Speakers:

Richard Manning, Chair, Development Assistance Committee, OECD

Rt Hon Hilary Benn MP, Parliamentary Secretary of State for International Development

Chair:

Rt Hon John Battle MP, Chair, APGOOD

John Battle opened the meeting by congratulating Tom Clarke MP on the successful passage of his International Development Reporting and Transparency bill through the House of Commons last week.

Richard Manning began by outlining the DAC Peer Review methodology: two DAC member countries (in this case Italy and USA) are deputed to examine the country in question. For the UK Review, there had been field visits to Nepal in November 2005 and Zambia in February 2006, meetings in London, and discussion of the first draft with DFID.

He said that the reviewers found that DFID is experiencing a "golden age", but this can't be taken for granted: the question is how to move forward.

They felt that the UK model is a powerful one for development cooperation - in terms of:

• leadership, staff and modern operational management approach;
• commitment to scaling up aid;
• poverty focus;
• pursuit of policy coherence.

He noted a number of key challenges for the future, including how to:

• Maintain support and "tell the story" - to the public, media, parliament - while scaling up aid
• Do "more with less" : 10% staff reduction while increasing aid rapidly;
• Pursue the concentration on poor countries;
• Keep sector focus, but with caution on sector spending targets (experience of USAID);
• Maintain key sector expertise, and address staff turnover;
• Take account of the recent multi-donor evaluation of general budget support;
• Strengthen local civil societies to hold governments to account;
• Keep sight of the grass-roots context - don't spend too much time in capital cities!

He said that DAC welcomed the policy push on fragile states, but presents particular challenges:

• Need for clarity about how to measure performance;
• Uncertain environments will require a thoughtful approach to the aid predictability agenda;
• May be staff intensive and thus a challenge to "more with less".

DFID's strong role in international thinking on development is appreciated - but there is a need to:

• Translate policies into practice e.g. compare statements on gender with missing the MDG on women's education last year;
• Balance between UK leadership role in aid reform and perception of promoting one model: more inclusive tactics in pursuit of its aid reform strategy (e.g. DFID's recent work with the Japanese);
• Build on assessment of multi-lateral performance without distorting multi-lateral principles.

Responding for DFID, Hilary Benn firstly thanked Richard and the DAC team for the review. He was grateful for their positive comments and paid particular tribute to the staff of DFID, who were the primary reason for the organisation's good reputation.

Regarding the challenges, he said he thought the DAC was especially right on the importance of maintaining public support post-2005 and "telling the story".

Regarding the other points, he commented that:

• Sectoral and thematic targets are also pushed for by civil society;
• Doing more with less will be a challenge;
• Grass roots and "demand side" of good governance will be a focus in the future and a key white paper message;
• Very many poor people live in "fragile states", thus it makes sense to concentrate effort there;
• He accepted that general budget support was just one instrument, and that where governance is not good a variety of instruments may be needed - rather than just walking away.

Comments and questions from the floor included:

• Given linkages between rights violations, conflict and fragile states, would DFID adopt a more rights-based approach?
• What was the DAC's view of DFID's new approach to aid conditionality?
• Does the DAC Review comment on the role of NGOs in keeping DFID "on its toes"?
• Will Treasury pressure on DFID to show results restrict work in difficult areas like fragile states?
• Why does DFID not have a policy on youth, development and volunteering?
• Do some questions not get on the DAC Review agenda e.g. does bilateral aid have a future?
• That sector targets and reports on sector spending are useful.
• A "Clapham omnibus" version of the DAC report: great job but could improve in some areas e.g. growth; you've been too arrogant; can you really do more with less?
• Many of the issues raised will be covered by the Tom Clarke's bill (see introduction).

Richard Manning commented that:

• It was important to get the human rights and development communities to work together;
• The new conditionality policy is noted as a very significant change, but need to see it in practice;
• Engagement with the NGO sector is crucial - north and south, in different ways;
• The DAC press office probably feels the Report is too opaque and would welcome a Clapham omnibus" summary! But must also take care not to over simplify;
• Proposals to phase out bilateral aid have not been realised in practice. Various reasons why, from national visibility to problems with effectiveness of parts of the multi-lateral system, but could happen if multi-lateral system more efficient;
• Sector outcomes useful as indicators, but sector spending targets not so much - outcomes rarely result just from sector spending.

Hilary Benn commented that:

• DFID does have a rights-based approach and accepts the conflict linkages - also re gender and women's empowerment, has linkages to HIV reduction;
• DFID had made a substantial step away from heavy aid conditionality, and is trying to encourage other donors, but as the DAC pointed out others can only take so much "leadership" - need for sensitivity;
• He thought sector targets did have uses but there is a tension between country ownership and donor-set targets - they needed to be debated on a case-by-case basis;
• NGOs do keep DFID on its toes, but not all UK public are behind them - hence the importance of "telling the story" and earning public support;
• Regarding multi- vs. bilateral aid, national visibility is an issue, especially in terms of public support. Effectiveness and better monitoring of it is the key.
• Correcting for uneven bilateral aid spending is perhaps the key role for multilateral agencies;
• Working in fragile states is necessary to hit the MDGs so DFID can't ignore it. Pressure for results is right and proper;
• He agreed that growth is vital, and DFID is not doing enough on it; some parts of the NGO community have not understood this either;
• DFID is working on encouraging youth interest in development, in schools particularly;
  Understand importance of measuring performance, but sector and thematic spending accounting is difficult due to the complexity of the real world- many interventions have multi-sector effects.

John Battle concluded the meeting by commenting that a litmus test of this "golden age" will be how we perform in the hardest circumstances - which means fragile states will be key.