Today the International Development Committee has launched an inquiry
into the Foreign, Commonwealth and Development Office's (FCDO)
approach to achieving Value for Money in its aid programmes.
The Committee's inquiry will consider how the FCDO defines Value
for Money, how it is currently funding its projects, and whether
its funding model is cost effective.
Value for Money has become more important to the FCDO in recent
years, as other sources of funding have come under increasing
pressure.
In 2011, the former Department for International Development
(DfID) established that it
saw ‘Value for Money' as “maximising the impact of each pound
spent to improve poor people's lives”. However, since DfID was
merged with the Foreign and Commonwealth Office in 2020, it has
not been clear what Value for Money means to the new Department.
Meanwhile, in the 2024 Autumn Budget, the Government confirmed
that Official Development Assistance would not return to 0.7% of
Gross National Income until certain fiscal rules were met. The
Office for Budget Responsibility confirmed that these fiscal
rules are unlikely to be met during the current Parliament,
likely leaving ODA at 0.5% for the foreseeable future.
As a result, the FCDO has increasingly turned to alternative
forms of financing its aid work in recent years. These include
acting as guarantor for loans from the World Bank to countries
like Ukraine and a greater focus on British Investment
Partnerships with private sector partners, like investors and
pension funds.
, Chair of the International
Development Committee, said:
“In tough economic times, the FCDO must not lose sight of its
responsibility to support some of the world's most vulnerable
people.
“As ODA feels the squeeze, it's more important than ever to
ensure that every penny of aid counts.
“The Committee's new inquiry will explore exactly what Value for
Money means to the FCDO, and what impact its funding model is
having on the effectiveness of its work abroad.
“And as the FCDO increasingly relies on alternative funding
sources, we will consider what form these take, and whether they
are being used responsibly.”
