ICAI finds both positives and gaps in government response to 2021-22 reviews

18 Jul 2023

The government’s response to the aid watchdog has been mixed, with 58% of recommendations from recent reviews adequately addressed but most outstanding issues still not, a new report finds today (Tuesday 18 July).

The annual follow-up review from the Independent Commission for Aid Impact (ICAI) looks back at the eight reviews published between July 2021 and July 2022, plus other outstanding areas of concern, assessing progress by the Foreign, Commonwealth and Development Office (FCDO) and other departments in implementing recommendations.

ICAI notes that the government engaged constructively with the follow-up process. As well as the eight reviews from 2021-22, the report also returned to six reviews published in previous cycles to address outstanding issues from last year’s follow-up exercise, on which progress was slower.

Overall, taking into account the recent reviews and older outstanding issues, the government was found to be adequately addressing 43% of ICAI’s recommendations.

Chief Commissioner Dr Tamsyn Barton said:

“ICAI follows up all of its reports to ensure that our recommendations are resulting in genuine improvements to the way UK aid is spent, holding the government to account on this important issue.

“While there is mixed progress on taking forward our recommendations, with 58% of them in recent reviews adequately implemented but a worse rate for issues outstanding more than a year, we found welcome progress in many areas. These included the Treasury taking forward our calls for greater flexibility around the aid spending target to cope with pressures created by so much of the aid budget being used for refugees in the UK, a strategy for International Climate Finance which we have recommended since 2018, and FCDO improving its investigations of safeguarding incidents.

“On the other hand it is worrying that the government has still not implemented three out of four of the recommendations to combat fraud, and that there is still no accountability for the commitment made by Theresa May in 2019 to align all aid with the Paris Agreement on climate change. These are some of the areas where we hope to see much better progress next year.”

Positive findings included progress on management of the aid spending target (currently 0.5% of GDP, reduced from 0.7% in 2021). ICAI had previously noted the considerable value-for-money risks created by treating the target as both an exact floor and ceiling. In this second year of follow-up, ICAI was pleased to see the precedent adopted in the Treasury allowing for added flexibility in managing the target as recommended, allocating an additional £2.5 billion in response to a rapid increase in aid being spent on refugees in the UK. However, ICAI has found many other value-for-money issues in the way support to refugees in the UK is provided by the aid budget and will follow up on these in future years.

Another positive outcome was that after ICAI had been pressing since 2018 for a cross-government strategy on climate finance to avoid duplication and ensure focus on what can achieve the biggest impact, a cross-departmental strategy was produced in March this year.

On safeguarding in the humanitarian sector, the report found that in spite of FCDO’s initial reservations about the ICAI recommendation, it had comprehensively reviewed its safeguarding case management systems, which helped it to identify 31 actions to be taken for improvement. As of December 2022, over half of these actions had been completed, with the remainder being worked on.

Less positively, the report noted that on tackling aid fraud, FCDO failed to take any new concrete actions to address ICAI’s three outstanding recommendations.
On alignment with the Paris Agreement, it found that the UK is not yet reporting publicly on how UK aid spend aligns with the treaty to limit global warming, a commitment made by Theresa May in June 2019.

The report also expressed concerns on how well the government was learning lessons from the COVID-19 pandemic: FCDO is yet to address ICAI’s recommendation to undertake a formal after-action review of the response, which heightens the risk that learning will not be captured to inform responses to future crises.
On aid best practice generally, reviewers found that FCDO had done little to support learning in departments less experienced at managing aid programmes, as ICAI recommended in 2019, only dealing with a small number of areas such as transparency reporting and Paris alignment.

ICAI returns to all its reviews to monitor the government’s progress in implementing recommendations, giving each a score of “adequate” or “inadequate”.
An “adequate” score means that enough progress has been made in the right areas and in a timely manner to address the core concerns underpinning ICAI’s recommendation. An “inadequate” score means that either too little has been done to address concerns; the response is insufficiently relevant to the concerns; or implementation of actions has been too slow, meaning ICAI cannot sufficiently judge their effectiveness.