Multilateral Aid Review summary - European Commission Budget (EC'ion Budget)

The MAR focuses on the external instruments of the European Commission budget: the Development Cooperation Instrument (DCI) for Asia & Latin America and thematic programmes; and the Neighbourhood (ENPI); and Pre-accession (IPA) instruments. Although almost all budget instrument spend is classified as ODA, none of the budget instruments, except for the DCI geographic programmes and most of its thematic programmes, are purely development focused. In 2009/10, DFID paid £789m for its share of the European Commission’s development budget instruments.

	comment
Contribution to UK development objectives	Weak
	+	Sheer size (€7 bn pa) and regional coverage make the Commission an important development player.
	+	High complementarity with UK bilateral ODA as instruments support 90 countries: many are UK priorities but do not receive UK aid.
	+	Strong mandate and policy framework for dealing with fragile and conflict sensitive situations, and increasing work on climate change.
	+	Impact of wider EU policies in trade, agriculture, fisheries, migration and climate change make the EU a key actor.
	_	Low poverty focus: 85% of budget instruments’ ODA spent on MICs
	_	Limited evidence of how spend in neighbourhood and pre-accession countries contributes to MDGs and poverty reduction.
	_	Variable evidence of impact/delivery against results across regions.
	_	Rules can be inflexible/cumbersome, hampering strive for results
	_	Budget instruments are less innovative than the EDF.
	_	Gender strategy is adequate on policy but weak on implementation.
Organisational strengths	Satisfactory
	+	Strong monitoring and financial management systems, with moderate administration costs.
	+	Predictable funding and funds generally released on schedule.
	+	Strong transparency practice: Commission has signed up to the International Aid Transparency Guarantee.
	+	Good partnership behaviour though model varies per region.
	+	Increasing levels of budget support with results based tranches encourage partner countries to look at value for money issues.
	_	Non-budget-support assistance has less of a focus on value for money.
	_	Less flexible in allocations than EDF: amounts are allocated per region and partly based on political considerations.
	_	No clear overall results framework is in place.
	_	Limited flexibility after funds have been programmed and cliff edge issue at the end of the funding cycle.
	_	Broadly meritocratic recruitment practices but continued challenge in recruiting development-specific expertise.
Capacity for positive change	Likely
	+	Proven capacity for change. Substantial scope for reform with new institutional set-up and commitment from Member States.