MPs report on Department for International Development Financial Management

The Commons Public Accounts Committee publishes its 52nd report of Session 2010-12, on the basis of evidence from the Department for International Development (DfID).

“The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:

“The amount DfID spends on aid will rise by 35% by 2013, but at the same time the Department has to cut its overall running costs by a third.
Achieving this level of savings at a time of rapid expansion in frontline services involve a substantial challenge if taxpayers’ money is to be properly protected and value for money secured. [emphasis added]

The Department is going to be spending more in fragile and conflict-affected countries and the danger to the taxpayer is that there could be an increase in fraud and corruption. However, the Department could not even give us information as to the expected levels of fraud and corruption and the action they were taking to mitigate it.

Unfortunately, the Department has not always kept its eye on the financial ball, and in 2010 stopped monitoring its finance plan. That must not happen again and DFID should report publicly on its financial management.

The Department’s ability to make informed spending decisions is undermined by its poor understanding of levels of fraud and corruption. Its current approach is too reactive and it needs to develop a sound framework for making sure funds are spent properly on the ground. This will be even more important as the Department channels more of its funding into fragile and conflict-affected states.

The Department’s current plan is to spend more via multilateral organizations and less through bilateral programmes. This poses a risk to value for money because the Department will have less oversight than it does over country-to-country programmes. Indeed, we are concerned that the strategy has more to do with the fact that it is easier to spend through multilaterals than go through the process of assessing value for money of bilateral programmes. [emphasis added]

To maximise the amount of aid that gets through to the frontline, DfID should have clear plans for how it is going to reduce or control running costs – particularly when channelling funding through partner and multilateral organizations with a management overhead at every stage.”[emphasis added]

Margaret Hodge was speaking as the committee published its 52nd Report of this Session which, on the basis of evidence from the Department for International Development, examined its financial management capability, its increasing focus on value for money, and the challenges it faces in managing its increasing programme budget while reducing its overall running costs.”

RD Comment: See Rick on the Road blog posting Thursday, July 24, 2008: An aid bubble? – Interpreting aid trends which raises the same issues as highlighted in bold above.

See also HoC International Development Committee, Committee Room 15 Working effectively in fragile and conflict-affected states: DRC, Rwanda and Burundi

Commons Select Committee to Scrutinise the DFID’s Annual Report & Resource Accounts

13 September 2011

“The International Development Committee is to conduct an inquiry into the Department for International Development’s Annual Report and Accounts 2010-11 and the Department’s Business Plan 2011-15.

Invitation to submit Written Evidence

The Committee will be considering

  • Changes since the election to DFID’s, role, policies, priorities and procedures;
  • The implications of changes for management styles, structures, staffing competences and capacity to deliver; and
  • The overall impact on the efficiency, effectiveness and cost-effectiveness of DFID’s activities.

The Committee invites short written submissions from interested organisations and individuals, especially on the following areas: the implementation of the structural reform plan: the bilateral, multilateral and humanitarian reviews; DFID administration costs; expenditure on, and dissemination of research; and the use of technical assistance and consultants.

The deadline for submitting written evidence is Monday 10 October 2011. A guide for written submissions to Select Committees may be found on the parliamentary website at:

Committee Membership is as follows: Malcolm Bruce MP, Chair (Lib Dem, Gordon), Hugh Bayley MP (Lab, City of York), Richard Burden MP (Lab, Birmingham, Northfield), Sam Gyimah MP (Con, East Surrey), Richard Harrington MP (Con, Watford), Pauline Latham MP (Con, Mid Derbyshire), Jeremy Lefroy MP (Con, Stafford), Michael McCann MP (Lab, East Kilbride, Strathaven and Lesmahagow), Alison McGovern MP (Lab, Wirral South), Anas Sarwar MP (Lab, Glasgow Central), Chris White MP (Con, Warwick and Leamington).
Specific Committee Information: / 020 7219 1223/ 020 7219 1221
Media Information: / 020 7219 3297 Committee Website:

What Accountability Pressures do MPs in Africa Face and How Do They Respond? Evidence from Ghana

Source:  Lindberg, S., 2010,  Journal of Modern African Studies, Vol. 48, No. 1, pp. 117-142 VIA Governance and Social Development Resource Centre ]

Summary: What is the role of clientelism in African politics? How are MPs held accountable in Ghana? This article examines the daily accountability pressures and responses of Ghanaian Members of Parliament, the strength of the institution, and the formal and informal aspects of their role. It finds that these MPs devote a significant proportion of their time to producing and distributing private goods to constituents, and to constituent service. Marginal attention is devoted to legislating and executive oversight. Some MPs have been able to counter political clientelism, however, through civic education and by reformulating constituent expectations toward the production of collective, public goods.

Despite the rapid expansion in research on African politics, little is known about the daily behaviour of legislators, their accountability pressures and responses. This case study on Ghana finds that groups that hold MPs accountable include constituents, the local party, extended family, chiefs, religious leaders, civil society organisations (CSOs) and businesses (although these last two appear to exert little pressure). They require MPs to perform five core duties – the provision of private goods, constituency service, constituency representation, legislation and executive oversight:

  • Personal benefits and clientelistic goods: This type of accountability is the most common in MPs’ relationships with their constituents and is the one that puts the most pressure on MPs. Different groups have varied expectations of the form that such benefits should take. They range from monetary assistance (such as school fees or small business start-up costs) to the provision of jobs. There is a clear division between rural and urban constituencies; urban MPs have much greater resistance to constituent demands.
  • Constituency service as community development: This is an area of heavy emphasis for constituents and chiefs, causing MPs to spend a lot of their time lobbying ministers for development projects for their area.
  • Constituency representation: There is a strong expectation of MPs to be heard in debates and to have a media presence. This is anchored in the traditional notion of family heads ‘speaking up’ for their people.
  • Legislation and executive oversight: It is primarily the executive which exerts pressure on MPs regarding legislation, particularly regarding voting conformity (by withholding of seats on lucrative tender boards). Active public debate and scrutiny are compromised due to the strength of the executive over the legislature.

The clientelistic relationship between the MP and constituents stems from traditional notions of ‘head of the family’, one who has a moral obligation to solve problems for followers in need. The hybrid role of MP as family head places enormous pressures on officeholders to be responsive to constituents’ needs and priorities. MPs face the dual sanctions of losing office at election time and the informal shame, harassment and loss of status within the context of family and community. However, some MPs have been successful in translating the informal family head role into pressure for the production of collective goods by engaging in civic education and raising political awareness:

  • MPs that have held regular community meetings to explain legislative business and policy have been successful in developing a strong voice for collective goods.
  • Focusing expectations on collective, public, and national-level goods has significantly reduced pressure on MPs to personally provide private goods.
  • It has also increased constituent perception of the importance of legislative behaviour for chances of re-election. This in turn has reduced clientelistic behaviour and promoted democratic responsiveness.

Access full text: available online

House of Commons International Development Committee interviews DFID

…specifically, Nemat (Minouche) Shafik, Permanent Secretary, Department for International Development, and her colleagues, on Tuesday 16 November at 10.30am, on the subject of DFID in 2009-10 and the Resource Accounts 2009-10. The proceedings can be viewed here on Parliament TV

Some of the questions asked:

  • You have a sharply rising budget yet your core administration budget is being cut…
  • We have expressed concerns about how well can you deliver a rising budget in that situation..
  • How are these cuts being applied?…
  • How do you differentiate between running costs and core administration costs?
  • Will you have to spend more money through multilaterals?
  • Will you be taking advantage of DFID staff commitments to their work by placing additional demands on them?
  • What are the most important risks with this reduction? And how are you seeking to mitigate them?
  • People are going to ask, how come they could make such big changes, surely there must have been some  bad management in the past…
  • There is a concern that costs cutting is the driving force, before you have even decided what you are trying to do,… when more of your budget is in fragile states. Our concern is does it compromise your program? Our concern is that you cant say yet because you don’t know what your program is yet.
  • How are you considering bring more work in-house, from external consultants who are doing it now?
  • Do you expect some multilaterals to be rated “poor” in your assessment exercise, and that we would then stop funding such multilaterals?
  • and much more…

Some of the replies given:

  • DFID is cutting its core administration costs by a third…
  • Total operating costs will be going down from 6% to 2% …
  • The average amongst the DAC donors is 4.3% for admin costs
  • Admin costs have been going down about 5% a year for the last 4-5 years
  • Budget has doubled since 2003 but staff numbers have dropped by 20%
  • Peak staff numbers were 3000+ , but now below 2000 for some years now
  • In the past 1 in 3 were doing corporate work, now it is more like 1 in 5/6 doing corporate work
  • We have closed 35 of the smaller offices over the last 5 years
  • Focusing now on a smaller number of high priority countries
  • We will be asking CSOs we fund to be more transparent about their costs
  • Our spending on consultants will be much lower this year, from £19 million last year.
  • We have looked at 43 multilaterals, at their performance, scoring them on a 4 point scale, with the aim of funding those at the top of the scale [there are 11 different criteria being used]
  • We have not yet taken a view about what to do with poorly performing multilaterals. There may need to be case by case decisions
  • The spend on research will go up from 2.6% to 3% in the next budget period
  • and much more…

See also the HoC Public Accounts Committee meeting on Wednesday 10 November, discussing DFID’s Bilateral support to primary education (covered by a NAO report)

Witnesses: Minouche Shafik, Permanent Secretary, Jo Bourne, Acting Head of Profession, and Liz Ditchburn, Director, Value for Money, Department for International Development.  Questions they asked:

  • How do you know that it is DFID’s spending that is making the difference? (when its contribution to the overall education budget is so small in countries like India)
  • Have you done any work at all to assess the impact? Our money, invested through you?
  • You cant say “DFID got 5 million into school”
  • Where is the evidence that you have made a difference? How do you know that DFID expenditure increased enrollment in Kenya?
  • A billion pounds has gone into education,…you have to know where it is making a difference.
  • and much more,…some tough questions, many on attribution…

Re the questions about costs and efficiency, readers may be interested in my blog posting titled:  “The Worst Question to Ask About Charity”

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