DFID Management Board

• the UN reform agenda;
• establishing the link between conflict prevention, humanitarian response and humanitarian reform;
• the need to be more engaged and up front in Whitehall on security and development issues, particularly within HMG’s counter-terrorism policy.

In summarising the discussion, the Board:

• thanked Jim Drummond and his team for the work put into the DDP and welcomed the clear step change in the Division’s performance over the last year;
• agreed that multilateral effectiveness was a priority area of work, a clearer policy statement on our engagement with multilaterals was needed and staff resources should be directed appropriately;
• requested a work plan for multilateral effectiveness should be developed linking into work being undertaken for the WP3 and the CSR. This should build on the MEFF and MOPAN work and feed into the UN High Level Panel reform agenda;
• agreed that a clearer story line was needed on why the humanitarian reform PSA target had changed from green to amber;
• agreed more work was needed on the PCRU and conflict architecture in the context of the CSR;
• agreed to more top level engagement on conflict prevention and humanitarian issues within Whitehall;
• agreed to that we should identify 5-6 countries where we could work more intensively with the rest of Whitehall on security and development issues.

Europe, Trade and International Division (ETID)

Amanda Rowlatt represented ETID, supported by Catriona Laing.

In discussion, the Board:

• were pleased with progress in 2005, particularly with the outcome of the EU Presidency;
• noted that our EU work had 3 strands:

  • EDF (with DG Development);
  • engaging with DG Relex, particularly on the EMAD region;
  • EU policy coherence across Whitehall. We should agree on a number of priority policy topics;

• agreed we should scale up influencing and working more strategically with the EU. This should also link to the work IDAD were leading on multilateral effectiveness and the WP3 discussions on aid effectiveness;
• agreed we should scale up influencing and working more strategically with the EU. This should also link to the work UNCHD were leading on multilateral effectiveness and the WP3 discussions on aid effectiveness;
• noted that institutional strategy papers could help country teams to analyse multilateral and IFI architecture at country level. Many CAPs were currently light on the multilateral agenda;
• agreed that we should primarily be working with partners to influence IFIs, but that we should be prepared to tailor our financial support as a last resort.
• agree that more could be done to develop central guidelines on Regional Development Banks Trust Funds and to clarify administration costs;
• noted slow progress was being made on trade but that the UK would continue to push to get acceptable offers on the table. Support to developing country negotiators at the Hong Kong WTO Ministerial had clearly been very effective;
• noted that a large amount of the Division’s budget was core funding. The debt initiatives and IMF shocks facility were making the ETID framework very tight although there was some scope to manage the timing of payments to cope with this;
• identified managing staffing changes as a key challenge for the division. Key post arrival and departure dates need to be staggered. ETID are working hard on handovers and induction processes;
• noted that the Division still need to resolve the issue of secondments being included in headcount targets. More work was being done on developing a more strategic approach and the development of central guidance for secondments to IFIs.

In summarising the discussion, the Board:

• thanked Amanda Rowlatt and her team for the DDP. The Division had had a good year with notable success during the EU Presidency;
• requested work on options for stepping up our engagement with the EU and improving their development instruments. This should involve IDAD and link into the WP3 and the work UNCHD have been commissioned to do on multilateral effectiveness;
• agreed a more systematic approach was needed to working with the IFIs and that this should feature more heavily in CAPs. The new ISPs would help but a more strategic approach was needed for MDB trust funds;
• agreed that more should be done on aid effectiveness and harmonisation with the MDBs. We should use the replenishments for the MDBs as an opportunity for high level strategic engagement. This should be a priority agenda item for DFID for the World Bank Spring Meetings;
• agreed that a more strategic approach towards secondments to multilaterals should be developed.

Finance and Corporate Policy Division (FCPD)

Richard Calvert represented FCPD.

In discussion, the Board:

• noted that FCPD’s strength came from its focus on getting the basics right – this would remain a challenge, particularly through the roll-out of the new ARIES system;
• noted that DFID was well-placed to meet its spending targets over the next few years, though data quality remained a concern in some areas;
• welcomed the substantial increase in attention to portfolio quality across the Department, which gave good grounds for optimism that the targets for improving portfolio quality could be met by 2008. That said, further work was needed both to sustain the improvement in management information in this area and to think about ways to strengthen the sharing of more qualitative information about effective delivery;
• noted challenges for the Division over the next year, aside from its wider change process:

  • continuing to strengthen DFID’s management information, and our analysis of it; and
  • putting in place a more strategic approach to audit and assurance, including wider risks and controls;

• noted within this context the need to review roles and responsibilities regarding public financial management. Good basic systems were in place for fiduciary risk assessment and annual reviews. However, consistent application of the systems remained a challenge, and we needed this to be further up the Department’s corporate agenda – FCPD would be looking to strengthen management information in this area, both for the Board and Regional Directors, as a means of sharpening focus on both levels of risk and directions of travel;
• noted that while staffing pressures remained a risk, good progress had been made over the last year. Key Band A posts had been filled and the Division was working to broaden its skills base, and to rely less on the knowledge of key individuals;
• welcomed the development of the QMR over the last year, though agreed that we needed to continue to look for ways to align internal and external reporting, and to minimise the transaction costs associated with data generation. We also needed to keep an eye on the effort involved in meeting NAO’s ever-increasing audit programme;
• noted that engagement with the wider organisation in relation to ARIES had been on the back burner during the QUEST rollout, but that the focus of Catalyst would increasingly switch to ARIES. The benefits of ARIES, both qualitative and quantitative, should be very positive;
• noted that the Divisional headcount reductions could be managed through a combination of ARIES and wider efficiency savings. The biggest risk to the 2008 target was a potential delay in the ARIES timetable;
• agreed that, while risk processes in DFID were generally working well, more still needed to be done to make best use of the corporate risk register, and to develop it into a proper management tool. The QMR should provide a framework for this;
• agreed that we would need to step up communications with Ministers and staff on how the CSR and WP3 processes were linked and what the key messages were.

In summarising the discussion, the Board:

• congratulated the Division on its continued strong performance, which was evidenced by DFID’s standing across Whitehall in financial and other aspects of corporate management;
• thanked Richard Calvert and his team for a focused DDP, and facilitation of the overall DDP process;
• agreed on the need for further discussion on the communication of the sequencing of WP3 and CSR work, their interaction and what this meant in terms of Departmental change;
• noted the need to further align external and internal reporting to reduce transaction costs;
• requested that the corporate risk register was revisited and revised to develop it into a MB management tool;
• welcomed the proposed focus on strengthening management information, and on a more strategic audit and assurance function, including the further work on public financial management;
• requested the Division to look at whether there was a stronger role for FCPD in identifying strategic issues for the MB and whether the Department was heading in the right direction over the medium term; and reach agreement on where this corporate function should be housed;
• asked to have an opportunity to discuss further the proposed handling arrangements for the benefits realisation as a result of ARIES.

Communication and Knowledge Sharing Division (CKSD)

Joy Hutcheon represented CKSD, supported by Mike Green and Paul Spray.

In discussion, the Board:

• were pleased that Evaluation Department was in a much better position than it was a year ago. Much of their work is now demand led, focused on outcomes and they engaged effectively with the Department, including the WP3 team. The Board noted that less has been produced this year than in 2004/05, but were reassured that this is a result of a “bunching” of publications with a large number being published in the next quarter;
• noted that the new communications strategy took into account the results of the Make Poverty History awareness polling. ICSD was consequently increasing its development education work in schools by 30%. The public still perceived the UN and NGOs to be the major players in development rather than Governments and IFIs;
• noted that work was ongoing to develop a DFID brand for three audiences: humanitarian work, countries in which we work overseas, and the UK. This was looking at the introduction of different brands and brand analysis, following the Rough Guide collaboration;
• noted that our research programme had moved away from small short term technical projects to the commissioning of larger programmes. This research was much more demand led and focused on communication and dissemination of the final product. The results would come through over the next three to four years;
• explained that progress has been made on the multi-donor evaluation of demonstrating the effectiveness of PRBS. The lessons learnt would feed into PD and should have traction with other donors. The work would also be publicised and made available to the NAO. We would need to watch carefully where the discussion went in the context of CSR and WP3;
• noted that there were currently no standard penalty clauses in DFID contracts which covered non or late delivery;
• noted that a new Communications and Information Unit had been established in AH to further implement QUEST. This unit would take receipt of QUEST once the system had been signed off. It would also subsume the Open Government Unit;
• noted the challenges for CKSD as:

  • need to raise the visibility and dissemination of the PRBS and other evaluation work;
  • implementation of the research strategy framework;
  • taking receipt of QUEST and considering how it might be enhanced to realise its maximum benefit;
  • managing the expectations of NGOs;

  offered MB engagement in the follow up from QUEST and raising the visibility of evaluation.

In summarising the discussion, the Board:

• thanked Joy Hutcheon for her introduction and for the work;
• welcomed the focus of the Division on results rather than process;
• agreed that Evaluation Department need to maintain product numbers and increase its visibility. They will need to demonstrate more evidence of their strategic impact. It was also agreed that Evaluation Department should pilot a bonus/penalty clause contracting systems, in conjunction with Procurement Department;
• agreed CKSD needed to focus on ensuring DFID stepped up our communications effort in line with our new strategy;
• thicken relationships further with the UK “development industry”; agreed on the need for more systematic Board engagement with the Division.