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Select committee inquiry

Independent Commission on Aid Impact Annual Report 2013-14

Closed

International Development Committee · Opened 2 July 2014 · Closed 5 September 2014

2 recommendations · 7 conclusions
Inquiry on parliament.uk ↗

What the inquiry looked at

“The International Development Committee has conducted its review of The Independent Commission for Aid Impact's performance and Annual Report 2013-14 and found that ICAI is performing well, but more effort is required to guarantee its independence during a challenging year ahead. Terms of reference”

The committee's words, from the inquiry page on parliament.uk ↗.

What it found

In the committee's words, from the summary of 4th Report - The Independent Commission for Aid Impact's Performance and Annual Report 2013-14 ↗

The Independent Commission on Aid Impact (ICAI) is an independent commission which reports to the House of Commons International Development Committee, not to the Department for International Development (DFID). We ensure its accountability to Parliament in two main ways: through a sub-Committee, which takes evidence on the reports published by ICAI; and through an inquiry each year carried out by the full Committee into ICAI’s Annual Report.

2013–14 has been a busy year for ICAI, with 12 reports published on a wide range of DFID’s activities. ICAI’s Annual Report contained three headline findings for DFID this year. Firstly, tighter management of multilateral partners is needed. Secondly, DFID needs to continue to improve its aid programme management capacity, especially where contractors are implementing programmes. Thirdly, DFID’s corporate results agenda—and in particular its use of ‘reach indicators’—is distorting programming choices.

We share ICAI’s concerns on these issues and intend to follow up its recommendations in two forthcoming inquiries this autumn: Beyond Aid; and DFID’s Departmental Annual Report 2013–14.

DFID spends a large amount of money—at least £200 million—on self-evaluation.

However, it cannot provide an exact total. We question this large expenditure, especially given that an ICAI evaluation recently found that DFID staff struggle to use self-evaluation material in their work.

The contracts of the current ICAI commissioners, contractor consortium and staff all end in May 2015. While staff contracts may be renewed, new commissioners and contractors must be recruited. Planning is underway for the transition to the next phase of ICAI: all possible efforts must be made to ensure this goes as smoothly as possible.

What the government said

The government responded on 17 November 2014.

Summary written by Accountability Index from the government's response.

DFID welcomes the Committee's report and responds to nine recommendations, mostly with 'Noted' and in two cases with 'Partially Agree'.

  • On multilateral and bilateral aid (Recommendation 4) DFID 'Partially Agree[s]'. It agrees that comparison of value for money across delivery routes 'must increasingly guide' allocation decisions, and will update its approach 'as part of our preparations for the next full MAR in 2015'.
  • On internal audit (Recommendation 6), DFID reports that the team has grown by 60% and the budget by 44% to £2m. Every country office will be audited 'at least every two years'.
  • On self-evaluation spending (Recommendation 8), DFID states that in 2013/14 it 'published 28 evaluations at a total cost of £8.84m', excluding costs contributed by other donors for joint evaluations.
  • On the 2015 transition (Recommendation 9), DFID 'Partially Agree[s]'. It says selection of new contractors 'should be complete early in the New Year', and an extension for the current contractor and Commissioners has been agreed up to the end of June 2015.

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 2 July 2014 to 17 November 2014.

  1. Oral evidence 8 Jul 2014
  2. Report 5 Sep 2014
  3. Government response 17 Nov 2014

What it recommended 2 recommendations · 7 conclusions

1We welcome the recommendations made in the Cabinet Office’s Triennial Review of ICAI.
Concluded (the committee's words)
We welcome the recommendations made in the Cabinet Office’s Triennial Review of ICAI. We are pleased to see that ICAI has already undertaken two broader, thematic inquiries (‘How DFID Learns’, and ‘DFID's Private Sector Development work’), and that a number are included in the Year 4 workplan. However, it is important to keep IDC and ICAI work distinct. ICAI’s memorandum of understanding with DFID prevents it from trespassing into policy areas, and whilst we currently have no cause for concern, we will ensure that ICAI keeps to its MOU when pursuing its new, more wide- ranging inquiries.
2Following the Triennial Review, our sub-Committee Chair has participated on the selection panel for ICAI’s...
Concluded (the committee's words)
Following the Triennial Review, our sub-Committee Chair has participated on the selection panel for ICAI’s future Chief Commissioner. We will hold a pre- appointment hearing for the Secretary of State’s preferred candidate for Chief Commissioner in the autumn. We will continue to develop our formal role in signing off ICAI’s workplan.
3Our new practice of taking formal evidence—as opposed to simply holding an informal meeting—for each...
Concluded (the committee's words)
Our new practice of taking formal evidence—as opposed to simply holding an informal meeting—for each ICAI report as it is published is working well. The process has helped strengthen the collaboration between us and the Commission; and it has enhanced our scrutiny of DFID. We plan to continue with the model over Year 4 of ICAI’s operations. We have found it useful when ICAI has submitted evidence to our own inquiries, and request that ICAI does this whenever it can.
4We have noted ICAI’s ongoing concerns about the ability of multilateral agencies to deliver consistently...
Recommended (the committee's words)
We have noted ICAI’s ongoing concerns about the ability of multilateral agencies to deliver consistently and well at country level. Like ICAI, we are anxious that improvements to the central management of multilaterals filter down to country level. We were concerned by the failings in engagement with the EU which ICAI noted. We welcome ICAI’s forthcoming inquiry on multilaterals; it should look particularly at the extent to which bilateral and core funding of multilaterals are ‘joined up’. DFID plans to carry out a Multilateral Aid Review in 2015. We recommend that, at the same time, it also undertakes a bilateral aid review. These simultaneous reviews should include comparisons between delivering aid multilaterally and bilaterally so that the relative opportunities and challenges connected with both mechanisms can be assessed. We also recommend that DFID ensure that the 2015 Multilateral Aid Review includes a careful analysis of the Department’s in-country capacity to manage multilateral partners, and that the Department has the right skills and processes in place to ensure its funds are spent wisely.
5As we indicated in our report on DFID’s Performance in 2012–13, like ICAI, we welcome...
Concluded (the committee's words)
As we indicated in our report on DFID’s Performance in 2012–13, like ICAI, we welcome the measures DFID is taking to improve programme management. But we note ICAI’s concern that DFID has yet to develop strategic guidance on when and how contractors of different sizes and specialisms can deliver most effectively so that ICAI’s Performance and Annual Report 2013–14 19 an appropriate contractor is engaged for the programme or project. We will follow up these and related concerns about programme management, including progress in implementing changes, in our report on DFID’s Departmental Annual Report this autumn.
6The revelations about TradeMark Southern Africa in December 2013 demonstrate the damaging consequences of weak...
Concluded (the committee's words)
The revelations about TradeMark Southern Africa in December 2013 demonstrate the damaging consequences of weak programme management. We were disappointed that DFID’s Director General Finance and Corporate Performance could give us no updated information on the improvements to DFID’s internal audit promised by the Secretary of State when she closed down TMSA in December 2013. DFID should provide an update on internal audit in its response to this report.
7ICAI is concerned that DFID’s corporate results agenda—and in particular its use of ‘reach indicators’—is...
Concluded (the committee's words)
ICAI is concerned that DFID’s corporate results agenda—and in particular its use of ‘reach indicators’—is distorting programming choices. This is something we intend to keep an eye on. We will follow up ICAI’s points in two forthcoming inquiries, Beyond Aid, and DFID’s Departmental Annual Report 2013–14.
8We find it worrying that DFID does not know how much exactly it spends on...
Concluded (the committee's words)
We find it worrying that DFID does not know how much exactly it spends on self- evaluation. However, the amount committed from central budgets alone is £200 million, which is a huge amount. Such spending might be justified if the lessons learnt were widely diffused through the organisation but it appears they are not: ICAI’s recent finding that DFID has a culture where staff often feel afraid to discuss failure is of great concern to us. DFID’s spending on self-evaluation dwarfs ICAI’s costs, which at only £3 million per year represent good value for money. In its response to this report, DFID should state the total amount that it spends on self- evaluation.
9We agree with ICAI that all possible effort must be made to ensure a smooth...
Recommended (the committee's words)
We agree with ICAI that all possible effort must be made to ensure a smooth transition for Commissioners, contractors and the Secretariat in May 2015. There are many risks: for example, whether the new contractors are appointed on time. We are concerned that there is a risk of a big gap in 2015 in reports and other ICAI functions is minimised. Another priority for us that possible organisational changes, and changes in personnel, do nothing to impede ICAI’s independence from DFID. In its response to this report, DFID should set out how it is managing the risks. We will be keeping a watchful eye on preparations for the transition, as well as DFID’s progress in addressing the important recent ICAI findings set out in this report, all of which we intend to follow up in forthcoming inquiries this autumn.

Evidence

Oral evidence sessions 1