In November 2020, the Government announced a reduction of Official Development Assistance (ODA) from 0.7 per cent to 0.5 per cent of Gross National Income (GNI), a “temporary measure” until a set of certain fiscal rules were met. In the 2024 Autumn Budget, the Government confirmed that the FCDO would be held to the previous government’s fiscal rules, with the OBR confirming that these rules, and therefore a restoration of the aid budget, are not expected to be met during the life of this Parliament. With the UK’s aid budget being under further strain due to Home Office spend on in-donor refugee costs, it becomes increasingly important that the FCDO ensures Value for Money on its programme spending.
In 2011, the former Department for International Development (DFID) published its Value for Money framework, setting out how the Department defined Value for Money, and how this was integrated within its work. This framework set out that Value for Money in DFID’s programme meant “maximising the impact of each pound spent to improve poor people’s lives”, and outlined the intention of DFID to “improve the Value for Money of all aid”, not just DFID’s own. No similar framework has been published by the FCDO since DFID merged with the Foreign and Commonwealth Office (FCO) in 2020.
This inquiry will consider not just how the FCDO defines Value for Money and how this is implemented within its programming, but also its use of financing instruments to ensure that ODA achieves maximum impact.
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