The cross-party International Development Select Committee publishes its report on the work of DFID in 2009–2010 today. The Chair of the Committee, Malcolm Bruce MP, said:
"We support the Government’s bid to focus more aid on fragile states.
Of the 34 countries furthest from reaching the Millennium Development Goals, 22 are in or emerging from conflict.
But there is no getting away from it, this is going to pose severe difficulties when it comes to make sure every pound is well spent.
War-torn or fragile states are inevitably more vulnerable to corruption and maladministration."
How does Papal visit count as aid?
When scrutinising DFID’s accounts the MPs were also surprised to discover that the Pope’s visit was paid for in part by money supposed to be for overseas development aid (ODA).
The Committee is demanding a response from the Government as to what the £1.85 million, transferred to the Foreign Office for the papal visit, was spent on and an explanation as to how this was ODA compliant.
Malcolm Bruce MP added:
"Many people will be as surprised as we were to discover that UK aid money was used to fund the Pope’s visit last year.
Ministers need to explain exactly what this was spent on and how it tallies with our commitments on overseas aid."
Back office budget cuts
The Comprehensive Spending Review (CSR) announced reductions in DFID’s running costs to 2% of the total budget. If achieved, this would make DFID the most cost-efficient development organisation in the world.
This is to be achieved by a large reduction in back office administration costs (which excludes front-line staff) of £34 million over the CSR period. The International Development Committee supports the proposals to make savings in back office staff, but the MPs are warning that Ministers must ensure that reduced administration budgets do not affect the ability to deliver aid programmes on the ground.
Mr Bruce said:
"In the last few years DFID has already made some big savings in administration costs - for example shedding over a third of its HR staff.
The savings set out in the spending review should make it one of the most efficient development organisations in the world - with fewer back office and more frontline staff - provided they do not undermine DFID’s ability to do its work effectively."
Savings being made at DFID
While declining as a share of total costs, running costs will increase in real terms over the next four years because the total budget will rise so much.
The increase in running costs, together with the reduction in administration costs, will allow DFID to recruit 300 to 400 more frontline staff.
The report urges the department to ensure it recruits staff with the right skills to work in fragile states and with multinational organisations.
There has already been a reduction in staff working on the Department’s corporate functions. Staff working on communications have been reduced from about 100 to about 60 this year and there has been a significant reduction in the number of Human Resources (HR) staff from 150 in 2005 to 89 in 2010.
The number of senior staff, including Director Generals has fallen from four to three and the number of Directors from 14 to 12. This reduction will continue the downward trajectory of corporate costs which have already been reduced from £57m. in 2006–07 to £38m. this year.