National Audit Office NAO

9. Responsibilities for considering the effectiveness of ODA expenditure are fragmented across government. For example, HM Treasury considers business cases for ODA expenditure, but does not have a role in considering the impact of actual expenditure. Departments are responsible for securing value for money from all their expenditure, including ODA. While a cross-government group of ODA spending departments exists, its focus on the effectiveness of that expenditure is limited (paragraph 1.4, 1.12 and 1.13).

10. Departments and cross-government funds use ODA expenditure to deliver a range of strategies, creating complexities in considering programme performance. The UK Aid Strategy in 2015 set the government’s strategy for spending ODA, establishing four objectives for that expenditure. At the same time the government set three objectives for the National Security Strategy. Alongside these cross-government approaches, country-level and thematic strategies (focusing on, for example, women and girls, migration and on economic development) have been developed. Departments looking to work together overseas are taking steps to bring these strategies together when implementing programmes. But the number of strategies – and their overlap – creates difficulties in terms of reviewing and then reporting performance. This undermines government’s ability to align performance with the objectives set out in strategies and with poverty reduction more broadly. Despite the country and theme focus of these strategies, HM Treasury’s allocation process remains heavily department-focused (paragraphs 1.2 and 1.3 and Figure 4).

12. Taking ODA expenditure as a whole, government has placed insufficient emphasis on demonstrating its effectiveness and on progress against the UK Aid Strategy. At departmental level, we found evidence that programme performance was monitored and then evaluated when the programme came to an end. But more widely, government has only just started to consider the effectiveness of ODA expenditure across departments and what this says about progress in implementing the UK Aid Strategy. In 2019 departments agreed a framework which sets out, for each of the four objectives in the UK Aid Strategy, ‘indicators of success’ as well as illustrations of the performance achieved. But the framework does not bring these measures together with expenditure, which is necessary to support an assessment of value for money (paragraphs 1.12 and 1.13).

13. Neither DFID nor HM Treasury has assessed whether allocating the ODA budget to departments other than DFID has had the impact intended. ODA-funded programmes generate challenges such as making sure expenditure is eligible to count towards the target and managing programmes in hostile environments. However, government wanted to draw on skills across-government when spending ODA to respond to changes in emphasis in the challenges it faced (such as mass migration and the impact of global warming). It therefore allocated more of the ODA budget to these departments from 2016 onwards. But it did not set out in detail the benefits it expected to achieve from this approach. Nor has it assessed whether its intentions have been delivered in practice (paragraph 1.14).