Foreword
The OECD Development Assistance Committee (DAC) conducts periodic reviews of the individual development co-operation efforts of DAC members. The policies, systems and programmes of each member are critically examined approximately once every five to six years, with five members reviewed annually.
The objectives of DAC peer reviews are to improve the quality and effectiveness of development co-operation policies and systems, and to promote good development partnerships for greater impact on poverty reduction and sustainable development in developing countries. DAC peer reviews assess the performance of a given member and examine both policy and implementation. They take an integrated, system-wide perspective on the development co-operation and humanitarian assistance activities of the member under review.
The OECD Development Co-operation Directorate provides analytical support to each review and is responsible for developing and maintaining, in close consultation with the Committee, the methodology and analytical framework – known as the Reference Guide – within which the peer reviews are undertaken.
Following the submission of a memorandum by the reviewed member, setting out key policy, system and programme developments, the Secretariat and two DAC members designated as peer reviewers visit the member’s capital to interview officials, parliamentarians, as well as representatives of civil society, non-governmental organisations and the private sector. This is followed by up to two country visits, where the team meet with the member and senior officials and representatives of the partner country or territory’s administration, parliamentarians, civil society, the private sector and other development partners. The main findings of these consultations and a set of recommendations are then normally discussed during a formal meeting of the DAC prior to finalisation of the report.
The Peer Review of the United Kingdom* involved an extensive process of consultation with actors and stakeholders in London; Nairobi, Kenya; and Amman, Jordan, in October and November 2019. The analytical report of the Secretariat was drafted prior to the COVID-19 pandemic and the announcement of changes to the United Kingdom’s institutional structures. The main findings and recommendations of the DAC were finalised following this announcement and approved by the Committee by written procedure on 9 October 2020. This report contains both documents.
The peer review took into account the political and economic context in the United Kingdom, to the extent that it shapes the United Kingdom’s development co-operation policies systems and programmes.
The United Kingdom is composed of England, Scotland, Wales and Northern Ireland. A conservative government led by Prime Minister Boris Johnson won elections in December 2019 with a significant majority. The United Kingdom departed from the European Union (EU) on 31 January 2020 and entered a transition phase which will end on 31 December 2020.
While the United Kingdom has a highly globalised economy with a long-term average economic growth rate of around 2%, the longer-term economic outlook is unusually uncertain. The terms of the exit from the EU are as yet unknown. The economy is based on a service industry which contributes approximately 80% of the United Kingdom’s gross domestic product (GDP) and London is the second-largest financial centre in the world. The government reacted promptly to the COVID-19 crisis and put in place a substantial set of economic support measures, but the economy is contracting sharply. GDP is projected to fall by 11.5%-14% in 2020 (OECD, 2020[1]). As a result, the government has reduced its official development assistance (ODA) budget for 2020 by USD 3.7 billion (GBP 2.9 billion).
Growth and high labour-market flexibility have kept unemployment levels low in recent years (HM Government, 2020[2]), but unemployment is now set to double to 10% and remain high in 2021, despite widespread use of furloughing (OECD, 2020[1]). At the same time, labour supply is likely to be affected by the United Kingdom’s exit from the EU. Housing price growth and business investment had already slowed during 2016-19 due to political uncertainty following the United Kingdom’s EU membership referendum.
Since 1997, the Department for International Development (DFID) has been the primary government department managing the United Kingdom’s ODA budget – spending 75% of ODA in 2018 – and the Secretary of State for International Development has been a member of the cabinet. The United Kingdom’s development finance institution – CDC Group – is a public limited company with DFID as the sole shareholder.
Significant developments since the 2014 peer review include the publication of a new aid strategy in 2015. The new strategy increased the proportion of the ODA budget managed outside of DFID, including through two cross-government funds, and introduced mechanisms to support a whole-of-government approach to development. DFID was tasked with supporting other departments and cross-government funds to manage ODA. In parallel, updates to the National Security Strategy positioned development co-operation more clearly within its scope and its oversight and co-ordination mechanisms.
An integrated review of the United Kingdom’s foreign policy is underway. In June 2020, the Prime Minister announced that a new Foreign, Commonwealth and Development Office would be formed on 1 September 2020 through a merger of DFID and the Foreign and Commonwealth Office. This peer review is being published as this merger is taking place so the full implications are as yet unclear.
* The present publication presents data from time series which end before the United Kingdom’s withdrawal from the European Union (EU) on 1 February 2020. Any reference to an EU aggregate in this report therefore refers to the EU including the United Kingdom.