Select committee: International Development Committee
Recommendation 20
Ninth Report - Investment for development: The UK’s strategy towards Development Finance Institutions
Published 15 Sep 2023
Paragraph 104
Addressed to Foreign, Commonwealth & Development Office
International Development Committee Investment for development: The UK’s strategy towards Development Finance Institutions All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
To deliver accountability and transparency and to operate in lockstep with the International Development Strategy, BII must assess the impact of its portfolio under previous strategy periods and actively manage its portfolio. BII must perform annual assessments of the impact delivered by all of its portfolio investments, including those businesses that are invested in through financial intermediaries. BII must divest from those investments that do not have a clear development objective and do not 58 Investment for development: The UK’s strategy towards Development Finance Institutions align with the International Development Strategy. In conclusion to these concerns expressed by the Committee and some that submitted evidence, we recommend the Minister maintain closer scrutiny on the whole budget and the proportion of the ODA budget allocated to BII. At a time of limited availability of the development budget, the taxpayer needs assurance that Official Development Assistance is used to support the world’s poorest people in the most effective way.
From: International Development Committee, Ninth Report - Investment for development: The UK’s strategy towards Development Finance Institutions (HC 884), paragraph 104, 15 September 2023
Government response
The government responded to the whole report on 7 December 2023 (deadline 15 November 2023).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government states that it "accepts or partially accepts all recommendations" on British International Investment (BII) and will work with BII to implement relevant reforms, including in negotiations for the 2027 to 2031 strategy.
- On governance, it "partially accepts" Recommendation 1 but "does not agree" that a government official taking a non-voting seat on BII's Board would enhance governance, citing risks such as "blurring lines of responsibility".
- On the British Investment Partnerships strategy (Recommendation 6), it accepts, but notes that consultation "will take time" and says it "does feel able to commit to publishing by summer 2024".
- On targets for BII, it says it is "not appropriate" to introduce multiple additional SMART targets in this strategy period, but the FCDO "will also review its SMART targets for BII as part of the next strategy period from 2027".
- On auditing and annual impact assessments, it believes a full rolling audit "would be disproportionate" but says Ministers "will review in 2024 whether additional spot checks" by external experts "are required".