Service Delivery Agreement

A. Accountability | B. Delivering Key Results | C. Improving Performance | D. Consumer Focus | E. Managing People | F. Electronic Government | G. Policy and Strategy

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A. Accountability

1. The Secretary of State for International Development is responsible for delivery of this Service Delivery Agreement and shares responsibility for delivery of the target on debt relief (PSA2(a)). The Department’s target concerning conflict prevention (PSA3) relate to the Conflict Prevention Cross-Cutting Reviews and is shared with MoD and FCO.

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B. Delivering Key Results

1 See published DFID Country Strategy Papers
2 Assessed on the basis of Country Reviews
3 See DFID Target Strategy Paper on "Achieving sustainability: poverty elimination and the environment"
4 This encompasses sound fiscal and monetary policies, legal frameworks, effective systems of regulation and taxation. See also DFID Target Strategy Papers "Halving world poverty by 2015: Economic growth, equity and security" and "Making Government Work for Poor People"
5 The top ten recipients of DFID Education Support are Bangladesh, China, Ghana, India, Malawi, Pakistan, South Africa, Tanzania, Uganda, Zambia. This target group of countries will remain fixed over the PSA period, 2001-2004
6 See DFID Target Strategy Paper "Education for All - the Challenge of Universal Primary Education"
7 The Dakar Framework for Action: Education for All - Meeting our Collective Commitments
8 Key multilaterals include World Bank, Asian Development Bank, African Development Bank and relevant parts of the UN system
9 The top ten recipients of DFID health care assistance are Bangladesh, Ghana, India, Kenya, Malawi, Pakistan, South Africa, Tanzania, Uganda, Zambia. This target group of countries will remain fixed over the PSA period, 2001-2004
10 See DFID Target Strategy Paper "Better Health for Poor People"
11 See DFID Target Strategy Paper "Addressing the Water Crisis - Healthier and more productive lives for poor people"

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Additional Targets / Measures

Objective I

• DFID focuses its policy and resources on the poorest countries. However, since there are large numbers of people living in extreme poverty in middle income countries, there will be a more focused deployment of DFID resources in middle income countries with high levels, or concentrations, of poverty to encourage governments and multilateral institutions to increase their efforts to reduce poverty;
• Work with the United Nations to build a clearer relationship between the United Nations Development Assistance Framework (UNDAF), the Comprehensive Development Framework and Poverty Reduction Strategy Papers;
• DFID is working to promote sustainable development and reduce poverty by seeking to reduce the incidence and impact of violent conflicts, manmade and natural disasters by the provision of timely, effective, co-ordinated emergency assistance in response to crisis situations.

Objective II

• Increase awareness and understanding of development issues in the UK, with a view to building support for international development. DFID’s strategy and targets are set out in the paper Building Support for Development. These will be promoted by integrating development concerns into UK education systems (e.g. producing guidelines on a Global Perspective in the school curriculum and supporting a global perspective in teacher training) and working with the media, business, trade unions and others in civil society. DFID will monitor the effectiveness of this work by annually surveying public attitudes. A baseline survey was carried out in July 1999 and published in the document Poverty in Developing Countries.

Objectives III and IV

• Although DFID is focusing on improving the education and health sectors in its 10 ten recipients, it is actively engaged in supporting improvements in health and education in many other countries. In particular, DFID will work with others to ensure that no government seriously committed to universal primary education is unable to achieve this goal for lack of resources.

Performance Information Validation

2. DFID top management will seek to verify the information used to assess performance against PSA/SDA targets by: biennial scrutiny by the Portfolio Review Committee of reviews of key country programmes; analysis of progress as part of the annual Departmental Resource Allocation Round; auditing of measures and procedures by Internal Audit Department; preparation of an annual Review of Development Effectiveness by Evaluation Department; quarterly and annual reports on progress in departmental Service Level Agreements.

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C. Improving Performance

C.1 Strategies for Improving Performance

3. A range of initiatives will be implemented to improve performance:

• Performance will be monitored through backward- and forward-looking annual reviews of progress against the objectives established in country and institutional strategy papers, as well as regular reviews of centrally funded initiatives (e.g. Challenge Funds), focusing on how performance can be improved. In-depth reviews will be conducted every 3-5 years.
• Policy and Performance funds have been established for Africa, Asia and the multilateral development institutions, currently ranging from 1 - 10% of programme budgets. These give flexibility to allocate additional funds to countries and institutions where progress on reform enables them to make effective use of funds in pursuit of poverty reduction;
• Running cost allocations will be based on an assessment of performance against the targets set out in Departmental Policy and Resource Plans and Service Level Agreements;
• New systems are being developed to improve monitoring and management of staff resources in order to ensure their effective deployment;
• DFID will carry out and publish the outcome of a rolling programme of efficiency reviews agreed with the Cabinet Office under the Government’s ‘Better Quality Services’ initiative by 2004. These should complement and be integrated with the Government’s Modernisation Agenda. These reviews will maintain pressure for improvements in all internal administrative areas.

C.2 Value for Money

4. We are committed to continuous assessment of our performance, and of improved value for money and effectiveness of projects in DFID’s bilateral programme, as demonstrated by a year on year improvement in the index of evaluated success. In order to reach this target, we are committed to;

• Project scoring carried out annually for all projects approved at Director level and above;
• Performance Reporting Information System for Management (PRISM) modified to enable aggregation of project scores according to level of risk across the department by 2001;
• Specific targets for scores against outputs and purposes for high, medium and low risk projects approved at Director level and above;
• Effective quality control systems for project scoring set in place by 2001. These will use the Country Performance Review process, systems audit by the Internal Audit Department, and quality checks by the Evaluation Department.
• Comprehensive monitoring and project cycle management systems for projects, programmes and joint systems (with other partners). Participatory approaches will increasingly be used to monitor, review and evaluate projects and programmes.
• Addressing issues of cost-effectiveness at appraisal stage by the project team and approval stage by the Portfolio Review Committee. An independent assessment of cost-effectiveness forms part of the evaluation process.

5. We shall improve monitoring of our multilateral programmes and assess their performance against objectives in the published Institutional Strategy Papers and against our annual reviews, which will develop performance measures. In particular, we shall seek to improve the effectiveness of DFID financial support channelled through multilateral organisations by encouraging greater selectivity, including the effective implementation of results-based budgeting in UN organisations, and performance based allocation systems in other multilateral institutions. The World Bank has an effective internal evaluation department and DFID is working to improve the capacity of the internal evaluation department of the European Commission.

6. To limit the costs of managing service delivery we have a target of a reduction of administrative overheads by 1% per year by the end of 2003/4. However, steps are being taken to ensure that quality and outcome of our services are not compromised. Furthermore, the department responsible for pensions to former colonial civil servants and dependants aims to reduce running costs (adjusted for inflation) each year in line with the reduction in pensioner numbers.

C.3 Variations in Performance

7. DFID identifies and responds to variations in performance by using long established risk management systems and is seeking to improve understanding of poor performance. Where factors are within DFID’s control, remedial action is taken. Where the problem is external or cannot be resolved easily, review systems provide managers with the information needed to make early decisions about whether resources should be reallocated.

• An integrated Performance Reporting Information System for Management (PRISM) will be rolled out across the office. This should enable staff and managers to assess progress within their own area of responsibility, and in comparison with others and take early remedial action.
• There will be DFID support to poor countries to help improve their statistical systems so as to identify variations.
• Annual country and institutional performance and planning reviews provide timely information on performance within and across different countries and regions. DFID’s strategy may be changed in the light of their conclusions.
• Improvements in a partner Government’s or multilateral institution’s performance can be rewarded by allocation of extra resources from DFID’s Policy and Performance funds.

C.4 Procurement

8. DFID aims to bring procurement into line with Government guidelines on the policy framework for public procurement, including untying the aid programme.

9. DFID’s approach to aid-funded procurement is that each contract is handled in the most appropriate manner. We are working towards closer management of strategic suppliers, and reducing the administrative burden on small contracts. We will use new technology, in the form of the Government Procurement Card and electronic tendering, to simplify administration.

10. Specifically, DFID aims:

1. Within one year of OGC conducting a successful pilot, to adopt e-tendering from its HQ offices.
2. By March 2002, to manage each of DFID's ten most strategic suppliers by a named procurement specialist. By March 2004, close supplier management will be in place wherever it is appropriate to the achievement of VfM.
3. By March 2002, to define all grade A3 and above posts in Procurement Department as key designated posts; these staff should either hold or be studying for MCIPS. Furthermore, 20% of Procurement Department staff should hold procurement qualifications to at least Certificate of Competence level.
4. Following the trial use of procurement cards by DFID in the UK, to develop a strategy for procurement of low value items by DFID world-wide.

C.5 Fraud

11. DFID will continue to monitor and report fraud through an ongoing programme of internal audits and maintain awareness of fraud through distribution of regular notices. The DFID 1999/2000 Annual Fraud Return reported nine cases of fraud. In all cases, action has been taken to improve systems of control to avoid recurrence.

12. All DFID projects are subject to risk analysis whereby potential risks, including those which may lead to criminal opportunities, are identified and minimised. DFID development assistance stipulates good accounting standards and procedures as well as probity in the use of funds. In an attempt to reduce the burdens on recipients, DFID is working with other donors towards common accounting standards and procedures. DFID also assists overseas governments to tackle their own problems of corruption and strengthen their accounting, audit and procurement systems.

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D. Consumer Focus

D.1 Consumer tests

13. DFID’s main ‘business’ is the British development assistance programme. This does not deliver services in the usual sense to people in the UK. However, we provide information on our work to the public and are working to be responsive to their needs.

• DFID Public Enquiry Point is one point of contact for people interested in DFID and its work. The service, which handles around 900 enquiries a month, can be accessed by telephone, mail or e-mail. We will have a complaints procedure on our Internet website by early-2001.
• A 'second generation' website is required that is more responsive to the needs of users and is easier and faster to navigate. The results of a questionnaire will help us redesign the website by early-2001.
• DFID undertook in 1998, and again in 2000, a series of Development Policy Forums across the UK. These events, with individuals and representatives of groups from society, are intended to share thinking and ideas on development issues, and also raise awareness and understanding.
• DFID publishes a wide range of material about development issues and the Department’s work, including all our Strategy Papers. These are widely available, and we actively promote a catalogue of all DFID’s publications, as well as producing ‘Developments’ magazine, which has readership well in excess of 100,000.

14. DFID calculates and pays pensions to former colonial civil servants and dependants. Minimum standards of service are contained in ‘Overseas Pensions Department: A guide to your pension’, which is a commitment to every new pensioner. This sets out standards of accuracy, promptness, responsiveness and satisfaction (gauged by customer surveys). Results will be published in an annual report.

D.2 Prompt handling of correspondence

15. We aim to:

• reply to 100% of all ministerial correspondence relating to the full range of DFID activity within 15 days of receipt;
• provide an initial response, as a minimum, to all queries received on overseas pensions within 2 weeks;
• reply to 95% of all written enquires (letter and email) to the Public Enquiry Point within 15 working days;
• give full (or, if necessary, interim) replies to telephone enquiries within 2 days.

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E. Managing People

E.1 Civil Service Reform

16. DFID is committed both by its Civil Service Reform Action Plan and internal Effective Staff Management and Diversity Action Plans to deliver a step change improvement in the quality and effectiveness of the management, motivation and diversity of its staff. Key targets contained in the Plans include:

i) To increase diversity in the Department by March 2005. Targets contained in DFID’s Diversity Action Plan are disaggregated by location and staff grade. A key indicator will be an improvement in diversity in the Senior Civil Service:

1. to have 30% of SCS posts filled by women;
2. to have 8.3% of SCS posts filled by staff with an ethnic minority background;
3. to have 3.3% of SCS posts filled by staff with disabilities.

ii) To maintain DFID’s high level of interchange in the SCS at least at current levels (82% with experience outside the Department and 66% with experience outside Whitehall).

iii) To deliver a comprehensive programme of management development training for all staff with management responsibilities and preparation for management training for more junior staff by the end of March 2002.

iv) to improve the quality of leadership through internal benchmarking (quantitative targets to be established by September 2001 following a first year baseline exercise).

E.2 Sickness absence and ill health retirement

17. DFID will seek to:

i) reduce sickness absence to 6.4 days per staff year (a 23.8% reduction) by 2003, based on measures advocated in Managing Attendance;

ii) reduce ill-health retirements to 3.72 per 1000 staff by 2005 (from 3.86 in 1999/00).

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F. Electronic Government

18. DFID has key interfaces with the UK public on public information, applications for funding, recruitment and letting of contracts. Most are already delivered electronically, and DFID are on schedule to meet all the Government wide e-business targets by 2005. By 2002, we aim to accept applications for recruitment vacancies and DFID funding programmes electronically. Our e-business plan will set-out the strategies for achieving the full benefits of the unfolding ‘e-technology opportunities’ in support of our business objectives.

19. Most of the payment of pensions to ex-Colonial Civil Servants and dependants (notably the actual payments) is already on electronic systems. By 2002, we aim to move to electronic signatures, so that forms can be accepted via the Internet.

20. For procurement, we aim;

• to adopt wide scale use of electronic invoices by end of 2002/03 (subject to trials at end-2000/01);
• to adopt e-tendering from UK base within one year of OGC conducting successful pilot.

21. We shall continue to upgrade our IT and to link DFID staff in overseas offices directly to DFID’s INTRANET and the INTERNET, where an appropriate business case is established. We aim to: improve our international communication systems, by introducing video conferencing facilities; start widespread use of e-commerce facilities; rationalise our account code structure (to improve interface with, and access to, off-the-shelf and state-of-art software); and further develop systems for monitoring performance and efficiency of Management Information Systems. Each should result in efficiency gains and contribute to the full range of DFID’s objectives and outputs.

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G. Policy and Strategy

22. The Government’s overall policy on international development is set out in the 1997 White Paper. This focused DFID’s efforts on poverty eradication and the outcome-focused International Development Targets. DFID policy is informed by a research programme, which is focused on these targets, and is steered by groups which normally include external expertise. Progress towards meeting targets is measured using published data (see Technical Note). The 2000 White Paper supplements the earlier one and focuses on poverty reduction in the context of globalisation. DFID is preparing a new Bill to lay before Parliament when the legislative timetable permits.

Consultation

23. DFID’s policy making process ensures that policies are outcome-focused, evidence-based, robust and forward looking. Both policies and targets are based on strategy papers which have been the subject of internal and external consultation. Steps are being taken to improve coherence in DFID’s policies across government. DFID goes to great lengths to obtain input and feedback from stakeholders, including customers, deliverers and the academic community. Policies are subject to regular review, which will become more critical during the Spending Review period.

24. We are becoming more participatory in the design of our strategies. Increasingly our Country Strategy formulation will be linked directly to wider, country-led processes, such as the Comprehensive Development Framework and Poverty Reduction Strategy Papers. Internal procedures ensure full consultation, as we have learnt that, unless stakeholders are adequately involved in project design, implementation and review, projects and programmes are unlikely to succeed.

25. A reduction in gender discrimination and other forms of social exclusion are addressed as mainstream issues in DFID’s policy making. There is an international development target that works towards women’s empowerment, with gender equality in education being a key measure of progress. DFID has recently launched a Gender Equality Mainstreaming (GEM) information resource on the internal DFID intranet and plans to launch the site on the Internet.

26. Ministers and officials will participate regularly in forums within the UK, to raise development awareness and receive feedback on policy, strategy and implementation.

Evaluation

27. DFID has in place well tested systems to support policy development. This includes knowledge and research programmes, risk analysis systems and evaluation, the results of which are used to challenge current practice and accepted views and feed back into new activities. DFID works closely with OECD’s Development Assistance Committee, UN agencies, the World Bank and policy makers from developing countries on the methodology of evaluation as well as work to assess progress towards the IDTs. This work feeds into the progress reports on achieving the IDTs, requested by the G8 Summit.

Peer review

28. Peer review of the UK development programme by members of OECD’s Development Assistance Committee acts as an independent check on DFID’s performance. We aim to improve on the standards which led the DAC to conclude, in its 1997 review, that DFID’s programme was clearly focused; that coherence and co-ordination both within the UK and internationally was being strengthened; that the bilateral aid programme was well organised and that strong multi-disciplinary skills and aid management approaches made DFID "one of the most professional and innovative aid agencies in either the bilateral or multilateral sectors". A further review is scheduled for 2001 and its recommendations will be considered. DFID participate fully in peer reviews of other OECD countries’ aid programmes, and aim to improve the coverage and effectiveness of the review process.

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