DFID headed toward centralization despite its leader's concerns

Rory Stewart, U.K. secretary of state for international development. Photo by: REUTERS / Henry Nicholls

LONDON — The amount of money the U.K. Department for International Development spent through its country and regional programs has fallen for the second year in a row, sparking concerns that the department is becoming too centralized despite the new international development secretary of state calling for it to move in the opposite direction.

DFID’s latest annual report, released last week, shows that while the amount DFID spent on programs and departments increased by more than £325 million ($430 million) to £10.7 billion in 2018-19, the amount that flowed through DFID’s regional and country programs decreased in both absolute and relative terms.

Aid insiders said the figures point to an ongoing trend at DFID toward greater centralization, meaning more programming decisions are being made at Whitehall as opposed to local, in-country offices.

“This trend creates challenges for ensuring DFID's programs respond to local needs and challenges, and risks reducing DFID's effectiveness in alleviating extreme poverty.”

— Jon Date, head of government relations, Oxfam GB

The shift has prompted concerns about the impact on the quality of U.K. aid and is also at odds with recent statements made by DFID’s current leader Rory Stewart.

Stewart has said publicly that he wants to boost the number of DFID “experts on the ground,” and has called for greater decision-making powers to be delegated to country teams.

“I would like to move to a world in which there was much more discretion for our country directors, where it is not all done through centrally managed programs,” he told members of the parliamentary International Development Committee last month.

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However, Stewart — appointed in early May — may not be in the job long enough to reverse the centralization trend, having vowed not to serve in a cabinet under Boris Johnson, who looks likely to become the U.K.’s next prime minister at the end of the month.

According to the report, the share of DFID funding going to regional programs fell from £4.5 billion in 2016-17, to £4.3 billion in 2017-18, to £4.1 billion in 2018-19. It is projected to fall further to £3.6 billion next year, representing an overall drop of nearly 10 percentage points in the share of official development assistance being allocated at the country level, from 45% in 2016-17 to 36% in 2019-20.

At the same time, DFID’s spend on central programs — where resources and decision-making are managed centrally, although some staff may be posted overseas — increased to £6.5 billion last year, up from £6 billion the year before, and £5.4 billion in 2016-17.

Experts said the trend is worrying and could compromise DFID’s position as an “aid superpower.”

"The report confirms that spending through country programs is falling rapidly, with an increasing volume of DFID programs designed centrally in Whitehall. This trend creates challenges for ensuring DFID's programs respond to local needs and challenges, and risks reducing DFID's effectiveness in alleviating extreme poverty,” said Jon Date, head of government relations at Oxfam GB.

Claire Godfrey from Bond, the network of U.K. development NGOs, agreed that making decisions about aid spending “from the top” goes against best practice, which calls for close work with communities and alignment with national strategies and priorities.

Godfrey said she hoped Stewart’s “promising statements on the need for additional DFID staff and increased control over decisions around prioritizing spending ... in country” would be taken up by his successor.

DFID hired an additional 281 people last year, according to the report, of whom only 49 were hired in-country, going against Stewart’s push for more local expertise.

A DFID spokesperson told Devex by email that there was “currently no directive to reduce the number of staff overseas” and that the “International Development Secretary has been clear he wants DFID to deploy more people with deep field experience, operating close to projects on the ground in developing countries.”

The report also shows that DFID upped the number of staff working on corporate functions between 2016-2019, from 522 to nearly 700.

A former senior DFID staffer, who spoke to Devex on the condition of anonymity to preserve professional ties, said the move to scale up DFID’s corporate skills was a response to the recent safeguarding and private contractor scandals, which have led to greater compliance and due diligence requirements.

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As more of the aid budget has shifted to other government departments, DFID has also been tasked with helping them ensure their aid spend meets ODA requirements.

The increased “corporate burden” is taking frontline staff away from running programs and is also slowing the department down, the former official said.

A DFID spokesperson told Devex by email that DFID’s staffing increases were designed “to enable DFID to effectively deliver and manage our ODA commitments and ensure that U.K. spend is delivering best value for money.”

In the past, DFID was known among aid donors for its decentralized model. The Organisation for Economic Co-operation and Development’s Development Assistance Committee’s peer review in 2010 called it the “cornerstone of DFID’s philosophy” and said its country offices benefited from “substantial delegated authority,” and were also home to half of DFID’s staff.

However, by 2014, DAC was warning that this decentralized model could be undermined by excessive Whitehall oversight which had ramped up under Justine Greening, development secretary from 2012-2016. Greening increased internal audits and insisted on ministerial signoff for aid spending over £5 million, where the threshold had previously been £40 million.

“DFID needs to balance oversight by headquarters and delegation to country offices to maintain the strengths of its decentralised system,” the DAC report states.

The trend toward centralization was cemented by the controversial 2015 cross-government aid strategy — which targeted spending 30% of aid through departments other than DFID, and also led to the creation of cross-government funds. The changes meant spending decisions were driven more “from the top” — from Whitehall and the National Security Council — and aligned with U.K. strategic priorities rather than local priorities, according to Godfrey.

About the author

  • Sophie Edwards

    Sophie Edwards is a Reporter for Devex based in London covering global development news including global education, water and sanitation, innovative financing, the environment along with other topics. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.