What to expect from DfID's aid reviews

It is internal review season at the U.K. Department for International Development.

Several aid reviews are currently ongoing at Britain’s donor agency: the multilateral aid review, the bilateral aid review, the civil society review, the operational review, the research review, and a coordinating period called the “coherence phase.”

The results of these will be released in the next few months, a DfID spokesperson confirmed to Devex. Among other things, the reviews will rebalance funding among countries and between DfID partners, and fill in some of the finer financial details for implementation of DfID’s new aid strategy.

Among the top-line expectations, DfID officials said there will likely be an increase in bilateral funding, a decrease in multilateral funding, a new definition of “fragile state,” and clarification of the channeling and procurement of aid through other government departments, in keeping with the new U.K. cross-government aid strategy.

Behind these shifts, DfID Permanent Secretary Mark Lowcock told members of the parliamentary International Development Committee in a hearing in January, is a push for adherence to aid objectives set out in the government’s manifesto, DfID’s own mandate and the new aid strategy, as well as a desire to “foster competition among implementers.”

“We’ve been trying to get a lot more competition into that choice between private sector, multilateral and civil society, and what’s happened is the private sector element and civil society element has grown,” he said, while the U.K.’s support to multilaterals “has been contained.”

While the aid reviews were originally scheduled for publication at different times — the civil society review was due out in December 2015 — many in the U.K. aid community expect the review results any time now.

“In light of the aid strategy, for those all to be released around the same time makes a lot of sense, so that we can see all the parts in detail, but also the sum of the parts,” Ben Jackson, CEO international development network BOND told Devex.

“We’re all waiting. It features in virtually every conversation with DfID officials,” Amy Dodd, director of the U.K. Aid Network added.

Multilateral aid review

Around 42 percent of DfID’s budget is channeled through multilateral organizations such as the World Bank, the Global Fund to Fight AIDS, Tuberculosis and Malaria and Gavi, the Vaccine Alliance. Another 20 percent is channeled to organizations to implement programs on behalf of multilaterals — nongovernmental organizations such as Oxfam and International Alert, or implementers such as Crown Agents.

In terms of allocations, Lowcock said, “I think what we will see when we do the numbers for 2015‑16 is that the multilateral share will come down,” estimating the percentage of DfID’s funding that goes directly to multilaterals will decrease to “38 or 39 percent” from 42 percent.

This is in part the result of a decision by ministers to cap U.K. contributions to many multilaterals. Organizations such as the Global Fund and Gavi, which have historically seen large buy-in from the U.K., saw reductions in the last round of replenishments.

Multilateral organizations are being assessed based on their contributions to “U.K. development objectives,” and “organizational strengths, according to a memo from the Independent Commission for Aid Impact to Parliament’s International Development Committee.

The review will assess 38 individual multilateral organizations and, for the first time, will evaluate “the way these organizations work together” and the multilateral system as a whole, Lowcock said. The aim is to resolve problems “on the micro level,” which naturally occur within big bureaucracies, such as the U.N. system, Lowcock said, or the World Bank.

While the multilateral aid review will look at organizations’ approaches to value for money on an individual basis, ICAI is pressing DfID to compare organizations based on their sector-specific value for money, as well as overall.

The U.K. has increasingly focused multilateral instruments on middle-income countries, and the review could shed light on how the government intends to reconcile that trend with its stated focus on fragile states. Lowcock has proposed that multilateral funds support low-income countries in their graduation to middle income status, and focus assistance on those middle-income countries burdened by regional conflict, such as Lebanon, Turkey and Jordan.

“If you compare British bilateral aid with what multilateral organizations do, you can see that, bilaterally, we have a much stronger focus on extreme poverty, fragility and conflict than multilateral aid does, on average,” Lowcock pointed out. He explained DfID are in “energetic dialogue” with multilaterals about further tailoring instruments to both the graduating context, like India, and those countries on the periphery of the crisis in Syria.

Bilateral aid review

The bilateral aid review will detail allocations to country programs, centrally-managed programs and the operations of other core departments, such as policy teams. This year’s BAR will also contain an updated list of the 28 countries in which DfID runs bilateral programs, and will contain, for the first time, a definition of a “fragile state” to inform the new U.K. aid strategy’s mandate of allocating 50 percent of all aid to fragile states.

As it stands, DfID directs around 85 percent of its bilateral funding — the part of the budget that doesn’t go to multilaterals — to “fragile or conflict-affected states,” as defined by the Organization for Economic Cooperation and Development, a statistic Lowcock said will likely remain high.

Lowcock also pointed out that so far in this round, multilateral [programs] have “performed less well than the bilaterals” when assessed against DfID aid priorities, pointing to a likely bump to bilateral programming, he said.

While Lowcock didn’t anticipate large changes to the list of 28 bilateral countries he said DfID “will be looking at additions.” When the donor assembled its list in 2010, Syria, Lebanon and Jordan were not yet reeling from the pressures of conflict and displacement currently taxing their capacity. Lowcock added he does not expect any “major subtractions” from the list.

For the definition of fragile states, DfID officials drew on research by the World Bank, the U.N. and academic sources to identify three criteria: external and social stresses that are likely to result in violence, limited capacity to manage disagreement and conflict in a way that does not lead to violence, and third — and “maybe the most important new thing we did,” Lowcock said — states that are especially susceptible to instability because of who their neighbors are.

Other reviews

While the civil society partnership review will not determine allocations, it will assess DfID’s strategy toward engaging international and domestic civil society organizations, which received about a quarter of DfID’s bilateral budget between 2014-15.

With the introduction of the new $1.4 billion cross-government Ross Fund, which focuses on vaccine research, the CSR will likely place a new emphasis on research organizations compared with previous reviews.

DfID’s operational review, ongoing for nearly five years, is assessing options to reshape the U.K. government’s overseas aid network. DfID has recently increased aid to programs managed centrally from headquarters in London, and decreased funding to programs managed by country offices.

In a memo to the Parliament’s IDC, ICAI officials said the shift toward centrally managed programs raises “challenges around ensuring coherence” between country offices. Remotely managed programming is an issue Lowcock said could be addressed by the new cross-government strategy, which will allow aid officials to operate out of consular offices in-country, in an effort to allow more coordination on the ground.

Finally, the government is in the midst of the “coherence phase” of the various aid reviews, which ICAI called “the most important but least clear part of the process.” 

The coherence phase will reconcile allocations from other reviews with DfID’s “top-down” objectives, taking into consideration the data from respective country programs. It should also provide some much-needed clarity around the logistics of the new cross-government aid strategy.

“Trying to do three‑dimensional chess with all of that is essentially what the coherence phase has been about,” Anna Wechsberg, head of strategy at DfID told members of the IDC at a hearing in January.

Chief areas of concern in the cross-government strategy are the introduction of several cross-government funds, namely the business-focused Prosperity Fund, with a budget of roughly $3 billion in official development assistance, and the Conflict, Stability and Security Fund, which will control another $2 billion over five years. The CSSF will be jointly managed by DfID, the Ministry of Defence, the National Security Council and will be housed in the Foreign Office.

“We have some anxieties about who’s going to be driving some of these funds,” Jackson said. “It seems slightly incongruous that a fund that’s supposed to be promoting business climate competitiveness ... is being led by the [National Security Council].”

Non-DfID aid allocations will make up about 28 percent of the U.K.’s total aid budget. Other government departments, including the Department of Health, the Department for Business and Innovation, the Department of Energy and Climate Change, the Treasury the Home Office and the National Crime Agency will also receive ODA-qualifying or “ODA-able” funds.

Lowcock said DfID is seconding staff to other departments to help with processes, running a procurement system, a monitoring and evaluation system and “basically how they are going to subscribe to all the rules of the game the Treasury has set out, beyond what is in the strategy on doing everything we can to maximize value for money.”

Finally, results from the landmark payment by results scheme currently being piloted in several test countries will likely also be released with the review results.

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