Independent Commission for Aid Impact publishes reports on DFID’s Use of Contractors and Programme Partnership Arrangements

17 May 2013

The Independent Commission for Aid Impact (ICAI) has today published two case study based reports on:

DFID’s use of contractors to deliver aid programmes; and

DFID’s Support for Civil Society Organisations through Programme Partnership Arrangements (PPAs).

ICAI has given both programmes a rating of Green-Amber.

Graham Ward, ICAI Chief Commissioner, said: “The case studies that we examined for both DFID’s use of contractors and programme partnership arrangements show promise for impact on intended beneficiaries. Civil society organisations and private sector contractors are valuable delivery mechanisms for aid and we have made a series of recommendations to increase the value that they deliver.”

The reports provide insight into DFID’s use of third parties to deliver aid programmes through different channels and mechanisms. In the evidence that we considered, both civil society organisations and contractors have helped to drive innovation and, while it is too early to say whether all the programmes will have a sustainable impact, the signs are promising.

DFID’s use of contractors to deliver aid programmes

The overall rating for the programmes we examined is Green-Amber. ICAI reviewed the DFID Central Procurement Group and a range of programmes with a combined contract value of £264 million. The case studies show that contractors are an effective option for delivering aid. DFID has selected contractors that have delivered positive results at competitive fee rates. DFID’s poor end-to-end programme management, however, has led to delays. In the case studies that we examined, this has had the greatest impact during the mobilisation phase and is exacerbated by a lack of ‘whole life’ individual responsibility for programmes. In addition, learning is not being captured from contractors or used to inform future programming.

The reform of DFID’s central procurement group has improved processes but is too slow and lacks prioritisation. As a result, decisions to use contractors are not guided by a strategic plan to deploy the right contractors, including major, niche and innovative new entrant organisations, to best effect.

DFID’s Support for Civil Society Organisations through Programme Partnership Arrangements

The overall rating for the programmes we examined is Green-Amber.  DFID makes grants to a value of between £151,000 and £11 million per year to 41 civil society organisations (CSOs) that share its objectives and that it believes are strong delivery partners. Our review considered six PPA agreements of varying size and type.

ICAI recognises that a vibrant civil society sector is an essential part of the UK aid landscape. While it is too early to conclude on the overall impact of the current

funding round, we find that PPAs are helping to drive innovation in the recipient organisations. In particular, they are improving the quality of performance management and accountability for results. We think it is likely that these changes will lead to improved results for intended beneficiaries, not just from PPA funding but across the CSOs’ full range of activities.

Notes to editors:

1. For further information please contact Sam Harrison on 020 7270 6742 or  S-Harrison@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.

2. 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.

3.  The Programme Partnership report was prepared by ICAI with the assistance of Agulhas Applied Knowledge. KPMG LLP were not involved since they provided one of the services provided in one of our case studies.

4. The Use of Contractors report was prepared by ICAI with the assistance of Concerto Partners LLP. In order to prevent a potential conflict of interest, Concerto were appointed through open competition to carry out the review. Concerto do not have any contracts with DFID and the review was carried out in isolation from other contractors with which ICAI works.

5.  ICAI reports are written to be accessible to a general readership and we use a simple ‘traffic light’ system to report our judgement on each programme or topic we review, as follows:

I.          Green: The programme performs well overall against ICAI’s criteria for effectiveness and value for money. Some improvements are needed.

II.         Green-Amber: The programme performs relatively well overall against ICAI’s criteria for effectiveness and value for money. Improvements should be made.

III.        Amber-Red: The programme performs relatively poorly overall against ICAI’s criteria for effectiveness and value for money. Significant improvements should be made.

IV.        Red: The programme performs poorly overall against ICAI’s criteria for effectiveness and value for money. Immediate and major changes need to be made.