Statistics on International Development 2007
Section 4
What is the purpose of UK expenditure on International Development?
1. This section considers the issue of what aid is being spent on. It is important to be aware that demonstrating the exact areas on which aid is being spent is not a simple and exact exercise and a certain amount of judgement is involved. Increasingly more projects are multi-dimensional and address interrelated policy areas. In addition more innovative types of aid instruments are being introduced. Together these make attributing expenditure to specific topics more difficult.
Input Sector Codes
2. Every bilateral project or programme that comes within the umbrella of GPEX, is marked with up to six ‘input sector codes’ that identify where funding will be spent. There are around 100 input sector codes, each of which comes under one of eight broad sectors:
Education (including teacher training and development awareness)
Health
(including communicable disease control, health personnel and maternal health)
Social (including social protection, shelter and housing and water supply)
Economic (including transport, communications, construction and manufacturing)
Livelihoods (including agriculture and aquaculture)
Governance (including
justice sector development and local government reform)
Environment (including
biodiversity and climate change)
Humanitarian Assistance (including emergency
food aid and de-mining)
3. For each sector code selected, budget holders indicate what proportion of the total commitment is expected to be spent in or on behalf of that sector1 . Prior to October 2002 just one dominant sector was identified which limits comparison between the latest five years and older data.
4. DFID is increasingly moving towards larger and longer term programmes including a greater use of Poverty Reduction Budget Support (PRBS) both General Budget Support (GBS) and Sector Budget Support (SBS). In PRBS, funds are provided directly to recipient governments and pooled with their own funds. Partner governments then use their own allocation, execution, accounting and reporting systems in spending the aid to support their development programmes. Understanding how the UK's money is used therefore means understanding the way in which the recipient government allocates and uses all its funds. In managing PRBS, DFID country offices monitor this process closely.
5. PRBS cannot be separately identified from partner government funds and while Sector Budget Support, by its very nature, is allocable to sectors, General Budget Support cannot be easily broken down. For statistical purposes, DFID has developed a standardised methodology to notionally allocate General Budget Support to sectors in the same proportions as the recipient government allocates total resources to ODA eligible activities. This means, for example, if a government intends to spend 25 per cent of its budget on education, 25 per cent of GBS provided would be attributed to education. This method allows GBS to be allocated to the eight broad sectors.
6. It is important to note that this methodology does not attempt to say where DFID funding actually goes, but where it would go if partner governments allocated it in proportion to their own budget. The methodology also does not attempt to measure, or claim to measure, marginal changes in governments’ expenditure resulting from aid flows.
Figure 9
DFID Bilateral Aid by Sector 2003/04 – 2006/07
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7. Figure 9 shows the split of DFID’s bilateral programme between sectors for 2003/04 to 2006/07. In 2006/07 just under a fifth of spend was classified under the health sector followed by economic and education, (both with 15 per cent). Humanitarian assistance and governance received the next largest amounts with 13 per cent each.
8. Over the last five years the proportion of DFID bilateral expenditure going to the health and education sectors has grown (both up by about three percentage points over the period). The proportion going on the economic sector jumped in 2003/04 but has declined each year since. The proportion of bilateral expenditure going to the livelihoods sector is on a downward trend, as is the proportion going to the environment sector. The proportion going to the social sector is on an upward trend while the proportion going to the governance sector is broadly level.
9. In volume terms, compared to 2005/06, the sector seeing the greatest increase in 2006/07 is the education sector (up £55m). This was followed by the health sector (up £49m) and livelihoods (up £31m). The sectors seeing the greatest decrease are humanitarian assistance (down from £70m), economic sector (down £24m) and governance (down £19m). Over the last four years all sectors have seen increases in aid in 2006/07 than in 2002/03 except the economic and environment sectors which have seen small declines.
10. Figure 10 shows how DFID sector allocable bilateral expenditure is broken down by region and sector in 2006/07. In Africa, the two sectors receiving the highest share of DFID bilateral expenditure was humanitarian assistance (22 per cent) and health (21 per cent). This was followed by governance and education (both 15 per cent). In Asia the health sector also received the highest share of DFID bilateral expenditure with 22 per cent. The second and third highest shares went to the economic (21 per cent) and governance (14 per cent) sectors.
11. DFID expenditure in the Americas, Europe and the Pacific shows a different pattern. In the Americas, Europe and Pacific the two sectors receiving by far the highest amounts of DFID bilateral expenditure, were the economic (29 per cent) and governance (28 per cent) sectors.
Figure 10
DFID Sector Allocated Bilateral Expenditure by Region and Sector
2006/07
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