Weak coordination and oversight limit effectiveness of £500m Blue Planet Fund

30 Nov 2023

• ICAI review of the government’s marine fund launched prior to COP26 finds ‘severe’ risks including lack of cross-government coordination and coherence of the portfolio – resulting in duplication in some areas and delivery gaps in others. 
• In order to launch rapidly and distribute funding early, Defra re-assigned some existing projects rather than focusing on needs of developing countries. 
• Watchdog raises questions over how clearly the Fund’s programmes contribute to poverty reduction – a requirement for all UK aid spending. 
• ICAI is concerned about the extent of transparency, accountability and guidance for the portion of the fund delivered by Defra’s arm’s-length bodies. 
• Government has taken steps to address issues such as the lack of engagement with developing countries by hiring regional coordinators and creating country plans. 

Delivery of the UK government’s flagship £500 million marine fund has been affected by a lack of adequate cross-Whitehall coordination and oversight, a new report by the aid watchdog finds today (Thursday 30 November). 

The Blue Planet Fund was launched by ministers in June 2021, ahead of the UK hosting the UN climate conference COP26 in Glasgow that year. The launch marked a key UK commitment to invest at least £3 billion in developing countries to protect nature and biodiversity as part of a broader £11.6 billion International Climate Finance pledge. 

Jointly managed by the Department for Environment, Food and Rural Affairs (Defra) and Foreign, Commonwealth and Development Office (FCDO), the Fund was designed to support developing countries to protect their marine ecosystems and reduce poverty through the sustainable management of oceans and their resources. 

Assessing the Fund’s performance so far, the Independent Commission for Aid Impact (ICAI) noted a lack of coordination and coherence between Defra – the Blue Planet Fund’s strategic lead – and FCDO, with duplicated work in some areas and gaps in delivery. 

Oversight was also found to be lacking, with some management processes still under development two and a half years after the Fund’s launch. Defra’s management of some of its delivery partners has been weak, and particularly so in the case of its arm’s-length bodies. ICAI noted that these organisations charged high overheads, ranging from 15% to 37% – higher than the norm for the delivery of aid-funded activities.  

The government was seeking to address some of the problems flagged in ICAI’s report with the appointment of five new regional coordinators and the drafting of country plans to better take account of partner countries’ own priorities and needs. However, the watchdog questioned the impact of these improvements with more than 90% of the Fund already allocated. 

ICAI Commissioner Tarek Rouchdy, who led the review, said: 

“The Blue Planet Fund’s stated aim was to help developing countries protect the oceans and reduce poverty. However, our review noted that in Defra’s desire to distribute funding rapidly there was not enough focus on what those countries needed. 

“We also noted a lack of coherence between Defra and FCDO and raised questions over how much the Fund contributes to poverty reduction despite this being a requirement for all UK aid. 

“It is positive that the government is seeking to address some of the issues raised and we recommend putting in place core management functions and stronger oversight measures of the Blue Planet Fund.” 

Defra started delivering its £310 million majority share of the Fund in 2021, while FCDO only began delivering its £190 million share in 2023. FCDO’s two-year delay was due to resource constraints resulting from the UK government’s decision to reduce its aid spending commitment from 0.7% to 0.5% of gross national income during the COVID-19 pandemic, with FCDO the responsible department for meeting the target. FCDO also had to pause non-essential aid spending for several months in 2022 due to the rising cost of hosting refugees and asylum seekers in the UK. 

Due to the speed with which the Blue Planet Fund was set up – there was a strong ministerial preference to launch the Fund at the 2021 G7 summit and to use its announcement to support other high-profile events including COP26 – Defra’s early portfolio re-assigned existing projects focused on marine protection, fisheries and pollution, bringing them under the Fund’s portfolio rather than designing new programmes based on consultation with countries. 

ICAI found that by scaling up, adapting, merging or renaming ongoing activities in this way, there was limited opportunity to create a Blue Planet Fund portfolio focused on countries with the greatest needs and Defra’s funding allocations were made before key management processes and controls were in place. 

The report also noted that while poverty reduction efforts are a statutory requirement for UK Official Development Assistance (ODA), the Fund’s programme selection criteria lacked a strong focus on this area. Many of the concept notes and some of the business cases ICAI reviewed did not provide adequate assurance that the programmes were to contribute to poverty reduction. However, ICAI found that FCDO’s Climate and Ocean Adaptation and Sustainable Transition (COAST) programme had recognised the issue and was seeking to strengthen this evidence base.  

There were further areas requiring improvement, including coordination at the country level. In Fiji, ICAI was told of poor communication across different programmes, including cases where the High Commission was not informed about planned projects or country visits carried out by Defra’s central teams.  

ICAI raised particular concerns about the arm’s-length bodies delivering Defra’s Ocean Country Partnership Programme (OCPP), where investments have been disbursed without a completed or signed memorandum of understanding and the process outlined in the business case had not been followed. 

In addition, when the Blue Planet Fund’s Joint Management Board identified several ‘severe’ risks – similar to the weaknesses in coordination and oversight of delivery observed by ICAI – these were not discussed at the International Climate Finance Management or Strategy Boards, suggesting a lack of cross-government oversight. 

ICAI added that, with several key management processes still yet to be finalised, including the Fund’s portfolio-level monitoring, evaluation and learning arrangements and its key performance indicators, it would be difficult to demonstrate its impact and value for money.  

ICAI makes the following recommendations on how to improve the Blue Planet Fund:  

Recommendation 1: As the strategic lead for the Blue Planet Fund, Defra should put in place formal core central management functions, including results management and reporting systems to enable the Fund to demonstrate impact and value for money. 

Recommendation 2: Given the major risks identified by this review, cross-government oversight of the Fund should be strengthened.   

Recommendation 3: The Fund should ensure that poverty reduction, as the statutory purpose of UK aid, is the primary focus of its programming.  

Recommendation 4: Defra and FCDO should ensure that governments and other national stakeholders in the countries where the Fund operates are empowered to shape programmes by creating formal channels for them to communicate their priorities and needs.