Oral evidence: Sub-Committee on the Work of the Independent Commission for Aid Impact Report- the International Climate Fund, HC 861Wednesday 14 January 2015
Oral evidence, 14 January 2015.
Witnesses
Nick Dyer, Director, General Policy and Global Programmes, DFID, Andrea Ledward, Head of Climate and Environment Department, DFID, and Katrina Williams, Director General, International Science and Resilience, DECC, gave evidence.
Chair
Good morning. Sorry to have kept you waiting; we overran slightly with the previous questions, so thank you for your patience. We have Andrea Ledward and Nick Dyer from DFID, and Katrina Williams from DECC, working together to answer our questions this morning. Are there any opening statements you would like to make before we launch into questions?
Nick Dyer
Just in terms of our reactions to the report, like the Commissioner said, I would take a number of key takeaways from the report. The first is the importance of climate change for development and for poverty reduction, and the fact that we are on track to deliver our objectives and to have a significant impact. I was particularly pleased to see the recognition of our influence on multilaterals and the good feedback on learning and safeguarding quality across the three Departments, and I think it set some fair challenges for us, some of which have just come out, around the delivery partners, data, quality, and some challenges around the private sector, which we certainly will take seriously, take away and consider.
Chair
Katrina, do you want to add anything to that?
Katrina Williams
I do not want to add anything in substance. We do work extremely closely together, so Nick has said most of it. I would just say that developing the fund has been a learning process, and I think, actually, the ICAI report has been a very helpful part of defining what our challenges are for the next phase.
Chair
Private finance is vital to tackling climate change. Now, ICAI says that you have not sufficiently engaged the private sector, which echoes the mismatch between ambition and ability identified by their DFID private sector development review. It is clearly a difficult area for you. How would you go about generating the detailed and differentiated private sector strategy that ICAI calls for, and what will you do to act more quickly when dealing with private investors, as ICAI recommends?
Andrea Ledward
I would just like to echo what Catherine said earlier, which is that working with the private sector takes time. It is very intensive, and it has taken us many years to design and develop partnerships to enable us to start programming and implementing. I think there has been significant progress in the last few months, actually, very recently, in a number of areas. One is the area of data. We have been co‑funding a report with Mercer to help get better information out there for pension investors. We have also been working with USAID and Bloomberg on Climatescope, which is improving the information that is out there to inform investors wanting to go into Africa and South Asia. We have also helped get first close on a couple of private equity funds under the umbrella of CP3, which is a climate public partnership. The Asia partnership reached first close in December, and that reached first close at $391 million, of which the UK component was about $90 million, so there has been significant progress. The third dimension that I would just highlight is with the multilaterals. The Green Climate Fund is the new, important global climate facility that was capitalised to the total of $10 billion in December, and that will have a new private sector facility that we are very much involved in shaping. We see that as being really groundbreaking and instrumental at the global level and we will bring it forward. A lot of our bilateral programming work will help sow the seeds and incubate some of the projects that we hope will be taken up by that global facility.
Chair
Nick, do you want to add to that?
Nick Dyer
The only thing that I would add is that the private sector is not just one thing. I have spent the last two years talking a lot to the private sector on climate, and what you get back is that some of the private sector want a better business environment; they do not need any subsidy at all. Some need capital or financial support. Some need a consistent revenue stream, so fewer tariffs. Some just want good property rights in a country. What the private sector wants is quite varied across the piece, and it is different in different countries and different companies. With what is a relatively small sum, compared to the needs across the system, what we should be doing is testing what works, and how we can unlock the private sector. That requires quite a lot of different types of interventions, just because of the range of what the private sector themselves are asking for.
Katrina Williams
Very much in line with that, engaging the private sector does take time and effort. Through something called the Global Innovation Lab, we have managed to attract quite a lot of City interest, thanks partly to the fact that the Prince of Wales sponsored a very successful summit for us last June, which attracted 140 different players. That is looking at the kinds of instruments that City experts think would be successful in different environments, so actually building that up—it will report back in April this year—and building up a toolkit are parts of the secret of success in this area. But as Nick says, it is a very diverse field, and it has taken us time to get this rolling.
Sir Malcolm Bruce
You say on the mid-term evaluation that it did not meet the standards recommended by the DAC, and that this requires significant improvement. Given that it has cost £238,000 to do it, I guess it does. So what was the value of this, if it did not really do the job?
Nick Dyer
It did come up with 15 recommendations across the range of our work and how we govern the facility, many of which are very helpful, and actually, we have produced a management response to that recommendation. It is disappointing, and I think we do need to step back and ask ourselves how we can manage our evaluations better to ensure this does not happen again in the future in terms of procurement, the terms of reference, and how we manage the advisory committee. We will certainly do that, but I would not say it has been completely a waste of resources, because there were some valuable insights and recommendations that we have taken away from it.
Sir Malcolm Bruce
They said that only one of the 16 Clean Technology Fund investment plans had a results framework in place, which obviously is a pretty serious indictment. What has been the response to that?
Nick Dyer
That has been one of the core areas in which we have engaged with the World Bank, the Clean Technology Fund, and the CIFs—because this is part of the Climate Investment Funds—and the influence that we have had in getting the rest of the international system to start developing results frameworks and to insist on getting results frameworks is recognised in the report. The fact that they are not in place is a function of where they have been, but all of these international funds now, and certainly the CIFs, are starting to develop their own results frameworks. The key performance indicators that we use in our own results framework, I would contend, have been quite influential across the multilateral system.
Sir Malcolm Bruce
I think the general point that ICAI were making was that when the fund was set up—you make the point that it was a learning process—quite a lot of money was being thrown out before the programme had been properly worked up. As a result of that, an awful lot had to be learned. I suppose the really important question is this. Okay, it was a bit of a scramble at the beginning and it was not properly evaluated; are you confident now that you are able to deliver and demonstrate value for money?
Nick Dyer
Katrina and Andrea may have a view on this. I think there are a number of parts to this. One is: what we are doing internally within DFID? We have had conversations within the Committee in terms of how we improve our use of evidence and our programming and implementation through the changes in our operational framework, so that is part of the story. Part of the story, also, is what we are doing in terms of generating evidence, research and knowledge across the system, which is a public good useful for everybody—we have got the knowledge programme for forestry, which I think is an important part of that—and then whether we are getting the metrics, in terms of the results and value for money, coming back from the programmes that we are funding, which is what we are trying to drive through these results frameworks in the international system. We have developed our own KPIs; we have got methodologies in terms of how we are going to track those. They are works in progress, and we will evolve these, but personally I think the building blocks are in place now to give us that kind of assurance on VFM.
Katrina Williams
Yes, I think I would agree with that. I mean, we in DECC have a rather smaller number of programmes, but have been very careful to work on the issue of KPIs. At the start of the fund, because we were investing in mitigation measures, we actually had more multilateral bodies that had a track record and could demonstrate value in engaging with mitigation measures. I think the point Nick makes about the influence we have had with the multilateral bodies is a very important one, in terms of actually challenging and encouraging the climate investment funds to sharpen the way in which they do evaluation. We have also helped and challenged them to move into other areas: so the dedicated private sector programme, which is now being established under the climate investment funds, is doing exactly what we have just been discussing in terms of bringing in private finance, and has the potential to bring in around the equivalent of £9.50 in private finance for each pound of public money invested. It has been a process both of developing our own evaluation model, and in challenging the multilaterals and making sure that they have got those models.
Sir Malcolm Bruce
And you will be able to prove over time that you have actually achieved that, rather than just that it is possible. I do not think that anybody would object to spending £238,712—to be very precise—on a £3.7 billion fund if it is about saying, “Does it deliver?”, if I could quote the former Secretary of State, Andrew Mitchell. He wanted that for everything that DFID did. It was controversial, but also focused minds. You surely need to be able to do the same thing: to be able to say, “We’ve spent this money, but it has delivered these very definite, measurable outcomes.”
Andrea Ledward
The ICF portfolio consists of over 200 programmes, so each one of those programmes has an individual results framework and an individual monitoring and evaluation component. The challenge for us has been the aggregation of that at a portfolio level. So the first results report that is currently with Ministers, we hope, will be the first transparent and public statement; it will reflect the data that is in the ICAI report, explaining what those KPIs are and explaining in more detail at an aggregate level. As Nick said, that information and those KPIs have been very influential, and you can see them reflected through the CIFs, through the new Green Climate Fund, the results management framework, and you can see them echoed in other parts of the international system. But a critical part is also something Catherine mentioned, which is the country‑level analysis. It is the integration at a country level, also—the results from the multilateral and the bilateral. We are doing quite a lot of work—triggered and encouraged in part through the MTE, actually—to think much more systematically about the country‑level lens.
Jeremy Lefroy
Thank you very much for coming and good morning. According to the interim report of the independent evaluation of the climate investment funds, only one of the 16 Clean Technology Fund investment plans did have a results framework in place. Could you explain why this was and what is being done to ensure that that changes?
Katrina Williams
It comes back to the point that Nick was making earlier about the work that we have been doing with the Clean Technology Fund to develop the indicators, to make sure that those are now in place. I think we have made quite a lot of progress on that front.
Jeremy Lefroy
And are you tracking the results of providing climate funding through the CIFs?
Katrina Williams
Yes. Clearly, with multilateral funds the tracking is more complex than it is for bilateral funding, but tracking the results and making sure that the results are being tracked is a big part of what we have been doing through our membership of the board that effectively manages the trust of the CIFs.
Andrea Ledward
We co‑chair the CIFs currently, so we have a really instrumental role, but also one of the things to mention is that the results data that is reflected in the ICAI report is from March. In the next data round, which will be in March 2015, we expect to see a significant jump in the results, because that is when we expect to see some of the CIFs data really coming through. There has been a time lag to do with implementation, so in the next few months we expect to see the CIFs data properly reflected. It has not been available to date.
Fiona Bruce
In your joint management response to ICAI’s report, you accept recommendation 2, which says, “More flexibility in the allocation of resource and capital expenditure is needed”. We have heard about resource and capital allocation swaps taking place, but only in the region of 5%. Do you consider there to be a need for greater flexibility than that? I note in your “Action to be taken” you are saying the Government will consider this as part of the next spending review, but presumably you will be making recommendations to the Treasury. Could you give us some information as to how you will be going about that?
Katrina Williams
Yes. The report brings out quite graphically the issues about how you do swaps between capital and RDEL. There are a couple of things to say: first of all, the 50/50 split in RDEL/CDEL at the start and the allocation between Departments was done on the basis of what the Treasury at the time, on the back of our best estimates, thought the individual Departments would need. As we have gone along, we have learned that it is helpful to have more flexibility for DEFRA and DECC to be able to spend RDEL. We have done swaps; we have learned as we have gone along. The Treasury has now given us the pre‑authorisation to transfer at least 5% for 2015-16, which I think amounts to about £16.5 million. That, in principle, should be useful for what we need to do for 2015-16. We are just working out at the moment what we, DECC and DEFRA think our RDEL requirements might be. We are doing some work to look at the future of the climate finance mechanisms, and part of that is a conversation with Treasury about whether we need more flexibility.
Fiona Bruce
But your view is that you do, by the sound of it.
Katrina Williams
It is very useful to have flexibility, and it is useful to be able to think in the context of, for example, whether we might need to spend more money on funding technological developments. Indeed, we are currently talking to the Government’s chief scientific adviser about whether there might be more demand for spending more money on R and D and technical applications. To date, I think, if you asked me about looking at 2015-16, I would say that the flexibility that the Treasury has given us is probably sufficient for what we need for 2015-16.
Fiona Bruce
Could I ask about this issue of managing returnable capital, which my colleague, Jeremy Lefroy, raised? I know that he, with an accounting background, might want to come in on this question again. It is the issue of how much clarity and consistency there is on what is capital, what is returnable capital and how returnable capital is going to be managed going forward if the sums are going to be much bigger and you have got three different departments involved. Could you comment on this, please?
Nick Dyer
Well, let me kick off on this. Mr Lefroy is right, in that the difference between the capital and the returnable capital is who holds the asset. Under straight capital, the asset is held on somebody else’s balance sheet; with returnable capital, the assets are actually held on the Department’s balance sheet, rather than on the Treasury’s balance sheet. It is about who generates the asset and who holds the asset. That has implications for the Department in terms of how we provision for that asset and how we cover that provisioning, and there are a number of moving parts here. One is how much returnable capital we will get from the Treasury, and that is a bit of an unknown going forward. The second is what the Treasury’s definition of returnable capital is, and we are working with them now in terms of what that is. The third is whether we have the skill sets to run returnable capital, and this has come up in previous conversations with the Committee. In DFID, we are focusing very much on looking at a small number of vehicles that can run returnable capital, some of which may have climate in them and some of which may not. The other is what is actually going on in the DAC in terms of how you define ODA. There was a change last year, in terms of shifting from a “flow of funds” approach to loans, to a grant equivalent. That is not going to kick in until 2018, but again there is another issue, in terms of how we measure ODA. There are lots of moving parts here. The answer to Mr Lefroy’s question of how much we currently spend in the ICF on returnable capital is that, actually, it is very small. We have got one example of a vehicle that is returnable, but that is because as an organisation we are trying to approach this very systematically and carefully, just because of the skill sets and the implications.
Katrina Williams
I would agree with that, and, as I think Graham Ward said earlier, from a DECC perspective, our budget is probably less attuned to managing returnable capital. That does not mean that we have been ignoring the returnable capital challenge. Indeed, we have got an investment in the Global Climate Partnership Fund, alongside other countries, that is around £30 million. That is capital that recycles within the fund, but is ultimately potentially returnable to the UK Exchequer, so we have been going—I think as Nick said—in quite a small‑scale way and quite cautiously to date. However, I agree that the work that we are doing together on the definitions and quite how we manage returnable capital is immensely important for the future of the climate finance funds.
Fiona Bruce
Although it is obviously up to the Chair, but I would be quite interested in having some further feedback on your thinking in due course on this whole area.
Chair
Yes, certainly. I do not know whether that is something you can provide this Sub-Committee with in future.
Nick Dyer
I certainly think this conversation needs to keep going, because it is an ongoing conversation that I think this Committee will keep coming back to in all of the conversations that we have. We will certainly have lots of opportunities. The main thing for me in all of this is how we fit with what is going on in the wider DFID approach to the private sector, economic development, and returnable capital.
Fiona Bruce
Absolutely.
Nick Dyer
There is a bigger story there, which I know you have had lots of conversations on, and we need to be fully consistent with that.
Fiona Bruce
Just a further question, going back to this flexibility between resources and capital expenditure, ICAI said in its report, “The ICF should deepen its engagement with developing country governments and national stakeholders, including through greater emphasis on capacity development”. Now, you partially accept that, I think possibly because in your report, you refer to some actions that you are already taking in that respect, but you do also say that there is a need to, “Identify opportunities to increase ICF support for country‑level engagement and capacity building in new and existing programmes,” and I would be interested in you elaborating on some examples of that, and commenting on an earlier question. That was that ICAI says—and I think a number of us on this Committee would concur—that ICF needs to be clearer about in‑country spend, to ensure full tracking of bilateral and multilateral projects. Could you comment on that whole area, please?
Katrina Williams
First of all, to give you an example of some of the technical assistance things that, for example, we have used RDEL for in DECC, we have a project called GET FiT Uganda, which is about promoting small‑scale, on‑grid renewable energy in Uganda. Actually, for this current financial year, one of the things that we have used RDEL for is to do some GET FiT scoping studies for other countries in Africa. That fits very firmly with the technical assistance and building technical ability part of the ambition.
Nick Dyer
On your second point about what footprint we have in a country, and whether we all understand what that footprint is—we have had a number of exchanges with the Committee on this, in terms of how we manage our centrally managed programmes—I can assure the Committee that we are looking at this. We want to be in a position where each of our country offices are absolutely clear in their own minds about what the whole asset base is of DFID’s footprint, and actually, the Government’s wider footprint in that country. That is very much in hand.
Fiona Bruce
Thank you.
Sir Malcolm Bruce
I raised the issue of the Climate Fund with the Prime Minister at the Liaison Committee the other week, and he said that he saw the Fund as being predominantly for the benefit of poorer countries, but on that basis, the objective of 50/50 between adaptation and mitigation has not been reached. It is about one-third on adaptation. Where are you on that?
Nick Dyer
We expect in 2015-16 the percentage going to adaptation to increase to around 34% on current programming plans. This was never a target; it was an ambition, and it is worth thinking about why it is not as high as perhaps you would expect. I think there are a number of factors to that. One is that the international system and countries themselves are better geared up to engage with mitigation, in terms of these institutions that exist. Mitigation is more expensive, in terms of the volumes of funding, and, in terms of adaptation, it is very localised. So in terms of the information that you have got available, you really do need to analyse and understand what the impacts are at a very local level and there are quite a lot of information gaps. That said, one of the things that we are trying to do in DFID is spend more of our money in country offices—so, to shift the balance away from centrally managed programmes into bilateral country offices, in part to try and mainstream climate, and in part to do more on adaptation. Over time I would expect the DFID footprint to be moving more towards doing as much, if not more, on adaptation.
Sir Malcolm Bruce
That raises a tension. You know from the previous exchanges that when the Climate Fund was set up, a lot of the development NGOs and the development community were concerned, not that it was not a good idea, but that it would effectively be raided from what the development budget would otherwise have been. Given that all of the ICF is classified as ODA, and yet money is going into BRIC countries, which are not priorities for DFID, in a sense that means that money is being spent where DFID would not have otherwise spent it. Is there a risk that defining it all as ODA actually diverts money away from poverty reduction and the focus on the poorest people and the poorest countries?
Nick Dyer
If you start from the presumption, which we do, that you cannot achieve poverty reduction unless you address climate change, and you recognise the two elements of climate change—the mitigation and the adaptation—then the reality is that if you want to address mitigation, you have got to operate in middle-income countries. That is where the value for money opportunities are, and that is where the scale is. I mean, 80% of all new forthcoming mitigations are going to be in middle-income countries. As an organisation, we accept that we do operate in middle-income countries. The issue then becomes the how—one is the what, the other is the how. The presumption for our bilateral aid is that we will use returnable capital and technical assistance and, where we can, we will try and get the middle‑income countries to self‑finance the technical assistance themselves. There is an issue about how you do it, as much as where you do it.
Sir Malcolm Bruce
It has been said that we only really achieve 0.7% because we set up the Climate Fund, and that we might not otherwise have done so. Do you accept that that is legitimate? I am not criticising the principle, but a big chunk of the DECC budget is now classed as ODA because of this fund.
Nick Dyer
It is 7% to 8% of total ODA, so it is a significant chunk, but given, as has been identified, the delivery challenges of scaling up a new fund at the pace that we were expected to scale that up and all the challenges that that has given us, I do not think that we could have spent the money just as easily elsewhere. It is a key part of the poverty reduction story. It is a relatively modest part of our total effort.
Sir Malcolm Bruce
But it is a big fund.
Nick Dyer
Well, 6% to 7% is a reasonable size, yes.
Sir Malcolm Bruce
To be clear, it is not that I or any other member of the Committee does not agree that climate change is a major issue and a cause of poverty, and dealing with it helps to mitigate poverty. It is a legitimate, proper part of development; the concern is whether or not it siphons money away from other pro‑poor priorities, because it comes within the overall umbrella, and whether it diverts funds to middle‑income countries that might not otherwise have gone there. I explained earlier that when we went to Brazil, having asked DFID what the ODA in Brazil was and being told it was zero, after our return, we found that £40 million was actually being spent through the Foreign Office, and I am assuming associated with DECC, I suspect, on forestry. Now, first of all, I think the Department could have been more forthcoming, but it implied to me a certain unwillingness to defend and justify the programme. We are doing something similar in China—DECC and DFID are engaged in China. Would it not be better to be up front about all of this and to be quite clear about what is poverty‑focused and what is legitimate engagement in dealing with climate change through the aid budget in middle‑income countries, rather than being in a sort of denial and pretending we do not do anything in Brazil and China, when clearly we do?
Katrina Williams
It comes back to the point the Prime Minister made at the Liaison Committee, where I think his response to the question about what you invested and how was: “It depends on where the greatest returns can be found”. It is a core part of our international climate negotiation strategy to say that, actually, we are not as the UK in the business of saying that aid should flow from the developed countries to the developing countries. We need to get the incentives right, so that we are actually encouraging the countries that can to think about funding climate mitigation and adaptation themselves. The other thing to bear in mind about investment in middle‑income countries is that, actually, there are co‑benefits. 73% of the world’s poor people live in middle‑income countries. There can be significant co‑benefits from investments in things like solar lighting, in terms of making energy cheaper for people right across the board, and that includes benefits to the poorest people.
Nick Dyer
The only thing I would add to that, Sir Malcolm, is that we will get to the end of this year in the new post‑MDG framework with a clearer recognition about the importance of sustainability and climate. I think there is going to be an international recognition that we cannot reduce poverty unless we address climate. The reality is that, although you say this is a big fund, the world needs $260 billion of mitigation activity per year and about $70 to $100 million worth of adaptation, so our fund is tiny compared to that. But the challenge for us is how we use the fund to unlock the resources that are needed, and to innovate and demonstrate the impacts at scale that we can actually point to for the resilience and low‑carbon target.
Sir Malcolm Bruce
I do not have a problem with that, but I think ICAI is saying—and I think we would support this—that you should be more open, more transparent, and more accountable, and explain it properly. Where is the pro‑poor benefit? How does it fit the development strategy? What is the legitimacy of partnering in middle‑income countries in a pro‑poor, pro‑development context? I am not actually saying that you should not be doing it; I am saying that you are a little bit too diffident and a little bit too uncomfortable, it seems to me, about standing up robustly and explaining it, which I suggest actually gives your critics more opportunity.
Andrea Ledward
I would just draw to your attention the examples of India and Indonesia, which are both very interesting examples where we have joint units. We are actually very confident and proud about what we do in those two middle‑income countries. In Indonesia, which was one of the case studies and is the biggest source of deforestation in the world, we have a joint unit where we work very closely together. It is a great example, actually, of how we are working on integrating the multilateral and the bilateral, and then working with them on the global arena and influencing them politically. India, again, is a great example where it is not huge volumes of finance, but it is very pro‑poor focused, and it is a lot of technical assistance to catalyse an enormous amount of change, particularly within the energy sector.
Jeremy Lefroy
Thank you very much. This really follows up a little bit from Malcolm’s question, which is that ICAI found it surprising that the ICF had no dedicated public website, and found it difficult to identify ICF‑supported programmes in published budgets. I have to say, I would echo that. It seems to me that the work—obviously a tremendous amount of pretty effective work is going on in many places—has very little public visibility compared with, say, the work that DFID is doing on Ebola and in other areas. I wonder whether this is partly a problem of the split between the three Departments involved, but given that it is a problem—apart from the occasional spurt of activity when there is a climate change conference on and people get interested in that, or perhaps there is a major event—how can we make sure that this work is much more visible, so that the public can understand that this is a real issue. It is not a theoretical issue, but an issue that is affecting the lives of hundreds of millions of people on a daily basis, and the UK is taking major steps to help counter the problems that they face.
Andrea Ledward
We would agree with you. We should, and we could, be doing more, and that is certainly what we aim to do now. There is a lot of information there about the individual programmes, but it is the aggregation of those, as I said, at portfolio level, to help people understand what that means. I am hoping that the reports result that will come out will be the first important step within that, but certainly we could do a significant amount more. I think the first major speech the Secretary of State gave last year on climate was actually quite important in this respect. At UNGA last year, in September, she gave her first major speech, where she talked about the integration of the climate and environment issues within the growth agenda and talked very confidently about the International Climate Fund within that. That, of course, was followed through at Lima—Ed Davey was there—and obviously will be followed through 2015, with all the opportunities building up with, as Nick said, the integration of the financing for development and stable development goals. Then there is the climate summit in Paris at the end of the year. These all give us a great potential, momentum and a platform with which we can start bringing together and talking more confidently about what the UK is doing.
Katrina Williams
I would agree with that, and simply say that I think in the international negotiating forum the profile of the fund has been extremely good, and the leverage that what we are doing under the fund has given us has been extremely powerful, both in terms of getting other people to come to the table, but also in terms of stimulating the debate about the ways in which you can put funding into the system and give the right incentives.
Jeremy Lefroy
But the British public, with the exception of people who take a great interest in these matters—and the British public do have an interest in this—are not, I would say, particularly aware of what the UK is doing. It seems to me that if we are to maintain support both for ODA and the expenditure of ODA on adaptation and climate change measures in general, then we need to be much more on the front foot about it, certainly politically. I do not expect you to agree with me necessarily, but would you say the fact that it is split between three Departments causes problems because there is perhaps a reluctance to tread on the toes of another Department?
Nick Dyer
No, I would not agree with that. In fact, from my perspective, this ICF joint-departmental approach is actually one of the stronger examples of cross‑collaboration that we have in my part of the business.
Jeremy Lefroy
Sorry to interrupt you, but at Cabinet level, who speaks up for climate change? Is it the Secretary of State for International Development, or the Secretary of State for Energy and Climate Change?
Nick Dyer
I would hope both, and I think that is the strength of having a Cabinet Minister who deals with international development and having other parts of Government that understand the international dimensions and are prepared to stand up and talk about them.
Katrina Williams
That is absolutely right. It is very much a double hat.
Jeremy Lefroy
I wonder if any colleagues have got any questions.
Chair
Fiona is going to come in on that cross‑departmental work.
Fiona O’Donnell
Carrying on the theme that I asked the earlier Panel, this example of departmental joint working, also with some FCO and Treasury input, do you think there are lessons that can be learned? This appears to have been more successful than other attempts. Where else do you think the opportunities are to replicate this example of joint working?
Katrina Williams
In terms of the lessons learned, it is about the point that Graham Ward was making earlier. We have identified very early where the complementary strengths lie in the different teams, and have actually exploited that at every level—at the centre, at the working level, and in‑country. Those are the lessons that it is possible to take, and actually they are based on having a very, very constant dialogue between the three Departments.
Nick Dyer
We have got quite variable geometry across DFID in how we engage with different Departments, for different reasons. I think where you are dealing with a multi‑billion pound fund like the ICF, it does make sense to have the governance structure that we have got, where we are working closely together. The CSFF has a similar structure with the MoD, the Foreign Office and DFID in terms of joint oversight of that particular fund, whereas in other cases—certainly in climate—we have got the joint units overseas in India and Indonesia as well. Where it makes sense, we can invest in that scale of governance. In other cases, it may not make so much sense, because you are dealing with smaller sums of money or they are particular issues. In the example that you gave of the Girl Summit last year, we worked really well with the Home Office on getting our own house in order in the UK in terms of our UK approaches to FGM, cutting and child marriage, but that only needed to be a one‑off for that moment. We have carried on with the Home Office since then, but we do not need a joint exercise to do that.
Fiona O’Donnell
There must, though, have been some difficulties. What were they and how did you overcome them?
Nick Dyer
I suspect that of the three of us, the only one who has been in it since the beginning was me. Yes, clearly, there are slightly different cultures in the Departments. We have got slightly different approaches in terms of how we do our business cases. We have just been cognisant of that. I think we have done better over the last few years in terms of reducing the amount of bureaucracy. There was a lot of paperwork, there was a lot of commenting, and we have stripped that back and we are a bit more focused now, in terms of using sub-committees, but also in terms of what our expectations and asks are. That has improved. It was a little bit too top‑heavy at the beginning, but I think that has improved a lot since then.
Katrina Williams
I have been in this almost as long as Nick, because I used to be the DEFRA representative on the board, so I have actually changed seats as we were going along. Just to echo what Nick said, I think that making sure that the board that oversees it had enough time to think about the strategy, as opposed to trying to approve all the programmes and putting in the architecture to allow that, was important. It then gave us the forum in which we could acknowledge that we have differences, and discuss those openly and put them on the table. That has helped us to resolve them and make sure that we can work seamlessly together.
Fiona O’Donnell
Access to the expertise in both DECC and DEFRA must have been hugely helpful to DFID. It would be nice to see that with other departments, like BIS when it comes to economic development, where the expertise is not there within the department.
Nick Dyer
Absolutely, and if you talk to the Government of India, they do not necessarily want to know about adaptation in Uganda, but they may want to know about electricity market reform in the UK. Unlocking that expertise within DECC for the benefit of developing countries is not going to happen through the ICF Committee, but I think that is a valid question, in terms of how we do that across the whole of Government. Andrea Ledward, Nick Dyer, and Katrina Williams, thank you very much indeed for a very helpful evidence session. That concludes the business of this ICAI Sub-Committee of the International Development Committee. Obviously many of the themes are to be continued, but I thank you very much for your time and your answers this morning. Oral evidence: The Work of the Independent Commission for Aid Impact, HC 861 21