact for many member organisations.
Chair: What I will do now is ask people to indicate. This is a very different way of doing things, and hopefully it will work out. I am going to take Wendy first of all.
Q242 Wendy Morton: Thank you, Chair. I just wanted to follow up on the point about the delay of the CSPR. You said it had had some real, tangible effects. Could you share any of those effects with us? Is there any sense that there are some projects that may have been delayed because of the delay in the CSPR?
Chair: If someone else wants to answer, feel free. You indicated as well, Danny, so do answer that, but also say what you were going to say when you put your hand up.
Danny Sriskandarajah: Good afternoon. I am Danny Sriskandarajah. I am the Secretary General of Civicus, which is a global alliance of civil society. We have members in 175 countries. We are the global equivalent of Bond in some ways. I speak somewhat as an outsider; we are not deeply embedded in the British context. On timing, the delays, for whatever reason, have hurt civil society.
I will give one practical example. I am a Trustee of an organisation that was a recipient of a PPA. Around 12 months ago we began a restructuring process that led to shedding of jobs in the anticipation that there may not be a successor mechanism that would be quite as generous in terms of core funding, or indeed that the delays would continue to a point where we would not be able to keep people in employment. That is a scenario, I suspect, that is common around many PPA recipients.
The wider point around timing, though, is that one of the advantages that British civil society has had on international development is not just the volume of resources that DFID has committed, but this notion of partnership that Kathleen has talked about: that civil society, and particularly well-established British NGOs, have been seen as equal partners in the development project. What has hurt about this period of waiting, and now with the uncertainties around the CSPR, is that the terms of that partnership seem to be changing. There are words like “supplier” used with much greater frequency, at DFID. Gone are the days when civil society seems to be seen as an equal and important partner in the development project. We are into a scenario that is unfortunately sweeping across the donor world. This will have serious and long-term damaging impacts on the health of British civil society, and indeed Britain’s standing in the development world, if indeed the CSPR leads to more of that approach.
Martha Mackenzie: I was just going to touch on your question as well. The issue with the delays for us is that, actually, as an organisation of our size, Save the Children were forewarned that the PPA would be ending and so have been able to adapt. The delay has not hit us as much. I know for smaller organisations, and from talking to Kathleen, that has not been quite the case. That adaptation process has been much harder without knowing what was coming.
However, there was a wider issue with the process as well. The meetings DFID set up today and the roadshow it is now going on post-CSPR is really welcome, but it is exactly the sort of consultation that should have happened before the CSPR was published. All of us did feedback quite repeatedly around 18 months ago, when the process started, that we did not have the opportunity to share that extensive evidence from the end of the PPA and make those recommendations about what the next round of funding might look like, how we might adapt, or what would be the appropriate way forward. We were really kept at arms’ length until this point. While it is really welcome to see DFID taking this approach now, and we urge them to keep doing these roadshows and this consultation, it feels like it has come a little late in this process.
Tonja Schmidt: Tonja Schmidt from Malaria Consortium representing Action for Global Health. In response to your questions in terms of practical examples, the ending of the PPA, even for agencies who ensured they did not have any dependency, has naturally led to a degree of downsizing of the programmes. I am excepting cases where new funding has been leveraged, which was an aim of the PPA. However, part of the timing issue is that now these new funding mechanisms have come out, the turnaround time for the first applications to Aid Direct and Aid Match is quick.
In some ways that is welcome. Those are due to close at the end of January for the first round. However, what it means is that NGOs are not necessarily in a position to take advantage of them. For example, larger NGOs that might want to benefit from Aid Match, for example by doing a Christmas appeal, are required to raise at least £100,000 of public money. The timings do not line up, so the opportunity may be missed. Similarly, for smaller NGOs, we do feel there is a gap in general within the CSPR for NGOs over £10 million in size, because they are not eligible for Aid Direct and may not have the means to themselves raise £100,000 to be eligible for Aid Match. Those agencies might be able to access that funding if they can form partnerships, but, again, the timing means that is highly unlikely at this stage for this round.
Chair: Tonja, thank you. We will certainly come quite soon to some of the specifics around the different streams of Aid Match, Aid Direct, and also Aid Connect, which Kathleen mentioned at the beginning.
Q243 Paul Scully: Kathleen, you mentioned SDGs and you also talked about the fact that it was quite a high-level report rather than the detail. I am wondering if you were surprised that sustainable development goals were not in there. Had you been consulted about that? Had there been any discussions within the consultation about that beforehand?
Kathleen Spencer Chapman: When Bond and other organisations were inputting last year, we were clear that SDGs needed to be a really important part of the framing. We were therefore very surprised not to see the SDGs even mentioned. While we welcome the reference to “leave no one behind”, which is obviously a very important part of the SDGs, we would have expected to see a much clearer framing of the overall review through the lens of the SDGs, in the sense of how DFID sees civil society’s role in relation to delivery of the SDGs.
That relates back to the wider question of the broader framework for aid policy, whether through the BAR and the MAR or the aid strategy from last year, which is an important part of it. It feels a little piecemeal at the moment. We would hope that the BAR and MAR provide a clearer sense of the SDGs being a key part of the way DFID perceives these issues.
Paul Scully: I am just wondering: is that a consistent view from other people in the room?
Chair: Does anyone else want to come in on the SDGs specifically?
Hayley Cull: Hayley Cull, Head of Campaigns and Advocacy at UNICEF UK. Just to echo Kathleen’s point, yes, we were quite surprised to see that SDGs were not part of the framing. It is something that we have heard repeatedly in previous conversations and we have made the point repeatedly to DFID. It certainly felt like quite a big omission to not have that in the framing.
Q244 Pauline Latham: I am quite interested to hear from a couple of you about the fact that programmes have been delayed. Does that imply that DFID is the main funder for all these organisations, and there is no other money available to some of them, other than what DFID has given? Danny said that he thought DFID was damaged by asking people to be suppliers of services and not partners. Nobody in this room is actually an equal partner with DFID, because DFID supplies the money. I am quite interested to know why you are feeling offended by that. Actually, you are suppliers of services. What is wrong with that? I just do not understand why you feel so offended and why you think DFID’s standing in the world is going to drop because of that.
Danny Sriskandarajah: It is to do with my understanding of development. The role of civil society is not simply to spend Government money, or indeed just to deliver services. Many of the organisations represented around this table bring with them a whole range of other assets. They have memberships that can be deployed here in solidarity or in support.
Pauline Latham: They have memberships?
Danny Sriskandarajah: Yes, they have memberships here.
Pauline Latham: What does that mean?
Danny Sriskandarajah: They have memberships in this country. For example, Oxfam might have hundreds of thousands or millions of people who are part of a supporter base. Oxfam’s role in development, I would say, is not simply about delivering services, but about building development awareness or engaging people, not just through Aid Match or resourcing but in terms of the wider development project.
In the Global South, the role of civil society again is not necessarily to build hospitals or schools, or to distribute tents. If we are talking about long-term social transformation, indeed, as the CSPR does on supporting civic space and local civil society, then we are looking at a much more sophisticated and complex landscape. That cannot be captured simply by a supplier relationship or contracting relationship.
One of the things that has stood out in the British Government’s approach, over a couple of decades, I would argue, has been this insistence on the multifaceted role of civil society in development. Some of the other major donors, USAID for example, have embarked on a different approach, which is to say that they want to deliver these services and will contract whoever can give them best value for money.
Not surprisingly, I understand that 19 of the top 20 recipients of USAID contracts are private companies, and only one of those 20 today is an NGO. That contrasts heavily with the British approach, which has been much more about partnership and a level playing field. This is not to say that value for money is not important or that delivering results is not important, but rather that the value added by civil society is more than just building hospitals or delivering bed nets. It is a wider relationship.
Pauline Latham: I did not get an answer to the question of whether DFID funds everybody here, and whether they get any other money.
Chair: Presumably the answer to that is no.
Kathleen Spencer Chapman: On that question, there is a real mixture among Bond’s member organisations of the relative importance of DFID to them. Clearly DFID is right to try to support organisations in moving to reduced dependence. That is something we would all agree with and is absolutely right. For some organisations, it was partly the type of funding they received from DFID that was perhaps different. For example, the PPA gave a level of flexibility and an ability to pursue strategic objectives, which is perhaps hard to find in other funding sources, even if it is a relatively small percentage. For others, DFID could have been a higher percentage. Even if it is 10% of your funding, it is still a delay, and levels of uncertainty around the future of DFID funding is still going to cause a business impact.
Dorcas Erskine: The question around diversity of funding and dependency is a valid one, and there is a need for NGOs to diversify their funding base. However, I would say that most NGOs do try very hard to do that. Most NGOs try to have a very diverse funding base. We are lucky as a larger one that we can do that. We can definitely take the hit much easier, as Martha noted. Our concern is for the small and medium-sized ones.
There is a bit of a contradiction in the civil society review, where the Government want to encourage a diversity of partnerships, which is not something we would disagree with. A statement that says no one organisation has the solutions to poverty reduction is a valid one, and it is one that can be backed by a lot of evidence. However, if you want to diversify, you have to make it easier for NGOs to access that kind of funding. One of the good funding modalities that is really hard to access is unrestricted funding. Removing that funding modality makes it really hard for certain NGOs to grow, diversify, and bring their solutions forward. That is one thing.
On the civil society space and the idea that we are suppliers, it is interesting. If you look at the review, it makes a lot of the fact that the civil society space in many countries is closing. There are attacks on human rights defenders; there are attacks on women’s rights groups. The idea that you have a funding modality that does not recognise that you need to encourage a civil society space is a bit of a contradiction.
Let me give you a practical example of a new, more restricted programme of funding that says you work on a supplier basis. We have recently won good DFID funding for our response in Haiti, and we work with a lot of women’s groups, because we believe that they are right at the coalface; they often do not get access to this kind of funding and know how to adapt to climate change, and so we think that they are going to be more sustainable.
However, we have an advocacy clause in that programme that says we cannot really advocate. We do not know what that means. If one of those women’s groups has a problem around some of the issues they are seeing in terms of how the grant is operating and how they feel about DFID in that context, and you called me for an evidence session, would I be able to tell you what those women’s groups were telling us? Would I be able to do that because of the advocacy clause that has been put in the programme?
If you see me as just a supplier, making sure that this community is able to have adequate shelter after this hurricane or this flood, I could do that. However, if you want to learn as to why certain aid modalities are not working, you have to give me the ability to talk about it. That is where the difference is.
Q245 Pauline Latham: Can you not do both?
Dorcas Erskine: Yes, but it is not quite clear that I can do both with an advocacy clause.
Q246 Pauline Latham: Do we have to pay more ,then, for you to be able to talk?
Dorcas Erskine: No, it is not about money.
Chair: It is about the rules that stop them talking.
Q247 Pauline Latham: Are you not allowed to talk to people? You provide shelter and do not talk to them?
Dorcas Erskine: If you say that I am a supplier, in your mind my job is to build an adequate shelter. I then build it; that is okay. However, I do not tell you that building the shelter in this particular part of the camp increases women’s vulnerability to violence, because it is really dark. I cannot tell you that the UNHCR, perhaps, is doing X, Y, Z. It is a different kind of partnership. Before I could tell you that. Why do you feel the need to put in an advocacy clause?
Q248 Pauline Latham: Are you telling me now that you are not allowed to tell anybody about it?
Dorcas Erskine: We are telling you that we are not clear on that. We have an advocacy clause, which says we are not supposed to advocate.
Pauline Latham: I am sorry, I do not know what an advocacy clause means.
Dorcas Erskine: Neither do we. It is a very new development.
Q249 Pauline Latham: Who has put an advocacy clause, whatever it means, in what?
Dorcas Erskine: DFID, in their modality.
Chair: The British Government
Q250 Pauline Latham: What does it mean?
Dorcas Erskine: Exactly. What does it mean? Why do we need an advocacy clause?
Q251 Pauline Latham: So you signed a contract and you do not know what it means, and now you are not allowed to talk to anybody.
Dorcas Erskine: No, because we do not have any clarity on it. We did ask. It is about the civil society space. It is an important point.
Chair: It is an important point, Dorcas, and you have made it. We have had half an hour; we have another hour and a lot of ground to cover. The downside of a slightly less structured approach is that we can go off into all sorts of directions. I am going to try to enable everyone to contribute, but also manage the process. I am going to take Lisa next, but I am conscious that both Diana and Simon have indicated as well; I will bring them in.
Q252 Dr Cameron: I have a question about the lack of description or involvement of climate change issues within the document. I know that some organisations have already expressed disappointment with that. Obviously it is key, both in terms of our commitments internationally and in terms of SDGs. I am assuming that we initially had responses from yourselves that highlighted climate change. What are your thoughts on the way forward?
Chair: Ruth, do you want to talk about climate change?
Ruth Jackson: No, not particularly.
Chair: Does anyone specifically?
Kathleen Spencer Chapman: I can come in. Like with the SDGs as a whole, we were disappointed not to see a clearer recognition of the challenges of climate change and a sense of how that would be built in, or a commitment that that would be built in to the way that programmes were managed and delivered. That is one of the areas we would be keen to discuss further with DFID around how that fits in. There was some conversation about that at the event this morning, where DFID confirmed that that was still an important part of their approach, even if it was not referenced particularly in the document. Again, we would hope to see more on that in the bilateral and multilateral aid reviews.
Q253 Dr Cameron: Are there concerns currently, then, that climate justice funding may be hanging in the balance, or do you expect to see it in the BAR and the MAR?
Kathleen Spencer Chapman: The CSPR itself does not raise concerns about specific pots of funding necessarily. It is more about how far DFID will value and aim to achieve programmes, through the civil society funding as well as broader funding, that really help to address the climate challenges that we face.
Danny Sriskandarajah: Like the SDGs, this is an important opportunity to encourage behaviour change, particularly among civil society organisations. Some are doing it naturally in terms of incorporating the climate agenda into the mainstream development agenda, if you will. However, there is a leadership role that the British Government have played in recent years around the SDGs and the climate agenda. Again, it would be a shame if the funding instruments that DFID uses do not keep pursuing that. It is in that context that the absence of a reference to the SDGs or indeed climate change in a civil society policy review would shock or disappoint people in our community
Q254 Chair: I am now going to bring in our specialist advisers, Simon and Diana. I am then going to move the conversation more specifically around some of the funding issues going forward. We have touched on that in a macro sense and we have talked a little about the impact of the delay, but we will drill a little more into the detail of the different streams. If people have thoughts on that, that is where I am going to move the questioning next.
Diana Good: I will be brief. Hopefully my point connects into the next discussion. The great advantage of the previous PPA partnership and performance agreements funding was that they offered strategic, long‑term, flexible unrestricted funding to civil society organisations. When I was an ICAI commissioner and I led the review of the PPAs three years ago, we were very impressed by what we saw in terms of large, medium, and small NGOs—who were the recipients of these agreements—actually using them to capacity-build with the really small NGOs in country, who were at the sharp end of delivery.
Whatever stream DFID uses, whether it is a multilateral, UNICEF, the World Bank, Oxfam, or a contractor like Coffey or KPMG, or whoever it might be, in the end, in country, the delivery is done by small local NGOs. They are very dependent on their relationship with the organisations around this table to actually build up capacity. If DFID want better results and better strategic thinking, somebody has to actually help those local civil society organisations. Wherever the money is allocated, it lands up being used by those organisations with their local expertise in country, but they have no resources.
This new funding is all going to be project, programme, restricted-related. The problem with that funding is that it does not give the first layer of civil society organisations the opportunity to spend some of that money building up the capacity, the learning, the results-orientation, and the basic ability to deliver in the way in which DFID wants it to be delivered. To ICAI, when we reviewed it, that was the great advantage of the PPAs. That element has definitely gone. I agreed with you, when you were talking about terminology. I am not really sure whether it makes any difference whether you are called partners or suppliers. The issue is: where is the wherewithal to give those sharp-end delivery people the ability to perform as well as we need them to do it?
Simon Maxwell: Pauline put her finger on a couple of really important points. On the partnership point, just to remind everybody, there is a good box in the latest ICAI report on transition about how badly NGOs are left exposed when DFID pulls out partly because of civil society space issues. On the bigger question, Bond did a very nice study earlier this year on the financing of NGOs. They looked at 325 NGOs. This is a £5.7 billion industry, of which about 20%, maybe 25%, comes from the Government; that is £1.3 billion out of £5.7 billion.
What is interesting about the Bond study is that it shows that most of the money has been captured in recent years by middle to large NGOs. The top 30 account for around half of all the money. Within that top 30, something like a third‑plus of the money comes from Government. For the smaller NGOs it is much less, and that is one of the drivers of DFID looking at new ways to fund NGOs. What you have got here is a large part of that funding coming from country-led delivery programmes; they deliver humanitarian relief in country X.
The CSPR does not discuss any of that at all. It simply looks at the core NGO civil society department funded programmes such as Aid Match and all the others. The PPAs were £120 million, which is less than 10% of the total DFID funding. My view is that if you want to have a serious discussion about DFID’s relationship with NGOs, you have to start out by understanding what the industry looks like: a £5.7 billion industry with some very large ones and lots and lots of very small specialised and local ones, and with the large ones capturing the major share of DFID money, most of which is not within these NGO windows but is actually for delivery of programmes on the ground. If you were doing a management consultancy on DFID’s relationship with NGOs, you would first of all say that there is a very large elephant in the maize field, because it is such a big funder of the system.
There is not in the CSPR, in my view, a strategic overview of that funding, because it is only concerned with certain limited civil society department-specific funding mechanisms. The Committee could perhaps think about encouraging DFID to take a step back and talk about the entirety of the funding. On the other hand, the sector itself should look at its entirety and make the kinds of points that are being raised about what it wants, and not just how it is dependent on DFID for customer funding. What does the sector want to do and what does it expect out of the Government?
Chair: That will be a very good segue into the next part of the conversation, but Pauline wanted to come back first.
Pauline Latham: It is interesting that Bond have done this survey on 325 NGOs. There will be many, many more than 325. Presumably they were the medium-sized and large ones, because you will not know thousands of small charities that are around the place and that are doing good work. It seems to me that of the main ones, there are far too many. We are actually funding what Simon has termed an industry. We are actually providing salaries for thousands and thousands of people, and I am not sure that is always the right thing we should be doing. People have some really good jobs and some of them are highly paid. Is that the right thing for DFID to be doing?
Q255 Chair: I shall let that hang in the air, and if anyone wants to address it when they come in, feel free. I want now to do, in a sense, what Simon said, which is to step back slightly and think about the bigger overall picture. I then want to ask a very specific question. I am going to throw two questions in and invite our witnesses and then other members of the Committee to come in.
The big question is: is your sense, both from your review and from other conversations, that this is going to lead to less money from DFID and the British Government going to civil society, or is that unclear? Very specifically, do you have any sense, beyond what was published, about how Aid Connect is actually going to work? There is a macro-question, and then a bit more of a micro-question for us to get our teeth into.
Martha Mackenzie: On whether it will mean less money going to CSOs or NGOs, the picture is still really unclear. That is partly because of what we have already touched upon: we have not seen this overarching strategy yet. Most of us can read the mood music, and a lot of the contracts and grants coming out of DFID are moving more towards the economic prosperity agenda. We have seen the advent of cross-Government funds like the prosperity fund, which are harder for NGOs to bid for. That is not necessarily a bad thing; economic development is a critical part of the SDGs, as is the prosperity agenda.
However, we certainly have seen some of those contracts come across our desk and said no, because they do not feel closely enough aligned with our values or areas of expertise. What will be very interesting to see when the MAR and the BAR actually are published is the overall aim for these different sectors, what that might mean for where an NGO’s strengths and weaknesses actually lie, and who is better placed to respond to those funds.
On the second point very briefly, there was not a huge amount of information this morning on Aid Connect and how that would work in practice. We were told to wait until after the Autumn Statement to get a better sense of what the envelope would actually look like. One of the issues raised, which actually touches upon what Diana was saying, is what that will actually mean for the balance of risk and our work with smaller NGOs and smaller organisations once the funding package becomes clear.
The humanitarian financing agenda is absolutely the right one, but, through the grand bargain and the promises made at the World Humanitarian Summit, we have all agreed to work much more with smaller local NGOs. Depending on how those consortia are set up or what the bids are framed like through Aid Connect, it is unclear who will be bearing the risk and what that process will look like. For us, that is a key question that was raised this morning, and which has not yet been answered.
Dorcas Erskine: On your first question, it is indeed unclear. However, one of the things that is encouraging around the civil society review, at least from our perspective, is a recognition that there needs to be a diversity of smaller NGOs who are able to access this funding. Our model is slightly different, as was hinted by Diana. We do deliver through some of these small organisations, and we try to build them up and exit in terms of sustainability. We got very excited when we first read it, because we have been running a campaign to DFID around giving to small women’s rights organisations directly.
We then started to read the small print. Most of these women’s rights organisations, which do amazing work, would not be able to access this kind of funding despite DFID’s willingness to diversify the sector or break the industry. It requires for them to have 25% matched funding. It requires that any amount given by DFID does not exceed 40% of their turnover. Given that some of the most effective groups that we work with have an annual income of around $12,000, that completely cuts them out of the ability to go for these kind of funds.
Also, the compliance issues are really heavy. We find it difficult to meet some of the compliance standards, but they are right, around transparency. This is why you do need these middle-men and middle-women NGOs. We take the compliance risk for some of these NGOs, but we cannot find an access for us in terms of the modalities that are currently proposed.
I am not sure—and we will have to see when we see more detail in terms of the aid reviews—how this is going to meet the objective of diversifying the sector. Most of the people who are trying to reach where DFID wants to reach in terms of aid effectiveness and smaller NGOs will not actually be able to meet that threshold. That is a concern for us, and it is not a self-interested one. We would not benefit from it. It is our programme modality, and we are not quite sure how this helps. There might be less money for them.
Q256 Jeremy Lefroy: On the last point, one model that occurs to me is from an organisation in Tanzania called Molly’s Network, which has been set up precisely to train small organisations in meeting compliance. Molly’s Network is not specific to any sector, so they could be working with women’s rights organisations or education organisations. I wonder if one way is to work with civil society in the countries where you operate and ask if there is some way of getting a certification body that identifies whether an NGO is reliable and has a proper accounting system and management system, even if its income is only $12,000 per year. That might be one way to do it, so that they are set up to be able to access the funding from DFID.
Dorcas Erskine: They still would not meet the funding requirements in terms of their income.
Q257 Jeremy Lefroy: These are certainly issues we can go back to DFID on. However, in terms of compliance, there is a way forward. I do not know if this came out to you in your discussions this morning, but the other point I wanted to make, as Martha rightly said, is that DFID’s focus is increasingly on economic prosperity, and, with that, jobs and livelihoods. Those are absolutely key, together with global public goods such as research into health and, clearly, humanitarian response.
Given that that is where we know the Secretary of State, her Ministers, and the general team are headed, does it make sense, then, to say that we now know what the priorities are? To take two examples, ActionAid and Malaria Consortium, you are very focused on livelihoods and malaria. We know that they are heading in the direction that you are experts in , and there therefore should actually be more opportunities for you to participate.
I wonder if it is worth thinking along the lines of where DFID is actually focusing. Rather than saying that it is not worth having a relationship with DFID because they do not seem to be interested, it is worth looking at the valid areas in which DFID work. Actually, most of these areas are cross-cutting. There will be work that each of you do that is relevant to those two or three key areas. Let us focus our interaction with DFID on those areas rather than just saying that you want to work with them right across the board.
Dorcas Erskine: Most of us are doing that already. That is fair.
Danny Sriskandarajah: There is a lively conversation happening around what some call the validation or verification process— that is, how do we lower the threshold for smaller organisations, particularly in the Global South, to be able to access funding. It is very unlikely that someone sitting in Whitehall is going to be able to write lots and lots of small cheques to $12,000‑per‑year‑turnover organisations. However, we can close that gap and build what we call a new generation of “fundamediaries”, who will be able to channel money and be accountable to taxpayers here, around the world, and wherever the donors are.
At the same time, the ultimate prize here is not to build a new bureaucratic system, but to take inspiration from how a TripAdvisor works in terms of crowdsourcing comments and building in new feedback loop systems, so that civil society organisations that are at the frontline of development are held accountable to the people they claim to serve, to the donors, and to each other. There is a real opportunity here.
There is a commitment to funding smaller or medium-sized organisations in the CSPR. However, the really interesting but difficult policy question is how a funder like DFID builds mechanisms that then do not cost the British taxpayers too much in extra administration yet allows for resources to be delivered as close to the frontline as possible.
That conversation is perhaps most real in the humanitarian sector, where only 0.2% of the $25 billion spent in humanitarian assistance last year went to frontline organisations. That means 99.8% of all international humanitarian funding last year went either to or through UN agencies or big international NGOs. However, we know that frontline responders are best placed; they are there early and are delivering value for money. We need a system for moving more of that 99.8% more directly and immediately to those frontline responders.
Q258 Jeremy Lefroy: Just to come back on that, I entirely agree with this idea of mechanisms for cheap and effective intermediaries. We raised precisely this idea last night at a meeting with the Secretary of State. One way of getting money through to local charities in the UK, although it would not be just have to be in the UK, would be through someone like Bond taking the initiative and setting up a very cost-effective organisation, rather than DFID going out and contracting to Triple Line. That presumably costs quite a lot of money, and so NGOs could do it at cost, making it possible for DFID, in a responsible way, to feed £10,000 through to a charity in mid-Derbyshire or Stafford.
That is what a lot of us want to see, because a lot of that money could be incredibly effective and very well-leveraged. The same would apply to organisations in Tanzania, Malawi, Pakistan and so on, where if you are giving £10,000 to an organisation that is effective, your fiduciary risk is very low compared with giving £1 million to even quite a good organisation, where you are quite likely to lose £20,000 or £30,000 somewhere along the way. The Secretary of State seemed to be receptive to that, but it is maybe something we can push as a Committee. It feeds into both what you are looking for and what we as constituency MPs are looking for in terms of the excellent organisations we come across every week.
Hayley Cull: On that point, but also on the issue around less money for civil society, it is obviously highly unclear. That is all to come out in the detail. However, one of the things that is quite encouraging within funding streams is the commitment to double the size of the Aid Match programme. The reason I note that as well is, having been at UNICEF UK a recipient of the Aid Match funds in the past, we know the twin benefits of that.
It is not only the direct benefits of the funding to the programmatic response we can give, and the benefit that can bring to children’s lives. It is also about the actual benefits that provides in terms of building public support for international development in the UK, which we know is such a crucial issue and something on which we need to continue working with DFID as equal partners. The commitment to double the size of that programme is really encouraging, and likewise the fact that the diversity of that programme will increase.
On the point around UK Aid Connect, there is clearly a lot more to be seen as to what that is going to include. We are looking forward to seeing that. On the scale of that, around the form that it is going to take, and around the design process within that funding stream, until we see more information from DFID about that and we can answer those questions, it is really quite difficult to know what it is going to mean in terms of the scale and the impact as well.
Tonja Schmidt: Just to add to the point raised by Jeremy in relation to technical organisations in the UK, we do feel that there has been a gap left by the CSPR with medium-sized organisations falling through the cracks. Technical organisations have been advising DFID for years on, for example, different health issues, and those organisations need funding to be able to support the world class experts that they have in engaging with that work internationally. That is not something that comes through project funding, and that is where a small amount of unrestricted funding such as was offered by the PPA makes an enormous difference. That difference has direct benefits in terms of DFID’s agenda, not just in the UK but in the countries where DFID operates.
Q259 Chair: Could you give some examples of the sorts of organisations that could suffer because of the loss of unrestricted core funding?
Tonja Schmidt: If I am allowed to give my own organisation as an example, yes. Malaria Consortium was a recipient of PPA funding. That was invested in an extremely transparent and accountable way, where every penny could be accounted for. It allowed us to undertake innovative research, to work with governments in developing countries, to build their capacity, to strengthen their health systems, and to deliver these programmes.
Crucially, it allowed us to be responsive and adaptive, particularly in a fragile country context where things are not predictable. If you want to deliver programmes to the level of quality that we believe they have to be, and in those environments, you have to be able to respond. That is where not having any unrestricted funding inhibits agencies from coping when there is an outbreak of fighting in South Sudan.
Q260 Chair: What will you do to try to protect as much of that work as you can? Will you in practice just build this into other funding applications, to try to get the money through alternative funding streams?
Tonja Schmidt: It is certainly the case that the majority of our work is through commercial contracts that we bid for. However, where under the PPA we did small pieces of innovative research, which led to huge leverage from a whole range of other donors, we now cannot take that first step on the ladder to get these key ideas for which funding is not necessarily yet available, because it is at the cutting edge. For the purpose of innovation, we believe in the freedom to adapt, and that unrestricted funding is an opportunity missed.
Polly Gillingham: I just wanted to build on Jeremy’s point about frontline CSOs. Often in the private sector suppliers, we do partner with CSOs as part of our competitive tender and implementation process. Therefore there is another stream of DFID money going to CSOs, albeit one step removed from DFID. In particular, we often to partner with niche CSOs in country. In the governance sector, we find often that the programmes include small grant funds that regularly go to small frontline CSOs in country for advocacy and awareness raising‑type work. Through these grant funds we are helping to build the capacity of those frontline CSOs.
Q261 Chair: Do you have any sense on Aid Connect beyond what others have said?
Polly Gillingham: It is interesting. DFID are obviously looking for more partnership between NGO’s and the private sector. We have looked at it and thought, “What next?” and are keen to find out more about how it is going to work in practice.
Ruth Jackson: I wanted to come back on what Jeremy said and echo what Tonja said. I also want to pick up on what Diana and Simon mentioned before. In terms of funding smaller CSOs and working with CSOs, that is something Oxfam and a lot of other large NGOs do. It is a big challenge. As Danny has said, it is something that we are having very much a lively debate about, because we do recognise that they can be much more agile and responsive, particularly in humanitarian responses.
The challenge, as others have said, is around the accountability, monitoring and compliance measures, and also the capacity and the ability to scale up, particularly in humanitarian response. DFID or others may give us some money for a humanitarian response, because they know that we can get there within 24 hours and deliver; we have the infrastructure to be able to get stuff to our warehouses, get it out, and get it delivered. Working with smaller organisations you can do that, but it is a much more complicated process.
There is a need to capacity-build at the same time, which, when you are trying to respond in an emergency, can be quite challenging. It often comes a bit further down the line, a couple of months in, once you have bedded it in. It is certainly something that we would like to see, but there are definitely some challenges around how that happens practically and where the risk is, and whether it is right to pass on that level of risk to small organisations.
It was recognised by DFID that the PPAs were used to look at issues such as programme quality, research monitoring, evaluation, and other innovative projects. There was recognition that this would also be included somehow in the new funding streams. However, we have not yet seen how this will work in practice. It is not necessarily that the funding for these measures will go completely, but we are not sure at the moment particularly how these kind of things will be funded. It will be interesting to see, and we would like to work with DFID, in terms of working out how to do cost recovery and how to factor in some of these other costs that are not necessarily about direct delivery, but which do create innovation as well as effective evaluation.
It is a good point that Simon and Diana make. The CSPR does have new funding streams, and they do come from the central pot, but it is not the total amount of funding. There is the country funding, and that is quite important in terms of working with CSOs and smaller NGOs in country and also in terms of sometimes funding more innovative projects. Yes, it is quite programmatic, but there can be a little more flexibility at the country level, and so in terms of doing the review, it important to take the step back that Simon mentioned.
Q262 Chair: That quite neatly, unless anyone else wants to come in at this point, takes us to the broader picture with the other reviews. Every week there is a new rumour, but the rumour this week is that we might be getting the other aid reviews in the next week or so. We obviously have the multilateral aid review and the bilateral aid review. As an opener, I am just keen to hear what you know, and how much knowledge any of you have that you can share with us ahead of publication. Hayley, if you want to kick us off on the multilateral aid review and anything UNICEF might know about what is happening.
Hayley Cull: There is probably not a lot to say, to be honest. We have obviously heard that the review will be coming soon, within the coming weeks, which we are very much looking forward to. Conversations are ongoing as to what that might include, and we are very much looking forward to seeing that. However, at this stage, until the review comes out, it is really quite difficult to comment.
Q263 Chair: Originally we envisaged this looking at all of the reviews, because we thought we would have all of the reviews. Inevitably, we have focused more on the civil society, and I deliberately gave us an hour of the hour and a half to focus on that. Do you have thoughts and comments on where we are with the BAR and the MAR, or any consequences you are aware of because of their delays?
Martha Mackenzie: I have just a couple of observations on the MAR. What will be really interesting is if DFID use it to set a marker about their plans for post-Brexit aid funding. Obviously, a huge amount of our multilateral aid goes through European institutions at the moment. I do not expect that will change with this MAR, but they may be setting down a marker for what their plans are post-exit, and which institutions they may want to move that money towards, or which institutions within the EU they want to keep funding. That is an interesting one to watch.
Another watch area for us is the IDA replenishment. The World Bank is coming forward with a much more ambitious figure for IDA than they have previously, and this is obviously a critical funding mechanism. They are doing a lot more work to release that money for lower‑income countries and to respond to the fragile states agenda. Whether, with the pledging moment we think being in December, the MAR indicates an increase in DFID’s funding towards IDA and the World Bank will be particularly interesting, especially given the Secretary of State’s ambitions for reform of the World Bank and desire to work with the World Bank on those reforms.
Q264 Chair: Is it your sense that, if the MAR and the BAR were published next week, they would look any different than they would have done six months ago?
Martha Mackenzie: What we have heard is that the MAR is likely to look quite different, and that is actually an area that the new administration had thoughts on and wanted to be propositional about.
Q265 Chair: And that is partly a consequence of Brexit, but partly views about other international institutions.
Martha Mackenzie: I think so. There is a sense that the UK is a very generous contributor to a lot of multilateral funds, and how we are leveraging that generosity and being more bold in a post-European age has spurred that. On the BAR, as has already been hinted, bids have been coming out of country offices and there is a sense that they know what their funding envelopes look like; we are expected less change there.
Q266 Chair: I do not want to keep it all on you, but you might want to respond to this. Do you have a sense of what the BAR changes might be? We have this general view that there will be a bit of shift to North Africa and the Middle East, but much beyond that I am not very clear. In particular, is there anywhere that you think is no longer going to be a recipient? Are there going to be any exit countries in the BAR? You may know more than I do on that.
Kathleen Spencer Chapman: We do not have much detail. We would expect a reduction or stagnation of funding to some of the poor but not fragile countries.
Chair: There would be a stagnation of funding. There will not be exits but they will not share in the growth.
Kathleen Spencer Chapman: We cannot comment.
Chair: You do not know.
Kathleen Spencer Chapman: We do not know enough detail. In terms of the broad shifts we might expect to see that. We will be watching areas like whether it fleshes out further what the emphasis on national interest means in practice.
Chair: Yes, that is very good.
Kathleen Spencer Chapman: That would be around, say, security or economic agendas, because we know that how to implement that is something that different Government Departments have been grappling with. There is also the poverty eradication objective, and so on, so that will be interesting to see, as we have already mentioned, in terms of how far the reviews are framed around SDG implementation and the UK’s role in that. With the development banks, how far does DFID intend to take a practical approach in ensuring those banks are focused on the poorest countries and people? Beyond that, it is hard to say very much
Ruth Jackson: I do not have any more information on the MAR or BAR specifically, but, reflecting on the annual report that came out in the summer, it is telling that there has been a reduction particularly to countries that are poor but stable and perhaps are less politically exciting. In particular, there are places, for example, like Kenya, Ethiopia, Malawi and even in Zimbabwe. These are places, in terms of poverty reduction and addressing that, there seems to be less of a focus on those, and there is a reduction in funding from the annual report. It would be interesting to see how that is reflected in the aid reviews. There has also been a reduction to South Sudan and Yemen, but we know that, hopefully, there will be additional funding from other funds to replace that. However, it is more the countries that are not those hotspots, such as Rwanda, Kenya and Tanzania, that do still need the support, but are less of a flashpoint than, say, Yemen. We are concerned and also interested to see what may come out in the MAR and the BAR around this.
Danny Sriskandarajah: I do not know about the status of those two reports, but I will give an observation on each. On the MAR, the really important policy question is about what the implications of the MAR scores are. Last time around, having been involved in Commonwealth Organisations, it was amusing – or depressing – to see that the Commonwealth Secretariat, which had one of the worst MAR scorecards apparently receiving more funding, presumably because of political reasons. Something like 40% of DFID spending goes through multilateral agencies. It is such a sizeable portion of the development budget. Despite the promise of the MAR to be more technically efficient, it is still motivated by political drivers. That is deeply frustrating given the level of oversight relative, then, to, civil society recipients of development expenditure. The biggest and most politically charged part of the development budget seems not to have the same level of scrutiny as smaller, arguably more efficient bits of the pie.
When it comes to the BAR, one of the most encouraging bits of the CSPR was the Secretary of State’s commitment to protecting civic space and the fundamental freedoms of civil society in many of the countries. Sadly, in far too many countries of the world, civil society is under threat. My colleagues documented serious threats to civil society in 109 countries around the world. High on that list of 109 are some of the biggest recipients of bilateral aid from this Government. Again, we need to have joined-up policy, and be thinking about what levers this Government will use through its bilateral programmes when it comes to the worsening conditions for civil society in many of those bigger recipients or partner countries.
Chair: Dorcas mentioned that issue as well, earlier on. That is very much on our agenda and radar. As a Committee, it is something we all feel very strongly about. When we are conducting either our thematic or country-based reviews, the importance of independent civil society and its voice in recipient countries is something we return to frequently.
Q267 Paul Scully: Notwithstanding what you have just said about scorecards, Danny, I am wondering whether any of you are expecting greater use of performance reviews in the MAR. If that is the case, how is that going to affect your work?
Chair: Do you want to have a try at that one? Do you want to elaborate at all, Paul?
Paul Scully: I do not want to reopen your exchanges with Pauline about the relationship. Do you think it is a good thing to have greater performance reviews and more detailed performance reviews within the multilateral reviews? Will that help you in your relationship? Do you think it might provide barriers? Do you think it might give you a greater sense of focus on what the Department is expecting within that relationship, and how you might work with them constructively?
Chair: You are thinking about things like the recent performance agreement with the Global Fund and what the implications would be of that kind of approach of a tighter management of performance by DFID of multilaterals. That is not an easy question. Who would like to answer it?
Kathleen Spencer Chapman: This is speculation, but given that we saw that with the Global Fund I would guess that it is quite likely that we see more of it for other multilaterals. The impact on NGOs is not so direct. We would be interested in looking at how DFID engages with multilaterals in terms of their own engagement of NGOs, for example. Is that something that DFID raises and values in its dialogue with multilaterals? Obviously, we are very interested in the overall good performance of multilaterals, and making sure that they are really doing the best possible job in tackling poverty. If those sorts of performance agreements contribute to achieving that then that can certainly be useful.
Martha Mackenzie: I would add to that that an area where it is interesting to think in that context is that our colleagues who work across Europe are very clear that the UK has a very positive role in the European Union’s development work, and actually we are one of the most progressive voices, shaping the priorities of that work and using our leverage, and the fact that we contribute a large amount of money to that pot, to shape it in a direction that a lot of us would be much happier about than once the UK leaves. Some of the indications coming out of European Union decision-making bodies suggest taking a more aggressive direction. The UK has a good track record of using its leverage positively. If we see more of that through the MAR, and more ambition to do that through the MAR, that is a good thing, and it is a recognition of the role that the 0.7% commitment gives us on the international stage as a global player, as someone who can deploy soft power effectively and really tackle some of these big, global challenges.
Q268 Chair: Thank you very much indeed. We have about another 15 minutes. We do not have to stay here just because we have the room arranged until 4.00. We have covered the main areas that I was hoping that we would cover today, and I am immensely grateful. However, there may be things that you were wanting to share with the Committee, or there may be issues that my Committee colleagues wanted to hear from you on that we have not covered. I am just going to give an opportunity for people to indicate if there is something, and if there is nothing we will bring the meeting to an end. If there are things then, please, here is your opportunity.
Simon Maxwell: I wanted to make a quick, evidence-based concluding remark about NGO funding. There is evidence on the importance of a strong NGO community within developed countries. Looking at the evaluations of Make Poverty History, for example, it is clear that UK development leadership internationally benefitted hugely from a strong, rich, deep, widespread civil society engagement on development issues. We see that reflected up to today in things like the 0.7% debate. A question then arises as to whether it is a sensible thing for Government to fund that, which is the point that Pauline has been working away at, or whether it should be funded entirely independently. It is worth saying that the evidence is that other countries think it is extremely worthwhile investing in the NGOs. There is OECD data on the amount of funding that goes to the NGO sector from different countries. We spend about 19% of bilateral aid through or with NGOs. In the Netherlands, they spend 38%. In a number of Scandinavian countries, the figures are well over 25%, and Canada is another. In some other countries it is much lower. Germany is very low; France is quite low. It seems to me that the policy question that lies at the heart of this debate is whether it is sensible for Government to invest in NGOs. Some countries do a lot; some countries do very little.
Q269 Chair: In those countries you have cited, Simon, that do a lot, is it predominantly through the local NGOs in the countries or through their own, for example Dutch, NGOs, or is it a mixture of the two?
Simon Maxwell: Everybody struggles with the problem of how to fund frontline NGOs in developing countries. It was a big issue at the humanitarian summit, which you looked at. Most that funding will be going to Dutch, Canadian or Scandinavian NGOs.
Q270 Jeremy Lefroy: Would the Dutch figures not be slightly skewed by Hivos and Cordaid, which have very substantial sums, presumably are classed as NGOs and are, in effect, part of the Government funding system?
Simon Maxwell: Myself, Bond and the DAC had a long correspondence last year about how you measure NGO funding, and some of these numbers are extremely difficult. If you look at the Bond study, for example, the British Council is in there as one of the 325 that they looked at. There is lots of unpacking to do. In Canada, for example, a big share of funding goes to conventional NGOs, but I do not know about the Netherlands.
Jeremy Lefroy: It is the same, which may not be a bad thing but it does slightly distort things.
Danny Sriskandarajah: I have another statistic relating to this conversation, and a general observation, if I may. My understanding, from reading DAC analysis is that on average DAC donors are giving about 13% of ODA through or to NGOs, at a ratio of roughly 12:1 between northern and southern recipients.
Q271 Chair: So 1% is going to southern NGOs, and 12% to northern NGOs.
Danny Sriskandarajah: There are some serious issues around methodology and definitions here. Yet, I was in a northern European country just the other day when, unofficially, the head of their development agency said that 95% of its funding was going through domestic NGOs, which must be the extreme.
Q272 Chair: Are you able to tell us who it is?
Danny Sriskandarajah: No, it is not published data. There are a lot of obvious, good reasons in terms of accountability and familiarity. Coming back to a general observation relating to the questions you were asking, Pauline, what is interesting here, and the CSPR touches on this, is what civil society is for in international development. Part of the answer is delivering value for money, and there is really good evidence to suggest all the various ways in which civil society can deliver value for money in development. The sorts of things we have been talking about point towards at least a couple of ways in which civil society is important and, indeed, critical.
If you take peacebuilding, a highly topical issue today in the world. Britain happens to have some of the best civil society organisations devoted to peacebuilding. It is incredibly difficult to do the sorts of work that those organisations do through short-term, projectised funding cycles, if you are trying to build trust and reconciliation in communities, build linkages between diaspora communities in their former homelands and so on. One of the advantages of, say, the PPA funding model was that it allowed some of those eminent peacebuilding organisations to do that long-term work in ways that would otherwise be very difficult to do.
A question that arises is that if you want to support civil society in going beyond the short-term results—the science of delivery, if you will—into the art of transformation, then how do you develop funding mechanisms that allow civil society to do that? The second question is what happens on the ground, especially in environments where civil society is under threat. Again, if you create a cadre of civil society organisations that are at the end of a very long funding chain—with sub-contractors of sub-contractors who are accessing small pots of money, on a projectised basis—you are not going to get the resilient civil society that can then stand up for itself. That is not just in terms of threats to civil society but so that long after aid finishes they are able to mobilise resources domestically and engage communities domestically. That is my worry here. The development industrial complex, if you will, has not been particularly good at developing or building a resilient and independent civil society in the Global South. That, as Jeremy said, leads to some really difficult policy challenges. That is what the CSPR really speaks to.
Dorcas Erskine: I just wanted to add a little interjection around it being really good if the Committee were to ask DFID what happened to all the evaluations and evidence that it has gathered on the benefits of giving unrestricted funding. Quite a lot of work has been done around the modalities of giving and its effectiveness. It would be really good to see that reflected, in terms of lessons learned, in how they shape their funding modalities going forward. They have invested a lot in that. They have invested a lot in getting us to be more transparent and in being able to track impacts and results. It would be good to see how this learning pans out.
I just also wanted to add to the sense around skill as well. This is where there are contradictions around thinking that large is always bad. Sometimes you do need to deliver to scale and you do need to get to countries very quickly. Sometimes the discussion almost puts a false dichotomy on what is effective in development. A lot of development agencies and NGOs have moved a long way from some of the misconceptions. A lot of us do fund, as was mentioned, frontline NGOs and frontline civil society groups. They are very small ones. We just absorb the compliance risk. It is not the case that these large NGOs are absorbing the money and not spending it very well. Most of it goes into frontline organisation. What we want is the next generation. We want the new funding modality to go directly to these small, southern-based organisations.
I want to be clear that that perception needs to be challenged, because most of us do deliver to small organisations, and this is how we know where they are.
Chair: That is a very good point.
Dorcas Erskine: Big is not always bad. You do sometimes need big organisations.
Chair: This meeting is observing a rule of meetings, which is that as the time runs out, everyone puts a hand up. Can I ask people to be reasonably brief?
Kathleen Spencer Chapman: Reflecting on going forwards, it is ultimately about how we can work with DFID in making sure that they make the most of what civil society has to offer, and all of the distinctive value that we bring, which is perhaps different from some other actors. We heard a lot of positive words this morning from DFID, for example in relation to Aid Connect and their ambition for that to be about innovation and for that to really bring about a strategic policy dialogue, learning and so on and so forth, and there was an element of regret that they had perhaps not managed to achieve that as well as they might have through the PPAs. That is really positive. There is also looking at how, through these funding mechanisms, we make sure that local CSOs are not disadvantaged and how we can make it work in practice. Clearly, the message was, “We are at the early stages. We want to work with you and engage with you to make this work.” That is great. Bond is very committed to working with DFID and the sector to flesh this out. The support from the Committee would also help to make sure that that dialogue really happens in the most meaningful way, both around the actual funding instruments and making sure that the funding modalities work to achieve the objectives that DFID wants and we want, but also, on the policy dialogue side, ensuring that we can really make the most of all of the learning and expertise that we have at different levels, including working together around the global change agendas and all the thorny problems that we need to work together on to tackle.
Q273 Wendy Morton: We have spoken a lot this afternoon about unrestricted funding and how we can get funding to some of the smaller NGOs. We, as a Committee, are very conscious of some of the newspaper headlines. You are as well, and you are battling against them as well. How can civil society help in mitigating some of the risk, in terms of getting funding to the frontline? Do you have any other thoughts on what you can bring to the table if we are to give unrestricted funding?
Chair: Polly, Tonja and Diana had indicated. I am going to ask them to say what they were going to say anyway, but if any of them fancies trying to answer Wendy’s question as well that would be great. Do not feel obliged if you do not feel you can.
Polly Gillingham: Going back to the bilateral aid review and the MAR, with the spread of ODA across Government Departments, we are hearing the phrase “cross-Government working” a lot within DFID. Something we will be looking at very carefully in the BAR is whether this is just about DFID spend in country or whether it is about how DFID is going to work with other HMG Departments in country.
Tonja Schmidt: I have two brief points on which it would be helpful to have further information from DFID. The CSPR, and perhaps some of the others, describes how DFID wants recipient agencies to be compliant with the international aid transparency initiative. It is incredibly important, but now we are also being asked to make the organisations we in turn fund also compliant. I am not sure DFID is aware of the extent and the cost of becoming compliant and staying compliant. It is an ongoing cost. It would be helpful if they could look into that and take it into account, because people will want to be supported through that. The second point was just around perhaps understanding a bit more how DFID sees all this fitting together. I asked George McLaughlin this morning if there was a theory of change for the CSPR and why they think these four funding mechanisms will lead us to the results they are looking for.
Chair: That is a very good way of putting it.
Tonja Schmidt: He said there was not, and it is important to get at those.
Very briefly, just to respond to the point from Wendy on unrestricted funding, part of the reason it is so important is because there is a rigidity in the other funding mechanisms available, whereby you agree the budget and the plan, and you cannot deviate. Building some flexibility into those would help. Small amounts of unrestricted funding would allow that flexibility. I would emphasise that it is possible to be completely transparent and completely accountable for unrestricted funding, just as with any other source of funding.
Diana Good: I have a suggestion that would be helpful in terms of evidence, and may be something that could be built into the Committee’s ultimate report on this. I suppose I am looking at Bond to organise this. Some mapping would be fantastically helpful here. I am acutely aware of the fact that there are very long chains of delivery, and the most recent ICAI report on fiduciary risk made very clear that DFID’s only knowledge and sight is of its first layer of contractor, whether that contractor is a Coffey or a DAI Europe, or it is UNICEF, Oxfam or Save the Children. It is then for those organisations to deal with all of the layers below. The more fragile the environment you are in, the longer that chain is. It can be seven or eight layers deep.
Ultimately, it is all being delivered in country by tiny, fragile organisations operating in very difficult places. For public knowledge and awareness, it would be fantastically helpful if you could do some mapping. I do not know how you would do it, but it could be for the last year or two, showing how the funding that goes to UNICEF actually gets streamed down through these layers, how the funding that goes to Oxfam gets streamed down through these layers, and similarly for Coffey, etc. We could then actually see what you are all talking about and really understand it.
Martha Mackenzie: Very quickly picking up on Wendy’s point, you are absolutely right. We do all have a job to do in terms of demonstrating the impact of UK aid and being transparent. One of the things this Committee has looked at throughout the course of this review, and which we would urge you to keep looking at, is the cross-Government ODA and how that is being measured. That, really, is where the gaps are starting to emerge and where the same rigour is not being applied.
Chair: I want to say a massive thank you to everyone for coming. This is part of an inquiry on allocation of resources that we launched earlier this year thinking that we would publish rather earlier, but it has been delayed by the delay in the reviews. We have the Secretary of State and the Permanent Secretary giving evidence to us in a few weeks’ time. We will publish early in the New Year. The evidence you have provided to us today, as well as elsewhere, has been immensely helpful. There are a number of practical suggestions for us as a Committee, but also for Bond and others, that have come up during the discussion that we will follow up after the meeting today. This has been a hugely helpful and beneficial hour and a half.
I am grateful that people re-jigged their diaries, both Committee members and witnesses, so that we could have this after some of you have been into DFID earlier on today. Many thanks for being here with us and for your evidence.