The International Development Committee's report agrees that DFID is right to focus more resources on fragile states if global poverty reduction goals are to be met. However, it highlights a number of concerns about DFID’s capacity to meet this and other new policy directions set out in the 2009 White Paper, based on analysis of the Department’s performance in 2008-09.
The Chair of the Committee Malcolm Bruce said:
"The question of whether DFID has sufficient staff resources to use its rising budget effectively has been a recurring and serious concern for this Committee. DFID is obliged to reduce the number of staff it employs to meet Government efficiency targets.
"The Department now plans to increase its activities in fragile states. While we support this, it is more difficult work which requires more intensive staffing and people with very specialist skills. It is not clear to us how DFID intends to resolve these conflicting pressures."
Climate change is another key White Paper focus area. Climate change threatens progress on poverty reduction and will hit the poorest people first and hardest. The outcome of the Copenhagen Conference in December 2009 was disappointing and real progress needs to be made before the next conference at the end of this year.
The Chair said:
"Tackling climate change is the biggest challenge the world faces, along with poverty reduction. The Copenhagen Climate Change Conference represented a collective failure by the international community to reach agreement on emissions reductions and climate change funding.
"We have made clear our view that financial assistance for developing countries to respond to climate change must be substantial and additional to money already pledged for poverty reduction. The Government is proposing a global tax on financial transactions as a new source of funding. We believe it should press its G8 partners to agree to this at the next Summit in June."
The White Paper also indicates that DFID will channel more funding through multilateral organisations including the EU, the UN and the World Bank. This offers the prospect of more coordinated delivery of aid, but only if these bodies increase their effectiveness and their poverty focus. The Report also argues for speedier reform of the governance of the international financial institutions.
The Chair said:
"The next round of funding for the World Bank’s International Development Association is approaching. The UK is the largest donor to IDA. DFID should use the leverage this gives it to press the Bank to focus much more on poverty reduction and to give developing countries a greater voice in determining how the Bank operates.
"The White Paper indicates that DFID will adopt a more rigorous approach to funding multilateral bodies by linking the sums it provides to performance benchmarks. It should make it clear that it is serious about this and that there are real consequences for poor performance."
The recession has had a significant impact on developing countries. It is estimated that an additional 90 million people will be affected by poverty as a combined result of the global food, financial and fuel crises over the last few years. Donors, including the UK, have responded and have sought to identify specific needs in developing countries. However the Report notes that many donors are failing to meet the aid commitments they have already made.
The Chair of the Committee said:
"Many more people in developing countries are living in poverty as a result of the recession. It is therefore more important than ever that we keep our promises on aid. The UK is meeting its aid pledges but a number of G8 and EU countries are failing to live up to their commitments.
"Only half of the additional funding promised to Africa at Gleneagles was delivered in 2009. New mechanisms are urgently needed to ensure that donors who fail to deliver on their aid promises can be clearly identified and held to account."