Chapter 14

Department for International Development

This Government is committed to helping the world's poorest people.

Over the next three years the Government will increase spending on international development by 6.2 per cent a year in real terms, taking it to almost £3.6 billion by 2003-04. This will be the largest ever UK aid budget in real terms and implements the Government's Manifesto commitment to reverse the decline in aid spending. The Government will ensure that the ratio of official development assistance to GNP will rise to 0.33 per cent by 2003-04.
The International Development Targets remain the centrepiece of the Government's development strategy. These include halving the proportion of people in extreme poverty by 2015, and delivering real improvements in health and education opportunities for the world's poorest people.
The Government will continue to focus resources on the world's poorest countries and on concentrations of very poor people in middle income countries. We will invest our resources where we believe they will be used effectively by governments which are committed to poverty reduction.

Achieving the International Development Targets will be a task for the entire international community. Under this Government the UK will remain a leading player on international development matters. The Government will use our increasing influence to improve the effectiveness of development assistance worldwide and to ensure that it delivers real help to the world's poorest people.

14.1 In the 1998 Comprehensive Spending Review, DFID received the largest percentage increase in funds of any major department. Those extra funds were deployed primarily in the UK's bilateral programme and focused on countries committed to poverty reduction. They enabled, among other things, an expansion of UK health and education aid programmes. The Government worked to combat diseases such as malaria and to tackle the HIV/AIDS pandemic; and to improve education for the poorest, reducing gender discrimination and giving as many children as possible the opportunity to develop their potential.

14.2 DFID have developed a comprehensive policy structure designed to deliver real improvements in the lives of the world's poorest. Country, Institutional and Target Strategy Papers set out the Government's international development policies and plans from country to global level. The emphasis throughout is on outcomes, and enabling real progress towards the International Development Targets.

A continuing commitment to helping the world's poorest

Box 14.1: Key PSA targets - Department for International Development

Improved education systems in the top ten recipients of DFID education support demonstrated by an average increase in primary school enrolment from a baseline of 75 per cent in 2000 to 81 per cent in 2004.
Improvements in child, maternal and reproductive health in the top ten recipients of DFID health care assistance demonstrated by a decrease in average under-five mortality rates from 132 per 1000 live births in 1997 to 103 in 2004.
An increase in the percentage of DFID's bilateral programme going to poor countries, particularly those with favourable policy environments.
By 2004, relieving the unsustainable debts of all heavily-indebted poor countries (HIPC) committed to poverty reduction, building on the internationally agreed target that three-quarters of eligible HIPCs reach decision point by end-2000.

Raising a billion people out of poverty

14.3 The UK's international development programme has made great strides in the last three years. Ranging from larger scale commitments like the five year, £67 million programme of support for the Ugandan education sector, to establishing micro-credit facilities across India, DFID is focused on delivering real improvements in the lives of the world's poorest people. But the challenge of delivering the International Development Targets is also great. To meet the chief target - halving the proportion of people living in extreme poverty by 2015 - will require one billion people to be lifted out of that poverty in a sustainable way. Britain will play its full part. But these targets cannot be reached without coordinated action across the range of bilateral and multilateral donors, and by developing countries themselves. The UK will seek to use its increased influence to deliver reform internationally.

14.4 A key element in enabling poor countries to develop faster has been the UK's unilateral debt cancellation initiative designed to remove unsustainable debt burdens from heavily-indebted poor countries (HIPCs) committed to poverty reduction. DFID and HM Treasury, working in close cooperation, have played a leading role both in pressing for enhancements to the HIPC initiative itself, and in persuading other countries to follow the UK's lead of committing to provide 100 per cent debt forgiveness. In the next three years the Government will seek to widen and quicken the debt relief process and provision for this has been included in the spending plans set out below.

14.5 DFID bilateral aid programmes are some of the most respected in the world for their effectiveness. This is partly because DFID allow recipients to use the money in the most efficient possible way for them, rather than making the resources conditional on purchasing goods and services from the donor country, as some do. Over the next three years, more and more DFID aid will be 'untied' in this way, and the Government will continue its campaign to get other members of the international donor community to do the same.

14.6 The cross-departmental review on Conflict Prevention detailed in Chapter 36 will provide a more effective mechanism for the UK to help reduce the number of people whose lives are affected by violent conflict. The funds which the UK spends on conflict prevention in sub-Saharan Africa will be brought together into one shared pool, and managed jointly by the relevant departments.

Spending plans

14.7 The commitment the Government demonstrated to international development two years ago in the Comprehensive Spending Review continues now. DFID's budget will grow by 6.2 per cent each year in real terms over the next three years, as set out in Table 14.1 below. This will take planned spending to almost £3.6 billion in 2003-04. This includes provision for relieving the unsustainable debt burden of HIPCs which have demonstrated a commitment to poverty reduction.

14.8 DFID is responsible for the CDC plc (formerly The Commonwealth Development Corporation), a public limited company wholly owned by the Government. The Government has decided to create a Public Private Partnership (PPP) for CDC, bringing an injection of private capital and allowing it to access private capital markets. The proceeds of the PPP will be recycled into aid spending.

Table 14.1: Key figures

£ million
	2000-01	2001-02	2002-03	2003-04
Department for International Development	2736	3065	3298	3510
African Conflict Prevention	30**	50	50	50
Total DFID*	2760	3115	3348	3560
of which: Resource Budget	2459	2736	2939	3147
Capital Budget	301	379	409	413

*Departmental Expenditure Limit, including sub-Saharan African conflict prevention budget
** Planned expenditure on conflict prevention in sub-Saharan Africa by FCO, MOD and DFID, of which DFID £24 million