By Judith Ugwumadu | 16 December 2014

The UK aid watchdog has welcomed a revamp of the rules and principles that govern Department for International Development programmes, but has said more needs to be done to clarify the relationship between value for money and impact. 

The Independent Commission for Aid Impact today published a ‘rapid review’ of DFID’s Smart Rules, to see how they address issues raised in its 38 reports to date. The rules have been designed to help the department focus more on programme delivery, streamline documentation and processes, improve risk management and increase compliance.

ICAI said there was evidence that some aspects of poor programme design and delivery had been tackled, and noted that the Smart Rules were helping to simplify procedures. For instance, where previously programmes had had to meet 200 requirements, these had been trimmed down to 37 rules, it said.

The watchdog also said it was ‘pleased’ that there was clear focus on the concept of value for money throughout the Smart Rules. But it added that value for money was not a measure confined to the relative costs of intervention, but had to bee seen in the context of long-term sustainability and impact.

‘There seems to be an implicit assumption in the Smart Rules that programmes providing value for money will deliver on poverty reduction,’ ICAI’s report stated.

‘We would expect that the Smart Rules spell out more clearly the causal relationship between value for money considerations, sustainability and impact. There is also an opportunity to help teams to look more at the relative burdens of different administrative models and their impact on value for money.’

ICAI chief commissioner Graham Ward said publication of the Smart Rules was a ‘good step’ towards improving accountability and simplifying procedures. ‘That said, there is more the department can do to embed the changes in behaviours that will be needed to make sure that the Smart Rules work as intended.’

Lead commissioner Mark Foster added: ‘We have regularly noted in our reports that DFID needs to define better who is accountable for delivery of its activities and how DFID’s systems and processes can get in the way of effective delivery. We believe that the new Smart Rules are a good start.’

As well as improvements to value-to-money, ICAI made several other recommendations on how the Smart Rules can be refined and improved. This included a call on DFID’s leadership to define a compelling vision for the department for the next decade, focused on reducing poverty in beneficiary countries.

Responding to the report, a DFID spokeswoman said: ‘ICAI has rightly recognised the importance of the reforms DFID has initiated. By cutting needless red tape DFID staff can focus on what really matters: changing the lives of the world's poorest people and delivering value for British taxpayers' money.

‘Improving our “rule book” is only the start with work already underway to transform training of staff at all levels so DFID can continue to get greater impact for every pound spent.’