International Development Committee
Oral evidence: Independent Commission for Aid Impact (ICAI) Synthesis Review, HC 474
Tuesday 16 January 2024
Ordered by the House of Commons to be published on 16 January 2024.
Members present: Theo Clarke (in the Chair); Dr Rosena Allin-Khan; Sarah Champion; Mrs Pauline Latham; Chris Law; Mr Ian Liddell-Grainger; Nigel Mills; David Mundell; Kate Osamor; Mr Virendra Sharma.
Questions 1 - 38
Witnesses
I: Dr Tamsyn Barton, Chief Commissioner, Independent Commission for Aid Impact; Ekpe Attah, Head of Secretariat, ICAI.
Witnesses: Dr Tamsyn Barton and Ekpe Attah.
Chair: Good afternoon and welcome to this afternoon’s evidence session on the Independent Commission for Aid Impact and the ICAI synthesis review. I welcome our witnesses joining us today and ask you to introduce yourselves, starting with Dr Barton.
Dr Barton: Thank you. I am Tamsyn Barton, the Chief Commissioner at the Independent Commission for Aid Impact, ICAI.
Ekpe Attah: I am Ekpe Attah, the Head of Secretariat at ICAI.
Q1 Chair: Thank you very much for joining us today. Could I ask you first to summarise the performance of UK aid during the current ICAI commission?
Dr Barton: Thank you. We published our synthesis review in September, looking back over the period from the beginning of our commission in July 2019. Obviously, it was an extremely turbulent period with huge external challenges, not least the pandemic, of course, Afghanistan, Ukraine—a lot of big external challenges demanding a huge response from the UK, along with others. Unfortunately, there were also internal and often self-inflicted challenges that prevented the best response, so our review is in many respects critical of what happened over the four years.
The big internal changes that caused difficulties were, first of all, the merger. I can answer more about that in detail but, in brief, the merger of the Foreign and Commonwealth Office and the Department for International Development created a lot of grit in the machine and inevitably meant that the new Department was inwardly focused and distracted, and it also led to the loss of development expertise. This was followed by rounds of very drastic budget reductions that—from what we heard in our citizen engagement—harmed the poorest people the most, and you have had evidence from the Department on the equalities assessment of the most recent cuts.
The third internal issue is that there was what we have called strategic drift over the period. There was not one clear strategy, and it needs that long-term focus to deliver results in the field of development. Instead, you had a succession of different priorities with a huge amount of churn in political leadership.
Q2 Chair: Thank you. Most of ICAI’s reviews since 2019 have in fact given positive scores and, overall, none were awarded a red score despite the challenges you have just outlined to the aid programme in recent years. What do you think that suggests about UK aid?
Dr Barton: Well, I do not want to give you an overall critical picture because those scores reflect the reality that we have seen. The nature of our scoring is we are doing reviews that will usually look back four, five even six years sometimes, so we may be reporting on results that happened some time before. The overall picture was a positive one: 11 out of 17 scoring “satisfactory” or “better” as a description for what the amber/green score meant. That shows that there is and there was still a really important level of good delivery.
However, what we noted as the period went on and we were looking at more and more recent changes—in particular, following the budget reductions that took place successively—is that you could see real concerns emerging about whether the best in the delivery could continue. We noted that particularly, for example, in our democracy review where we saw a fall-off in technical expertise. We noted it also in our agriculture review.
It was a picture where you can even see from the scores the beginning of that deterioration. Having said that, it is not such a finely calibrated system that you can pick up all the improvements. We have noted—as well as external stakeholders—that since Andrew Mitchell took over as the Minister for Development there have been some improvements, but they will not get picked up immediately and I can talk more about that if anybody would like to ask.
Q3 Chair: Thank you. How satisfied have you been overall with the Government’s response to ICAI reviews during this commission?
Dr Barton: It has been a mixed picture, to be honest with you. On the positive side, we have had responses to all of our reviews. I know that there are other similar organisations that do not get that courtesy from the Government. We always get serious responses in which effort has been put to think about what can be done, and usually they are timely. A few have been a bit late, but for the most part they have been timely. They were obviously badly affected during the pandemic when capacity was limited.
We have had only two recommendations rejected. That is really unusual. That happened in the context of our review on the use of UK aid for refugees and asylum seekers in the UK. In that case, the Government rejected our recommendations that I think were very much in line with what the Committee itself recommended. They were that there either needed to be a cap on the costs going to refugees in the UK or some sort of floor for the budget for the FCDO, allowing it to plan.
The other area where our recommendation was rejected was in reviewing the methodology. It appeared to be a bit disproportionate with 29% of the budget being used for that purpose, so being used in the UK.
Q4 Chris Law: I want to explore a little bit more about the impact on expertise. I know that quite a number of very experienced staff left—in fact went off to other countries, including Germany, to their benefit and our loss. Have you seen any improvements in recruitment given such a catastrophic loss through the merger and the cuts to aid?
Dr Barton: On that point about expertise, there was a very clear picture emerging at the time we did our synthesis review. We made sure to update our figures right at the end because it is a constantly changing picture. You have a number of different professions, like health, education, engineering, whatever it may be, and there are inevitably fluctuations over time in the need for them and the vacancies and so on. However, we saw particular gaps emerging in crucial areas like governance, which came out in the democracy and human rights review, in agriculture and food, ironically at the time when that was becoming more of a priority in the wake of the invasion of Ukraine, but also in humanitarian, which has been consistently a high priority and in other areas.
What we were seeing particularly was often the most senior people leaving, and—perhaps even more importantly—country-based staff leaving. That is people from the countries bringing their expertise themselves into the Department’s work. All of that was related to the merger, in the sense that the Foreign and Commonwealth Office had a different set of priorities and a different set of rules for recruitment. In general, the assumption is that you can find the skills within for the most part, so there tends to be less competition and openness to external people coming in because of the focus on UK security, and so on, and because of this tradition of the diplomatic service being separate.
There is also more emphasis on generalist skills that are agile to cope with anything that might happen in foreign affairs. It has been quite difficult to meld that with having the focus on expertise over the long term and, in particular, this openness to expertise from the countries that we aim to provide official development assistance to. Without that understanding it is very difficult to be effective. Therefore, we had focus groups with quite a number of country-based staff and they were thoroughly demoralised and told us they felt disempowered in the new set-up. That was one of the more striking things about the expertise.
Has it improved now? Yes, in the sense that there have been some external recruitment rounds. For a long time, there was absolutely nothing and there has been much less during the period of this commission than in prior years, but there have been some. We saw very welcome words in the White Paper that suggest that the intention is to recruit more externally. That means bringing in a greater breadth of ideas, which was always a traditional strength of DFID, and from more countries, not only UK nationals. That would indeed be positive, and you can see the beginnings of it.
Q5 Chris Law: You said that the Foreign and Commonwealth Office was more generalist and from within and that contrasted with DFID. Who has the upper hand here? We think of the merger as being a shared relationship, but we are contrasting—depending on who you speak to—that there is still a difference between the two sides, so who is winning this argument? Is Andrew Mitchell winning the argument about getting more specialised and broader countries or are we still having this push back from the Foreign Office?
Dr Barton: What is happening now is necessarily a complex picture because you have had the merger for more than three years, although it is notable that people will often still identify themselves by what their original Department was, but you are getting new people coming in who do not have that history. What is clear is that the FCO had many more people. That inevitably meant that many of the cultural norms were going to persist in the new Department. Some of them were considered to be just too important not to have, so it was seen as very important to the new Department that developed vetting—which is the highest level of security vetting—should be applied to the entire new Department. That was clearly a norm from a culture in which the priority was security, quite understandably so, but we certainly questioned whether that highest level of clearance was really necessary for ICAI staff and many of the staff in the merged Department.
Q6 Chris Law: Are we recruiting really experienced, skilled personnel now or are people less skilled, less experienced to replace those we have lost previously?
Dr Barton: It is always a challenge to replace the most senior expertise that has had so many years of exposure of working in government. It is hard when you come in from the outside. Perhaps what you can say more clearly is that most of the recruitment that has come to fill those gaps has still been by accrediting internal people. There are some advantages to that, in that people are familiar with how government works, but there are some disadvantages because they will not have had the range of experience outside.
Q7 Chris Law: Your report states that since the merger there has been a decline in transparency and less focus on evidence and learning, and a reduced culture of internal challenges within the FCDO. How should the Department address this? Just an additional point: has the FCDO done enough to address fraud risks in UK aid?
Dr Barton: There is quite a lot there, but what the Department needs to do on those areas—we have seen the efforts to do something about expertise. I think I can say—and I think the Committee itself will have noted—that there have been very definite improvements in transparency.
We were waiting for the response to our recommendations on our transparency review at the time when Minister Mitchell arrived. We were worried about whether we would get the response we hoped for and a commitment to the highest level of transparency, which according to the IATI standards had been the original promise from the 2015 aid strategy, but we have had a strong response there.
There are very good commitments in the White Paper and there has been much more transparency about budget allocations. That used to be extremely difficult in the period following the merger when there was much less transparency. We would like to see that trajectory continue, but it needs to apply across all the Departments that spend aid. We note that the White Paper is obviously not just about the FCDO, and we would like to see those levels reached, not only by other Departments but also by other bodies that deliver aid, for example BII where we have heard again some good commitments. We noted in our transparency review and in our China review that there was insufficient transparency also from the British Council, so that is one area that we are keeping a close eye on.
Fraud is another area where we noted in our programme operating framework review that if you have a huge new Department with a lot of very urgent priorities, sometimes the day-to-day corporate grind might not reach the senior people so much because of the range of things that they have to deal with. When we reviewed the extent of compliance, for example, we saw that that was quite weak in a number of areas that were stronger in the days when you had a Department just focusing on aid delivery. That could be part of the background to why we have not seen a good response to our review on fraud in bilateral programmes, so the ones directly managed by the Government. When we last looked at it, we considered three out of four recommendations to be inadequate and that was concerning to us.
Ultimately, it seems it is primarily about resources and whether there are enough people. It is not that we did not see a response, especially from the counter-fraud people, but because we have concerns we are now doing a country-level fraud review. We are looking at what happens at the other end of the chain—because we were looking more at processes in headquarters up to now—to ensure that there is that level of awareness.
We have had better responses on that recently and also we saw that that was mentioned in the White Paper. Therefore, we are hoping that ends up in delivering better measures to ensure that aid gets to the people that it should get to and is not diverted.
Q8 Mr Ian Liddell-Grainger: I would like to explore a bit more, like what Chris was saying, what you said to start with about the merger, because in your documents you said that there have not been many examples of benefits from the merger. You said there were three: positive engagement in the global scheme, stronger focus on development, and improved collaboration with the Ministry of Defence. You then go on to say, which is interesting, that officials who are focused on global development challenges, rather than country-to-country aid delivery, have generally been more optimistic about the potential of the merger.
I have two questions. The first part, if that is all they have achieved, it is not great in three years. If your second bit is what you are saying, there is a serious structural problem where it takes new people to see the big picture. Is that a fair synopsis?
Dr Barton: What do you mean by the “second bit”?
Mr Ian Liddell-Grainger: Basically, where you say that people who concentrate on country-to-country aid delivery—have generally been more optimistic about the potential. There is a dichotomy here, and especially what you said to start with when you were doing your preamble. You brought up the merger and the issues here. This is part of your report. Are you under-egging the pudding?
Dr Barton: Under-egging in being not as critical as we might have been of the merger?
Mr Ian Liddell-Grainger: Yes.
Dr Barton: What we did want is—because ICAI obviously does not itself set policy on anything—to adjust to whatever the picture is in front of us for what the Government have decided to do and then try to have the fairest assessment possible. We put a lot of effort into trying to find where there were benefits from the merger. There were areas where we thought we would clearly see them: democracy and human rights is one where it definitely did miss opportunities. You had a Department that was just looking at inclusion and economic and social rights on the one hand and a Department that was just looking at civil and political rights over here.
We looked at it really hard and, on the whole, we could not find that it had fulfilled its potential—just really small achievements in those areas. However, there is still a chance for things to improve if there is the right trajectory in the wake of the White Paper or whatever future developments there might be.
There is this dichotomy between the global and the country level. I think we should give the Government credit—I think it is more than a small achievement—that there was such a big whole of Government push on climate, particularly in the run up to COP26. That is where you were able to mobilise all that diplomatic support, together with all the promises of assistance and actual assistance to countries in planning their own nationally determined contributions or whatever it might be, so I think that is a significant achievement. It is much harder for us to say how much better that was than it would have been if you had had separate Departments, but it is probably a bit better so we thought we should give credit for that.
On your point about global versus country, the great strength of the former DFID was that huge autonomy was given to those representatives and countries to make decisions based on the considerations that were most important there. Once you had the merger, obviously you had more focus on those global issues where it is easier to bring together the levers. As things stand, what we are seeing is you now have so many countries where aid should be delivered. Therefore, we count it as an improvement that you are now considering development in lots of other posts, as FCDO would call them, lots of other country offices as they would have been in the past. That is hugely widely spread and that is a really big challenge when you are not just focusing on 30 countries, which is for the most part what DFID was doing. Therefore, yes, it is much harder to deliver on both levels.
Q9 Mr Ian Liddell-Grainger: I will take an example: India. Your report—and I am going to have to read this—“raised concern that aid was being used to support the bilateral relationship and lacked a strong enough focus on development outcomes”. Now there is your problem between aid and FCDO. The point you are making is understood, but there is a complete breakdown there. Either it is bilateral, or it is aid—and that was from your March 2023 report—so surely there is a fundamental issue here.
Dr Barton: There are some fundamental issues about what the priorities are at the end of the day. This is much more acute in countries where there are enormous strategic priorities from a foreign policy and commercial and security point of view, such as India, than it will be in Malawi, for example, so you will see those trade-offs. We did observe occasions where the aid was being used transactionally. Therefore, if, like us, you are concerned more about value for money than results you are not going to see the best results of them.
Having said that, in India we saw some very good examples of work on climate, which was where—to our surprise, frankly—we found that civil servants were doing a better job on the investments at that time, and this is investments on lending and equity, and so on, rather than grants, than were BII. We are waiting to see in our follow-up whether that is still true. Not all the benefits of that development expertise were lost because of the focus on strategic priorities, because you had a joiner of priorities on climate change. Therefore, we encouraged them to build on those successes.
Q10 Mr Ian Liddell-Grainger: I come to my last point, which is they have appointed a second permanent secretary. I suspect that that was out of the necessity of what you have just been saying to an extent—there are obviously other things—but is that helping? Is it working? Do you feel that permanent secretary is getting the help they need to be able to do the second part of the bilateral to the development? Is that working?
Dr Barton: It is no accident that when previously you had one Department dealing with development and foreign policy you had a separate wing to deliver the aid side of things. That is just because of the way that any type of bureaucracy will work. It is more straightforward if you have straight lines of accountability going right up to the top, and this really matters when large amounts of money are at stake. I think, just in principle, it was really important to have a second permanent secretary with that level of accountability for the money and we are starting to see some of the benefits, at least that is how it appears from all the things that I see in the White Paper. The proof of the pudding is to come, I guess.
I don’t know whether that is already working at country level because it is going to be much more challenging for that second permanent secretary than a former permanent secretary of DFID, just given the whole breadth: so many more countries, so many other issues to deal with, and you still have a sort of partial matrix structure in large parts of the Department. It is not all separated out because they do not want to lose what they still hope for in the way of benefits from the merging of diplomatic and development capacity.
Q11 Mr Ian Liddell-Grainger: One final thing: if you were giving advice to that second permanent secretary, what would you say?
Dr Barton: Well, we do interact regularly.
Mr Ian Liddell-Grainger: You do, but obviously you have concerns about this. What advice would you be giving to allay the concerns that you have to that person?
Dr Barton: You mean specifically on the extent to which country-driven development is still a possibility?
Mr Ian Liddell-Grainger: Yes.
Dr Barton: We obviously encourage a return to focus on locally driven or country-driven priorities—that comes through most of our reports—and we make sure we do country portfolio reviews. There are signs of a returning focus. We did a review looking at Ghana at the beginning of our time. We chased for quite some time to find out whether they had done what we asked in having portfolio results, so basically bringing together what had been achieved in Ghana.
It took quite a long time but now we seem finally to be returning a bit more to looking at those results, whereas still in other countries, when we looked at India, you are not really seeing that focus on the results. You have a sort of road map with a whole range of goals, and so you cannot track things in the same way. I think there is some way to go but we would encourage them to return to focusing on the country results and engagements.
Q12 Dr Rosena Allin-Khan: Thanks very much for coming today. With a return to the UK spending 0.7% of GNI on ODA not expected for several years, how can the Government maximise the effectiveness and value for money of the reduced aid budget?
Dr Barton: We set out at the end of our report seven big points to consider and opportunities for how the Government could rebuild, given that we are overall seeing quite a grim picture. Number one on that list was about budget volatility and managing it. We have done a whole series of reviews that have looked at how the Government have managed that target for meeting 0.7%. We started off looking at, right from the beginning, whether there was any waste of money when you had an initial build and then a plateau from 2013 to 2019. Then we looked at what happened in 2020.
We said that in the first period it was well managed from a value for money point of view, but if there were shocks, the system might not work so well. The system by which they avoided those risks was always by using the fact that you can move your multilateral payments around to an extent. Therefore, on your directly managed programmes, you do not have to hit them with the worst of cuts or pile too much money into them. You can use these other ways of doing it, when there are other donors involved who can smooth out those fluctuations. That was pretty well managed until 2020.
In 2020, obviously that was the period of the pandemic, which did not help, but the merger happened in the middle, and we had the beginning of a series of reductions that were driven in a very top-down way, which did not manage volatility well. Instead of waiting, as in the past, to the end of the year, they took a very, very pessimistic forecast, and shot £3 billion out of the budget, meaning a huge cut in the bilateral side. Yet they discovered at the end of the year—which they should have known earlier on—that they still had quite a bit of money in hand, so it was then a matter of just dishing it out to the multilaterals at the end.
That meant more drastic cuts than were necessary. That was the beginning of this series of cuts ending up with this unprecedented situation, where you had the permanent secretary coming before you saying that he did not know what his budget was and he had to pause all the spending except on the most essential aid. You have seen the worst possible management of volatility. From what we have seen, I think we are now on a steadier path.
It was absolutely excellent to see that, in the face of these problems created by so much money going towards refugees in the UK, as a point of principle the Treasury allowed the Minister up to 0.55%, which is exactly the type of flexibility we want to see. If you manage a budget that tightly, so it is a floor and a ceiling, you are inevitably going to get waste of money. That would be our top line on the technocratic aspects of managing volatility.
Q13 Dr Rosena Allin-Khan: Your report says that the UK has dismantled many of the channels it relied on to deliver ODA spending at 0.7%, which is obviously a bit of a concern, and that the FCDO would need time to return to that figure, particularly for bilateral spending. Does this suggest that any return to 0.7% would need to be phased in over several years?
Dr Barton: I think in general it is better not to have things that are too extreme because it just makes it easier to manage a proper process to decide on the best way of spending money. There is a caveat to this, though, and we looked into this really thoroughly when we did our first review because we were looking into the NAO’s concerns about whether there was, in effect, any value for money risk in the amount of money being put into multilaterals.
My caveat is that you could rise relatively quickly if you put it through multilateral channels that you already had the confidence in, and it was the right time for them. The most obvious of these at the moment is humanitarian. You will be aware that the scale of humanitarian need has increased so much over this period, owing to some of the turbulence that I talked about, so that all the appeals are getting less and less funding. It would be possible to have an increase if you were using the sorts of channels that you have that faith in. That could happen relatively quickly.
You also have multilateral channels like the Green Climate Fund, which would be in line with Government priorities. You could move your spend up more quickly in some areas. Clearly, I have not done the detail, but that would be my broad picture. However, for the directly managed spend, I am afraid that it will take a long time to rebuild those partnerships and channels. Unfortunately, it is not just the direct impact on the ground—and that matters hugely to the people who talk to us about the harm to them—but it is the reputation more broadly with the whole range of partners, whether in-country or other donors or other multilateral organisations.
That will take a long time to rebuild and will have an impact on the impact of the spend, because partly what the UK is doing is not just its own direct action, but it is trying to galvanise action by others, particularly in the area of climate.
Q14 Nigel Mills: Is Andrew Mitchell’s commonly used view of, “We can leverage in extra money; it does not really matter how much we have cut our budget by,” realistic or is that just a phrase that gets him out of a hole?
Dr Barton: Well, I would not know whether he puts it quite as crudely as that. He clearly does often have to point to what he is able to do through financial instruments, given that his access to grant funding is much less. Unfortunately, there are so many needs, particularly of the poorest, that cannot be met just through leverage. If you take an instrument like BII—which the Minister has put a lot of emphasis on—it has a very important role and investment in the private sector is part of the engine of growth, but I think it is very challenging to achieve, within all the goals that are set, the benefits for poor people that the Government are expecting.
The ratios of leverage are not that great on the part of BII or indeed any of the other financial institutions, bilateral or multilateral, that are dealing with the private sector. They are rather overblown on the whole because it is tough to go against the markets as they are. It is a slow progress to enable people to see, for instance, that it is worth investing pension fund money or you can take that risk and not lose your money. The UK has made important steps in that, but the proof of it becoming much larger investments and all of us deciding those are safe investments has some way to go.
Q15 Nigel Mills: Okay, thank you. In your report, I think you use an interesting phrase that there has been a strategic drift in UK aid policy. Whether that means there just was not a strategy at all, but what do you think the consequence of that has been?
Dr Barton: “Drift” is the word we use, and sometimes that was also wording used by officials trying to explain to us how it felt to them. It is not that there were no strategies, but there was such a succession of strategies following each other at speed that it meant for people whose job it was to deliver them that they were not sure about what the priorities were and whether they could take the risk of doing the work to get ready to spend on one initiative or another.
I think what that led to was poor performance, because you need a sustained focus. If you look at the biggest success stories, at our deforestation review where there is a very well-known forest markets and governance programme—I think it has been 20 years—you need that long-term engagement on the whole to have more transformative impacts. If you are just veering in different directions all the time and not following one line you are not going to get good use of the money. To be fair, there was also the problem of yearly spending reviews most of the time, and that was another factor that made it very difficult.
Q16 Nigel Mills: Your review calls for a renewed focus on any extreme poverty and putting vulnerable people at the heart of development work. Are you suggesting that the drift meant we lost our focus on those things and the money was not being spent as we planned for it to be spent? Is that the consequence?
Dr Barton: Absolutely. One of the things that we said is that in the end in that environment you get more budgetary imperatives driving things, so not necessarily in line with what the priorities are. You will not see in any strategy that the Government decided they needed to spend nearly a third of their budget on refugees in the UK as the priority for development. That happened because it was how the Treasury decided to interpret that policy, that that was the way to fund it.
I think you would not have seen so much capital being invested in BII if that had not been money that was made more available by Treasury as opposed to resource. That was another budgetary driver. Another one was the legal obligations at the time of harsh budget reductions. What you saw was more drastic bilateral cuts through the first two years and then, to an extent, rebalancing in the third year but it was not related to a strategy. They would say, “We are going to do more bilateral,” but actually the reverse would happen.
Q17 Nigel Mills: Does the White Paper fix all this? Is this now a distant problem and everything is fine going forward?
Dr Barton: You will be aware that ICAI’s role is not really to review policy as such. As you know, we have not done think-tanks and others will have done a thorough review of the White Paper from that point of view. What we have done, of course, is to look at it to get indications as to where they are following up on our recommendations. It is very pleasing to see that this is happening in a range of areas, as far as policy goes and sometimes policy is enough, like on transparency.
I think where we will still have doubts is this was billed as an occasion to consider whether the Government were still a superpower. Superpower implies something in budgetary terms, and it is not clear that the UK has the budgetary resources to be able to respond as in the past, so even on top priorities, like humanitarian, you saw the budget halved. That has meant that it has not been able to do that in the context of rising humanitarian needs.
Therefore, while the White Paper does put the poorest at the heart of things, as we have advised, in policy terms, the question is whether it will arise in principle. It is back to the question that you put before: if there is much more money available for investment, it is a much longer-term enterprise for that to translate into poverty reduction benefits for poor people.
Q18 Nigel Mills: Thank you. Finally, the White Paper also focuses on localisation. Is that something you recommended or are there pitfalls we should be aware of in going down that route?
Dr Barton: Localisation is something that the Government have committed to in principle, and it is generally agreed to be best practice as an approach, even though best practice is still not often enough implemented. It is a struggle for the whole range of development partners to do this, so it is something that we have advocated. For example, when we looked at the humanitarian response to Covid as generally in the context of emergencies, it is absolutely vital to support local actors because they are the ones that bring the resources quickly to make the most difference.
What we found when we did our follow-up last year was that despite the commitment to this—and they told us they thought they had done really well in improving—there was no tracking mechanism for seeing what they were doing, because there is a percentage and in humanitarian it is more complicated for the overall development budget. But as they were not tracking it, clearly they were not really doing it, so we do not know because if you are doing something you are not going to know if you have achieved it. I think that is where we want to see the proof of the pudding. We do think it is a good thing.
Are there pitfalls? Yes, there are. I think the most complex are to do with another topic we have frequently touched on, which is anti-fraud measures. Those are the challenges. It is much easier to manage them if you are directly dealing with projects yourself rather than some sort of opaque chain where there is a local actor. The Government do not have the capacity to manage—with the small resources that they have—a very large number of local actors, and that has always been the challenge.
The humanitarian team has found some ways to do this through either the UN channels or coalitions of NGOs, like the Start Network. There are ways, but it is quite challenging. Of course, the US has been experimenting with this and has found it much harder to do in practice.
Q19 Mrs Pauline Latham: Can we turn to climate change and climate-related aid? The climate-related aid programming increased during the synthesis review period. How effective has UK aid been in that area?
Dr Barton: Climate has been at least one of the most consistent areas of focus throughout. Of course, we have had pledges that have been reiterated frequently on climate, so that helped protect climate investments to a degree during the process of budget reductions but within limits. I think there was a letter to the Public Accounts Committee that detailed some of the programmes that had to be paused during the pause because they were considered not lifesaving and essential, but many of them were climate projects. I guess the thinking was, “Well, that one can just wait a bit and then we will get back to it.” One of the reasons that we are doing our review is to check on how much impact the pause has had.
Where they have invested, and they have invested consistently and in relation to a strategy, we have seen some really good examples. I mentioned earlier in the area of deforestation, which is an area of long-standing expertise in the UK. We also saw some really good examples of climate resilience in our agriculture review. I think perhaps the most striking thing in the period has been how the UK, along with others, has successfully pressed for the multilaterals to increase their focus on climate. We looked at the African Development Bank early on and then the International Development Association or the bit of World Bank lending that is for the poorest countries.
To be honest, we found that the focus had not been very strong in either case. Our recommendation to the UK was to do more in this area with others to move the multilateral system to deliver on these global pledges, because in a way that could be more important than what can be done bilaterally. There we definitely have seen progress. Obviously, it is not just down to the UK. In the case of either, we found that it was linked to the previous Administration where Donald Trump was the President, and that had clearly had some impact on what the World Bank felt it was able to do.
Overall, there were some very impressive examples. There were huge diplomatic efforts over COP and the pledges, which so far have at least protected the climate programming to a degree. You will have to wait for our review next month to find out whether they have actually kept to those pledges.
Q20 Mrs Pauline Latham: We could talk about the international development White Paper and its commitment to spend £11.6 billion on international climate finance by 2026. Do you think that is on track to achieve that?
Dr Barton: We are still in the process of writing it, so we will have to tell you next month on that. You are absolutely right it was very important that the White Paper reiterated that pledge. I think you will all be aware that there was quite a lot of media coverage that suggested the Government could not keep to that pledge. Back in July, Andrew Mitchell published a written ministerial statement that set out some changes in the accounting. That is the background to what we are looking at, the extent to which that pledge was kept.
Mrs Pauline Latham: So wait to see next month?
Dr Barton: Yes, I am afraid I am going to keep my powder dry for next month, if that is all right with you.
Mrs Pauline Latham: Okay.
Q21 David Mundell: Thank you. There has not been a specific review of UK aid for economic growth and private sector development, but you have produced a number of reports that touched on the issues, and of course this Committee has also conducted our own BII report. On the economic development portfolio, in your report you have identified a risk of BII focusing on mature markets—which we also did—without sufficient priority for poverty reduction. Are you reassured by the White Paper’s commitment to ensuring more than half of BII’s investment goes into the lowest income countries by 2030?
Dr Barton: I am going to surprise you here, because you know that ICAI has been quite critical of BII originally in the last commission and its review of the then CDC and then more recently in our India review. In this case I want to say some words in its defence. It is obviously an instrument that needs to break even, and that imposes limits on what it can do, as we have touched on in earlier questions.
The Government are expecting a lot of it, so they have piled in all this extra capital, and they are asking for BII to go into new markets completely—and indeed more mature ones—like Indonesia, for example. They have asked BII to go into Ukraine, which may be a mature market but it is certainly not an unchallenging one. They are also asking for the focus on the hardest to reach and the most fragile areas—I think that was the terminology. In my past at EIB, I had to spend time investing in countries and it is always harder to find good quality projects where you can be sure of a return but ones that also deliver on the mandate of whatever you are trying to achieve, poverty reduction in this case. In those less mature markets there are often fewer investable opportunities. That is very challenging unless you have grant money coming alongside.
I would not want to criticise the ambition that has led the Government to ask BII to do this, but it is quite difficult to fit with all the other things that they are being asked to do and to ask them to break even. That is my word of caution on it, but the ambition that poverty reduction has to be the end of it is the important thing. We think that it will do useful things in India, but it has to be a clear chain of logic that leads to poverty reduction and ultimate benefits for poor people.
Q22 David Mundell: I think your caveat is very important for people to understand. That emerged in some of the evidence in our inquiry. You cannot invest if there are no investments, that is self-evident, and in some of the most fragile environments there aren’t. That is a fact.
The Government also aim to make BII one of the most transparent development finance institutions in the world. Do you share their confidence in being able to achieve that aspiration?
Dr Barton: I do. There I don’t think any defence is needed. All DFIs have some commercial sensitivities, but there is no reason why BII cannot rise to the top of the pack. This is something that they have all been working on improving over time and there is room for a lot more transparency and clear information. It is very much in line with what we have said in our transparency review. We are very hopeful that it will happen, because it can happen.
David Mundell: Good. Thank you.
Q23 Kate Osamor: I am now going to ask you some questions on women and girls. How effective do you think UK aid has been in supporting women and girls during the current ICAI commission? I know that you have done quite a few reports so that shows that you have a bit of intel that you can expand on.
Dr Barton: There is a lot that I could say on this. The first important thing to stress is that the picture is much better than it would have been, say, 10 years ago. It has been a consistent policy focus, and we have seen again recently a new strategy on women and girls, which is very welcome. In all this strategic drift, that was one thing that kept being reiterated. That has been helpful and one area where officials and others delivering knew that it was a UK priority that they had to do something about.
Clearly, we have had some good, positive reports on what was done for girls in education. Of course, we found points to improve—did they mainstream it everywhere—but on the whole there are some particularly good stories about inclusion where girls would have not had school if it were not for UK aid and its partners. Perhaps one of the most striking is Afghanistan, where we still do not know long term how much of that legacy will last. However, it was an important thing to do and something to set against the failures otherwise in that context. There are some strong records there.
On the leadership in the whole area of sexual violence, particularly in conflicts but also violence against women and girls generally, which was originally the ICAI’s most positive review of any area in the last commission, there have still been some very strong stories there about using evidence to make a positive difference. In the past, I think that the UK would not have taken such a challenging subject and tried to make an impact, so we have seen the benefits there. We saw improvements particularly on this. It was one area where maybe the merger helped to get DFID, FCO and the MOD all working together, one theory of change, one strategy, one delivery, and much more survivor focused than we saw at the beginning, actually listening to women and girls.
Of course, it could always do more, and we did find some areas of weakness. In our peacebuilding review we looked at the most positive case studies, but there were examples in Nigeria where women were at risk of harm because you are exposing women if they get involved and are very visible and then you pull out and leave them. That was a bad case. I know the Committee has worried a lot about the budget reductions, perhaps particularly in the area of sexual and reproductive health and rights, which we also have mentioned. There was the entire equalities assessment that showed the negative impacts of those reductions. They make a real difference to women’s lives.
We also found, just in the normal business, that sometimes there are blind spots. The Government were convinced that they were doing everything in a gender-sensitive way in their projects with forests and biodiversity, but we heard from women that that is not how they felt. We also heard in literature reviews that that is a common problem.
Overall, I would say a stronger performance than the past with still some areas to improve.
Q24 Kate Osamor: How do you think that cross-Department working together could be improved when it comes to mainstreaming gender equality?
Dr Barton: Thank you for mentioning that specifically because I should have mentioned that. I have focused most of my prior remarks on FCDO and, of course, all Departments spending official development assistance have a gender equality duty. However, that was not always so well known to them as it was to DFID and then FCDO.
I remember when I was involved in the last commission in a review with the then BEIS Department—I forget exactly what it stood for—that was responsible for the research programmes. It was not so aware of it, but once we gave it that recommendation it took a lot more action to make sure that all research integrated that perspective. We have found in general that is often the case. I cannot think of any other specific examples, but it is just not to the forefront in the policy statements of other Departments in the same way.
I think that it is important that it becomes cross-Government. This is one area where I remember being quite surprised to find that the MOD had taken this on board in its work on conflict-related sexual violence. We met a number of people who were gender experts who had been seconded in and were crucial to the programmes and they were changing things in that respect.
Q25 Kate Osamor: Would you say that the MOD is a Department that we should be looking at in the way that it possibly might need a bit of assistance to ensure that everything has the gender lens put on to the work that it is doing?
Dr Barton: It just needs continual pressure and scrutiny in general. I mention it because I guess I had expected from my prior experience of the Ministry of Defence that that was less of a focus, whereas at least in this area it was quite striking how the women, peace and security part of its work was seen as important and motivating for staff. We met a lot of highly motivated people, more expert people than we would have thought and a real commitment across the board. That is now several years ago, so it will be important for the Committee and for ICAI to keep a close eye on this.
Q26 Kate Osamor: Thank you for that. Lastly from me, how effective has UK aid been in supporting democracy and human rights during the current commission?
Dr Barton: Our review in this area was generally pretty positive because we saw some very impressive programmes although, as I mentioned earlier, there was a bit of a fall-off towards the end because of the budget reductions. Nevertheless, there were quite a number of impressive programmes, a real range, everything from the traditional FCO work on the death penalty, for example, to some impressive work I remember in Pakistan, which was ultimately about local priorities coming to the top as a way of working, and including some of the most marginalised people and including transgender people. That was extremely impressive.
There are some great examples from which to learn, but we did give an amber/red score for the coherence on democracy and human rights. There were a lot of missed opportunities. We started to see some improvements in areas, for example, like the way that Governments work with the Westminster Foundation for Democracy, which I am sure you are all familiar with. Yes, there has been some good performance.
There is one area where I am not confident yet as to whether we will see—and we are still doing our follow-up—a positive response from the Government. It is one of the most challenging areas, which is to do with supporting people who are at risk, human rights defenders or other people who are taking risks in standing up against their Governments. There we did find the UK performed less well than other donors in many cases. Sometimes this was to do with prioritising other important strategic goals for the Government. Sometimes it was just to do with the modalities of funding, avoiding potential fiduciary fraud risks, for example, and doing it only project by project rather than providing long-term support. That is an area where we would like to see a stronger response in line with others. That would be very good.
Kate Osamor: Yes, it is noted that for ICAI it feels sometimes the relationship with Government is a priority over the civic space, so that is something that we do need to keep an eye on because all those relationships are important. Thank you.
Q27 Chair: I will pick up on two things and then I will turn to another colleague. First, you mentioned girls’ education and that was obviously a very big priority for a previous Prime Minister and a different Government. I would like to know, within the women and girls strategy, how the change in political leadership has affected that being a high priority. Secondly, you mentioned budgets being on average a year-long contract. I am struck that from other evidence sessions we have heard that, for example, the Americans might do, say, a three-year programme. How has the very short-term nature of the contracts affected delivery on the ground?
Dr Barton: Girls’ education certainly appeared to remain a high priority as far as policy was concerned, even with changes in leadership. There was a sustained focus following the original Foreign Secretary focus by Boris Johnson and then when he became Prime Minister. What unfortunately set back the impact was that even in this area at the time of the budget reductions I think there was a 54% cut, something like cutting in half, all those centrally managed programmes, which are ones that you will probably be familiar with, like the girls’ education challenge fund. That was where the problem lay. I don’t get the impression that this is less of a focus in the White Paper. I think that is still a strong commitment. Can you remind me of your second question?
Chair: The point about the yearly funding.
Dr Barton: Yes, thank you for mentioning that because we have been critical in the past. It is still the case that in the former FCO—and it used to be the case for the cross-Government funds—budgeting was always done yearly, making it very difficult to deliver something in a narrower timeframe. Fortunately, that is done less, although it is still a problem in some instances. What I was referring to earlier, which has effectively created a similar situation, is if you have budget reductions very drastically happening each year and you have spending reviews only lasting a year. Effectively, they might have a three-year project or a five-year project, but they have to worry that maybe in year 2 they will be told that there is no more money. That has been more the situation that we have seen during this period.
Q28 Mr Virendra Sharma: Given the significant reductions to the ODA since 2020, how well has the UK been able to respond to international conflicts and crises during the review period?
Dr Barton: Crisis response has probably been one of the hardest things for the UK, and particularly humanitarian response. That is something where there is a huge amount of expectation from the public and from parliamentarians as to what they can do.
One of the things that we pointed to in this context in our synthesis review was when we had crises such as the floods in Pakistan or the famine in east Africa, where in the past we would have expected a significant amount to be mobilised—which would have got others on board and, therefore, led to a better response from the international community—there were very limited responses. I think that initially it was tiny and that eventually they came up with about £12 million at that time. There may have been more since. The initial response, which is when you need the most, was weak. That was a key issue as far as the budget reductions go.
Q29 Mr Virendra Sharma: How effective has UK aid been in improving global health and nutrition during the current commission?
Dr Barton: That is quite a big area to answer on, so I will have to be a little bit glib.
On health, where we carried out proper reviews as opposed to just information notes, such as where we looked at Gavi or the Global Fund, for the Covid responses—a lot of that at least has health at its heart—we did have a pretty positive assessment. We carried out a rapid review and then we did a full review focusing more on the humanitarian side, but the picture was the same. The initial response was very strong and effective. Again, budget cuts affected the later response. That is a strong point. There was this investment in the important area of research that ultimately led to the vaccine that saved many lives: the Oxford-AstraZeneca vaccine. There is a strong record of achievement for the pandemic. Ironically, because indirectly the pressures on the UK following the pandemic meant the reduction of the overall budget, that meant a weaker response in areas like sexual and reproductive health, as we have mentioned in passing.
On nutrition, that was a proper, thorough and rigorous results review. There, as with our other results review on education, we were impressed because the Government had surpassed their target. We really crunched the data because in the past we had found with maternal health, for example, that they were not necessarily doing as rigorous measurement and perhaps exaggerating their achievements. However, in this case they were probably underestimating their achievements in nutrition. The methodology was something that they had thought about and developed further in response to our review. It was very positive.
The challenge was that because of the budget reductions they initially delayed the pledge on nutrition for growth that had been expected. I think they ultimately did come up with a significant pledge. That puts in question the extent to which they are going to be able to follow through, even though they know what they need to do. However, the White Paper says they will, so let’s hope that that is the case. Generally, it is a positive picture other than reduction of budget.
Q30 Sarah Champion: First of all, thank you for all the work that you both and ICAI do. In previous appearances before this Committee, you talked about difficulties that ICAI had been having in scrutinising FCDO specifically, getting access to papers, getting approval to go to different countries to do your work. Has that changed at all?
Dr Barton: Many thanks to the Committee because without the Committee’s pressure we probably would not have overcome all the barriers that existed, particularly with the post-merger Department. We are encountering a lot fewer difficulties in accessing information. Of course, frequently in areas where the Committee would like us to focus, which are very topical, we will get teams saying to us, “We are so incredibly busy doing the response we do not have time to tell you what we are doing.” There are delays for those practical reasons—that inevitably happens. We have been doing evidence gathering for our climate finance review while everybody was frantically preparing for the COP. However, that is normal and understandable.
Even in parts of Government that were less used to us, overall we have had—it may not be quick. The Home Office was overwhelmed at the time that we were trying to get information from it, but it did, in fairness, give us the information. For example, it gave us all the papers on the contracts, which had not previously been given to other scrutiny bodies. That is all very positive.
The real challenges that we have had this year compared to past years have not been the ones where we have asked for your help, such as on budget or access to information. It has been the uncertainty about whether the commission would be extended or not in the context where we had no staff. It is not that we had no staff, that is the wrong way to put it, but we had only one very recent and relatively junior member of staff who knew about the content of our reviews at a time when we were suddenly going to have to add another nine months of scrutiny. That has been quite a challenge because I think we all agree that it is important that there should not be a gap.
Q31 Sarah Champion: Dr Barton, can you tell us how you are staffed?
Dr Barton: Now there is very good news, and I am sure that the fact that you continue to encourage this has been helpful. We have a fully staffed secretariat. Just to explain, it was at the time when—
Q32 Sarah Champion: Are these staff that you employ direct or who come from the civil service?
Dr Barton: Some of them will come initially from outside but they effectively join the civil service once they join the secretariat. Ekpe Attah is heading the secretariat of 10 civil servants and can give you the details on the ins and outs of our arrangement.
We are fully staffed. There are three legs to ICAI. There are the commissioners, there is the service provider—we have an outsourced arrangement—and there is the secretariat. Normally, it is not such a problem if you have a changeover of commissioner and service provider as you have the stable secretariat. Fortunately, I have been lucky enough to have Ekpe throughout my time, but in this case we had a turnover of all the people who knew the reviews at the same time, so there was a bit of a lack of institutional memory.
Q33 Sarah Champion: There were budget issues as well as staffing issues. Have those all been resolved now?
Dr Barton: We have had enough money to complete our programme as agreed with you, possibly even slightly more than we could use—that remains to be seen—because of the lack of capacity and the lateness of time to do it. We are basically squeezing a year into nine months. The only remaining issue where we would like things to be changed, but Ekpe tells me it is unlikely that we will succeed, would be going back to the system we had with DFID where you a had a four-year settlement, which enables you to plan and not have these stop/start problems that we have had that have reduced the amount of scrutiny we can do.
Q34 Sarah Champion: You might want to push back on this. It would seem that while there are usual problems of capacity and crises that would slow down the information that you are seeking and things like budgets and staffing, it could be seen that you were politically vulnerable for a while. Are there things that you would like to put ICAI on a stronger standing going forward that we could or should, as a Committee, be lobbying for?
Dr Barton: Yes. You will remember well the period in which it was considered that there might not be a need for a Committee or, indeed, for an independent commission. After that a review was carried out, which was not quite in line with previous reviews, but it appeared to be aiming to limit more the independence of the commissioner. Obviously, we think that would be a loss of its value because the value is to be an external and independent commentator and avoid those conflicts of interest or being vulnerable to pressure.
In an ideal world, we would be closer to the model of the NAO on a statutory footing. We co-ordinate a great deal with the NAO and we always have the joke that it has the superpowers that we do not have. Again, I find that Ekpe, who has seen all this over some time, is pessimistic that in our next review that will happen after my time we will get any statutory powers. It is possible to think about how ICAI could be given a sounder footing through the International Development Act, which already has a clause about the necessity of independent evaluation of official development assistance. ICAI has been performing that role since 2011 so, from our perspective, it would be a stronger position, albeit not all the way to the superpowers, if ICAI was integrated into a revised version of the Act.
Q35 Chair: How has the one-year extension of the current commission affected ICAI’s work?
Dr Barton: I hinted at this just now. In a way it was good that we had an extension—because initially we just got an additional three months—that because of the crunch on budgets and staff gave us enough time to do a proper job on the remaining reviews. The unfortunate thing was that it did not prove possible to find a replacement for me as planned. It took a long time from the point where it became evident, so from being phoned up by the Minister to ask if I would continue, which I think was in early July, to mid-September, which was when it was possible for us to have a green light. That has been the real challenge because normally we would have done at least eight themes during the year. We have crunched that down to six, and we are having to do them at great speed compared to normal. We had to narrow the scope a bit. All those things have made it a bit more difficult. We think that we have managed to rescue it and we can still do something useful that I hope you will also find helpful.
Q36 Chair: How great would you say the risk is that there will be a gap in scrutiny at the start of the next ICAI commission?
Dr Barton: I don’t feel completely complacent after what happened last time. The good news is that there has been progress and we hope soon to see results from the part-time recruitment that you have been involved in, Chair. My colleagues and I have been putting the word about to get as many good applicants as a replacement for me as possible and there has been a search company involved. They have in various ways made it a more attractive post, so we hope that this time we will see a replacement for me. That is probably the biggest worry that is evident at the moment, given that it went wrong previously. It takes a surprisingly long time because now there is a more centralised process than in the past for public appointments.
Q37 Chair: Ekpe, would you like to jump in on either of my questions or Sarah Champion’s?
Ekpe Attah: Yes, just quickly on staffing to say that we are at a full complement now. Part of that is the bedding down after the merger, so it took a while to come to fruition. Tamsyn has talked about security clearances. We got an exemption around security clearances so we do not have to wait the length of time that FCDO centrally does. In the other piece as well, we are also allowed to recruit externally. That comes back to the point you made around expertise. We can go out and get people in, which has helped. It just took a while to bed in.
Q38 Kate Osamor: The last question is from me. Tamsyn, we expect your successor to be appointed, I believe, in a few months. What would you say their priority should be, apart from the work plan and the existing work?
Dr Barton: What should their priority be? I am hoping that they arrive as planned at the beginning of July. Obviously, this is a year full of uncertainty, but it is anticipated that there will be an election at some point in it. One of the most challenging issues as chief commissioner with my colleagues has always been thinking around the corners. Frankly, it has not been a dull moment politically speaking. I think that it will be a priority for the new commissioner and their team to do that future-gazing exercise and think hard about how they imagine the possible scenarios over the four years as they start to think what key topics to pick. I know that it is frustrating for you sometimes that it will take maybe 18 months from an idea that we put to you before you get a published report, so you need always to be thinking ahead as to what is going to matter most at that stage.
We, of course, will give, useful as it may or may not be to them, our thoughts on the areas that we think still need looking at the most. A key part of it is finding the right areas and then it will be building the relationships, with this Committee most of all, of course—that is super important—but with all the Departments spending ODA. It certainly helped me that I was able to make those links early on.
Chair: Thank you to our witnesses for coming in today. I call this meeting to a close.