ICAI report on DFID’s Oversight of the EU’s Aid to Low-Income Countries

11 Dec 2012

The Independent Commission for Aid Impact (ICAI) has today published a report on the Department for International Development’s (DFID’s) oversight of the European Union’s (EU’s) aid to low-income countries.

The EU is the world’s second-largest aid donor after the United States, providing aid to more than 150 countries. UK contributions to the EU specifically for aid expenditure are approximately £1.4 billion a year, 16% of DFID’s total aid spending. The review focusses on the impact of EU aid on the ground in low-income countries through three case studies: Mozambique, Tajikistan and Uganda.

The ICAI Report found that, at a central policy level, DFID had a clear focus for its engagement with the EU, with evidence of DFID influencing EU policy. DFID, however, does not have the same level of assurance as it has from other multilateral partners such as the World Bank. This is important, given the substantial scale of the UK’s contribution and the limited discretion the UK has about the EU as a route for aid. The review also found that the quality of engagement between DFID country offices and EU delegations was variable at the country level. Because of this DFID does not make full use of the potential combined impact of UK and EU funds.

The involvement of recipient governments in EU programmes, particularly on planning, is clear. There is less evidence, however, of how intended beneficiaries are involved in the design and assessment of EU programmes. Weaknesses in the EU’s own performance management and results framework make an overall view of the impact of EU programmes difficult to achieve. The evidence from our case studies is mixed. There are some positive results but long-term impact and sustainability have not been demonstrated and exit strategies are not clear.

Overall rating: Amber-Red

Recommendations:

• DFID should set out clearly (a) what action is needed and (b) how long it will take to deliver the same level of assurance on its contributions to the EU as it achieves elsewhere. This should include improvements to the performance management of EU aid and better access to EU information;
• DFID should give better guidance to DFID country offices on how they should contribute to EU country strategies and to existing co-ordination forums, so as to ensure a better combined impact from UK and EU funds and a greater focus on actual EU performance;
• DFID should ensure that the EU secures ongoing input from intended beneficiaries and effective intelligence on what is needed on the ground, in order to inform and challenge dialogue with recipient governments;
• DFID should engage more actively on developing and driving through the EU’s planned improvement of its risk management processes, given the potential this has for improving the impact of EU aid.

Graham Ward CBE, ICAI Chief Commissioner said: “The scale and coverage of the EU’s expenditure provides a considerable opportunity for DFID to contribute

to aid programmes worldwide. This report shows that, despite making good headway in influencing EU aid policy, DFID needs to push the EU for a better

account of where taxpayers’ money is going and to engage further with EU projects and programmes at a country level to ensure that it is spent to best effect.”

Notes to editors:

For further information please contact Tom McDonald on 020 7270 6779 or t-mcdonald@icai.independent.gov.uk. The Independent Commission for Aid Impact (ICAI) is the independent body responsible for scrutinising UK aid. We focus on maximising the effectiveness of the UK aid budget for intended beneficiaries and on delivering value for money for UK taxpayers. For further details on ICAI, the work plan and for links to each report, please visitwww.independent.gov.uk/icai. ICAI’s Chief Commissioner is Graham Ward CBE. The three other Commissioners are Mark Foster, John Githongo and Diana Good. Their biographies can be found on the ICAI website. This report was prepared by ICAI with the assistance of KPMG LLP, Agulhas Applied Knowledge, Center of Evaluation for Global Action (CEGA) and the Swedish Institute for Public Administration (SIPU International).

ICAI Traffic Light Ratings:

• Green: The programme performs well overall against ICAI’s criteria for effectiveness and value for money. Some improvements are needed.
• Green-Amber: The programme performs relatively well overall against ICAI’s criteria for effectiveness and value for money. Improvements should be made.
• Amber-Red: The programme performs relatively poorly overall against ICAI’s criteria for effectiveness and value for money. Significant improvements should be made.
• Red: The programme performs poorly overall against ICAI’s criteria for effectiveness and value for money. Immediate and major changes need to be made.