Oral statement to Parliament

Statement by the Secretary of State for International Development: the Bilateral and Multilateral Aid Reviews

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

COPY PENDING

Mr Speaker, with permission I should like to make a statement about the Government’s Bilateral and Multilateral Aid Reviews, which are published today.

The Coalition Government’s decision to increase the UK’s aid budget to 0.7% of national income from 2013 reflects the values we hold as a nation.  It is also firmly in Britain’s national interest. But this decision imposes on us a double duty to spend this money well.

On my first day in office I took immediate steps to make our aid as focussed and effective as possible.   I commissioned reviews of DFID’s bilateral programmes in developing countries, and of the UK’s aid funding to international organisations.   These Reviews have been thorough, rigorous, evidence-based, and scrutinised by independent development experts.  They will fundamentally change the way aid is allocated.

Recent events in North Africa and the wider Middle East have demonstrated why it is critical that the UK increases its focus on helping countries to build open and responsive political systems, tackle the root causes of fragility and empower citizens to hold their governments to account. It is the best investment we can make to avoid violence and protect the poorest and most vulnerable in society.  

Bilateral Aid Review

The Bilateral Aid Review considered where and how we should spend UK aid. Each DFID country team was asked to develop a ‘results offer’ setting out what they could achieve for poor people over the next 4 years. Each offer was underpinned by evidence, analysis of value for money and a focus on girls and women.  The results offers were scrutinised by over 100 internal technical reviewers and a panel of independent experts. Ministers then considered the whole picture deciding which results should be prioritised in each country.  Consultation with civil society and other Government Departments was undertaken throughout. 

As a result of the Bilateral Aid Review:

We will dramatically increase our focus on tackling ill health and killer diseases in poor countries, with a particular effort on immunisation, malaria, maternal and newborn health, extending choice to women and girls over when and whether they have children; and polio eradication.

We will do more to tackle malnutrition which stunts children’s development and destroys their life chances; and do more to get children - particularly girls - into school.

We will put wealth-creation at the heart of our efforts, with far more emphasis on giving poor people property rights and encouraging investment and trade in the poorest countries.

We will deal with the root causes of conflict and help to build more stable societies, as people who live amidst violence have no chance of lifting themselves out of poverty.

And we will help the poorest who will be hit first and hardest by the effects of climate change - floods, drought and extreme weather.

As a result of the Review we have decided to focus UK aid more tightly on the countries where the UK is well placed to have a significant long-term impact on poverty.

By 2016 DFID will have closed significant bilateral programmes in 16 countries. This will be a phased process honouring our existing commitments and exiting responsibly. The countries are:

China, Russia, Vietnam, Cambodia, Moldova, Bosnia, Cameroon, Lesotho, Niger, Kosovo, Angola, Burundi, the Gambia, Indonesia, Iraq and Serbia.

This will allow us to focus our bilateral resources in the following 27 countries:

Afghanistan, Bangladesh, Burma, Democratic Republic of Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, Occupied Palestinian Territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, Sudan, Tajikistan, Tanzania, Uganda, Yemen, Zambia and Zimbabwe.

Together, these countries account for three quarters of global maternal mortality, nearly three quarters of global malaria deaths and almost two thirds of children out of school.

Many of them are affected by fragility and conflict so we will meet the commitment made through the Strategic Defence and Security Review to spend 30% of UK aid to support fragile and conflict-affected states and to help some of the poorest countries in the world address the root causes of their problems.

We will also have three regional programmes in Africa, Asia and the Caribbean, and an ongoing aid relationship with 3 aid dependent Overseas Territories namely St Helena, the Pitcairn Islands and Montserrat. 

Multilateral Aid Review

The Multilateral Aid Review took a hard look at the value for money offered by 43 international funds and organisations through which the UK spends aid.

The Review considered how effective each organisation was at tackling poverty. It provided a detailed evidence base upon which Ministers can take decisions about where to increase funding, where to press for reforms and improvements, and in some cases where to withdraw taxpayer funding altogether. 

The 43 multilateral agencies have fallen into four broad categories.

First, I am delighted to tell the House that nine organisations have been assessed as providing very good value for the British taxpayer. These include UNICEF, The Global Alliance for Vaccines and Immunisation - GAVI, the Private Infrastructure Development Group, and the Global Fund to Fight AIDS, Tuberculosis and Malaria. We will increase funding to these organisations, because they have a proven track record of delivering excellent results for poor people.

But of course there is always room for improvement and we will still require strong commitments to continued reform and even better performance.

Funding for the next group of agencies - those rated as good or adequate value for money, such as the United Nations Development Programme and the World Health Organisation - will be accompanied by specific pressure from the UK for a series of reforms and improvements we expect to see in the coming years.    

We are placing four organisations in “special measures” and demanding they improve their performance as a matter of urgency. These organisations are UNESCO, the Food and Agriculture Organisation, the development programmes of the Commonwealth Secretariat and the International Organisation for Migration. These organisations offer poor value for money for UK aid but have a potentially critical niche development or humanitarian role which is not well covered elsewhere in the international system or contribute to broader UK Government objectives. We expect to see serious reforms and improvements in performance. We will take stock within two years and DFID’s core funding may be ceased if improvements are not made.   

The Review found that four agencies performed poorly or failed to demonstrate relevance to Britain’s development objectives.  The Review therefore concluded that it is no longer acceptable for taxpayers’ money from my Department to continue to fund them centrally.  So I can tell the House today that the British Government will withdraw its membership of the United Nations Industrial Development Organisation, and that DFID will stop voluntary core funding to UN HABITAT, the International Labour Organisation and the UN International Strategy for Disaster Reduction. This will allow over £50m of aid money, to be redirected immediately to better-performing agencies.

We are working closely with other countries to build a coalition for ambitious reform and improvement of all the multilateral agencies.

Conclusion

As a result of these Reviews, over the next 4 years, UK aid will:

  • secure schooling for 11 million children - more than we educate throughout the UK but at 2.5% of the cost
  • vaccinate more children against preventable diseases than there are people in the whole of England
  • provide access to safe drinking water and improved sanitation to more people than there are in Scotland, Wales and Northern Ireland combined
  • save the lives of 50,000 women in pregnancy and childbirth
  • stop 250,000 newborn babies dying needlessly
  • support 13 countries to hold freer and fairer elections
  • help 10 million women get access to modern family planning

I believe that these results - which will transform the lives of millions of people across the world - will make everyone in this House and this country proud.  They reflect our values as a nation: generosity, compassion and humanity.   But these results are not only delivered from the British people; they are also for the British people.  They contribute to building a safer, more stable and prosperous world which, in turn, helps keep our country safe from instability, infectious disease and organised crime. 

Aid can perform miracles but it must be well spent and properly targeted. The UK’s development programme has now been reshaped and refocused so that it can meet that challenge.

I commend this statement to the House.