ICAI Report on the Department for International Development’s Bilateral Aid to Pakistan

17 Oct 2012

The Independent Commission for Aid Impact (ICAI) has today published a report on the Department for International Development’s (DFID) Bilateral Aid to Pakistan. The report examined whether DFID is achieving impact and value for money by assessing £250 million of its expenditure on health, education and humanitarian assistance. 

Pakistan is a large country facing major development challenges. It is unlikely to achieve its Millennium Development Goals on education and maternal and child health by 2015. These challenges are compounded by significant levels of violence, high corruption risks and recurring natural disasters, including the 2010 floods, which affected an area four times the size of Britain.

The ICAI report found many commendable aspects to DFID Pakistan’s work:

• The education programme shows a sophisticated design and some promising early results, including improving education quality. We welcome experiments in working with the low-cost private sector as a potentially cost-effective way of reaching out-of-school children. It is too early to assess whether the results are sustainable and scalable.
• The humanitarian work shows good evidence of learning and a strong focus on value for money. There are good results for the modest scale of investment but Pakistan’s lack of preparedness for future disasters is concerning.
• The health programme, however, has faced major difficulties over its life, which we believe should have been addressed in a more timely fashion. The difficult institutional environment clearly undermined impact. The programme is now undergoing substantial redesign.

UK aid to Pakistan has scaled up dramatically in recent years and will continue to do so, from £87 million in 2007-08 to a planned £446 million in 2014-15. This would make Pakistan the largest recipient of UK bilateral aid in the world. DFID has not delivered programmes on this scale in Pakistan before. This challenge is magnified by the difficulties of working in insecure provinces, weaknesses in budgetary processes and public financial management systems and recent constitutional reform devolving federal power to the four provinces, which is leading to uncertainty. This suggests that active risk management should be applied to programme scale-up.

 Recommendations:

• Overall rating: Green-Amber
  
• DFID should ensure that the conditions for scaling up its programmes are clearly articulated and that it retains the flexibility to reallocate funding away from under-performing areas.
• DFID should increase its support for promoting affordable and equitable private sector delivery of health and education services to poor communities.
• DFID should make building resilience to natural disasters at the household and community levels a core element of its programme.
• DFID programmes funded through country systems should include agreed standards for budget integrity as a condition of scaling up.

Graham Ward CBE, ICAI Chief Commissioner, said: “Overall, we found that the DFID Pakistan programme is dynamic and innovative, with a good range of impressive initiatives. DFID has no track record, however, of delivering programmes in Pakistan on the scale that is now contemplated. Delivering aid there also involves considerable challenges, so we believe that the planned programme scale-up needs to be approached carefully.”

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 workplan and for links to each report, please visit www.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.