A report released today by the National Audit Office has welcomed steps taken by the Department for International Development to improve transparency over how aid it distributes via multilateral organisations is spent. The report found that the review is a significant step towards the Department being able to improve the value for money from its spending through these organisations which totalled £3.6 billion in 2011-12.
The Department’s 2011 review, which assessed 43 organisations, was a more thorough and comprehensive process than previous assessments. The review was valuable: both for providing accountability to UK taxpayers and for promoting reform in the multilateral organisations themselves. It enabled the Department to show international leadership. Since the review, other countries have used elements of the Department’s approach to assessing and rating multilateral performance. For example, Australia has used similar methods and the Netherlands has publicly reported its assessments for the first time.
The review rated nine organisations as ‘very good’ value for money for UK aid, 16 as ‘good’, nine as ‘adequate’ and nine as ‘poor’. The Department has already announced funding increases to those it rated as offering better value for money and that it will cease to fund four of those it rated as ‘poor’ value for money for UK aid. Funding to those organisations it rated as ‘good’ or ‘very good’ will increase from 74 per cent of the total in 2010-11 to 77 per cent in 2014-15.
However, international agreements limit the extent to which the Department can change its funding. It is important, therefore, that it has co-ordinated, up-to-date plans on how it will use the review to drive performance improvements in each organisation .
The assessment framework used in the review was logical and covered key factors which are important to value for money. While the assessment framework compared well with recognized models for assessing value for money in organisations, the guidance to assessors did not always ensure consistency and some organisations found it difficult to fulfil all the evidence requirements. Organisations rated as ‘very good’ did not need to meet a minimum set of standards and their cost-effectiveness was not always compared to alternative delivery methods.
The Department plans to update the review next year and it is important that any changes in the ratings are backed by adequate evidence.