What's missing from DfID's Bilateral Development Review?

The U.K. Department for International Development released Thursday its first Bilateral Development Review since 2011, after a yearlong delay.

The BDR offers little new information about DfID’s bilateral priorities, instead bringing together some of the agency’s more recent shifts in aid spending. These include an emphasis of spending aid across the government, a pledge to spend 30 percent of aid through fragile states, an end to general budget support in bilateral spending in favor of earmarked contributions, and plans to follow through on its pledge from April’s Syria donors conference to spend an additional 1.2 billion pounds ($1.5 billion) in the Middle East and North Africa region.

“The BAR does not demonstrate any radical changes in policy but rather indicates that existing trends will be accelerated. Economic development, creating jobs, boosting trade and investment all receive heavy emphasis,” Peter Young, director of Adam Smith International, told Devex.

Despite the relatively unsurprising results, civil society organizations speaking to Devex said this review offers one significant shift from past BDRs. Many development organizations claim the agency left them out of review consultations, a radical departure from the methodology used in the previous BDR in 2011.

Young also pointed to the strong rhetoric in the document emphasizing that aid should serve “the national interest,” as well as the BDR’s “particular attention and the aid benefits of leaving the EU,” he said. The BDR says Brexit “will provide the U.K. with a unique opportunity to exercise even greater control over development policy and funding.”

A missing voice?

Approximately 23 percent of bilateral aid is delivered through civil society organizations, according to the Organization for Economic Development Cooperation. While some consultation may have taken place through CSO country offices, 10 U.K.-based international development organizations that spoke to Devex claimed DfID did not ask for their feedback on the review.

One organization said they were invited “a long time ago” for feedback, but pointed out the review was delayed “for awhile,” indicating that the most recent partner feedback on bilateral spending was submitted more than a year ago.

Speaking on background to preserve business ties with DfID, the organization said they submitted concerns and questions through Bond for International Development — which typically serves as a DfID-CSO go-between — “more than a year and a half ago,” but that the feedback wasn’t solicited by DfID and they never heard back or received confirmation from the agency.

Another development practitioner said this BDR “was very light on mentions of civil society,” and that “the methodology feels a bit less rigorous,” pointing out this BDR also lacks a country-by-country breakdown of priorities, unlike the 2011 BDR.

When Devex told a DfID spokesperson by phone about the claims and asked for confirmation that civil society was not consulted, the spokesperson emailed the following:

Funding commitments

The BDR states that DfID “will increase payment by results,” the mechanism whereby delivery partners are only paid after they demonstrate impact. Payment by results contracts represented the majority of new contracts awarded by DfID last year, comprising about 74 percent of all contracts awarded by the central DfID office, the review states.

DfID’s PBR strategy worries small-to-medium organizations, which say they lack the upfront budget overhead to deliver projects without help from DfID. It’s still unclear whether the agency will take this into consideration and offer more generous payment mechanisms with it’s smaller partners in-country. The recent announcement of U.K. Aid Connect in the Civil Society Partnership Review, which is geared toward small-to-medium organizations, could be a clue as to how DfID’s payment plans will shake out.

The CDC — a Pandora’s box?

A bill to increase the budget of DfID’s development finance institution CDC Group PLC from 1.5 billion pounds to 6 billion pounds is currently preparing for a vote in Parliament. The CDC uses official development assistance to invest in the private sector in development countries. This BDR places a strong emphasis on the CDC’s potential to catalyze private investment in countries currently transitioning out of bilateral cooperation with the U.K.

“Development Capital, as opposed to grant finance, allows us to invest in promising businesses in emerging and frontier economies and redeploy returns generated into other programmes, making our investment better value for money,” the review reads. “DfID invests in this way through our investment partners, including CDC, the U.K.’s development finance institution, and the International Finance Corp., part of the World Bank Group.”

The boost in funding and remit may signal DfID’s ambitions for expanding the CDC’s reach. The group’s current mandate allows the institution to work only in sub-Saharan Africa and South Asia, regions where few countries are expected to graduate from fragile or conflict status or lose foreign aid.

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