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The effectiveness of Official Development Assistance expenditure

The government needs to do more to demonstrate its £14 billion of spending each year on Official Development Assistance (ODA)1 is effective across the full range of activities it supports, according to today’s report by the National Audit Office. 

Every year since 2013 the UK government has met the target to spend 0.7% of its gross national income on ODA. Since 2015, the government has been legally obliged to meet the target.  

The NAO report found that departments have put in place structures to support target setting and performance assessment. And there is good evidence of individual programmes securing impact.  However, taking ODA expenditure as a whole, government has placed insufficient emphasis on demonstrating its effectiveness and on progress against the UK Aid Strategy. The NAO found that government has only just started to consider the effectiveness of ODA expenditure across departments and what this says about progress in implementing the UK Aid Strategy.  

Responsibilities for considering the effectiveness of ODA expenditure are fragmented across government.For example, HM Treasury considers business cases for ODA expenditure, but does not have a role in considering the impact of actual expenditure. Departments are responsible for securing value for money from all their expenditure, including ODA.  

The 2015 UK Aid Strategy set out that more ODA expenditure would come from sources other than the Department for International Development (DFID). The proportion of total ODA DFID spends has decreased from 89% in 2013 to 81% in 2015 to 72% in 2017. ODA spending by other government departments (such as the Foreign & Commonwealth Office), by cross-government funds (such as the Conflict, Stability and Security Fund), and through other payments and attributions has almost trebled over this period. 

Neither DFID nor HM Treasury has assessed whether allocating the ODA budget to departments other than DFID has had the impact intended. ODA-funded programmes generate additional challenges such as making sure expenditure is eligible to count towards the target and managing programmes in hostile environments.  

Widening ODA expenditure to other departments has increased risks to effectiveness. For departments other than DFID the changed approach to allocating ODA creates an opportunity to access new funds at a time when many feel their core funding is under great pressure. It is also not clear whether the intended benefits, for example, of drawing in wider skills have been realised.  

There has been a lack of progress in improving transparency, a key objective of the aid strategy. DFID publishes good quality information on expenditure, for example, how much is spent, by which department and in which country. But the NAO found that very few departments make public information about their ODA expenditure, such as the amounts for which they are responsible, the programmes this budget funds, or the impacts secured for this spending.  

The NAO recommends that as part of the next Spending Review, HM Treasury should assess departments’ capability and capacity to deliver ODA projects and their plans to evaluate their effectiveness. Government should also strengthen its approach to the governance of ODA so that it is clear where responsibility sits for overall coherence and achieving value for money.  

“The ODA spending target has been successfully met for the past five years. It is however unclear whether government is achieving its objectives in the 2015 UK Aid Strategy. “Government does not know whether giving responsibility for spending ODA to a larger number of departments has had the impact it intended.  And its progress in improving the transparency of spending has been slow.  “While there is good evidence that many aid programmes are securing an impact individually, government does not know whether all parts of ODA, taken together, are securing value for money.”

Gareth Davies, head of the NAO

Notes for Editors

Key facts

£14.1bn 
UK Official Development Assistance expenditure in 2017

23
number of UK public bodies contributing to the Official Development Assistance target in 2017

28%
proportion of Official Development Assistance by bodies other than the Department for International Development in 2017

5
number of years the UK has met the United Nation's Official Development Assistance target of spending 0.7% of Gross National Income on overseas aid

138
number of countries in receipt of Official Development Assistance expenditure in 2017

23%
increase in Official Development Assistance expenditure between 2013 (the first year the target was met) and 2017

2020
year by which the UK Aid Strategy targeted improvements in transparency of UK aid spending

17%
proportion of bilateral Official Development Assistance spent on humanitarian aid in 2017 – the highest proportion by sector

53%
proportion of bilateral Official Development Assistance spent in countries classified as least developed in 2017 – down from 55% in 2013

 

  1. In 2010, the coalition government committed to spending 0.7% of UK gross national income on overseas aid – known as Official Development Assistance (ODA) – from 2013 onwards. This is the proportion of a nation's income that the United Nations has said developed countries should aim to spend on overseas aid. The UK has met the 0.7% target each year from 2013 to 2017. In 2015 this commitment became legally binding. The increase in the UK's gross national income and the UK's commitment to the 0.7% target has led to an increase in total UK ODA expenditure.
  2. The NAO examined 26 programmes in five countries (Pakistan, Somalia, Uganda, Turkey and China) for our report. They are detailed in the Appendices of the report.
  3. Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
  4. The National Audit Office (NAO) helps Parliament hold government to account for the way it spends public money. It is independent of government and the civil service. The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether government is delivering value for money on behalf of the public, concluding on whether resources have been used efficiently, effectively and with economy. The NAO identifies ways that government can make better use of public money to improve people's lives. It measures this impact annually. In 2018 the NAO's work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £539 million.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 36/19