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Jeanne Delebarre

International Development Committee

House of Commons

 

 

 

 

 

(by email)

 

April 16th 2020

 

 

 

Dear Ms Delebarre,

 

 

Thank you for your letter of March 27th providing BEIS with the questions from the Members of the International Development Committee’s Subcommittee on the work of the Independent Commission for Aid Impact.

 

BEIS is grateful to the Members for showing flexibility in enabling us to proceed with this important scrutiny while physical gatherings are discouraged in order to limit the spread of Covid-19.

 

In the Annex that accompanies this letter I have set out the BEIS responses to the Members’ questions following up on ICAI’s June 2019 review of the Newton Fund.

 

 

Yours sincerely,

 

Tom Child

Deputy Director – Global Research and Innovation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annex: BEIS responses to the Subcommittee on the Work of the Independent Commission for Aid Impact member questions

 

Q1 The Government response to ICAI’s review accepted all of ICAI’s recommendations and stated it was already implementing all of them. Please provide us with an update on progress made with completing each of the five ‘actions ongoing’ outlined in the Department’s response since July 2019?

 

Action 1 (Recommendation 1) - ‘new guidance on ODA compliance to ensure best practice across delivery partners in the Autumn, and require these partners to report on their processes for adhering to this guidance.’

 

BEIS has revised our ODA grant conditions for 2020/21 to reflect both Cabinet Office best practice guidance and to set out clearer roles and responsibilities for a number of issues, including ODA compliance for which we now require quarterly reporting, programme completion reports and risk registers.

 

These new requirements will be replicated in a standalone ODA compliance guidance document that will support implementation. This guidance will be published in June after a final consultation with the Delivery and Learning Group made up of delivery partner representatives.

 

Following the ICAI review, BEIS asked delivery partners to provide additional details of their ODA compliance processes and will be presenting feedback on the review of these processes to the Delivery and Learning Group alongside the new guidance document.

 

An ODA Eligibility working group established under the Delivery and Learning Group will follow and help to foster continuous improvement.

 

Action 2 (Recommendation 2) - ‘review [of] DfID best practice and guidance and develop an ambitious plan to maximise the positive impact on gender equality.’

 

BEIS is developing an ambitious cross-fund (Global Challenges Research Fund (GCRF) and Newton Fund) approach to gender equality.

 

Since 2019, independent consultants Tetra Tech (formerly Coffey) have been working on our behalf to capture best practice across DfID, other ODA and non-ODA funds, as well as from Newton Fund and GCRF delivery partners. Tetra Tech is on track to submit its findings along with recommendations to BEIS in late April. BEIS will use the final report to help develop a cross-fund strategy on gender, diversity and inclusion which will inform future Newton Fund allocations and activity.

 

An overarching policy statement on gender, diversity and inclusion for the Newton Fund is included in the new Newton Fund Operational Framework which has been developed in response to ICAI recommendation 4 and is expected to be published after the current Covid-19 restrictions have eased. This will require delivery partners to submit a statement on gender considerations for all new research calls, which BEIS will assess in advance of confirming allocation of funds.  

 

Action 3 (Recommendation 4) - ‘review [of] Newton Fund governance and the mechanisms which underpin accountability to ensure they remain fit for purpose.’

 

BEIS has undertaken a systematic review of Newton Fund (and GCRF) governance.  This has confirmed the governance hierarchy and clarified roles and responsibilities. An updated ODA Governance Map will be published after approval at the next ODA Ministerial Board meeting. Going forward, reviews of governance structures, roles and responsibilities will be included in the annual Assurance Plan, to ensure governance structures remain fit for purpose.  

 

Vital to effective governance is the provision of accurate and timely management information. Related work to enhance monitoring and reporting, e.g. quarterly reports, programme completion reports and ODA specific risk registers, will also support greater accountability. 

 

Action 4 (Recommendation 5): revised evaluation strategy that includes a coherent Value-for-Money framework and data collection options […] led by external independent contractors.

 

BEIS has developed a new value for money peer review methodology in consultation with other HMG departments and academic/sector experts. This methodology has been recognised as valuable by other sector actors, e.g. DfID plans to use it for a final programme evaluation with the Economic and Social Research Council (ESRC). BEIS is now working with Tetra Tech to pilot this methodology on Newton Fund projects as part of the mainstage evaluation of the Fund.

 

Action 5 (Recommendation 6): the final stage of the ‘Monitoring, Evaluation and Learning’, new KPIs and a new ‘Data Reporting Transformation programme’.

 

Monitoring Evaluation and Learning (MEL) has been strengthened by new governance structures (including expert advisory groups) and new evaluation modules including gender equality and value for money. A sub-set of our proposed Key Performance Indicators (KPIs) have been piloted and a value for money pilot is underway, providing valuable learning for the full rollout of both. BEIS is currently on course for a phased rollout of KPIs from the summer to the end of the year to tie into the development of RODA (‘Research ODA’, a new information management system). RODA is currently being testing with a subset of users to ensure it is robust and fit for purpose. Rollout for all users is planned for Q4 2020.

 

a. Have any decisions been made on whether the Fund will continue in its present form, or a different form, after 2021?

 

Decisions on funding post-2021 are to be taken at the Spending Review. BEIS is committed to continuous learning and making improvements where appropriate.

 

Q2 Why did the Department publish a strategy for the Global Challenges Research Fund but not one for the Newton Fund?

The Newton Fund operates as 17 bespoke bilateral partnerships, each of which has a specific country strategy in place to ensure the activity is appropriate to the needs and aspirations of our DAC listed partners. GCRF is a UK led thematic fund for which a single strategy is more readily applicable. BEIS has, however, recognised that a single overarching fund level strategy for the Newton Fund would offer additional value in developing further coherence.

a. When will the Department publish a strategy for the Newton Fund?

There are already country level strategies for each Newton Fund partnership. However, BEIS agreed with the recommendation from ICAI that a Fund level written strategy would be beneficial, and our intention is that this strategy should be published alongside a public commitment to future funding in order to shape that subsequent phase of activity.

b. What does the Department intend to do to rebalance the Fund’s objectives so that it is focused more on international development, especially when it comes to capacity building in partnering countries and enforcing compliance with delivery partners?

 

BEIS is working with our 17 Newton Fund partner countries to review and refresh the country-level strategies to ensure activity continues to effectively strengthen research and innovation in developing countries to promote sustainable economic growth. A review of capacity strengthening policy and programmes across Newton Fund and the GCRF is currently in progress. This will ensure future activities reflect sector best practice and lead to effective development outcomes. The newly created ODA Project Management Office will enhance assurance processes with our delivery partners.

 

Q3 How will the Department’s revised evaluation strategy ensure that the Department is able to convincingly measure value-for-money and project impact?

 

BEIS has expanded the scope of the externally commissioned Newton Fund evaluation strategy and developed in-house measures and governance structures to bolster the approach in assessing value for money and enhance the analysis of project and fund impacts. This reflects the lessons learned during the mid-term evaluation and the ICAI review. These include: 

 

  1. bringing forward a more intensive assessment of value for money ahead of the commencement of other components of the Final Evaluation. The methodology, designed in consultation with other Government departments, academic and sector experts, is a rubric-based peer review[1] of a sample of projects, using existing data complemented by new evidence, which will measure value for money at the project level and aggregate levels against KPIs which will allow BEIS to regularly monitor the value for money during delivery. Post-delivery, our external evaluators will conduct an in-depth value for money assessment including DFID’s 4 E’s (economy, efficiency, effectiveness and equity); 
  2. targeted consultation of in-country partners as part of the Final Evaluation to further address gaps in the evidence base;
  3. developing, piloting and implementing a set of 26 KPIs ranging from immediate inputs through to long-term outcomes to provide information on the progress of the Fund and whether it is set to achieve its intended impacts; and
  4. convening an independent expert advisory group to ensure the design and implementation of evaluation, value for money and KPI activities and analysis are robust and rigorous.

 

Together, this approach will test the extent to which Newton Fund activities contribute to positive changes in partner countries, achieves its goals and whether the fund overall represents value for money. 

 

Q4 Why was over half of actual and forecast Newton Fund spending concentrated in four middle-income countries and how does this help the poorest people in the poorest countries?

Total expenditure is only one consideration – for example when you take per capita spend, the Newton Fund is investing more in our partnership with the Philippines than with China.

That said, almost 2/3 of the world’s poor are understood to be living in middle-income countries, and India alone has over 286 million citizens classed as ‘extreme poor’, more than any other nation.

Furthermore, the regional and global impact of larger middle-income nations in terms of environment, climate, health and food systems means that our working with them delivers a range of benefits which are felt by those in less developed countries. 

It is also important to note that the Newton Fund is just one of HMG’s ODA research funds, working alongside the GCRF, DfID and DHSC funds to enable us to work across the full spectrum of DAC listed countries.

a. Does the fact that 90% of UK aid spent through the Fund stayed in the UK with UK institutions represent the best use of Official Development Assistance?

A unique and valuable feature of the Newton Fund is the fact that UK funding is matched by our partner countries. This has a range of benefits, including ensuring equitable partnerships and sustainability of funding for the longer-term in partner countries. Leading journal Nature recognised this in a July 2019 article (https://www.nature.com/articles/d41586-019-02172-9).

 

In 2019 DFID commissioned a review of the evidence base for research capacity building in low and middle income countries, conducted by Research Consulting (https://assets.publishing.service.gov.uk/media/5d42be4eed915d09d8945db9/SRIA_-_REA_final__Dec_2019_Heart___003_.pdf). This specifically highlights the importance of local matched funding as part of best practice for capacity strengthening programmes – it demonstrates the commitment from local stakeholders, ensures alignment with local-national priorities and is an indicator for future sustainability. 

 

Regardless of where it is spent, all Newton Fund expenditure is directed towards the development needs of our DAC listed partner countries. Research and innovation outcomes are highly mobile and the primary beneficiaries of new knowledge created as a result of our collaborations are individuals and communities in ODA eligible countries – both Newton and non-Newton.

Anecdotally, we understand that some of the greatest value to our partners is the opportunity to work alongside their UK counterparts, who are often world leading in their field and may otherwise not have a means by which to collaborate.

Finally, it should be noted that within the 90% estimate provided by ICAI will be training and capacity strengthening work undertaken by partner country researchers and innovators whilst visiting and spending time in the UK. These individuals are then able to return home with new knowledge and skills for further dissemination. BEIS sets no limit on the proportion of funding that can be used in this way.

b. What does the Department intend on doing about ICAI’s findings that the proportion of UK aid staying in the UK, and the matched funding model, may potentially be disadvantaging poorer countries?

 

As set out above, BEIS believes the match funding model to be a strength of the Newton Fund, although we take a broad interpretation of the concept (focusing on ‘matched effort’) in order to accommodate the realities faced by some partners in securing financial contributions and the possible interruptions that funding may encounter

 

The Newton model would clearly not be appropriate for poorer nations and this is why HMG has a range of interventions to ensure we are able to support the development of research and innovation across lower- and middle-income settings.

 

Q5 Will the promotion of gender equality be taken into account in any future Strategy for the Fund?

 

BEIS is developing an ambitious cross-fund (Global Challenges Research Fund (GCRF) and Newton Fund) approach to gender equality. Since 2019, independent consultants Tetra Tech (formerly Coffey) have been working on our behalf to capture best practice across DfID, other ODA and non-ODA funds, as well as from Newton Fund and GCRF delivery partners. Tetra Tech is on track to submit its findings along with recommendations to BEIS in late April. BEIS will use the final report to help develop a cross-fund strategy on gender, diversity and inclusion which will inform future Newton Fund allocations and activity.

 

 

Q6 How does the Department respond to ICAI’s findings that the Newton Fund’s approach to capacity building was unconvincing beyond enhancing the careers of individual academics?

The Newton Fund has enabled us to support research and innovation capacity building in partner countries across a wide range of disciplines and at different levels:

 

  1. systems (e.g. UKRI’s Staff Exchange programme for research funder staff);
  2. institutions (e.g. Royal Academy of Engineering’s Transforming Systems through Partnerships); and
  3. individuals (e.g. British Council Newton PhD Scholarships).

 

The review of capacity strengthening that BEIS is currently undertaking across the Newton Fund and GCRF will ensure our activities continue to be guided by sector best practice and deliver the most effective development impact possible.

 

a. The grants that ICAI examined included almost £300,000 of support to three fellowships including a biography of Boer leader, Paul Kruger; a project examining the role of divine images in the work of Cicero; and postgraduate research into jazz in South Africa. How do these and similar grants contribute to development impact?

BEIS, with our Newton country partners, sets the overarching strategy and broad programme areas, while delivery partners (UK and overseas) are empowered to use their expertise to identify and support specific activities that will have the greatest impact.

 

Helping developing country partners to build stronger research and innovation systems through strengthening the capacity of individual researchers and innovators is one of the delivery mechanisms employed by the Fund. Strengthening capacity across a range of disciplines is an important feature of the Newton Fund and will contribute to a balanced and holistic research and innovation ecosystem.

 

Looking specifically at the arts and humanities, these play an important role in a development context, from supporting the establishment of cultural and tourism sectors with associated economic and jobs benefits, to enabling communities to understand and learn from their historical experience.

 

Of the small selection of grants ICAI featured in their report, if we take ‘South African Jazz Cultures and the Archive as an example, this project prompted a change in admissions policy at Stellenbosch University. Post-apartheid-era structures are still grappling with the legacy of a segregated schooling system and a vast under-representation of leading musicians from practices other than Western art music. The admissions policy of the university was subsequently adjusted to enable due recognition to be given to prior experience and learning. This project has directly benefitted previously disadvantaged scholars of exceptional promise by enabling the structural transformation of a university environment.

 

b. How do the above examples of grant awards support the Department’s claim that ‘delivery partners […] are best placed to ensure that activities remain at the very cutting edge of research and innovation and are therefore able to deliver maximum benefit for the development of partner countries.’?2 Will the Department reconsider this position and put processes in place to monitor closely how future awards meet both research excellence and development objectives?

 

The UK is recognised for the strength of its research and innovation system, which is testament to the capability of UK funding agencies and is the reason why Newton partner countries are so positive about the Newton partnership approach. BEIS delivery partners represent the UK’s world-leading expertise on research and innovation and are uniquely placed to work with partners countries to design programmes to address those countries’ identified development challenges.

 

However, BEIS and are delivery partners are committed to continuous improvement and are working as follows to ensure future awards continue to deliver both development impact and research excellence:

 

  1. strengthened grant terms and conditions which reinforce the central importance of development impact and ODA eligibility;
  2. a review, supported by independent experts, of our approach to capacity strengthening; and
  3. more regular and focused assurance activity led by the newly established Project Management Office.

 

 

 

 

 

Q7 Why was the Department unable to give ICAI sufficient evidence demonstrating that all Newton Fund spending counts as Official Development Assistance?

 

Considering the large number of awards made under the Newton Fund, it is perhaps helpful to take a systems approach to explaining and demonstrating ODA eligibility:

 

Before allocations of funding are made to delivery partners, all Newton Fund programmes are assessed by BEIS for ODA compliance and development impact. The independent Mid-Term Evaluation confirmed that ODA eligibility is a key prerequisite of fund activities and is assessed at both the country and project level. Activities observed by the independent evaluators were found to be compliant with ODA eligibility rules. 

 

BEIS delivery partners are experienced in delivering world-leading research for development programmes and have the expertise to work with partner researchers in developing countries to identify solutions to the challenges that affect their countries most. The delivery partners are best placed to assess the ODA eligibility in their field of expertise for individual projects or activities. The Process Evaluation Report found that the current model, where the responsibility for ODA compliance sits with delivery partners, is logical and efficient.

 

In response to the ICAI review, BEIS has increased the level of engagement with delivery partners on the subject of ODA compliance and has created further opportunities to share best practice.

 

a. In its response to the review, the Government stated that ‘There are clear roles and responsibilities for ODA compliance, with requirements set out at the allocation and grant stages.’

 

How does this tally with ICAI’s findings that delivery partners in some countries are ‘pushing the boundaries for what constitutes ODA’; and that ‘BEIS has entirely devolved the monitoring of ODA eligibility to its UK delivery partners and did not provide ICAI with convincing evidence that they verified that their partners’ criteria and processes were sufficient or applied rigorously enough’

 

It is an important feature of the Newton Fund that our delivery partners take responsibility for ensuring ODA compliance at the awarding and delivery phases of projects. They are in a much stronger position to understand the specific nature of the research or innovation activity in question and how ODA rules apply in that circumstance. This obligation is clearly set out in grant terms and conditions. This operational requirement is not unique to the Newton Fund; DFID frequently takes a similar approach.

 

Our own independent evaluations found no evidence of ICAI’s suggestion that delivery partners had tested the boundaries of ODA eligibility, and the BEIS ODA Ministerial Board, with cross governmental representation, continues to endorse the delivery model of the Newton Fund.

 

However, in response to the ICAI review findings, and those within independent evaluations, BEIS will be conducting more regular and formal assurances of the processes that our delivery partners have in place.

 

b. If new guidance and reporting requirements were issued to delivery partners regarding ODA-eligibility, please provide us details of what these new requirements are.

 

New requirements for ODA eligibility and compliance reporting are captured in Grant Allocation letters. They include the requirement for written assurances on ODA compliance in delivery partner quarterly reporting, and programme completion reports. These confirm ODA eligibility throughout a programme’s lifetime. Delivery partners are also now required to maintain and submit ODA specific risk registers and highlight ODA spend in their audited accounts. The new Project Management Office provides additional guidance and opportunities to share best practice regarding ODA eligibility in line with BEIS policy to promote consistent understanding and application across delivery partners.

 

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[1] A rubric is a tool that provides an evaluative description of what performance or quality looks like at different, defined levels (standards). A panel of appropriate experts assess evidence of performance against the criteria and allocate the appropriate standard to achieve a rating. These ratings and associated evidence can be aggregated up to appropriate levels. Rubrics and peer review have been used in other assessments of research and development. Two well-known examples include Canada’s International Development Research Centre’s Research Quality Plus and the UK’s Research Excellence Framework exercise.