Webinar: Navigating the new DFID

As the United Kingdom’s Department for International Development grapples with a number of changes — including a new leader and transitioning to a new way of spending official development assistance — its partners are set to feel the effects. To help organizations prepare, Devex convened a panel of experts to discuss the shifting policies, priorities, and funding channels, and their implications for contractors. The conversation also covered funding insights from previous years, with analysis of what may have led to the relative success of top private sector and NGO contractors. Finally, the panel discussed Britain’s impending exit from the European Union, the current plans, and what a leaked memo reveals about the transition period. 4 big themes and takeaways 1. Safeguarding reforms post-Oxfam Following recent revelations of sexual exploitation among some Oxfam staff during a 2011 mission in Haiti, DFID chief Penny Mordaunt has placed an increased emphasis on safeguarding. Earlier in the month, U.K. aid chiefs announced new “tough and exacting” standards at a safeguarding summit. The standards, which apply to both future and existing contracts, will assess codes of conduct, response procedures, hiring and recruiting, and overall risk management. Organizations that don’t comply will not be eligible for DFID funding, which may shrink the pool of organizations that are able to bid. Mordaunt has noted that these standards will apply to all DFID partners — including the private sector and U.N. agencies. 2. Supplier reforms In response to allegations against Adam Smith International, former DFID chief Priti Patel implemented a number of contractor reforms. Devex U.K. Correspondent Molly Anders highlighted two that were particularly significant for contractors: limited liability contracts and open-book accounting throughout the supply chain. These reforms are set to roll out to NGOs later in the year. Contractors with extensive DFID experience and those who use DFID as a main source of funding will not feel the effects of these reforms as deeply as others, as many already have these systems in place. Smaller contractors, subcontractors — especially those in-country — contractors with diverse funding portfolios, and NGOs are set to be most affected by these reforms. 3. Funding insights DFID disburses funding through a number of channels, but UK Aid Connect is a good option for those that are new to the agency, are relatively small, or have a good in-country presence, as it’s currently fairly flexible. Anders highlighted the Small Charities Challenge Fund, designed to make up the deficit from the new window of eligibility for UK Aid Direct, which now excludes smaller charities. But she pointed out that the amount it contributes is not currently enough to bridge the gap. “We’ve yet to really see how that will make up for it,” Anders said. For early-stage information on DFID funding, Matthew Wolf, a development analyst at Devex, recommended attending Supplier Engagement Events or following @DFIDProcurement on Twitter. Early market engagement events can also be found in Devex’s DFID Funding Activity. In addition to DFID-specific channels, including UK Aid Direct and UK Aid Match, the U.K. government is aiming to spend 30 percent of its ODA through other departments and cross-government funds by 2020. “The Conflict, Stability and Security Fund is probably the one you want to watch out for,” Anders noted. The fund, which replaced DFID’s previous Conflict Pool and is focused on areas at risk of conflict and instability, is currently open for bidding as one of the larger cross-government channels. Among the top private sector and NGO contractors, there appeared to be an emphasis on health and humanitarian work, particularly on the African continent. Wolf noted that top contractors in both categories — PricewaterhouseCoopers and Save the Children — served as “fund managers.” In this role, they dispersed funding to other actors — PricewaterhouseCoopers through the Girls’ Education Challenge and Save the Children through the Start Network. However, there were some notable differences between private sector contractors and their NGO counterparts. While funding to private sector contractors declined between 2016 and 2017, it increased for NGOs. But given recent changes, “I would expect that we see them surge,” Wolf said. 4. Brexit Though draft plans have suggested maintaining a close relationship with the European Union and European Commission when it comes to aid, nothing is certain. While Brexit is scheduled for March 2019, aid eligibility will remain the same through the transition period. U.K. organizations will continue to have access to European Union and European Commission funding channels during this time. Less is known about the post-2020 period. “Both parties hope that the U.K. will continue to engage on those off-budget mechanisms, such as the migration fund,” and the U.K. hopes to guide the European Commission to reform on-budget mechanisms so that they can bid on them, Anders said. A leaked memo from the European Commission indicated that if the U.K. exits the bloc without reaching a deal, live contracts are in danger of being terminated. As a result of this, and other fears leading up to Brexit, some U.K.-based organizations are looking at relocation.