Speech

Full transparency and new independent watchdog will give UK taxpayers value for money in aid

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

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Secretary of State for International Development Andrew Mitchell’s speech to Oxfam and Policy Exchange at the Royal Society in London, 12pm 3 June 2010.

Today I want to deliver a message from the new Coalition Government of Britain directly to the millions of people around the world who are battling against poverty, disease and injustice. Our message is this: the people and Government of Britain are on your side, and we will use every tool in our policy armoury - aid, trade, climate policy, diplomacy, business investment, and more - to champion justice, freedom, fairness and prosperity for you. 

And I want to convey a message directly to the hardworking taxpayers of Britain: your contribution to our life-saving UK aid budget imposes a deep responsibility on this Government, and on me as Secretary of State for International Development, to deliver and demonstrate value for money in aid. I will work night and day to honour that commitment.

To those big messages I add a third which I address to another audience - to all those involved in international development. Be prepared for change. Not a change in our levels of compassion, nor in our understanding of the deep value of international development. Rather, a change of approach, a fundamental change that empowers people, that creates and sustains wealth rather than simply redistributing it. A change in how we position development in the 21st century.

It would be hard to imagine a more appropriate forum to deliver these messages: Oxfam’s amazing work is a beacon of hope for millions. I think back particularly to Goma in 1994, when Oxfam’s work in helping to provide clean water to the refugees from Rwanda undoubtedly saved tens of thousands of lives. Neither could we have a more appropriate host than Neil O’Brien of Policy Exchange.

So it is here with you today that I will set out how we will apply our Coalition Government’s shared values to the great cause of international development.

I will argue:

  • Firstly, that global poverty both affronts our moral conscience and is a direct threat to Britain’s vital national interests.
  • Secondly, that well-spent UK aid is amongst the most effective investments we can make - but that we need radical steps to ensure that our aid achieves all it can.
  • Thirdly, that transparency, accountability, responsibility, fairness  and empowerment will be our watchwords.
  • Fourthly, I will announce two new concrete steps we will take to achieve this: the creation of an independent aid watchdog, and our commitment to a UK Aid Transparency Guarantee.
  • And fifthly, I will argue that although aid is important for development, we must use the whole of the British government’s policy spectrum to tackle global poverty.

A shared commitment

The imperatives of creating  wealth and tackling misery, exploitation and poverty are hard-wired into the British DNA.

And our Coalition Programme outlines a strong, deep and ambitious policy agenda on international development.

Our Coalition Government is motivated by a shared determination to erode the terrible inequalities of opportunity which we see around the world today.

We believe in the British Big Society: decentralising power and responsibility; empowering citizens; making governments more transparent and accountable. But in our shrinking world, we are not just the British Big Society - we are all part of a global Big Society.  And we will apply our values to that. Our approach will move from doing development to people to doing development with people - and to people doing development for themselves.

In Britain, we see a vital role for the state in helping to strengthen and build the Big Society by actively catalysing change, agitating for social action, and pressing home every opportunity to strengthen communities.  Internationally, in parallel with this, we see a central role for a vibrant, strong Department for International Development, agitating campaigning and helping to deliver progressive change for communities worldwide. Our progressive, global vanguard.  

Why International Development?

Our vision will always be about making life better for the poorest people in the poorest countries. As simple - and as complex - as that.

It is worth reminding ourselves of the scale of the challenge that confronts us. 8.8 million children die before the age of five each year. Half a million women die due to complications in pregnancy or childbirth. More than a third of children in Africa are short for their age - this stunting affects brain development.. 72 million children are missing out on primary education. Every day nearly 25,000 children die from easily-preventable diseases. More than 33 million people are infected with HIV/AIDS. There are more than 14 million AIDS orphans in sub-Saharan Africa, more than all the children in Britain. Every hour, over 300 people become infected with HIV and 225 people die from AIDS…and 31 of these are children.

Clearly, we must act, and act now, to right these wrongs and end this terrible waste of human potential.

But promoting global prosperity is also firmly in Britain’s national interest. We’re all in this together.

If we don’t tackle the root causes of our problems we will spend much more in future in trying to deal with the symptoms.

That’s why we want to prevent the spread of global diseases rather than waiting for them to attack us.

That’s why we want to tackle radicalisation by helping to build peaceful and stable societies overseas.

That’s why we want to help to build low carbon economies at home and abroad and to support vulnerable people in adapting to climate change rather than continuing our high carbon path.

That’s why we want Europe’s neighbour, Africa, to be a prosperous trading society. 

That’s why we will champion a trading system that is free, open and fair rather than one that pursues an isolationist policy and limits market opportunities.

And that is why we attach such importance to helping Afghanistan to become a more stable, functioning state. I saw for myself only last month the massive potential, but also the huge challenges, involved in getting that country back on its feet.

Development is good for our economy, our safety, our health, our future. It is, quite simply, tremendous value for money: the best return on investment that you’ll find anywhere in government.

Accountability

There is clear evidence to show that effective aid works miracles.

In 2007/08 alone, British Aid

  • Trained more than 100,000 teachers
  • Supplied just short of 7 million anti-malaria bednets
  • Vaccinated 3 million children against measles
  • Brought clean water to almost 1 million people
  • Provided electricity to close on 200,000 people.

And just look at this statistic: British aid pays for five million children in developing countries to go to primary school every day. That’s roughly the same number as go to primary school in Britain yet, it costs only 2.5 per cent of what we spend here. That’s real value for money.

But we can’t escape the fact that today’s fiscal landscape is radically different from what has gone before. There is a massive deficit, which it is our number one priority to tackle.

Against this backdrop our protected aid budget imposes a double duty to ensure that for every pound of taxpayers’ money we spend, we demonstrate 100 pence of value.

And that we demonstrate it in a way that helps us to achieve the Millennium Development Goals. Goals which have captured all our imaginations but which for so many people are so far away from being achieved.

Of course, there are those who argue that in these difficult times aid and aspiration are inevitable casualties of austerity.  Collateral damage. I disagree. This is a time to reaffirm our promises to the world’s poor people, not abandon them. We won’t balance the books on the backs of the world’s poorest.

We resolved, in our Coalition programme for government, to honour our commitment to spend 0.7% of GNI on overseas aid from 2013, and to enshrine this commitment in law.

We will keep aid untied from commercial interests, and maintain DFID as an independent Department, focussed on reducing poverty.

We will stick to the rules laid down by the OECD about what spending counts as aid.

As Shadow Secretary of State I have travelled in dozens of countries over the last five years. I have been struck by how much DFID contributes to Britain’s global reputation. How it has broken new ground in international development and often succeeded where others have failed.

Like our diplomatic services, our armed forces and the BBC World Service, DFID has become part of Britain’s national identity, reflecting our values and strengths overseas. I commend it and am proud to be its Secretary of State. Under my stewardship I want it to do more not less.

But pride should never lead to complacency. To the British taxpayer I say this: our aim is to spend every penny of every pound of your money wisely and well. We want to squeeze every last ounce of value from it. We owe you that. And I promise you as well that in future, when it comes to international development, we will want to see hard evidence of the impact your money makes. Not just dense and impenetrable budget lines but clear evidence of real change.

We currently spend aid in no fewer than 102 countries. For some of these countries that aid is absolutely critical, the safety net that saves lives. But it’s time to pause, to review whether we’re really targeting money where it’s needed most. For example, China is a country which spent £20 billion hosting the Olympics and Russia is a member of the G8.

We will bring the China and Russia aid programmes to a conclusion as soon as is practical. Instead, we will spend the money on our priorities such as maternal health , fighting malaria, and extending choice to women over whether and when they have children.

Prioritisation is vital. I have instigated a full-scale Value for Money Review at DFID, in order to identify projects that should be stopped and savings that should be made so that we can increase aid spending in poor countries more quickly. We have made an immediate start: ending the use of aid money to fund a Brazilian-style dance group with percussion in Hackney, and ending the practice of sending hard copies of the DFID magazine around the world at a cost to the aid budget of £240,000 every year. The savings from these measures will be ploughed straight back in to the frontline aid budget. We will also rent out two floors of DFID’s central London offices, bringing in an extra £2 million for frontline aid. A small figure compared to the scale of the deficit, but an immense amount for people on the ground in developing countries. Our growing budget makes discipline, thrift and a relentless focus on value for money more important, not less.

Overall we plan to redirect £100 million from projects that are low-priority or that are not performing, to programmes that have a better success rate in improving the lives of the world’s poor. Combining compassion with hard-headed discipline in order to help more people escape from poverty.

Across the Atlantic, Hillary Clinton has pledged to put women ‘front and center’ of the American development agenda. That is the right choice. As David Cameron and Jeff Sachs argued earlier this year, women can hold the key to development in the world’s poorest countries - in education, enterprise, micro-finance and healthcare. Investing in women pays dividends throughout the entire community.

Tackling the scandal of maternal mortality is particularly important. Half a million women die during childbirth every year, a figure that has barely fallen in the past two decades in many regions. So we will work to strengthen health systems and family planning facilities in developing countries, including taking steps to improve access to well-trained midwives and emergency obstetrics care.

We need to ensure too, that action on women and development is on the agenda at key global meetings. This will be a top priority for us at the G8 and UN summits this year. Today, the Prime Minister is discussing this very subject with Prime Minister Harper of Canada - the host nation for the G8 and the G20 - in the run up to those meetings. 

We will shine our spotlight too, on multilateral spending.  Over a third of our aid money is channelled through 20 organisations, including the EU, the World Bank and the UN. There are good reasons for this. Working in partnership through these multilateral bodies we can achieve results that we could not hope to achieve acting alone. Yet in some places, corporate governance is weak, operational efficiency patchy, and too little attention is given to results on the ground.

So we will conduct an impartial and rigorous assessment of the efficiency and effectiveness of all the multilateral bodies that we fund. We will be fair. We will be open. We will be transparent. But, if necessary, we will be tough.

And this brings me to my central point today.

Independent evaluation of British aid is absolutely crucial. There is something a bit too cosy and self-serving about internal evaluation. Reviews that focus on process and procedure miss the real issue: what did the money achieve? What change resulted from it? How were lives made better?

We need a fundamental change of direction - we need to focus on outputs and outcomes, not just inputs.

Sweden has been using independent evaluation for years and others, including the MIT Poverty Lab, have shown that we can be much more scientific about measuring what works.

Aid spending decisions should be made on the basis of evidence, not guesswork.

So today I can announce that we have taken the first steps towards creating a new independent aid watchdog to gather evidence about the effectiveness of DFID programmes. 

We will never maintain support for our growing aid budget unless we can offer to the British public independently verified evidence that it is being well spent.

Empowerment, responsibility and fairness

The philosophy of empowerment will be central to our approach.  We want poor people to be masters and owners of the international development system, not passive recipients of it. 

David Cameron said of the Big Society: “As long as there is deep poverty living systematically side by side with great riches, we all remain the poorer for it”

The ideas of the Big Society are already familiar to people who work in international development. So much so, that you might think we took some of them from the best of development thinking.

The idea that working together in a community is a fundamental human instinct. That society is built not by laws and bureaucracy but by community values and tradition.

The Big Society defines our new approach to development. An approach that delivers choice and demands accountability. An approach that fundamentally lends itself to this value for money agenda.

As I said earlier, this approach is defined by a fundamental recalibration of the balance of power; one that sees people in developing countries moving from a position of having development done to them to one where they shape progress themselves. In other words, giving people that most fundamental of human rights: the power to shape their own lives.

Many aid agencies are testing options that involve giving control to citizens through direct cash transfers. I want us to explore that for ourselves. And where cash is not appropriate, we’ll look at other measures that involve participation, choice, and self-determination. I’ve seen for myself in Ethiopia just how effective this can be. 

These sort of schemes often make it more difficult for bureaucracies to waste or skim off money. Most importantly of all, they give people the power to make their own decisions.

But working to build capable and effective states is also vital. Where the market or communities are not providing core functions or services, the role of government is crucial. Here too, we’ll put the power in the hands of developing countries rather than dictating activity from a distance.

As we said in our Green Paper, we will test the concept of Cash on Delivery aid that has been mooted by the influential Washington-based Center for Global Development.

The principle is simple. A group of donors makes a binding promise to provide money when a developing country makes progress towards agreed results. Results-based aid.

With Cash on Delivery, developing countries can choose which investments will move them forward most quickly.

We will be evidence-based, and sensitive to the specific needs and attributes of different countries. By testing new approaches carefully through a selected number of pilots we can make an informed decision about whether, how and where we can roll them out more widely.

Linked to this theme are other, wider opportunities for empowerment. The sort of power that enables citizens to hold their governments to account. In future, when we give money directly to governments in poor countries we want to earmark up to five per cent of the total amount to help parliaments, civil society and audit bodies to hold to account those who spend their money.  We’re also going to explore ways in which we can improve local advocacy, to help poor people to have a greater say in matters that affect them nationally and internationally.

Transparency

If empowerment is a key component of Big Society development, so too is transparency.  Transparency for the taxpayer and transparency for the recipient.

This is an agenda that President Obama has led in the US. Indeed, USAID’s Administrator, Raj Shah has promised to usher in an era of ‘extreme transparency’.

So today I’m pleased to announce a new UK Aid Transparency Guarantee that will make our aid fully transparent to citizens both in the UK and in recipient countries.

The UK Aid Transparency Guarantee will help to create a million independent aid watchdogs - people around the world who can see where aid money is supposed to be going - and shout if it doesn’t get there.

The Guarantee commits us to publishing full information about DFID projects and programmes on our website - in a way that is user-friendly and meaningful.

Over time, we want to make that information available, in an open and standardised format to the people who depend on the funding: the communities and families living in poor countries. Knowledge is indeed, power.

The simple act of publishing information can help us achieve many of our most important development aims. It reduces the risk of corruption and waste. It improves the quality of public services and increases public sector accountability.

In Uganda, for example, the level of education resources diverted away from their intended purpose dropped dramatically as a direct result of better public information about resource allocation.

In another example, a group of community health clinics in Uganda was chosen at random to receive published report cards. Public meetings were organised to publicise the quality of the clinics’ health care. As a result, waiting times dropped, staff absenteeism plummeted, fewer drugs were stolen and crucially, there were a third fewer deaths of children under the age of five. Or, to put it another way, 550 lives were saved.

So we will bring the post-bureaucratic age to aid. We will also   push for greater traceability across the aid system and for others to adopt our level of transparency. We will lead by example, and argue for common formats and standards for aid transparency internationally, so information from all donors is presented in a way that is consistent, exchangeable and  comparable.

I put DFID staff on notice now, that every time I visit our work overseas I’m going to be asking:

  • What are the results - the outputs and outcomes of your work?
  • Where’s the element of choice in what you’ve offered?
  • How are you engaging with local people and civil society, as well as their government?
  • Are we making that shift that puts power in the hands of the local people?
  • Are you being transparent - and are you supporting the governments we work with to be transparent too?

This change may start with us in DFID but it doesn’t end with us. I want transparency, accountability, responsibility, fairness and empowerment to be the words that define our funded activity wherever it takes place. And I want this to be the mantra that defines our partner bodies too, be they multilaterals, governments or Britain’s brilliant NGOs.

We will now move ahead with our drive for greater transparency and independent evaluation. And let me be clear: we will extend those principles to our partners in development, to every organisation that receives money from us, or more accurately, from the British taxpayer. Transparency and independent impact evaluation are powerful tools for greater efficiency. This represents a step change in the way that we approach aid and a huge step forward in our fight against corruption and waste.

Beyond Aid

Aid is important: it has saved and improved the lives of millions of people and it can save and improve millions more in the years ahead. But aid is a means to an end, not an end in itself. Countries don’t get rich from external aid: they get rich from self-propelled economic growth driven by private enterprise. Smart UK policies can help with this.

The message we have to put across, the message we have to shout from the rooftops, if necessary, is that 21st century development is about much more than aid. It’s about what we do with our policies beyond aid. It’s about creating opportunities across the whole policy spectrum.

We can be clear: 21st century development is a complex tapestry of trade, investment and enterprise, climate change, economic growth, debt relief, financial services, intellectual property and advancing new technologies. Themes that are woven in and out of the essential fabric, creating a richer and more complete picture.

Fragile states are a particular challenge: one where engaging and supporting better governance is critical. By pulling together the three strands of development, defence and diplomacy our response can be greater than the sum of its parts. That’s precisely why the Prime Minister set up the National Security Council to take a cohesive and co-ordinated approach to the very real problems of conflict. This special blend of policy response also has a huge role to play in conflict prevention, an area which is becoming an increasingly important focus of our work.  

The NSC is perhaps one of the most tangible examples of cross-Government working but, we can and will, make connections with wider  Whitehall at each and every opportunity.  Whether by:

  • advocating more open trade policies
  • lobbying for a climate change deal that is fair to the developing world
  • promoting the interests of women and girls in poor countries
  • promoting entrepreneurship and the foundations for strong economic growth
  • supporting financial services that benefit both poor countries and poor people or;
  • arguing for a more development-friendly regulatory regimes

……we will be part of that debate. 

I see DFID as a key, joined-up, integrated department, a bright star in the Whitehall constellation, a department of state for development in the developing world. That’s why DFID has a seat at the Cabinet table and it’s why I won’t be satisfied until our message rings down the corridors of each and every department in Whitehall.

When David Cameron said that it is time for change, he really meant it. So now as our Coalition Government starts on its agenda for change, let us bring international development to the forefront of our efforts. The prize is great: a better life for millions of people, and a safer, more prosperous world for Britain.