The Department for International Development's (DFID) objectives continue to focus on achievement of the internationally agreed Millennium Development Goals with the overarching aim of poverty reduction. This focus remains valid. However, on current trends most of the Goals will not be met by the 2015 deadline. The prospects for achieving Millennium Development Goal 2 on universal primary education by 2015 concern the Committee. To meet the target of all children completing primary education by 2015, universal access to schooling will need to be in place by 2010. The necessary schools will therefore have to be built and teachers trained in less than two years. The global economic downturn may exacerbate the risk of failure if development assistance levels are not maintained and donor commitments on aid are allowed to lapse. In straitened economic circumstances it is vital that every pound spent achieves the maximum impact, not least so that public support for aid expenditure can be maintained. The Committee is not convinced that DFID's evaluation processes allow it to make an accurate assessment of what its funding is achieving. The Independent Advisory Committee on Development Impact has begun to improve evaluation within DFID. This process must continue with the full engagement of the Department. DFID's ability to deliver its objectives is beginning to be constrained, despite its rising budget, by the Government-wide requirement to reduce its administrative budget and therefore the number of staff it employs. The Government should urgently reassess whether DFID has sufficient staff in place effectively to deliver the objectives which it has assigned to the Department under its Public Service Agreements.

Incorporating HC 945-i, ii, and iii of session 2007-08. The DFID annual report 2009 published as HC 492, session 2007-08 (ISBN 9780102953664)

Government response to HC 220-I, session 2008-09 (ISBN 9780215526472)

DFID is right to focus more resources on fragile states if global poverty reduction goals are to be met. However, this report highlights a number of concerns about DFID's capacity to meet this and other new policy directions set out in the 2009 White Paper (Cm. 7656, ISBN 9780101765626), based on analysis of the Department's performance in 2008-09 (the Department's annual report 2008-09 published as HC 867-I,II, ISBN 9780102962154). Climate change, another key White Paper focus area, 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 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 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, though many donors are failing to meet the aid commitments they have already made.

work of the Committee in Session 2008-09 : Second report of session 2009-10, report, together with formal Minutes

In the current economic crisis, poor countries are experiencing significantly reduced income from trade, remittances and foreign investment. As a result, an additional 90 million people are expected to be living in poverty by the end of 2010, and 400,000 more children are likely to die. Progress towards the Millennium Development Goal of eradicating hunger and extreme poverty has been set back three years. At the G20 summit in London in April, agreement was reached to provide billions of dollars of additional resources for the international financial institutions (IFIs), with the majority going to the International Monetary Fund (IMF). This will provide a much needed boost for balance of payments support, yet it remains unclear how much of the funding will benefit developing countries. The huge increase in resources for the IFIs needs to be matched by governance reforms and developing countries need to be given a stronger voice on the boards and in the decision-making processes of the multilateral institutions. The recession should not be used as an excuse to reduce aid flows but developing countries must also be assisted to derive the maximum benefit from their own resources. They lose billions of dollars each year to tax evasion by international companies. The UK has a clear responsibility to address enforcement of international tax standards in relation to those British Overseas Territories which are tax havens. More effort is needed towards securing an agreement in the pro-development Doha round of World Trade Organisation negotiations. Finally, DFID must do more to show the public the many and varied positive outcomes of its work in poor countries.

DFIDs programme in Nepal : Sixth report of session 2009-10, Vol. 1: Report, together with formal Minutes