Today ICAI published a performance review on value for money in programme and portfolio management.

In recent years, the Department for International Development (DFID) has been working to build value for money considerations further into its management processes and its relationships with implementers and multilateral partners, establishing itself as a global champion on value for money.

Overall, ICAI concluded DFID has come a long way in embedding value for money into its business processes. Its diligence is improving the return on the UK investment in aid, which is most visible through incremental improvements in economy and efficiency at programme level.

ICAI also found some gaps and weaknesses, including a tendency to focus on economy and efficiency rather than emerging impact, shortcomings in the annual review process, and a lack of attention to retesting the original value for money proposition in light of implementation experience.

Cross-cutting drivers of value for money, such as levels of country partner ownership and potential synergies between programmes, are not clearly identified at the portfolio level, although ICAI welcomes the increased focus on ‘leaving no one behind’. A more ambitious value for money agenda would address the larger question of how UK aid is helping to deliver transformative change in its partner countries.

ICAI has made the following recommendations:

  • DFID country offices should articulate cross-cutting value for money objectives at the country portfolio level, and should report periodically on progress at that level.
  • DFID should encourage programmes to experiment with different ways of delivering results more cost-effectively, particularly for more complex programming.
  • DFID should ensure that principles of development effectiveness are more explicit in its value for money approach.
  • DFID should be more explicit about the assumptions underlying the economic case in its business cases, and ensure that these are taken into account in programme monitoring.
  • Annual review scores should include an assessment of whether programmes are likely to achieve their intended outcomes in a cost-effective way.

Press coverage: From Poverty to Power

Read the report