Newton Fund review: Parliament sub-committee endorses ICAI’s findings

15 Jun 2020

An Independent Commission for Aid Impact (ICAI) review of the Newton Fund, a £735 million research partnerships fund, has today been endorsed by a parliamentary sub-committee, which warned that the UK government needs to address “serious” value for money concerns in how the fund is managed.

The sub-committee on the work of ICAI, part of Parliament’s International Development Committee, launched an inquiry following ICAI’s review in June 2019 of the Newton Fund – a UK aid fund managed by the Department for Business, Energy and Industrial Strategy (BEIS) that aims to build science and innovation partnerships to reduce poverty. At the time, ICAI awarded the fund an amber-red score after finding that it was poorly designed to tackle development challenges and reduce poverty among the world’s poorest people. The review also raised concerns around transparency, tied aid, value for money and oversight.

After scrutinising ICAI’s review and taking further written evidence, the sub-committee today concluded that it agreed with ICAI’s concerns, and it warned that the government was “dragging its feet” in implementing the improvements that ICAI had called for a year ago. The sub-committee endorsed ICAI’s view that the Fund should be redesigned to put development impact at its core, and that BEIS should demonstrate tangible value for money and compliance with ODA rules, while also ensuring it was holding delivery partners to account.

ICAI Chief Commissioner Dr Tamsyn Barton said: “We welcome the sub-committee’s endorsement of our review and its support for our recommendations.

“Although we recognise that BEIS has made some improvements, we were disappointed with the government’s response to our review. In particular, we believed our main concerns relating to poverty reduction and tied aid had not been taken on board fully, and we hope that the sub-committee’s findings will encourage the government to look at these issues again. We will continue to monitor the government’s progress through our follow-up process.”

In its original review of the Newton Fund, which is entirely funded by UK aid, ICAI raised concerns that the ‘matched funding’ model (where partners have to match UK contributions in funding or in kind) meant that almost 90% of the fund stayed in the UK with UK institutions, which is contrary, at least in spirit, to the government’s commitment to untie all aid. It also found that secondary objectives, such as building ties with partner countries like China, India, Brazil and South Africa, were often the main driver of the fund’s work, rather than focusing on poverty reduction as required under aid-spending rules. ICAI made six recommendations for how the fund could ensure it met both its primary purpose and the untying commitment, how it could reduce gender inequality, and how it could improve governance, learning and value for money.

Following the government’s response to ICAI, the review typically would have been the subject of an oral evidence session in front of the sub-committee. However, due to the coronavirus pandemic, the committee instead took evidence from ICAI and government in writing before publishing its conclusions.

ICAI also expects to scrutinise the Newton Fund again as part of its annual follow-up report, which is due to be published later this year.