The Independent Commission for Aid Impact said that although the department’s approach to value for money in programme and portfolio management is “helping aid money go further”, improvements are still needed.

The review, which looks at the departments spending and performance, found that the DfID’s approach “was not adequately reporting and capturing results and value for money at the country portfolio level, or how programmes work together to deliver lasting impact, including future dependency on aid”.

The watchdog said: “There is a risk that the current approach leads Dfid to prioritise the immediate results of its own programmes over working with and through others to achieve lasting change.”

ICAI said DfID should ensure the principles of development effectiveness are more explicit in its value for money approach and programmes should reflect these principles.

DfID has said it welcomes the report and its suggestions and is already prioritising value for money.

The government department plans to save almost £500m in efficiency savings by 2019-20, higher than the target set in the 2015 Spending Review. DfID said it is on track to meet these savings.

It said in a statement: “ICAI itself says that DFID’s diligence in driving value for money is improving the return on UK investment in aid‎, highlighting our efforts to ensure every single penny goes further to save lives and creates a safer, healthier and more prosperous world – which is in all our interests.

“We are continuing to hold aid organisations to account by tying funding to performance, closing programmes which fail to meet development objectives, and increasing efficiency savings.”

The review comes amid public questioning of UK aid spending, particular the backing of international charities, like Oxfam, being investigated for sexual misconduct by aid workers. 

NGOs and DfID were being questioned by the International Development Committee about sexual exploitation in the aid sector in Parliament today, where Oxfam publicly apologised over the scandal.  

Oxfam agreed not to bid for any new UK government funding until it reforms following the allegations of its aid workers in Haiti being involved in cases of sexual exploitation, bullying and intimidation.