WRITTEN EVIDENCE BY THE UK SUSTAINABILITY AND TRANSITIONS WORKING GROUP TO THE INTERNATIONAL DEVELOPMENT COMMITTEE INQUIRY ON THE PHILOSOPHY AND CULTURE OF AID

 

Introduction

 

The UK Sustainability and Transitions Working Group is made up of UK based NGOs, think tanks and academic institutions working on issues relating to sustainability and transitions, primarily in the global health arena. We define ‘Transition’ as a process by which a country that was previously receiving external donor funding through official development assistance has that money reduced, ended or it is transferred to another programmatic aim. The transition can take place slowly or suddenly, leading to a change in aid relationship between the donor and recipient. 

 

We welcome the broad scope of this inquiry and submit the topics below related to the sustainability of UK aid allocation, international public financing, and the role of other actors in UK aid delivery, to help shape the terms of reference. We believe that addressing these questions will help to ensure that UK aid is delivered in an effective, sustainable and accountable way, putting those who are most marginalised and vulnerable at the centre of the Government’s approach. We would like to emphasise, however, that the list of questions suggested is not exhaustive. 

 

 

Theme 1: Sustainability of UK Aid Allocation

 

Question - How does the way in which the UK determines aid allocations consider sustainability and preserve development impact? What are the key steps needed to minimise the negative impact that this has on marginalised communities?

Rationale - In 2010, DFID’s official development assistance (ODA) investment approach changed significantly to be driven by a core determination of eligibility based on gross national income (GNI) per capita. If a country that DFID was working in was a middle-income country (MIC), DFID would  withdraw funding and a DFID country presence rapidly, without consultation or sufficient planning. Many countries that faced these transitions were unprepared to fill the gap, with the most marginalised suffering disproportionately. In 2016, ICAI awarded the department an Amber-Red rating for its approach to managing exit and transition in its development partnerships, and stressed its concerns over the lack of subsequent progress when following up in 2018. In 2019, DFID developed the Working Principles on Transition which guide the planning and implementation of transitions, and began taking a ‘gradation’, rather than ‘graduation’, approach to aid relationships. It is important to investigate how the UK manages aid transition to understand if and how true sustainability can be achieved, particularly in the context of the departmental merger.

 

Question - How should the UK aid process account for and respond quickly to 'development backsliding' and 'reverse transition' as a result of the damage caused by major crises, such as COVID-19?

Rationale - The impact of COVID-19 on many countries’ economies is likely to necessitate a reassessment of country eligibility, a review of transition readiness assessments, and a range of additional interventions to address both COVID-19 and the widespread secondary impacts on essential services and countries’ fiscal space. If cuts and transitions are poorly managed and not mitigated against, it could create further harm and a reversal of the development gains that years of investments have helped bring. It is critical to understand what policies and guidance are needed to ensure transitions are effective, efficient and sustainable.

 

Question - How and to what extent is the UK Government’s aid allocation methodology prioritising countries and communities with the most need?

Rationale - ODA investment approaches that are driven by a core determination of eligibility based on GNI have led to development backsliding over the last decade, disproportionately impacting marginalised communities. When solely looking at countries’ GNI, it can appear that they can afford to take over health programming. In reality, however, countries’ fiscal space may be much smaller because of their debt burden, limited ability to raise tax revenue, and now the primary, and secondary, impacts of COVID-19. The GNI approach to ODA is increasingly seen as no longer fit for purpose and not responsive to where there is the greatest need. Recent research from the World Bank highlights that 82% of the new poor may be concentrated in MICs. With the FCDO developing their Strategic Framework for ODA, during a context where we need to maximise aid effectiveness and value-for-money, it’s important to consider and strategise how the FCDO can develop a needs and evidence-based aid allocation methodology, that leaves no one behind.

 

Theme 2: Aid as International Public Finance

 

Question - In the context of Sustainable Development Goals that apply to all countries, should aid be considered a global public good? What implications could this have for who contributes aid and who should receive aid? What shifts might this imply for how the UK and other current OECD-DAC donors should view and deliver aid? 

Rationale - In 2015, the Sustainable Development Goals became applicable to all countries around the world, but current global mechanisms for collecting and distributing aid are still limited to specific sets of countries. The conventional logic of “aid” sees countries eventually “graduate” from ODA as other types of finance become available to fill spending gaps. Looking at aid through a global public good lens reframes it as an international public financing mechanism that doesn’t just fill gaps, but can overcome global challenges and promotes universal benefits. The proposed alternative development framework of ‘Global Public Investment’ (GPI), argues that the shifting geopolitical environment requires us to challenge traditional beliefs regarding ODA. For example, BRICS countries, where large parts of the populations live in poverty, have seen their collective proportion of global GDP (PPP) grow from 18.8% in 2001 to 30.5% in 2019 and are demanding a seat at the top-table of decision-making. Determining how to evolve the delivery of UK aid in this changing global environment will be essential to its future success.

 

Question - Should aid be a permanent component of the global financing ecosystem rather than a temporary exercise?

Rationale - Aid is often viewed as a temporary service that must be reduced and wound up once recipient countries’ incomes rise, despite the persistence of poverty in many instances. For example, former International Development Minister, Justine Greening, justified the increase to DFID’s budget in 2013 by arguing that it is a short term boost that will eventually no longer be needed. If, however, the purpose of aid is to deliver on the Sustainable Development Goals (SDGs) and fulfil the vision of Universal Health Coverage (UHC), significantly more funding is required than is currently available from donor and domestic resources. The UK Government echoed this sentiment in its response to the IDC Sub-Committee’s report on ICAI’s review on The Changing Nature of UK Aid in Ghana; “the global need for development finance far outstrips levels traditional donors can provide”. It is, therefore, necessary to understand how countries that can afford to spend more, such as the UK, can take on long term financial responsibility for responding to emerging global challenges to support less financially-able countries and ensure no one is left behind, leading to sustainable development outcomes.

 

Question - How can the UK leverage its international position to shape and evolve the global philosophy, culture and practice of aid?

Rationale - With the UK’s G7 Presidency and board representation in relevant multilateral organisations, it is well placed to foster wide consultation of the alternative approaches to the philosophy, culture and practice of aid. One such approach is Global Public investment; a concept that proposes several shifts to move from the current “aid” mentality to a new common framework for financing social, economic and environmental challenges in all countries. However, implementing new frameworks requires international support, thus we must consider the role that the UK Government, and other stakeholders, can play in the short, medium and long-term to develop concrete proposals for the implementation of new approaches to aid. 

 

Theme 3: Role of Other Actors in UK Aid Delivery 

 

Question - What role should civil society, both in the UK and in aid-recipient countries, play in guiding and sustaining the development gains generated from UK aid?

Rationale - Broadly, this question could explore the multiple roles that civil society and marginalised communities should play to inform decision-making by the UK Government about how best to direct their resources to have the most impact and the role they might play in implementing and evaluating aid programmes. In the context of  donor exit, or transition, civil society frequently experiences cuts or total loss of funding from those donors. Civil society plays a critical role in providing services to marginalised populations, advocating on behalf of them and fostering country ownership by holding governments accountable. When governments are unable or unwilling to replace funding gaps with domestic funding, this shift can have a tremendously negative impact on some of the most vulnerable and marginalised people. Responses to this question could also consider how the function of civil society, and community-led organisations, are being affected by the cuts to UK ODA.

 

Question - What are the ways in which UK aid can foster country-ownership and ensure the involvement of all key country stakeholders?

Rationale - Decisions about the appropriate direction of technical and financial support are often done in absence of the groups who are affected, leading to decisions being made on the donor’s strategic interests rather than national needs and priority. For example, in ICAI’s assessment of the Changing Nature of UK Aid in Ghana, they recommended DFID should include citizen needs and preferences within portfolio and programme design and management, and that there should be clear guidance on how UK aid resources should be used in implementing mutual prosperity objectives. Answering this question will help to foster  a discussion about how to ensure sustainability and nation-led accountability are included in the UK aid process.

 

Question - How can the UK work with other donors to avoid simultaneous transition from aid and deliver value for money?

Rationale - Other donors of aid, whether bilateral or multilateral stakeholders, may choose to withdraw support within the same timeframe. This is defined as simultaneous transition and can contribute to dangerous financing cliffs for health services, impacting the quality and availability of healthcare, and cause gaps in coverage for human development services. Understanding how donors can work with each other to avoid simultaneous transition is essential in minimising these adverse effects.

 

 

 

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