The Newton Fund

Review

Our review found that the £735 million aid fund is poorly designed to deliver its primary purpose of addressing development challenges and advancing development for the poorest people and countries through research and innovation, and does not ensure its spending is a good use of UK aid. We made six recommendations.

Findings

• The Fund was not originally designed as an ODA fund, and its original focus was on promoting the benefits to the UK from collaborating on research and innovation with middle-income countries, as emerging research nations, economic powers and trading partners of the future.
• This repurposing was not accompanied by any significant change to the Fund’s design to reflect its new primary purpose of promoting international development.
• The Fund was poorly designed to deliver development goals; secondary objectives have often been the main driver of its choice of partnerships and approach.
• The first round of Newton Fund allocations was determined more by the absorptive capacity of UK delivery partners, than the needs of partner countries.
• The matched funding requirement may disadvantage poorer countries, who tend to be less well resourced.
• Our survey suggests that almost 90% of UK aid spent through the Newton Fund stays in the UK with UK institutions.
• BEIS does not provide effective oversight or management, resulting in blurred accountability, a lack of transparency and weak coordination within and across country partnerships.
• The Newton Fund is promoting some strong research partnerships, but the Fund is not promoting the best use of ODA and some projects appear not to be within the ODA definition.
• The Newton Fund lacks a convincing approach to capacity building.
• BEIS has no coherent approach to value for money at the Fund level.
• The Newton Fund is reported by BEIS as untied aid, but it appears to be tied aid in spirit.
• The Newton Fund does not have a Fund-level approach to capturing development outcomes and so it is not possible to reach an informed conclusion on the Fund’s development impact over the past five years.

Recommendations

1. As the Newton Fund is 100% ODA, BEIS should ensure that the Fund increases its focus on achieving its primary purpose, which is to meet the development needs and priorities of its partner countries. It should require improved ODA compliance and assurance processes across delivery partners.
2. The Newton Fund should ensure that it meaningfully considers options for reducing gender inequality and reports against its progress.
3. Given that the UK is committed to untying 100% of its aid and reports its aid as fully untied, BEIS should ensure that the funding practices of the Newton Fund comply with both the letter and the spirit of the untying commitment.
4. BEIS should improve the governance and accountability of the Newton Fund and put in place a strategy setting out how it will maximise development impact as its primary purpose.
5. BEIS should improve the Newton Fund’s approach to and measurement of value for money.
6. The Newton Fund should improve its approach to monitoring, evaluation and learning at the Fund level.