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Departments: Public Expenditure

Volume 465: debated on Tuesday 23 October 2007

To ask the Secretary of State for International Development by what methodology the annual net cash-releasing savings of £492 million per year by 2010-11 mentioned on page 238 of the Comprehensive Spending Review have been calculated. (159552)

DFID, like all other Departments, has agreed to make value for money savings of at least 3 per cent. annual net cash-releasing gains on our total departmental budget and 5 per cent. annual real reductions in our administration budgets by 2010-11. As in the 2004 Spending Review, the methodology for assessing gains achieved by more poverty-focused allocation is based on econometric studies by Paul Collier and David Dollar showing that the impact of aid varies with countries’ per capita income and policy environment. Gains are also generated by improved performance of DFID’s portfolio, as measured by the scores awarded to projects in annual monitoring reviews.

To ask the Secretary of State for International Development what the main element will be of his Department’s value for money programme which will generate annual net cash-releasing savings of £492 million per year by 2010-11, as mentioned on page 238 of the Comprehensive Spending Review. (159553)

DFID, like all other Departments, has agreed to make value for money savings of at least 3 per cent. annual net cash-releasing gains on our total departmental budget and 5 per cent. annual real reductions in our administration budgets from a near cash resource departmental expenditure limit plus capital DEL baseline of £5,310 million. The gains on our programme budget will include allocative efficiency gains from more poverty-focused allocation of multilateral and bilateral aid, and efficiency gains from improved performance of our bilateral portfolio.

To ask the Secretary of State for International Development how the increased capital expenditure for his Department announced in the Comprehensive Spending Review will be allocated. (159554)

DFID’s increased capital budget will enable us to increase our contributions to effective multilateral organisations. Alongside a growing bilateral programme, spending through the multilateral helps us influence and improve the quality of the whole aid system, rather than just the money we spend directly. Our capital budget will also be used to finance debt relief and capital investments in partner countries.