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Watchdog urges Penny Mordaunt to improve delivery of foreign aid

The report made five recommendations on how to improve value for money.

Improvements are needed in the way foreign aid is delivered, a watchdog has told International Development Secretary Penny Mordaunt.

The Independent Commission for Aid Impact (ICAI) said her Department for International Development (DFID) was “not adequately” reporting results of programmes and value for money at a country-by-country level.

In a review DFID’s approach to how programmes work together to deliver lasting impact, including reducing future dependency on aid, was also criticised.

DFID supplied Shelter Packs which were distributed in the British Virgin Islands after Hurricane Irma (MoD/PA)

The ICAI said weaknesses in the annual review process – which scores projects according to the delivery of activities and outputs, rather than by their progress towards end results – could undermine the approach to value for money.

It found targets were frequently revised and that there could be pressures for optimistic scoring of programmes.

However the commission did note the department had been diligent in its efforts to cut waste, detect fraud, and improve efficiency and this work was improving the return on the UK investment in aid.

Tina Fahm, the ICAI commissioner who led the review, said: “The Department for International Development rightly places a high importance on ensuring it delivers value for money in everything it does.

“In recent years it has come a long way on embedding value for money, and this is undoubtedly making the UK’s aid spending go further and reach more people.”

She added: “However there are still important areas for improvement to ensure the department delivers the maximum value for UK taxpayers and makes the biggest difference possible to the lives of those it helps.

There are still important areas for improvement to ensure the department delivers the maximum value for UK taxpayers and makes the biggest difference possible to the lives of those it helps ICAI commissioner Tina Fahm

“For example, by adding equity considerations into its value for money assessments, DFID acknowledges that reaching marginalised groups can be more costly.

“We are yet to see evidence, however, that DFID has considered how to weight the needs of different beneficiary groups in its decision-making on value for money.”

The review made five key recommendations for DFID to improve its approach to value for money.

They included introducing, and reporting on, value for money objectives at the country portfolio level and experimenting with different ways of delivering results more cost-effectively.

The commission also called for principles to be more clear and reflected in value for money frameworks if needed and to be more explicit about assumptions underlying the economic case.

Finally the commission recommended that an assessment of whether programmes are likely to achieve their intended outcomes be produced in annual reviews.

A DFID spokesman said: “This report rightly recognises that DFID is a global champion in achieving value for money and is leading the rest of the world in pushing vital reforms through the international aid system to help the poorest people and ensure UK aid cannot be better spent.

“ICAI itself says that DFID’s diligence in driving value for money is improving the return on UK investment in aid‎, highlighting our efforts to ensure every single penny goes further to save lives and creates a safer, healthier and more prosperous world – which is in all our interests.

“We are continuing to hold aid organisations to account by tying funding to performance, closing programmes which fail to meet development objectives, and increasing efficiency savings.”

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