International Development Committee Inquiry: The FCDO’s approach to displaced people

CAFOD Response – January 2025

About CAFOD

1. CAFOD is the official aid agency for the Catholic Church in England and Wales; part of the global Caritas confederation of national organisations, each governed by their national Bishops’ conference and linked to national Catholic commissions on health, education, and peace/justice issues. CAFOD partners with diverse local NGOs in its operations, including faith-based groups and others working on humanitarian, development, peace building, human rights, and other issues regardless of religion or culture. Local leadership of crisis response (referred to by some as ‘localisation’) and the strengthening of capacity of local and national civil society actors is at the heart of CAFOD’s mission and way of working.

Note: Throughout this submission, civil society actors are referred to as local and national non-governmental organisations (NGOs) and local actors interchangeably.

Introduction

2. Global displacement continued to rise in 2024, with contexts that CAFOD and our local actors are operating in greatly affected – not least Sudan and South Sudan, Ukraine, and Gaza. Conflict and the effects of climate change persist as key drivers of forced movement.
3. This submission seeks to make four key recommendations, based on programming experience from local agencies and CAFOD staff, to better support the effectiveness of UK ODA spending on supporting displaced people across the globe. These recommendations should be viewed through a lens of “genuine partnership”[1] that the new UK Government has proposed with the global South:
1. Deliver on targets for better quality financing and risk sharing for local and national actors, to better support those best placed to engage with displaced people
2. Analyse the local partner portfolio to assess whether ODA is reaching local actors best placed to engage with displaced people
3. Increase resilience and development programming in conflict affected states
4. Commit to a robust definition of climate finance

Deliver on targets for better quality financing and risk sharing for local and national actors, to better support those best placed to engage with displaced people

4. The UK Government has committed to a localisation agenda. However current funding approaches, both ODA and more broadly in the sector, are not maximising empowerment of local and national organisations in the global South – there is a gulf between rhetoric and practice in terms of engaging such actors. For example, the Grand Bargain, to which the UK is a signatory, has a global target of 25% of humanitarian funding reaching local actors as directly as possible, yet just 4.5% of all trackable humanitarian funding went directly to local and national actors in 2023.[2]
5. CAFOD’s experience in working with local partners to deliver programmes is that a lack of risk sharing, a heavy risk management approach to programming, and a lack of provision for core costs are all detrimental to delivery for local organisations. FCDO engagement and funding take a heavy risk approach to programme management, and lack substantial support in risk sharing. This puts funding out of reach for many local and national civil society organisations.
6. Similarly, a lack of funding for core costs can negatively impact local actors; anecdotal examples show local actors unable to meet core costs or provide basic facilities for staff such as functional latrines. Such funding is vital not only for operational needs, but for broader capacity development, which in itself is sometimes not allowed to be included in project-based funding proposals. Greater risk sharing needs to be put into practice to better empower local civil society actors. Processes such as due diligence passporting need to be better resourced, to reduce the duplicative burden on agencies.
7. Local actors are best placed to respond to those displaced and in need; take Sudan for example, and the successes of the Emergency Response Rooms in agile response over the course of the recent Sudan conflict. They have been pivotal in supporting affected communities, but there have been challenges in funding reaching such organisations.
8. Recommendations:
1. Investigate and propose improvements to ODA funding mechanisms and their lack of accountability to localisation targets. This includes funding to multinational organisations. Global and context specific targets for increasing direct and indirect funding to local actors would be a positive move, including for example, clarity on the passing on of overhead costs from prime signatories to local and national organisations.
2. Investigate the management of programming contracts, to ensure that risks are properly shared with downstream local and national actors, rather than a top-down, risk averse approach, which passes the buck to local organisations.

Analyse the local partner portfolio to assess whether ODA is reaching local actors best placed to engage with displaced people

9. CAFOD welcomes the focus of this inquiry in assessing the role of local and civil society organisations in supporting displaced people. Many local actors, including CAFOD partner organisations, are best placed to engage and support displaced communities:
1. Ovibashi Karmi Unnayan Program (OKUP), CAFOD’s partner, is a leading community-based migrant workers’ organisation in Bangladesh – they support migrant workers before, during and after they travel abroad for work, often driven to seek work in the Gulf states as climate change is making it harder to support their families through smallholder farming. OKUP supports migrants in rights education and training and with challenges abroad (including violence, sexual violence, passport confiscation, unacceptable workloads and conditions, even those who die as a result of their work), and migrant workers and their families on return to Bangladesh. They have indirectly received funding from ODA as part of a consortium, but never directly. Assessing opportunities for greater engagement with organisations like OKUP, as migrant work proliferates due to climate change, and with the announcement that Saudi Arabia will host the 2034 World Cup Finals, would be a positive way to ensure the expertise of local actors (who are best placed in supporting displaced people) is made full use of. For context, 6,500 migrant workers from Asian countries died in Qatar in the run-up to the 2022 World Cup[3], and in 2022, 1,502 Bangladeshis died in Saudi Arabia, a rate of more than four per day)[4]
2. CAFOD partners in Syria working on refugee protection are part of a global, multi-country refugee-led organisation (RLO) consortium called the Resourcing Refugee Leadership Initiative (RRLI), which is led by six RLOs and funded by philanthropic institutions, including the Open Society Foundation and the Hilton Foundation. This inquiry should investigate how FCDO could provide support to RLO-led funding mechanisms and consortia, such as RRLI, to promote a more agile, flexible and empowering approach than is possible when they remain the junior sub-grantee to UN agencies and other traditional channels. Over recent years, UNHCR has piloted initiatives to support RLOs, for example, but this remains a tiny fraction of their overall budget. The ways of working of UN agencies remain far from the solidarity, partnership and accompaniment model that partnership based INGOs adopt, or the approach of RLO-led platforms like RRLI.
3. The majority of international aid funding goes to the ‘usual suspects’ of international NGOs, international organisations and government bodies; and there is a lack of transparency on how intermediary organisations and funding mechanisms disperse funding to local actors, including migrant- and refugee-led organisations, and national and local NGOs of host communities in communities hosting forcibly displaced persons. For example, CAFOD research with Development Initiatives found across the Horn of Africa “humanitarian assistance within the food sector that is provided directly to LNAs [local and national agencies] has not accounted for more than 5% of total food sector funding in any year between 2017 and 2022.”[5] This inquiry should consider the role of intermediary organisations, such as commercial organisations, UN agencies and INGOs, in terms of the partnerships with local and national organisations, in areas such as risk sharing, commitment to capacity strengthening, and fair cost sharing, for better long term development strategies and ultimately better value for money.
4. FCDO has piloted and scaled up funding to regional, national and local women’s rights organisations through flexible funding to the Equality Fund, which then provides flexible core funding to women’s rights organisations. In addition, the FCDO department overseeing the funding to the Equality Fund has established an advisory group process that is comprised of representatives from local women’s rights organisations and networks to help steer its policy and practice in this area. This same model should be applied for increased and more effective engagement by FCDO on those forcibly displaced. An advisory group of representatives of migrants, refugees and representatives from refugee-led and migrant-led organisations and networks should be established, and regular meetings convened. In addition, FCDO should pilot and then scale up funding to refugee-led and migrant-led organisations through consortia and funding mechanisms that they manage, such as the above-mentioned RRLI platform.
10. Recommendations:
1. Analyse the portfolio of local actors that are engaged through ODA funding, specifically those best placed to engage with displaced populations. Better quality engagement can include:
1. Structured, regular policy dialogue with Migrant and Refugee-Led Organisations at global and country levels
2. Funding to national/local NGOs, including Migrant and Refugee-Led Organisations
3. Holding international agencies accountable for empowering equitable partnerships and meaningful capacity-strengthening of national/local NGOs, Migrant and Refugee-Led Organisations– improvements in portfolio of engagement, funding mechanisms and holding intermediaries to account for capacity strengthening, can significantly support in engagement of local actors who are best placed to support displaced communities.

Increase resilience and development programming in conflict affected states

11. CAFOD and partners recommend increased investment in agriculture and livelihoods work (including agroecology approaches) which can build resilience to conflict-affected and displaced communities rather than just humanitarian aid. Central to this is an ability for FCDO to understand and support the potential for community-led programming, as programmes to strengthen resilience (e.g. local food production by displaced farmers in areas of a country under the control of non-state parties to a conflict) often involve support to community assets and engagement with local decision-making structures which extend beyond the more narrow focus of humanitarian programmes or needs assessments on the individual and/or household levels.
12. There are strong examples in Myanmar, of community members trained in agroecological techniques, who are then able to support internally displaced persons (IDPs) who arrived in the location through training and help to produced food locally.
13. Similar examples are evident across other contexts including South Sudan, where joint host and displaced community members (due to conflict and climate change) groups are supported through agricultural and business training, and go on to improve resilience to shocks and strains – examples of success involved groups raising funds for further business and mathematics training and supporting children orphaned through conflict with school fees.
14. Recommendation:
1. Ensure ODA supports resilience and development programming for displaced and at-risk communities.

Committing to a robust definition of climate finance

15. CAFOD welcomes this inquiry’s recognition of climate change as a key driver of displacement. Strengthening the impact of climate-focused ODA is a key way to mitigate climate change impact, and in turn displacement.
16. There is no internationally adhered to definition of what does (and does not) count as climate finance. Recent accounting changes in the UK mean a significant amount of general aid spending in climate-vulnerable countries is counted as International Climate Finance (ICF), even if it is nothing to do with climate. Funding channelled through international financial institutions (even though much of their climate spending is given out as loans, which are worsening debt crises in many vulnerable countries) has attracted criticism from experts.[6]
17. Government policy in this area could be improved, in turn improving value for money, by committing to a robust definition of what does and does not count as climate finance (as well as clarity on their intended funding contribution to the New Collective Quantified Goal). The UK’s ICF spending would benefit from greater scrutiny to ensure public money labelled as finance for climate action is spent accordingly, leading to greater clarity, effectiveness and transparency of climate finance and climate action, and in turn ensuring better value for money.
18. Additionally, scrutinising ODA funding disbursed through channels such as the World Bank and British International Investment (BII), which may not be coherent broader FCDO approaches to climate change, is a further way to ensure better ODA effectiveness in supporting displaced people.
19. Recommendation:
1. Develop a rigorous definition of International Climate Finance (ICF), and scrutinise expenditure of ODA, both directly and through BII, World Bank and multinational development agencies, to assess alignment with broader climate goals.