International Development Committee
Oral evidence: ICAI's performance for 2020-21 and Follow-up Review of 2019-2020 reports, HC 687
Tuesday 14 September 2021
Ordered by the House of Commons to be published on 14 September 2021.
Members present: Sarah Champion (Chair); Mr Richard Bacon; Theo Clarke; Mrs Pauline Latham; Chris Law; Navendu Mishra; Mr Virendra Sharma.
Questions 1 - 51
I: Dr Tamsyn Barton, Chief Commissioner, Independent Commission for Aid Impact; Ekpe Attah, Head of Secretariat, Independent Commission for Aid Impact.
Dr Tamsyn Barton and Ekpe Attah.
Q1 Chair: I would like to start this one-off session of the International Development Committee’s inquiry looking at the report by ICAI. It is the performance report of 2020-21 and the follow-up review of 2019 and 2020. ICAI is an independent body that is there to scrutinise ODA spend at the FCDO and across other departments, and it reports directly to this Committee to maintain its independence. I will start by handing to the chair of the ICAI sub-committee, Theo Clarke, with the first questions.
Q2 Theo Clarke: Thank you, Chair. Dr Barton, what were the key findings outlined in this year’s annual report?
Dr Barton: As with all annual reports, ICAI sets out broadly its accountability in terms of what our products have been, what we have spent, what themes we have noted and what our performance has been, according to our key performance indicators.
In terms of products, we had fewer than usual. We published eight reviews: three scored ones; one rapid review; a companion report, which was the sexual exploitation and abuse report that went with the preventing sexual violence report; the annual follow-up report, and two information notes.
We did fewer than usual, and we spent a little less than usual, because of the turbulence in the year. There were delays. Officials were very pressed and were unable to respond to us in a timely way as a result of the pandemic. Of course, we delayed starting new reviews while we were waiting to see what was happening with the future of parliamentary scrutiny. For all those reasons, we did slightly less than we normally would.
However, if you look at our performance, you can see a generally good performance against our key performance indicators. Perhaps the most important one is the number of our recommendations that were adequately implemented. If you look at last year’s follow-up, we saw just under 80%. One should not be too precise, because it is a matter of judgment, but it is very encouraging for our work to see that much of an improvement over the previous year’s follow-up.
We also noted important themes—perennial themes, if you like, except that the changing UK aid landscape picture was a bit more dramatic than in previous years. At that time, we saw some progress on issues like leaving no one behind and gender, and some good work to address fragility. Those, broadly, were the themes in our annual report.
Q3 Theo Clarke: Thank you very much. You were appointed Chief Commissioner in January 2019, so I am interested to know, looking ahead, what you see as your key priorities over the remainder of your four-year term as Chief Commissioner.
Dr Barton: I would say that my first priority is to maintain and safeguard ICAI’s operational independence as an independent commission. Without that, you will not get the scrutiny that is required. What you do is enormously important, but you do not have the resources that we are able to have to do that in-depth work looking at a lot of material that is not publicly available. That is the No. 1.
The second really key issue is to make sure that, if we think ahead to the end of the Commission, we have selected the right reviews and stuck to our criteria to ensure that we are looking at the most material, the highest risk, the most strategically important, and the areas that resonate with the public, covering as much of the range of the Sustainable Development Goals as we can. That is going to be really important for us. Those reviews are carried out with appropriate attention to how the multilateral channels have been used, because that has been a bit neglected in the past, and ensuring that we integrate the voices of people who are on the ground and affected by UK aid. That is something that remains a priority.
The final and third priority—and it seems a bit early for this but I want to draw your attention to it—is thinking already about transition to the next, fourth commission. Although we are only just over the halfway mark, in practice, based on experience, it has to be started way ahead to look at establishing the next Commission. Ekpe might be able to complement on this based on past experience, because we saw a gap at the beginning of the prior commission for something like 10 months. That is why I am mentioning it already. Ekpe, perhaps you can explain why it takes so long to set up a new commission.
Ekpe Attah: There are two key pieces to the transition, and both take longer than you might expect. The first is the public appointments piece. It is about getting a replacement for Tamsyn and the other two part-time commissioners. The second is the procurement piece. On the assumption that ICAI phase four will have a contracted service provider, as we have worked with in the past, that procurement process takes a long time. One of the things that we want to engage with FCDO on is getting it engaged on both those pieces this autumn—around now—if we are going to be in the right position for the transition to phase four.
Q4 Chair: Thank you. Could I ask a couple of follow-ups on that? You said that one of your main tasks for the future was maintaining ICAI’s independence. Does that mean that you feel it is under threat? Could I also ask where we are at with the framework agreement in terms of refreshing it? Does that happen each new commission or does that happen on an ongoing basis?
Dr Barton: Independence always takes constant vigilance. During the period when there was a review undertaken of the ICAI by the FCDO, that was something of a theme, which was very important to us. We were very pleased that at the end of it there was a very clear and transparent commitment to keeping that independence in particular in the reviews that we select and carry out.
However, we are experiencing more challenges than in the past. A great deal of this is probably to do with a lack of familiarity of many of the people we deal with in the new, enlarged department. ICAI was very well-known in DfID, but less so in FCO, which had many other responsibilities apart from aid management.
It is something that has come up before. We have had a major issue with our budget. You were kind enough to write on this topic, because it was a concern to us. It was a matter of principle that we should follow the practice of the past, which has always been that we will forecast as accurately as possible, so as not to waste any taxpayers’ money, and allow the department to recoup what it needs, but that we would not be told at the beginning of the year, “You can only have this much”. In this case, we were told, already a couple of months into the financial year, which is very late for planning, when all of the review topics had already been agreed with you. That was a concern to us.
Q5 Mr Sharma: When will the contract with your external supplier, Agulhas, come up for renewal?
Dr Barton: This is a question that I should probably pass to Ekpe, because the contractual arrangements and procurement were done before I arrived, even though I was six months earlier than my fellow commissioners. I would expect that it runs to the end of this commission, which would be July 2023. On the arrangements for replacement, I will pass, if I may, to Ekpe, who led at the time.
Ekpe Attah: Just to confirm, Tamsyn is right. The contract with Agulhas runs until the end of June 2023. As I mentioned in the previous question, our assumption is very much that there will need to be a retendering process for phase four. We have had some initial discussions with the sponsor team about that, but we just want to engage with them a bit more closely than we have done over the last couple of months, simply because of, frankly, a lack of capacity and vacancies at their end, and to kick off the tendering process as soon as possible.
Q6 Mr Sharma: Should I take it that you have already started the retendering of the contract, or not yet?
Ekpe Attah: We have not, no. We have a plan but we are looking to engage with FCDO on implementing that plan with their procurement specialists and our sponsorship team.
Q7 Mr Sharma: How will you go about ensuring that there is sufficient competition in the next procurement?
Dr Barton: I will kick off by saying that this is so important to us that we engaged the procurement department in the former DfID some while ago, because we realised that it takes time to ensure that there is a good market. More specifically, for more recent discussions, I am going to hand over to Ekpe.
Ekpe Attah: That is the key reason why we are pressing to start the process early. June or July 2023 seems like a long time away, but the key to stimulating the market is early market engagement. That is drawing on the procurement expertise that sits in the new FCDO, particularly on the legacy DfID side, because this will be the fourth time that they have been involved in this process. The key is early engagement with them, so that we can engage the market as early as possible.
Q8 Chair: Your external supplier takes the vast majority of your budget—just over £2 million in the last year. How do you maintain control over the budget as well as the work and the output that they are getting, so that they are working for you rather than the other way round?
Dr Barton: A small amendment to that point is that we have experimented with some work that is not done by our main supplier in this main contract. For example, when we undertook our reviews on fraud—we have one under way and one done—we procured it separately and ran it in-house. I introduced an impact report to make sure that we are achieving the biggest impact that we can by making sure that we are able to carry out a lot of in-depth research and interviews. For that, we also go outside the main contractor, because there would be conflicts of interest in what they would say about the impact. We have gone a bit beyond the use of our main supplier.
Having said that, they are our main focus. We are very fortunate that we have a supplier with a long history and institutional memory, and that is something that we very much appreciate. Having said that, I make sure that I know as much as possible about the work of the previous commission, so that we are not reliant only on the institutional memory of the supplier.
We have introduced, in addition to our regular monthly meetings that exist with the secretariat, much greater involvement of the commissioners in holding the supplier to account. We introduced quarterly meetings to discuss that. As a result, we have seen probably smoother implementation than we would have done otherwise. I cannot comment directly on how it was in the previous commission, but if you look at the reports that were done in the tailored review, for example, there seem to have been more challenges in the past. The key to success is more dialogue. Ekpe, do you have anything to complement that?
Ekpe Attah: I would say that the secretariat is largely structured to performance-manage or at least keep a grip on the service provider in terms of a review of production, which the review team largely does as account managers, and the delivery team looking at the finances. As Tamsyn said, there is a monthly contract meeting, where we go through the performance of the service provider in quite a lot of detail. We performance-manage them quite tightly, and that is one of the reasons why, over the lifetime of ICAI—in past reviews, you have had a tailored review and the previous triennial review—the size of the secretariat has grown, largely to performance-manage or to keep a grip on the performance of the supplier.
Q9 Mr Bacon: I would just like to ask about this contractor/supplier arrangement that has an enormous added faffage, because of the procurement that you have both mentioned. I have just been looking at Agulhas’s website, and the first three things I see are the UK aid for halting deforestation report, Assessing DFID’s results in nutrition, and The UK’s support to the African Development Bank Group. The obvious question is: why do you not hire these people, or people like them, on your books? Why do you not have in-house as a standard default position for most of your work? After all, that is what the National Audit Office does. It buys in consultancy from time to time, but the balance is very much on in-house, skilled people, with a range of skills. Why can you not do that?
Dr Barton: There are some attractions to doing things in-house from our perspective, and that is one of the reasons we experimented, which we were able to do, as I mentioned, in the case of a couple of reviews. There is an attraction in principle from the point of view of nimbleness. If you have people in house, you can set them to work straight away. As we collaborate closely with the NAO, we can see that that can be helpful.
Having said that, one of the big advantages for us in the arrangement we have, which has a consortium, with a lead supplier, is that, for each review, we can get the top specialists or really good specialists for each area, so we build a team specifically for that review. That may take a bit longer, but given the length of time of our reviews, it means that we can produce something of a different kind of value to a relatively more straightforward and simple audit done by a generalist, which is what the NAO can do.
Q10 Mr Bacon: The NAO does not only have generalists. It has value-for-money specialists in each area, from transport to health, to the environment and international aid. You can hire a series of specialists.
Dr Barton: I am comparing it to NAO when it comes to ODA, so do not take my remarks as being relevant to the whole of the NAO. Inevitably, it does not have a range of people who are specialists in humanitarian, education and health. That is all I mean. We are able to recruit that.
I should recognise the reality of the fiscal situation at the moment being that it is unlikely that Government would wish, given its very tight position on staff, to give some of those staff to ICAI. That is probably what lay behind earlier decisions that you would have fewer in house and more contracted. As I said, there are pros and cons to each model. What we would like is for the next commission to have as free a hand as possible. If the only options are outsourcing, we would like the commissioners to be involved in that process.
Q11 Mr Sharma: Dr Barton, what were the key challenges that ICAI faced over the past 12 months in holding the Government to account for their aid spending?
Dr Barton: Many of the challenges were shared with Government and, indeed, many people working around the country, because, inevitably, the pandemic dramatically shaped what we could do. We could no longer travel. The officials in-country that we are dealing with were, in many cases, no longer in-country; they had been drawn down. There were great pressures on people’s time because of the number of responsibilities that they had to juggle. That was a context for everybody.
Additionally, I would say that a merger such as the one that took place between DfID and FCO is always going to create some challenges. Initially, there was a lot of continuity as people carried on working in their old lines, but over time there has been more change. During the year, there has been quite a lot of uncertainty, which, for our work, has tended, added to all the other things, to lead to more delay.
Within the last 12 months, of course, we had the review that was done by FCDO, following a certain amount of uncertainty about whether ICAI would continue and about what the Parliamentary arrangements would be, which, as I perhaps mentioned earlier, delayed us agreeing a work plan. We have had the experience before of agreeing the work plan with a committee, and then a new committee having different priorities.
Overall, there were quite a lot of impacts from the turbulence of the last year. Nevertheless, we have proved relatively resilient. As you see, we have continued to deliver. We have continued to hold the Government to account. I suppose the only area that we are uncertain of in terms of how it is going to work for the future and which has become more of a problem over the year is access to information. That is really the most vital commodity for us to work effectively. We need access to the information, which is held internally. We need to be trusted to look at it and base our judgments on it, even when we are not necessarily publishing it all. That is the biggest remaining challenge for us.
Q12 Mr Sharma: You touched on the pandemic. Covid-19 has affected everybody and work has been disrupted in all areas. Can you elaborate on that and on what measures you put in place to mitigate this?
Dr Barton: The key thing is that, if we want to be really effective in scrutinising aid, we do need some way of getting a line of sight to what is happening on the ground. During this period, as commissioners, secretariat or service provider, we have not been able to travel, but what we have done is organise remote visits. In particular, there is one area that we are quite pleased with in terms of how we have built it up. I mentioned the importance of hearing directly from people affected by UK aid, so we have got a lot better at organising remote field research, so that we can integrate that. If you look at our deforestation review, for example, you will see some really impressive results, which even changed the recommendations we made as a result of that. That was the chief mitigation measure: working out how we could do as much as possible remotely. We are keen to get back on the ground as soon as possible.
Chair: I think we all share that keenness.
Q13 Mrs Latham: It is a year since DfID and FCO merged to become FCDO. How do you feel the merger, and the accompanying reorganisation and review of objectives, has impacted on UK aid?
Dr Barton: That is a very big question that we have not devoted a rigorous review to, so I cannot give you information in the usual style of ICAI, based on lots of thoroughly collected evidence. This is more anecdotal, I would say, which are the only reflections that I can provide.
As I mentioned earlier, there was, initially, a lot of continuity. We could see that quite clearly. It is partly because, if you look at the bilateral programmes, there had been a long period in which there had been a real effort to align objectives across high commissions and embassies. For most, I do not think there was a huge change there. Perhaps the implication of the head of mission being accountable for the spend was just that bit clearer. As yet, I would not say that there appear to be major shifts there, although what you can see in some areas are the beginnings of some of the benefits that we have heard that may happen by combining diplomatic heft with UK aid.
The area where this is most evident is in climate change, with the COP 26 coming up at the end of the year. We can see strong engagement of heads of mission, which can be combined with the programmes in country. If you have ambassadorial help in relation to countries’ plans and their nationally determined contributions, you can see that that is going to increase the impact of UK aid. The real test will be whether, after COP26, that continued engagement will happen or whether it will be a shorter term issue.
In relation to the merger and the reprioritisation, the initial agreement of priorities has been carrying through really only through the specific programme reprioritisation that has happened. ICAI has reviewed what happened in 2020. We have not yet reviewed what happened in 2021, so we are not really in a position to tell you about that side of things. In relation to 2020, we had a lot of concerns in the report that we did on the management of the spending target. I can explain more about that, if you would like.
Chair: Not at this point, thank you.
Mrs Latham: It may come up in further questions.
Q14 Chris Law: Ideological cuts were pushed forward by most Conservatives just before the summer recess. It might be a bit early to find out if your reviews have shown what has happened on the ground. Speaking personally to the chief executive of an NGO in Afghanistan, they described the cuts as abhorrent, and were told by FCDO that they did not care where the cuts lay. Have your reviews picked up any real-world consequences of cuts and reallocations in the UK aid budget on the delivery of aid?
Dr Barton: As I mentioned, I cannot give you a comprehensive overview. I can talk a bit about what we discuss in the follow-up report, which we are hearing about today. One of the immediate concerns for ICAI is whether our recommendations are implemented. That is absolutely key to our mission of improving aid. When we were following up outstanding issues on reviews, for example, of maternal health, we had seen initial good progress in relation to respectful care for new mothers, which is an area that had been a bit neglected previously, and there were other areas in which maternal health was expected to be improved. What became a concern was we were hearing at the same time that the very flagship programmes that were going to be carried out in this area were no longer going to happen. To that extent, how could ICAI’s recommendations be implemented? That was the concern for us. It does mean that we have a rather limited view of what is happening on the ground.
In our climate change reviews, even when it was clearly still the top priority, there were cuts taking place in the bilateral programmes. Even though there is a commitment—and this is the area most protected because of the pledged £11.6 billion—we could see that some of the programmes that we were looking at were likely not to continue. We cannot look at that in a comprehensive way, but it does raise concerns for us.
Another area that we touched on in our follow-up review is the area of research. Research has seen a huge expansion of use of official development assistance over the last years. ICAI produced some pretty critical reviews of the Global Challenges Research Fund and the Newton Fund, managed by BEIS. At this follow-up, which is our third in a row, we saw real progress and improvements, but the irony was that we were seeing such heavy cuts to the programme that it was not clear whether they could use these implementations. They have sorted out the governance and have much clearer ODA compliance; they have also sorted out how they are going to measure value for money; they have a strategic approach; they have hubs that ensure, at country and regional level, more prioritisation; and yet there is much less resource flowing through. It is to that extent that we could pick things up.
As to your remark that you had heard from an NGO that officials were not caring what they did, one thing that I would say is that all of the officials we interviewed in relation to the management of the spending target were extremely committed to making sure, as best they could, that any reductions in expenditure had the least real-world impact, although it was not necessarily in their individual hands to do that. That does not resonate with me.
Q15 Chris Law: Thank you. That is helpful and leads me on to my next question. It looks like these cuts could be indefinite, given the parameters by which it needs to rise in terms of our overall GDP. The decision to reduce the UK ODA spending to 0.5% is going to lead to further, large cuts in UK aid. Is it possible that the FCDO can manage the budget-reduction process while, at the same time, minimising impacts on aid on the ground and what is being carried out for the beneficiaries?
Dr Barton: It is a very difficult task. We were looking at the year 2020, when we were just looking at the GNI reductions, but you had a prequel of the challenge because, in the spring, no one knew how huge the impact of GNI might be. At that stage, the Government were looking at a £2.9 billion cut. It is a bit difficult to say what the base line was, but we would estimate that it would have been something like £15.8 billion initially, so that is a pretty substantial cut.
In our Covid procurement review, we saw that, by autumn, they were trying to protect the bilateral programme. However, they were not able to do so because they waited so long and did not leave enough pathways open. When it became apparent that GNI was not going to reduce as much as they had initially thought, it was only possible at that stage to return money to the multilateral programmes. Our initial evaluation, when we looked at Covid procurement, in our information note was not correct.
The reason for this seems to be linked to the way in which the predictions of GNI were made. When we looked at those, it seemed that the most pessimistic ones were being used and were being retained, even when the data was going in a different direction. We looked at this from 2013 to 2019, and they were not following the way in which DfID had traditionally always used the multilaterals more as an option at the end of the year, rather than in the middle of the year. I hope that that is not too complicated an explanation.
Chris Law: No, that is helpful, thank you.
Q16 Chair: Could I ask how ICAI has responded to the conclusions and recommendations of the FCDO’s review into ICAI?
Dr Barton: We have responded as positively as we can to those recommendations, but the majority of them are not really in our hands. One of the recommendations that was in our hands was to ensure that, in all of our reviews, we add value to what is happening elsewhere and do not duplicate. That is something that we tried before but we redoubled our efforts. It runs through all of our terms of reference and we are very conscious when we are burdening officials at the same time others are. It is something that we discuss with you to have a productive combination.
Otherwise, I would say that the main area where we have responded is that we have sought more and more engagement with the department, and particularly with ministers. In the past, that was not open to us, and the review has opened up to us more regular dialogue with Lord Ahmad, for example, which has been helpful, as well as with the Foreign Secretary’s adviser on development issues, Stefan Dercon. That has been extremely helpful and productive. We can see that that feeds into people contacting us for advice, so that we can fulfil the part of our mandate which is to help learning in the department. The other part, of course, is accountability, and we think that they are equally important.
Q17 Chair: You mentioned that part of your remit is to help Government learning. I wonder if that presents a conflict when you are scrutinising what has already happened to advising on what ought to happen in the future.
Dr Barton: I do not think that it should present a conflict. One of the themes that we emphasise in the follow-up review is that transparency is what gives rise to learning, so we want openness about what has and has not gone well, if there is going to be better performance in the future. Even on the back of good performance, we want to improve all aid. I do not think that there is a conflict at all.
A lot of the strength of what we say is very thoroughly looking back at what has happened. Ministers in this Committee have remarked that they would like us just to be forward-looking, and we sometimes think that that means that perhaps they just want us to listen to what they say will do. We do listen to that and it is very important for us to understand that in order to know what recommendations we should make, but we need the proof of the pudding as to what is done.
Q18 Navendu Mishra: It is good to see you, Dr Barton. Unfortunately, the aid budget has been reduced for the UK, but this Committee has a role to scrutinise that budget and how it is spent. Could you tell us how ICAI will seek to carry out the scrutiny and how you will safeguard that role going forward, especially in light of the merger between DfID and FCO?
Dr Barton: One of the ways in which we can continue to safeguard our role in independent scrutiny, apart from this senior-level engagement that I talked about, which really does help, is in an important, legal way. We have something called the framework agreement, which is the nearest we have to a legal basis. It is only really based on informal co-operation, but it does set out the expectations that we can have of each other.
At the moment, we are still operating on the framework agreement, which was signed by Alok Sharma, so it is quite old. We were expecting to have a new one by June at the latest, and we had thought it was going to be earlier than that, but we have not got there yet. In the process of contributing our thoughts to how it might work, what we have done is to set out clearly what we would like to see, particularly in respect of access to information. The current agreement is really quite clear that we should have full and unfettered access to relevant information up to official level, including official-sensitive information.
Things have changed slightly with the merger, in that the Foreign Office traditionally required everybody to be vetted, which is the higher level of security clearance, and there is a much stronger culture around information security. We feel the need to get additional support to ensure that we can get access to information. It is a bit of a worry to us, because we have been asking if we can have this higher level of vetting, so that we can be trusted with the information. We were not granted that when we asked over a year ago, and yet now the entire department is going to receive this higher level of security clearance. These are the sorts of details that help us in relation to the framework agreement.
It also gives some sort of guide to the services we can expect to the department. You will realise that ICAI is a pretty tiny set-up. There are only 10 civil servants. We cannot have our own HR or IT department. We do depend on what the department gives us. That is something where we want to have clear expectations of each other. At the moment, not all those things are working. For example, we have been struggling to recruit since May for one of our three senior posts. I should pass to Ekpe as to why it is that we have, through a series of efforts, been unable to get our advertisement out until a few days ago. Ekpe, perhaps you can explain that.
Ekpe Attah: As Tamsyn said, we rely on it for corporate services, given our size, and we have been caught up in the teething problems that have emerged across the corporate-services piece through the merger. Without going into a huge amount of detail, there have been delays on recruitment and filling posts within FCDO post the merger and as a result of the merger. We have been caught up in that because we use their HR systems.
What I would add to that is there were probably hundreds of roles across the department that have been caught up in this, but there are only 10 of us. If we are 10% down—one of our senior posts is 10% down—since May as a result of the HR issues that the department is going through, they probably impact disproportionately on such a small organisation as ICAI.
Navendu Mishra: I must say that the signs are not good in terms of problems with recruitment and infrastructure issues. ICAI is facing a budget cut of 15% going forward. Independent scrutiny is very important. I know that the budget is smaller, but it is still a sizable amount, so the signs are not good. Thank you for that.
Chair: This Committee is also a vital part of maintaining your independence and is a role that we take very seriously, so please do keep us informed if there is more that this Committee can do, particularly around the practical, logistical issues that you seem to be facing. Could I pass over to Richard Bacon, please?
Q19 Mr Bacon: You have already referred to some of the changes in your relationship with the department. Did I understand you to say that access to Ministers was becoming easier because of the merger, in effect?
Dr Barton: That is what has happened. I do not know whether it is because of the merger or because of the renewed engagement that happened as a result of the review of ICAI carried out by FCDO. The review did not explicitly say that ICAI should have greater engagement with Ministers. Nevertheless, we started the process with Baroness Sugg having regular updates with us, and then she passed the baton to Lord Ahmad.
The framework agreement has said up to now that we just have an annual meeting, which was formerly with the Secretary of State for International Development. It would now be with the Foreign Secretary. We have not met the Foreign Secretary yet.
Q20 Mr Bacon: How many times have you met Lord Ahmad?
Dr Barton: I might have to look at Ekpe there. Four?
Mr Bacon: Several.
Dr Barton: Yes, several times—at least four, do you think, Ekpe?
Ekpe Attah: It is several, yes. We would have to check. We can come back with the detail, but certainly more than under the DFID regime.
Q21 Chair: Is it Lord Ahmad who will be leading on the framework agreement? Do you have a designated Minister?
Dr Barton: As we understand it, Lord Ahmad has willingly taken on the role of interlocutor. It is not clear that he is himself responsible. That is definitely with the Foreign Secretary.
Q22 Mr Bacon: Do you mean that it is effectively delegated to Lord Ahmad?
Dr Barton: I am not sure that that is the case. For the framework agreement, as I mentioned, we have now had two quarterly meetings with the Foreign Secretary’s adviser on development. In the review, it stated clearly that he is the senior interlocutor who we work with most closely.
Mr Bacon: The adviser is.
Dr Barton: Yes.
Mr Bacon: What is his name again?
Dr Barton: Stefan Dercon. He was formerly DfID chief economist. We have met him slightly less often than Lord Ahmad, but that is just to do with timings. It is a quarterly process.
Q23 Chair: I find it slightly concerning that for such a key document, which has been outstanding since June, you have not been formally told who is responsible for delivering it. Am I understanding that correctly?
Dr Barton: We understand that it is the Foreign Secretary, because we know that his adviser is dealing with it. Ekpe, I am going to revert to you, because I know you have discussed directly with officials. We understand that he and his team will need to sign off the framework agreement. Is that correct, Ekpe?
Ekpe Attah: Yes, that is absolutely right.
Q24 Navendu Mishra: The merger took place over a year ago. I believe you mentioned June as ICAI’s expectation regarding the framework agreement. Do you have a rough timescale or has that gone under the water again?
Dr Barton: We had the impression during the review that the framework agreement would include some of the recommendation areas that were due to be completed by the end of March. The department subsequently clarified that it had not seen the timetable as being that tight. It then thought it would be May. Lord Ahmad explained to us that it would be June. Since then, we have had some delays. I am going to pass to Ekpe again, who can set out what the delays were and whether we have any sense of the current timescale.
Ekpe Attah: The first thing to say is that we are not fully sighted on what has been happening within the department. My understanding, based on the conversations I have had with officials there over the last several months, is that there has been a combination of issues at their end. Some are around capacity in terms of staffing, some are around the Treasury’s formatting requirements for agreements with arm’s-length bodies that it is imposing on the department, and some are around the internal clearance-process system that the draft is going through. The Foreign Secretary still seems to be the competent Minister for that. I suppose that all of those things, from our perspective, seem to have been adding to the delay. There has been a delay, as Tamsyn said. We were expecting this to have been signed off by the end of June at the very latest.
Q25 Chair: Do you have a letter or communication confirming that you are operating on an extension on the existing format?
Dr Barton: We do not have a letter, but we have been assured by DG Delivery that that is the basis on which we are operating. Going back to the original question, having the new agreement would make our basis a lot clearer when it comes to issues like access to information.
Q26 Navendu Mishra: Going back to Sarah’s question, you technically do not have, at the moment, a formal arrangement.
Dr Barton: The old one is considered to be still in force. We did have a period of two or three months when we were not completely clear that that was the case, but we have been assured by DG Delivery that we are operating under the old framework agreement.
Navendu Mishra: It is an extraordinary situation.
Chair: It is.
Q27 Mr Bacon: How are the monies that have been spent in the current commission authorised?
Dr Barton: That was covered in the earlier phase, because the ICAI commission is for four years. That was signed off by Alok Sharma before the end of the first year. The essential idea is that there is a settlement for four years.
Q28 Mr Bacon: And we are still within that four-year period.
Dr Barton: We are, and we have also been assured that we still have that settlement. The third commission will still have that amount in order to complete our scrutiny. The problem for us is that we already had all this delay last year owing to what I have explained, so we were well under our spend. This was the year when we forecast and asked for the biggest amount, which is £3.3 million as compared with £2.8 million. To be fair to the department, they have clearly made efforts, given that there have been terrible cuts everywhere. They do not want to cut us too much, but we do not like the principle that it should apply the cut to us, rather than us, as before, just explaining what we would spend.
Q29 Mr Bacon: There is an obvious answer to that, and I am just wondering if you have ever thought about it. You have discussed the extent to which you are worried about your independence. You have discussed the extent to which you are beholden to the department for money. You have expressed concerns about access.
The National Audit Office is completely independent. It has no concern about that. It is statutorily independent. It has no problem with money. It does not get it from Government, but from a statutory commission, the Public Accounts Commission. It has no problems about access. It has statutory access. It can write a letter to a department under Section 2 of the National Audit Act 1983 and say, “We are coming. Open your doors”. It even audits the security and intelligence services, although, unsurprisingly, it does not publish reports on it. Have you ever thought of rolling ICAI into a division of the National Audit Office? You would solve all these problems, would you not?
Dr Barton: I do not think you would solve all of the problems.
Q30 Mr Bacon: You would solve the three problems of independence, access and money.
Dr Barton: But you would not get the same product. Andrew Mitchell’s vision for ICAI was to do more than the National Audit Office could do. The first thing that I should say is that, during my time, we have had a closer collaboration with the NAO than even under previous commissions, which is very productive. We are very pleased to see them. We took help from it when it came to our reviews of the spending-target management, because it had done reviews before. It has now taken up the baton and is looking at 2021.
You said that it has no problems with money because it can be allocated sufficient by the statutory commission, but since ICAI was founded, it has certainly had much less. It has been able to do only one and a half reviews a year in the area of ODA.
Q31 Mr Bacon: One of the reasons why it has spent less—and I know this because I happen to chair the commission—on studies on value for money in international development is because of the existence of ICAI. I have discussed with the Comptroller and Auditor General. It has dialled back, knowing that you exist with your X million pounds a year. If you did not exist, or if you rolled into it, doubtless it would come back to the commission and say, “We are doing this differently now. We need to expand our activity”. There is nothing difficult about any of that architecturally, is there?
Dr Barton: Not necessarily architecturally, but you would not get the same value, for the reasons I explained earlier. You would not have the range of expertise in relation to the reviews, which really delve into the development impact rather than a more process-based approach.
Q32 Mr Bacon: Why not? You could buy that in. Since it is a bigger buyer of consultancy, you might get more bang for your buck.
Dr Barton: We cannot say what would happen in a fiscally constrained world, but the availability of resources is generally more constrained. We can look back at what happened in the past. If you look at when the NAO was solely responsible, in addition to this Committee, there were fewer reviews done, and they were much less in-depth.
Q33 Mr Bacon: How many reviews did you do last year and the year before?
Dr Barton: It depends on what you count as reviews, but we did eight products. This was a particularly lean year, where we had to do two information notes, one rapid review and three scored reviews. That was because of all of the things we could not do as a result of the problems we are having.
Mr Bacon: In a typical year.
Dr Barton: Eight is a reasonable amount. That is what we hope to achieve this year.
Q34 Mr Bacon: I sat on the Public Accounts Committee for 16 years, and we have typically had six to eight reports. I got to know Suma Chakrabarti and Mark Lowcock, because they came so regularly. In fact, I just bumped into Mark Lowcock outside an hour ago. The level of activity was quite high. It is probably lower now, because of the existence of ICAI. I am not completely persuaded that what I have just suggested could not work and still deliver a value-for-money product.
Dr Barton: I do think that there could be value for money from NAO doing more work, but you would not get the same product. Long ago, I worked for the Government when NAO was solely responsible. Although it might be true that there would have been eight products, products that are more financial audit are far more limited in what they can look at compared to a review.
If you look at a recent case of the work that it has done on Afghanistan, for example, compared to the review that we are undertaking, it is at a completely different level of thoroughness. There is a real risk of a reduction in scrutiny, if it is left entirely to the NAO. That is not in any way to suggest that it does not do an amazing job, based on the resources it has. I too met the Comptroller and Auditor General, and that has helped our having a sensible collaboration and division of labour.
Q35 Mr Bacon: I have one more question, which is about the exchange of correspondence between yourselves and the Foreign Secretary when your China information note was published. The Foreign Secretary stated that the note was inaccurate and misleading. What was your reaction to that letter?
Dr Barton: We sent back a reply explaining that he was not aware that his own officials had fact-checked the box that we had added to our review. The difficulty with it was that it was a very rushed process. It happened that our note was just at the point of being published or possibly two days beforehand. Suddenly, there was this Written Ministerial Statement, which we had no prior warning about. We very quickly added a box. We went to officials and they signed it off as accurate, but somehow the information did not fully flow. We did not have an answer to our response, so we imagine that we fully reassured the Foreign Secretary that it was completely accurate.
Q36 Theo Clarke: I just wanted to pick up on Navendu’s points about your budget cuts. As the sub-committee, we signed off the forward programme with you for what your reviews would be going forward. I would just like to ask how specifically that budget cut will impact on the forward programme that we, as a committee, agreed with you. Secondly, will there be a risk of any redundancies in your team as a result of that budget reduction?
Dr Barton: Perhaps I will take the second part first, because that is relatively straightforward. Subject to any correction by Ekpe, I do not think we have seen any reduction in our headcount. What you might call the admin budget, for shorthand, is fine. The cuts have been in our programme budget, which is the funds that we have to carry out our reviews. Having said that, as you heard, we have in effect lost one member of the team, but we hope that that is temporary. For the programme budget, it is about 15% cut.
The difficulty in my answering you directly saying that, for definite, this review is not going to happen at the time said is that things are moving around. Inevitably, with events in Afghanistan, for example, we have not been able to get all of the information that we needed or to have the time of officials, which is understandable. That may have a knock-on impact in terms of delay. The way that our budget works is that we pay large amounts at certain periods in each review. If something falls one side or the other of a line, it makes a big difference. At this point, we have to watch it and think, “Where is that going to fall?” and then adjust.
One of the biggest challenges for us is that we do want, this year, at least to start the reviews that you agreed with us on democracy and human rights and on peacebuilding. That is something that I am determined as I can be to do, but I cannot, with full assurance, go ahead and say that, for certain, we will have no problems in delivering those programmes. In the end, we draw our funds directly from the department, and the tap can be turned off. At the moment, we prefer to go ahead as best we can and to keep telling the department, “This is what we are forecasting”, but we do see that getting riskier as time goes on.
Q37 Theo Clarke: To confirm, you cannot commit to delivering the programme as a result of the FCDO’s cuts to ICAI’s programming.
Dr Barton: I certainly cannot commit to starting it within this year. Given that you all agreed it in January and we have seen delays, that would be a frustration, but I guess the bigger issue is that it has this knock-on impact on next year. By then we are, in effect, in the last year of the commission. Scrutiny delayed is effectively scrutiny denied. That is the risk.
Q38 Chris Law: I just want to ask a little bit about the reports on 2019-20 and what the key findings were that were set out in the follow-up review.
Dr Barton: The follow-up review was an interesting, mixed picture, I would say. I will start with the good news. We were really impressed with the response that we got in our following up of outstanding issues with the CDC and BEIS. Frankly, our initial reviews were extremely critical. We scored them amber/red. We outlined some considerable problems that they had to address.
In the case of CDC, we looked at every single one of those recommendations, we carried out a very thorough review and I have to say the co-operation with them was excellent in doing that. It was like a mini-review, where we looked at the investments to see what difference it has made that they considered development impact, and we saw genuine improvement, which was very reassuring. I mentioned some of the improvements on the research side earlier. That tells a good story to us: openness, transparency, learning and improvement. That is the ideal ICAI virtuous circle.
The less encouraging part of the story was that, for all the three reviews that we were looking at from those years, we saw an inadequate response. I cannot think of any year that was like that. We only introduced the scoring of adequate versus inadequate in the previous year. That was something that came out of the consultation when we started the third commission. People find our scoring as an assessment of performance very transparent. You can get a feel for how UK aid is doing through the scores of our main reviews, so the suggestion was to extend that to the follow-up, because that is often where the rubber really hits the road.
We only had one precedent of scoring adequate versus inadequate, but, as I mentioned, we saw that almost 80% of our recommendations were implemented. I am afraid that we are not seeing anything like that picture. I would say it is more like 50% of them being implemented, based on our recent assessment. For each one, we did not get the documents to verify. For example, let me take the prevention of sexual violence initiative, which is something that I know all of you have taken a lot of interest in. That was something where we were hearing, particularly from Lord Ahmad, very encouraging things about their response. You have heard from him directly that they are working on a strategy that would solve a lot of the problems that we encountered in our review. Unfortunately, however, we could not get any documents which would show that this was happening.
In the past, we have been able to review draft strategies, and that sometimes still happens, but it did not happen in this case. That is not because it does not exist—I am sure that it definitely does—but rather that there is just a feeling that we should not see something, even in draft, and that that is not appropriate for ICAI. It just makes it very difficult for us to carry out our work properly. That is why we had, in the end, to decide that each one of them was inadequate.
Q39 Chris Law: Just to follow up on that, that is really disappointing to hear. A drop down to 50% is really poor performance. I wanted to know what your thoughts are on the reasons for the department failing to engage. Has there been a cultural change from the head downwards? Is it to do with the merger? What are your thoughts on this? How do we encourage them to be more open in the future?
Dr Barton: We can certainly see that a good amount of it relates to the turbulence of the year. We understand how difficult it has been for people. We have experienced that directly. That definitely is key to the explanation. Even senior officials have acknowledged that the merger has created additional challenges to them doing what they would like to do. Even though they kept a lot of continuity going, it is inevitably more complicated for decision-making and sign-off to happen in relation to things like providing information or any kind of action. There are all sorts of practical things that we mentioned in relation to ICAI itself—for example, how recruitment is done, or IT systems—which, inevitably, have a drag on productivity in any merger. I am sure that the merger is also part of it.
Q40 Chris Law: How long is it predicted that it is likely to continue? In terms of sign-offs, do we have sufficient people at the helm now that we have a merger, because they have lost a Secretary of State and other ministers we had when there was a separate department?
Dr Barton: I am not sure not that I can really pronounce on whether there are sufficient people at the helm. That sounds more like Committee business than ICAI business. Remind me what the other part of your question was.
Q41 Chris Law: How long do you think this difficulty is likely to continue?
Dr Barton: There is probably a lot of interesting evidence on how long mergers in general take, and how long they take in Government. A final endpoint is always a complicated thing to judge. I know that the department has worked very hard on transformation as the merger is known, and that progress is being made, for example, in beginning the changes on IT. Unfortunately, we are in that bumpy process and one never knows, with IT projects, whether you can really rely on the deadlines. The deadlines have moved in relation to that IT combination, but I would have to check with Ekpe. The figure I had in my mind was something like 2023. Does that sound like what you remember with some of these new systems that are replacing the old ones, so that there will be full merger?
Ekpe Attah: I must admit I cannot recall accurately. They seem to have moved slightly, so I cannot gainsay you, Tamsyn.
Dr Barton: That is what they were more recently saying would be an endpoint for that, which is something you can measure. I was told by the DG Finance & Corporate that they feel that you can really see the lines of the new department taking shape, so there is a bit of stabilisation there. Certainly, for our interlocutors, we now have a director we can speak to, as well as the DG. To that extent, we can see it is bedding down.
Q42 Chair: If replies or information are slow or do not come to you, do you have any sanctions that you can impose, or is it literally just telling this Committee and we can write to a Minister?
Dr Barton: We hope that it is not going to come to sanctions. One of the things we would never do is change our judgements in relation to any of the issues that we encounter. We want to be as fair as possible in judging the aid programme. We can only resort to dialogue as a way of trying to resolve issues, and to listen to the department when it has good reasons for asking us. We have been very patient when it comes to Covid delays, or delays on Afghanistan, and have tried to find ways of reducing the burden, making sure that we carry over all of our documents from other reviews into this review and so on.
We do not have sanctions. We do very much appreciate the role of this Committee in keeping an eye on this and helping us continue to get access to what we need.
Q43 Chair: We fully accept that there have been unprecedented pressures on the department, both internationally and of its own making, because of the process of the merger, but there comes a point when you start to think that things are being deliberately withheld, which means that your ability and ours to effectively scrutinise becomes very challenging. It sounds as though, at the moment, you are giving the benefit of the doubt that this is a process that will work through, but I wonder, with your future inquiries, when we will start to see you researching these last 18 months to see where those blockages are and if they could have been avoided.
Dr Barton: The picture is going to become clear over time. I am not sure that we are giving full benefit of the doubt, because that would be too complacent. Officials would probably say that I am rather vigilant and that I complain whenever there is a slight delay.
Q44 Chair: That is your job and that is what you are funded by taxpayers to do.
Dr Barton: Indeed. We do give them the benefit of, I suppose, an understanding of particular circumstances. We are not happy when we see, for example, once we have negotiated that there will be an increased period for a Government response to a review, that agreed period is exceeded because of predictable things like a summer holiday. Those things are a bit of a problem for working with you, because you need the response before you can scrutinise.
Our biggest problems are access to information. It has been explained to us, as I mentioned earlier, that the Foreign Office has a culture of information security being primary, which is very important. The merged department is raising the standards of information security. It explained to us that, because of the merger, there are more documents in a context where security issues are more prominent in some areas. If it were only in those areas where we had problems we would understand it, but it is not clear that it is only those areas.
I would say that it is probably understandable that there are more sensitivities about information on China than Ghana. That is understandable, even though we still think, as far as aid spending goes, it should be completely clear and transparent what money is being spent for what purposes, if it is official development assistance. We try to calibrate our expectations, based on what we think is reasonable.
Q45 Chair: Thank you very much. It is something that this Committee will continue to keep a close eye on, because when the budget is smaller, our scrutiny needs to be even more focused, to make sure that we are still getting that value for money or, if we are not, make the case for why there ought to be more investment into it.
Q46 Mrs Latham: As you mentioned, ICAI has been going for about 10 years now. It was set up by Andrew Mitchell, quite controversially at the time. Over that time, you have been scrutinising aid spending. You have not been there for the 10 years, but what evidence can you point to that the aid spend is delivering better value for money now than it was 10 years ago, because of ICAI’s existence?
Dr Barton: Realistically, we would have to look at specific reviews and improvements resulting from specific reviews to answer that question. I am probably best placed to mention those reviews where I have had some direct involvement, although I know that, in ICAI’s first phase, there was the case where an entire programme had to be shut down that was wasting taxpayers’ money.
I am happy to say that we have not had anything similar to that recently, but you could see real improvements in value for money. As I mentioned earlier, in our follow-up report, we looked at the base management of the research programmes, which was billions of taxpayers’ money. When we initially looked at it—and it was my predecessor who started looking at the Global Challenges Research Fund—there was really no strategy and very limited checks on compliance.
Although we know that that ODA-funded research has often been of enormous value—you can see individual examples that are terrific, and the Covid vaccine is a result of that research—we also brought out instances that were not. It was absolutely clear to us that the department had really taken action. In fact, we specifically asked it in one of our recommendations to do work on value for money, and you can see the ways in which that has improved. That is the kind of answer that I would give.
It is also one of the reasons why we undertook our reviews focusing on fraud—initially bilateral, which you have already heard about, but we are now working on multilateral fraud, which is a bit more of a complex story. In many ways, there was a lot of reassurance about how fraud is managed and controlled in the current environment across most departments, although there are improvements due in some, where you need a better culture of openness and so on.
The work of my fellow commissioner, Tarek Rouchdy, in focusing attention on the procurement environment and ensuring that counter-fraud specialists have a role to play there, is something that offers significant value for money, because his point is that that is where the larger amounts of money can be lost if there is any element of collusion or lack of open competition. Those are areas where ICAI shines a spotlight.
In the end, of course, we cannot be certain that the department will heed our recommendations, but, at least historically, it has a good record in heeding them.
Q47 Mrs Latham: Have you seen any evidence that it has learned from your reviews? Can you point to anything specific other than the fraud investigations? How do you think the UK aid-spending departments—because it is not just FCDO that spends it—can be improved?
Dr Barton: In this particular report, BEIS was a shining example of taking on board our recommendations. We saw improvements in almost all of the areas. We would still differ with it over whether what it is doing constitutes tied aid or not—let me be clear about that. We still see that, most of the time, the research is going to UK institutions, and that is something that we see as tied, at least in spirit.
Having said that, in all the other areas, whether it be value for money, gender or governance, there has been a credible response. The challenge now is whether it still has the resources to use that. It is by no means just FCDO where we look for take-up. We see that throughout. I have spared you the detail, but we look at each recommendation and judge whether it falls on the adequate or inadequate side of the line. It is still the case that a lot of it is taken very seriously. The reason that we scored the follow-up inadequate in all cases this time is because we are not seeing the documentary evidence to prove it. They tell us they are moving in the right direction, but we are waiting for the proof.
Mrs Latham: It tells you want you want to or would like to hear.
Q48 Chair: You mentioned that you work with other departments to follow the ODA spend. In talking to us today, you have just been talking about the relationship with the FCDO. Are you directly engaging or have you engaged over the last 18 months with any other departments? Has there been a similar lack of timeliness about evidence and access to it from other departments?
Dr Barton: In this particular follow-up review, as I mentioned, there is a real contrast in the engagement with BEIS, which is a department I have seen a lot of over the last couple of years, while I have been commissioner. When I started, I made a huge effort to get out and meet everybody across Whitehall because, at that time, about 25% of the expenditure was in other government departments apart from DfID. Just concentrating on DfID, as you have found in your own scrutiny, is simply not going to be enough. It is one of the reasons that it was chosen that there should be a full-time commissioner, to have time to make all those links.
What has happened which has slightly changed our approach is that, at the end of last year, the Foreign Secretary announced that he had taken oversight of a much larger proportion of aid. A figure of 93% was mentioned. However, it has proved quite complicated in practice to know the extent to which you can count it as oversight. Without getting too technical, you have accounting officers for each department who are accountable to Parliament. They have to retain that. It cannot be superseded by the responsibilities of the Foreign Secretary.
Just to give you an instance of that, we have been looking at the deforestation and biodiversity work, which is across three departments, so we have seen quite a lot of Defra and BEIS, as well as FCDO. It is clear that that is a work-in-progress and a new division of labour. It was still handled by one department—I think it was BEIS. It was not FCDO that was handling it as the main interlocutor, but we dealt with all three. That is bedding down as to how it is going to work. We still think it will be important to see other departments. In fact, in our suggested areas of importance for the framework agreement, we have asked that, when there is the annual session with the executive part of the Board of the FCDO, other departments be represented, so that we do not miss out on the key ones. We think that they are still accountable for quite a lot of ODA spend.
Q49 Chair: It is a lot of money. Can you pull you back in your relations with BEIS? Have you found the replies to your questions and the access to information easier to get than with FCDO, or on a par?
Dr Barton: It certainly was much easier to get the information from BEIS. It was very open, co-operative and transparent. There was a slightly different issue that came up in relation to the reprioritisations, where it felt it had not received the transparency that it needed when it was implementing the cuts, because the prioritisation was being led by FCDO. That is behind the curtain and we cannot verify that, but in relation to what it was doing for us, we found it extremely co-operative and open.
Chair: Thank you. We have a session coming up with the Foreign Secretary, so this is something that we might want to raise.
Q50 Theo Clarke: Just to pick up on Sarah’s question, what would be the reverse? You said that BEIS was very co-operative and excellent to work with. Which department was least helpful and least co-operative with ICAI when reviewing ODA spend?
Dr Barton: I am really referring to the follow-up process. In this particular year, we only had FCDO and CDC. CDC was super co-operative. As I mentioned, we did a whole mini review, which took quite a lot of its time. It was very worthwhile from our point of view, because only that way could we really look in depth at what had happened, but it is not quite comparable to a department.
Q51 Theo Clarke: DfID was traditionally very good at scrutinising where aid was spent. I do not think that the same could be said of other departments across Government, so it would be useful to know where this Committee should be focusing its attention and where the money is not being spent as well when it is ODA.
Dr Barton: I do not think I can give you an answer in relation to the current situation. You can get a picture of the way that ICAI generally works via our scoring mechanism. You need to have a longer-term tracker to see how performance is working. In any particular year, it can be a little bit arbitrary. If you look at this year, in our annual report you will find that, out of three scored reviews, two were amber/green and one was amber/red. The red was more on the Home Office side. It was modern slavery. It was not the only department. It would not be fair to say that, in every case, that clearly shows that it is much worse.
That pattern, where you have roughly two thirds of what you could call satisfactory is something that is established for quite a while. I am not sure that we are going to see exactly the same pattern in the coming year, but because there is not a big sample, it would not be fair to say that the quality has definitely gone down. You need to track it over several years.
Chair: Can I just say to both you thank you for the work that you and the team do? I know that it has been a challenging 18 months for you and your organisation as well, but it is so important that we do scrutinise exactly where the money is going and make sure that we are getting that value for money, because there are so many people around the world who are utterly dependent on our contribution, and so many people in the UK who really care about where their money is going.
You have helped this Committee enormously because of the depth of investigation that you can do, and I really value the relationship that we have. We are here to fight for your independence going forward, and we look forward to that relationship long into the future. This session is now closed. Thank you very much.