How DFID works with multilateral agencies to achieve impact

11 Jun 2015

The Independent Commission for Aid Impact (ICAI) has published a report today, which reviews how the Department for International Development (DFID) works with multilateral organisations such as the World Bank, European Union and United Nations agencies.

DFID depends greatly on the multilateral system to achieve results. Multilateral agencies are able to deliver aid on a large scale and have widespread legitimacy to lead and co-ordinate development and humanitarian assistance. DFID is well respected as a funder and has significant influence in the multilateral system. In 2013-14 DFID spent almost two-thirds (£6.32 billion) of its budget through multilateral agencies and many agencies depend on DFID as their largest funder.
Our review found that DFID has used its influence to promote positive change and encouraged agencies to focus on cost effectiveness. This has contributed to demonstrable reform in some individual agencies over recent years.

Despite this positive impact we are concerned that DFID is operating without a clear overall strategy for engaging with the multilateral system. Our review also found that DFID’s focus on improving agencies’ management processes has been at the expense of strategic dialogue on what multilaterals do and how they do it. DFID’s focus on improving organisational effectiveness is important, but higher-level strategic concerns should not be crowded out as a result. DFID would gain from dedicating more senior leadership to these critical relationships and explaining their role more clearly to key stakeholders.
At a country level, there is a real opportunity for DFID to understand the multilateral landscape more fully and, collaborate with the various players in effective coalitions to make a difference to the lives of the poor.

Graham Ward, ICAI Chief Commissioner, said: “DFID has significant influence in the multilateral system. DFID has rightly used this influence to promote reform and encourage a focus on value for money. We are concerned that DFID lacks a clear strategy for overall engagement with multilaterals. A strategy for engaging with the system as a whole would help to guide the UK’s resource allocation and prioritise areas for further reform”.
Mark Foster, lead commissioner for this review, said: “To get the most out its partnerships with multilateral organisations DFID should focus on strategic challenges and long-term impacts that would yield improved leadership, simpler delivery processes and better ways of partnering between DFID and agencies. Transparency with regard to impact, as opposed to scrutinising processes, should be the priority for DFID’s engagement”.

As a result of our findings, we have given a rating of Green/Amber.

We have made the following recommendations:

Recommendation 1: DFID should have a strategy for its engagement with the multilateral system as a whole at the global level.
Recommendation 2: DFID needs clear objectives for its work with the multilateral system in its country-level strategies.
Recommendation 3: DFID should address the low proportion and limited seniority of its core staff resources devoted to managing its relationships with multilateral agencies.
Recommendation 4: DFID should continue to press for greater transparency and accountability of multilaterals.
Recommendation 5: DFID should promote more integrated working amongst multilateral institutions at country level.
Recommendation 6: DFID should work more collaboratively with other bilaterals in its engagement with multilateral agencies.
Recommendation 7: DFID should communicate more effectively to taxpayers about the role, impact and importance of multilaterals.


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