Items in bold have separate entries elsewhere in the Glossary
DFID administrative costs cover the total cost of delivering all DFID’s programmes. They include UK based and local staff, consultants, travel, rents and communications. They also cover expenditure in respect of residual rent liability on the Chatham Maritime site arising from the terms agreed for the privatization of DFID’s former Next Steps agency, the Natural Resources Institute. Other administrative costs cover the overseas costs of staff in agreed diplomatic posts concerned with full time administration of aid delivery. Under DAC definitions all these items are wholly ODA eligible.
DFID administrative costs presented in SID are not directly comparable to those presented in DFID’s Resource Accounts due to some differences in methodology and definitions. The major difference is in the treatment of Programme Funded Administrative costs. In SID, Programme Funded Admin is defined as administration costs, which is in line with DAC definitions. Whereas Programme Funded Admin is classified as programme expenditure in the Resource Accounts.
GPEX and ODA also include ODA-eligible administrative costs of other government departments or agencies. For 2011 flows, the FCO has used a more precise method approved by the DAC to estimate administrative costs in relation to front line diplomacy and have reported higher administrative costs than in previous years as a result.
SID presents three concepts of aid to developing countries: the DFID programme of aid; Gross Public Expenditure on Development (GPEX); and Official Development Assistance (ODA). The DAC maintain a list of Recipients of Official Development Assistance (ODA). There are also some countries to which the UK gives aid that is not classified as ODA. Further discussion is found in Section 2.
The UK is attributed a share of the EC’s External Assistance Budget based on total UK contributions to the EC. Each budget line within the External Assistance Budget is attributed to either DFID or Other UK Government Departments based on the aim of the budget line (development, conflict prevention, improving international relations). To calculate DFID’s attribution, 15.1 per cent (the UK’s share of EC expenditure in 2011) of each budget line attributed to DFID was totalled. The attribution for Other UK Government Departments uses the same method.
Not all of the EC External Assistance Budget scores as ODA. It is not straightforward to provide a precise figure for the share of individual UK Government Department’s attribution which should score as ODA. Most of the UK’s share of EC expenditure for developing countries is attributed to the DFID programme and is shown under multilateral contributions (Table 18).
This refers to net lending to countries on the DAC List of ODA Recipients by banks in OECD countries. Loans from Central Monetary Authorities are excluded. In Statistics on International Development, figures obtained from the Bank of England, are shown in Table 6.
Bilateral aid covers all aid provided by donor countries when the recipient country, sector or project is known. Core contributions to development organisations not on the DAC list of Multilateral Organisations is also classed as bilateral aid (for example the Education Fast Track Initiative). Core contributions to organizations on the DAC list of Multilateral Organisations in support of their development programme is classed as multilateral aid.
This aid type covers funding that is channelled through a multilateral organisation and DFID has control over the country, sector or theme that the funds will be spent on. For example, this includes contributions to multi donor trust funds and special appeals managed by multilateral agencies.
This aid type includes DFID bilateral programme that is channelled through UK or international Not for Profit Organisations, such as NGOs or Civil Society Organisations. It contains both funding for specific projects and core funding i.e. when DFID has no control over the sector or recipient country.
The British Council is the UK's international organisation for educational opportunities and cultural relations. The FCO supports the British Council through grant-in-aid funding. This funding goes to support a range of initiatives including building the capacity and quality of English language teaching; supporting education systems; and using cultural exchange to improve economic welfare. UK ODA statistics include the proportion of this work which is clearly focussed on delivering economic welfare and development in ODA eligible countries. The British Council’s aid activities in developing countries are reported by the FCO and are shown in Table 2.
CDC was transformed from a statutory corporation into a public limited company in December 1999, paving the way for it to become a Public/Private Partnership. From 1999 to 2004 it traded as CDC Capital Partners. From July 2004, most of the operational staff, including all overseas offices, transferred to a new company called Actis Capital LLP, which was de-merged from CDC. Actis has a majority of private sector partners and manages some of CDC’s investments under contract. CDC Group PLC itself remains wholly Government-owned and is now the UK government’s instrument for investing in the private sector in developing economies (it does so through fund management companies). The conditions under which the CDC operates means that its investments must have a clear development objective. It provides equities to companies in ODA eligible countries, and these disbursements and repayments are included as UK flows. The net amount (i.e. equity purchase less equity sales) of CDC investments in ODA-eligible countries is reported as ODA.
Chevening Scholarships fund international students who want to study in the UK. Largely funded by the FCO, the Scholarship scheme also receives significant contributions from universities and other organisations in the UK, and from a wide range of overseas sponsors including governmental and private sector bodies, with which the FCO have partnership agreements. Funding from this scheme to students from ODA eligible countries are included in UK ODA and GPEX statistics.
Non-governmental organisations, trade unions, and church faith and community groups have a long and impressive record of involvement in international development. These civil society organisations and networks can play a vital role in empowering poor people overseas and in building global alliances in support of eliminating world poverty.
The aim of the joint DFID/ DECC fund, known as the Climate Investment Funds, is to support development and poverty reduction through better environmental management, and help developing countries respond to the realities of climate change.
These are pension payments made to ex-members of the UK Overseas Civil Service who were employed directly by developing country governments. These payments are administered by DFID but they are not sourced from DFID Departmental Expenditure Limit (DEL). These payments are reported under ‘Aid from Other UK Official Sources’.
A loan, the terms of which are more favourable to the borrower than those currently attached to commercial market terms is described as concessional (or a soft loan) and the degree of concessionality is expressed as its grant element.
The Conflict Pool is the principal mechanism by which the Government allocates joint resources in support of its commitments to prevent and tackle conflict, as set out in the Building Stability Overseas Strategy. It focuses on discretionary conflict prevention, stabilisation, and peacekeeping activities. Its resources for 2011/12 to 2014/15 were set by the 2010 Spending Review through a joint conflict settlement. This settlement is additional to departmental budgets, and is managed jointly by the Department for International Development (DFID), Foreign and Commonwealth Office (FCO), and Ministry of Defence (MoD). It brings together diplomatic, defence and development capabilities into an integrated, cross-government response to instability and conflict overseas.
The Conflict Pool combines ODA and non-ODA resources. The figures quoted in Table 2 for the Conflict Pool represent the ODA amounts actually disbursed through FCO/ MoD systems. All Conflict Pool funds disbursed by DFID are ODA eligible and are included in the DFID Bilateral Programme.
In this publication “Country Specific Bilateral expenditure” refers to spend which can be allocated to a specific recipient country. This excludes regional expenditure and projects that are not allocable geographically. Table 15 provides a breakdown for country specific expenditure.
This definition includes funding from all spending divisions with DFID, regardless of whether or not the division is a country programme or an international/policy programme.
DFID’s programme is allocated to budget lines for either: a) dedicated country/ regional aid programmes or b) international/ policy programmes. Country programmes are divisions within DFID which work in specific countries e.g. to East & Central Africa Division or Asia Division. International/ policy programmes are divisions which work on a policy area or with international organisations e.g. Policy & Research Division, or International Relations Division. More details on DFID budget allocations by programme is published in DFID’s Resource Accounts which is available on the DFID website.
Country Programme aid is different to country specific aid, which is based on the recipient country of the funding and not DFID division.
The DAC List of ODA Recipients is designed for statistical purposes. It helps to measure and classify aid and other resource flows originating in DAC countries. It is not designed as a guide to eligibility for aid or other preferential treatment. In particular, geographical aid allocations are national policy decisions and responsibilities.
Countries are divided into income groups based on Gross National Income (GNI) per capita as reported by the World Bank, with the Least Developed Countries (LDCs), as defined by the United Nations, separately identified. Countries that have exceeded the high-income threshold for three consecutive years at the time of the review are removed from the List. The DAC List is reviewed every three years.
See Annex 3: Debt Relief
Developing countries are those countries and territories in the DAC List of Recipients of Official Development Assistance (ODA).
The Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD) is a forum for consultation among 23 donor countries, together with the European Commission, on how to increase the level and effectiveness of aid flows to all aid recipient countries. The member countries are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Korea Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and USA.
The DAC sets the definitions and criteria for aid statistics internationally. Statistical Directives exist to encourage comparability of reporting of resource flows by DAC members. The countries receiving aid are set out in the DAC List of Recipients of Official Development Assistance (ODA).
This term covers all DFID expenditure on development assistance. The DFID programme comprises:
This is investment that adds to, or acquires, a lasting interest in an enterprise operating in an aid recipient country, the investor's purpose being to have an effective voice in the management of the enterprise. It is measured as the change in the net worth of branches, subsidiaries, or associate companies to the investing company. Direct Investment is shown in Table 6.
ECGD is an agency of the Department of Trade and Industry and provides insurance for exporters against the main risks in selling overseas, and guarantees to banks providing export finance. It also negotiates debt relief arrangements on commercial debt.
Payments by the ECGD to commercial banks, enabling them to maintain internationally agreed interest rates for export credits for trade with aid recipient countries, are known as International Stabilisation Grants. These are included in Other Official Flows (OOF) but are excluded from GPEX as they are not developmental. ECGD debt relief is included in GPEX.
Export credits finance the supply of goods and services to aid recipient countries. Only credits with an initial or extended maturity of over one year are included in total flows of resources. Private export credits are those made available by the private, bank and non bank, sector. Guaranteed export credits are those parts of private export credits guaranteed by ECGD.
In Statistics on International Development the term Financial Aid covers Poverty Reduction Budget Support (PRBS) and other financial aid provided to partner country governments (i.e. projects and programmes including sector wide approaches not classified as PRBS).
The term ‘financial aid’ is sometimes used in a wider sense to mean a grant which is the subject of a formal arrangement with the recipient government or institution. This would cover all bilateral aid other than technical co-operation and administrative costs. In Statistics on International Development, bilateral financial aid expenditure is sub-divided into PRBS (General and Sector), Other Financial Aid, Other Bilateral Aid, Humanitarian Assistance and Debt Relief.
See Poverty Reduction Budget Support
Gift Aid refers to tax that is reclaimed by UK charities from the HMRC on donations made by UK taxpayers. Previously, this was estimated by DFID through an annual voluntary agencies survey. Following a review of the cost of this survey versus the impact of the results (Gift Aid reported in 2009/10 was less than 1% of total ODA), it was decided to estimate this figure through a different method. This method applied the proportion of Gift Aid paid to charities active in development in 2009/10 to the total amount of Gift Aid paid to charites by HMRC in 2010/11. This provided a conservative estimate due to non-response to the 2009 voluntary agencies survey.
In 2011/12 a smaller scale survey was undertaken to update the gift aid figure. This methodology is still under development and will be improved for 2012/13.
The estimate of Gift Aid for UK Civil Society Organisations is included in ODA and GPEX (shown in Table 2).
The Governance and Transparency fund is a one-off fund which has been designed to help citizens hold their governments to account through strengthening the wide range of groups that can empower and support them. Table 19 shows how much DFID has funded through the GTF in 2011/12.
This comprises all expenditure by UK voluntary agencies on development assistance and relief to recipient countries, to multilateral agencies or to private international organisations for the benefit of recipient countries net of any support from official sources. Data are shown in Table 6 and estimated using the total amount of Gift Aid paid by HMRC as reported in their statistical publications.
GNI comprises the total value of goods and services produced within a country (i.e. its Gross Domestic Product or GDP), together with income received from other countries (notably interest and dividends), less similar payments made to other countries.
GPEX is expenditure by all official UK sources (i.e. government departments and public bodies such as CDC), on aid to developing countries on the DAC list of ODA eligible countries and multilateral organisations and some other countries, which meets the criteria for developmental Official Flows agreed by the DAC.
See Export credits.
See Income groups and Annex 1.
See Annex 3 – Debt Relief.
Humanitarian assistance generally involves support to humanitarian organisations and the provision of material aid (including food, shelter and medical care), personnel, and advice in order to:
DFID provides funding to certain UN agencies (mainly WFP, UNICEF, OCHA, UNHCR and WHO) for their humanitarian assistance programmes in individual countries. These amounts are recorded as bilateral disaster relief as DFID has influence over the use and destination of the funds. DFID also gives core funding to these organisations where we do not specify the recipient of the funding; this is classified as multilateral aid.
DFID also channels assistance through Civil Society Organisations, such as the Red Cross, as a means of providing humanitarian assistance to individual countries. These contributions are recorded as bilateral aid as the destination country is known.
The categorisation of recipient countries by income groups is based on Gross National Income (GNI) per capita figures as reported by the World Bank. The income groups used in Table 15 and 17 of this publication are based on the 2010 GNI per capita data and according to the thresholds set out below:
See Sector
The purpose of the International Climate Fund (ICF) is to support international poverty reduction by helping developing countries to adapt to climate change, take up low carbon growth, and tackle deforestation. It is jointly managed by DFID, DECC and DEFRA.
In the mid 1960s, 24 developing countries were identified as having particularly severe long term constraints on development. They were assessed on three criteria: per capita GDP, manufacturing base and literacy. Inclusion on the list of LDCs as defined by the United Nations is now assessed on two main criteria: economic diversity and quality of life. The total number of LDCs since 31 March 2004 is 48 and they are identified in Annex 1.
This is aid delivered in the form of core contributions to organisations on the DAC List of Multilateral Organisations. A core contribution is when DFID does not specify the recipient or sector of the contribution and funds are transferred into the general budget of a multilateral and are not separately identifiable from other donor’s contributions. DFID aid delivered through a multilateral organisation where the recipient country, sector or project is known is classed as bilateral aid.
Some international bodies conduct activities that benefit both developing and developed countries. The DAC have agreed proportions that account for the activities of these organisations that focus on developing countries. When ODA is reported these agreed proportions are applied to core contributions. For example, when reporting core contributions to UNESCO only 60% is reportable as ODA.
The flow of resources to aid recipient countries is a term used in DAC reporting and corresponds broadly to the following transactions with recipient countries and multilateral institutions (for the benefit of recipient countries).
It excludes:
Official development assistance is defined as those flows to developing countries and multilateral institutions provided by official agencies or by their executive agencies, each transaction of which meets the following tests:
Official development assistance is shown both gross and net of loan repayments. From 2005 only aid to countries on the DAC List of Recipients of Official Development Assistance is eligible to be recorded as ODA.
The UN target for aid (0.7 per cent), endorsed in 1970 by the UN General Assembly, is expressed in terms of net ODA (i.e. after deduction of loan capital (i.e. principal) repayments) as a percentage of Gross National Income.
This aid type covers bilateral aid that is not elsewhere classified, i.e. it is not defined as PRBS, Technical Assistance, or Debt Relief and it is not delivered by a multilateral organization or an NGO. It includes:
Other Official Flows are defined as flows to developing countries by the official sector which do not satisfy both criteria necessary for ODA (i.e. can be either non-concessional and convey a grant element of less than 25 per cent or non-developmental purposes or both).
These are strategic level agreements between DFID and UK civil society organisations with which it has significant working relationships and shared objectives. The PPA sets out at a strategic level how the two partners will work together to meet the Millennium Development Goals. Table 19 shows how much DFID has funded through PPAs in 2011/12 and is broken down by organisation.
Poverty Reduction Budget Support (PRBS) can take the form of a general contribution to the overall budget (general budget support) or support with a more restricted focus (sector budget support). PRBS is aid which is:
And, in the case of sector budget support
Note:
I. This definition was agreed in May 2005 and is wider than previously used. The main difference is that the old definition required PRBS to be spent through a central exchequer while the new definition recognises the important issue that the funds are spent using national (or sub-national) financial management systems and are allocated through the government’s budget process.
II. The difference between the definitions with regards to DFID’s current portfolio is likely to be relatively small. Some PRBS expenditure included in SID has been classified under the wider aspects of the new definition, however to date no retrospective marking exercise has taken place so most of the historical PRBS data has been gathered using the old definition. In the future, expenditure will be classified using the new definition.
See Official and Private Flows
Promissory notes are a method of funding multilateral organisations where DFID ‘deposits’ funds with the Bank of England. Multilateral organisations then ‘encash’ these funds as they need them. They include capital subscriptions to the World Bank, the Regional Development Banks, the International Fund for Agricultural Development, the Global Fund to Fight AIDS, TB and Malaria, GEF and the Montreal Protocol.
When reporting internationally, DFID reports the deposits of its promissory notes. However, previous to the 2007/08 edition of SID, DFID reported its promissory notes encashments. Within this publication, promissory note deposits are reported, consistent with DFID’s international reporting.
International Development Banks, which serve particular regions, for example the African Development Bank or the European Bank for Reconstruction and Development.
Resource Accounts are an accrual-based approach to Government accounting that adopts a commercial style of preparation in line with generally accepted accounting practice. Accruals accounting is a method of recording expenditure as it is incurred, not when it is paid out, and income as it is earned, not when it is received. Resource Accounting requires departments to report on and manage all assets and liabilities and takes account of non-cash charges not previously recognized under cash accounting such as depreciation and capital charges. Resource accounts also provide information on how resources have been used to meet objectives.
Under Resource Accounting, expenditure is recorded at the time goods and services are consumed rather than when payments are brought to book.
Statistics on International Development continues to be produced on a cash basis in line with international reporting practices and so the data contained in Statistics on International Development is not directly comparable with the data published in DFID’s Resource Accounts.
The areas of the recipient countries’ economic or social structure that aid is intended to support. DFID categorises its aid into broad sectors: Education; Health; Social Services; Water Supply and Sanitation; Government & Civil Society; Economic; Environment Protection; Research; Humanitarian Assistance; and Non-Sector Allocable.
DFID introduced a new set of sector codes in 2007/08, more closely aligned with the codes used internationally by the OECD DAC. Earlier projects have been mapped to new classifications although there may be some discontinuity in more detailed sectors but the effect on the broad sectors presented in this publication will be small. This means the sector analysis presented in Tables 5 and 6 are based on a new set of broad sectors and will differ compared to data published before 2007/08.
Technical Co-operation is the provision of know-how in the form of personnel, training, research and associated costs. It covers primarily:
It also includes:
Increasingly training is also being provided by means of short in-country courses as part of, or in association with, country projects. This is not fully captured at present in the statistics on training. The costs of these activities are included within projects and programmes.
Voted funds are those funds approved by Parliament for public expenditure. Details are contained in the supply estimates.
Bookmark with:
What are Bookmarks?