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About two-thirds of DFID's expenditure in 2011-12, including nearly 40% of its bilateral spending, went through multilateral organisations even though they have higher administrative costs. This represents a major change in recent years and has been accompanied by a decline in direct aid to recipient Governments. DFID argues that the change is not a reflection of its need to spend money quickly, but a result of the reduced need for budget support in countries with rising tax bases and improved financial management, as well as its focus on fragile states. The DFID needs to ensure that it has thoroughly examined other options such as greater use of local NGOs and sector budget support. DFID has switched expenditure from low income to middle income countries, in part because several countries with a large number of poor people have recently graduated to middle-income status. Policy towards middle income countries varies and DFID needs establish and make public the criteria it will use to inform decisions of when and how it should cease to provide aid. DFID should also consider establishing a Development Bank - that could offer concessional loans alongside grant aid and would free from the constraint of having to ensure that cash was spent by the end of the financial year. Staffing also may still not be sufficient to oversee the huge expenditure of UK taxpayers' money undertaken by multilaterals. MPs remain concerned that DFID's has ended its bilateral programme in one of the world's poorest countries, Burundi, and is urging the new Secretary of State to re-instate it.
While DFID's total budget is increasing, the Department will both restrict operating costs to 2% by 2014-15 and reduce its administrative costs by a third in real terms, from £128 million in 2010-11 to £94 million by 2014-15. This report warns that capping operational costs and staff numbers may not reduce overall costs or improve effective delivery of development assistance. The International Development Committee also raises concerns that cost pressures are driving DFID to use consultants to deliver its programmes, rather than in-house expertise. The Department spends £450 million on technical cooperation per year. Much of this is good work, yet it was unclear exactly what this money was spent on, or how effective it was and the extent to which external providers were used. DFID needs to improve its assessment of which projects and services it should use consultants for; and assess more carefully the use of consultants to manage the Department's own delivery programmes. In its efforts to reduce administrative spending DFID might be 'exporting' these costs to other organisations, including NGOs and multilateral aid organisations, with higher real administration costs. The Department should assess the best and most effective way to deliver development assistance as it may be able to do it more cheaply and effectively than external organisations. The report recommends that the Department improves its tracking of and reporting on the total cost of administering its aid programme with the aim of quantifying how much aid actually ends up reaching recipients.
This report is the International Development Committee's annual review of UK aid programmes and the administration of the Department for International Development (DFID). The Committee finds that field work overseas should be given greater priority and Ministers must explain UK spending on humanitarian projects more clearly. DFID should not provide funds to support disasters in middle income countries by raiding bilateral development programmes in low income countries. Other wealthy OECD countries must play their part in providing humanitarian assistance. DFID should set out annually its provisional budget for humanitarian relief, what is held as contingencies for unpredictable events and how it will be deployed if not called upon. There has also been a decline in DFID's spending on budget support, the consequences of which should be assessed. £1,075 million of DFID's bilateral expenditure is spent through multilaterals and private contractors. DFID has put in place a number of changes to improve the value for money provided by spending through and should report on their effectiveness. The Committee is also worried that the Department actually spends 40% of its budget in the last two months of the year, which raises questions about the smooth running of management and planning processes. DFID staff should have longer postings overseas (normally a minimum of four years) so that they can develop a deeper understanding of the culture and politics of the country they are working in and engage more effectively with the country's politicians.
As the end of the 2010-2015 Parliament approaches, the Committee has taken the opportunity to look back on their work. This Report outlines some of the Committee's work, progress and effectiveness during this Parliament and sets out areas that may be of interest to their successor committee. It has also provided the opportunity to scrutinise what actions the Government has taken with regard to issues and recommendations raised in our reports.
The Independent Commission on Aid Impact (ICAI) is an independent commission which reports to the House of Commons International Development Committee, not to the Department for International Development (DFID). The Committee ensures its accountability to Parliament in two main ways: through a sub-Committee, which takes evidence on the reports published by ICAI; and through an inquiry each year carried out by the full Committee into ICAI's Annual Report. 2013-14 has been a busy year for ICAI, with 12 reports published on a wide range of DFID's activities. ICAI's Annual Report contained three headline findings for DFID this year. Firstly, tighter management of multilateral partners is needed. Secondly, DFID needs to continue to improve its aid programme management capacity, especially where contractors are implementing programmes. Thirdly, DFID's corporate results agenda - and in particular its use of 'reach indicators' - is distorting programming choices. The Committee shares ICAI's concerns on these issues and intend to follow up its recommendations in two forthcoming inquiries this autumn: Beyond Aid; and DFID's Departmental Annual Report 2013-14. DFID spends a large amount of money - at least £200 million - on self-evaluation. However, it cannot provide an exact total. The Committee question this large expenditure, especially given that an ICAI evaluation recently found that DFID staff struggle to use self-evaluation material in their work. The contracts of the current ICAI commissioners, contractor consortium and staff all end in May 2015. While staff contracts may be renewed, new commissioners and contractors must be recruited. Planning is underway for the transition to the next phase of ICAI: all possible efforts must be made to ensure this goes as smoothly as possible.
The ongoing violence by Palestinian and Israeli extremists does not bode well for peace negotiations for a two-state solution, but as much of the coverage surrounding recent violence has highlighted, restrictions which restrain economic development within the Occupied Palestinian Territories (OPTs) remain a key issue for the Palestinians. In particular, as the World Bank made plain in a report last year, there would be scope to raise Palestinian GDP by over 20% if Palestinian businesses were allowed to invest the part of the West Bank controlled by Israel. The conflict between Hamas and Israel and the stalling of the peace talks should not prevent the UK and other European countries from pressing Israel to end unnecessary restrictions. In particular, the Committee challenges the assertion that restrictions which curtail economic development in the OPTs are based on Israel s security needs. The UK should encourage both sides to negotiate to address the disputed issues, including Palestinian access to 3G and 4G services in the West Bank, and greater access to the West Bank aquifer, construction permits, demolitions and master plans. DFID should also support the World Bank programme for helping the Palestinian Authority with land registration. While the Committee welcomes the UK's decision to introduce labelling guidelines for products made in Israeli settlements, they call for a review to examine whether the guidelines have been implemented and to what effect. MPs also strongly support the Palestinian Market Development Programme but also call for the provision of a Sector Grant Facility and Development Impact Bonds in the OPTs
Sierra Leone and Liberia have made remarkable recoveries since their civil wars. Ban Ki Moon was in Freetown this month to bring an end to the UN Security mission and set the UN presence on a conventional development footing from 1st April 2014. In Liberia there has been a gradual drawdown of the peacekeeping mission which will approximately halve the UN military presence by 2015. However both countries remain fragile with high unemployment and concerns about corruption. The devastating Ebola outbreak in Sierra Leone and Liberia demonstrates the dangers of ignoring the least developed countries in the world. The weak state of the health system in both countries has greatly reduced the effectiveness of the response to Ebola. There is an alarming lack of capacity in the health system, including a shortage of skilled clinicians.The Committee have determined that the scale of the Ebola crisis now unfolding in Sierra Leone and Liberia, may well be connected to declining levels of international support for health system improvements in what remain two of the poorest and least developed countries in the world.
The West and the East approach economic development differently. The Europeans and Americans stress free and fair business climate, promoting private activities generally without picking winners, and improving governance. East Asia is interested in achieving concrete results and projects rather than formal correctness, prioritizing a few sectors for industrialization, and eventual graduation from aid. The West mostly shapes shifting strategies of the international donor community while the East has in reality made remarkable progress in industrial catch-up. The two approaches cannot be merged easily but they can be used in proper combination to realize growth and economic transformation. This book proposes more dialogue and complementarity between the two in the development effort of Africa and other regions. In this collected volume, contributed by experts and practitioners from both East and West, the need to introduce Eastern ideas to the global development strategy is emphasized. Analysis of British and other Western donor policies is given while Japanese, Korean, and other Asian approaches are also explained with concrete examples. The concept of governance for growth is presented and the impact of rising China on development studies is contemplated. The practices of industrial policy dialogues and actions assisted by East Asian experts are reported from Tunisia, Zambia, Ethiopia, Rwanda, and others. The book should be applicable to all donors, institutions, NGOs and business enterprises engaged in development cooperation.
Disabled people in developing countries are the poorest of the poor: if we are serious about tackling extreme poverty, our development work has to target them. So while it's good the UK government has brought disability on to the agenda for global development goals (1) - DfID must now lead by example and make effort to ensure the needs of disabled people become a clear and sustained priority going forward within its own development programmes. Despite enormous global advances in education and health since the turn of the millennium, disabled people continue to be excluded from the most basic of services. The Committee calls for DfID to: produce a disability strategy; appoint a larger team responsible for disability; and strengthen reporting processes; show much more ambition in its work with disabled people by targeting them and their needs explicitly; give disabled people a central role in its work; and promote attention to the needs of disabled people including making it an explicit requirement that funding reaches disabled people, especially in disaster and conflict situations where they are amongst the most at risk