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ICAI has just entered its third four-year phase. ICAI is a major asset in ensuring aid is well-spent. Having reviewed ICAI’s prior work, we think ICAI could should focus more on “results claims”—that is, whether the estimates of expected benefits that underpin decision-making by Ministers are well-evidenced.
Rory Stewart, the UK’s new Secretary of State for Development has big ambitions for the country. In light of Stewart’s self-declared candidacy for Prime Minister, we look at four areas where he can demonstrate his credentials and value to UK taxpayers, and bolster international efforts to reduce poverty with UK leadership.
In our new policy paper, we take advantage of the fact that the impact of UK aid is independently assessed by the Independent Commission on Aid Impact (ICAI). Looking back over 8 years and 65 graded assessments, even with a focus on riskier projects, we find that almost 80 percent of UK aid assessed was well spent. With a spending review on the horizon, HM Treasury will be looking closely at departmental performance and should use ICAI’s findings to shape their allocations.
The Independent Commission for Aid Impact (ICAI) issued a report this week on the performance of CDC–the UK’s development finance institution–in low-income and fragile states. ICAI gives CDC an Amber/Red rating on its performance, which means “unsatisfactory achievement in most areas, with some positive elements.” In particular, the commission says that CDC has not done enough to monitor its performance.
The UK’s 2015 National Aid Strategy committed all departments to be “Very Good” or “Good” on Publish What You Fund’s Aid Transparency Index (“the Index”). We look at a leading indicator of transparency and conclude that, beyond DFID, progress has been almost non-existent. With a spending review to set budgets to 2022 expected next year, departments should take the last chance to step-up their performance and HM Treasury should not renew their spending if they don’t.
The UK Secretary of State for International Development Penny Mordaunt spoke powerfully last week about the opportunities for expanding investment in developing countries, including through CDC, the UK’s development finance institution. But a new proposal to count the reinvestment of returns on development finance towards the aid target would contradict the principle underpinning the rules on measuring aid, reduce the UK’s aid effort, and create volatility for other aid (and HM Treasury).
Some development fundamentalists think that aid should never be spent directly in the national interest. At the other extreme, some people—apparently including the UK Treasury—believe all development cooperation should be directly win-win. Both these polar opposites are dangerously wrong: the truth is in-between.
Successive governments have long felt that UK Department for International Development (DFID) needs to work better with the rest of Whitehall. There have been efforts to join up better in government, sometimes successfully, but there remains a feeling in Whitehall that DFID is too tribal, too protective of its budget, and unwilling to roll up its sleeves to contribute to the government’s wider priorities including security, economic opportunities, and influence.
The new UK Secretary of State for International Development has committed to “find new ways to help other departments make their spend more effective” as one of her five pledges for UK aid. Here we look at why the law underpinning the UK’s aid expenditure is weaker on poverty and gender equality outside of the Department for International Development (DFID) and identify four things the government should do to improve aid effectiveness.