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Contracting work out can create as many problems as it solves Contracting work out can create as many problems as it solves
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It seems reasonable to assume that Justine Greening didn't go into politics to distribute money to consultants. Yet some of the more garish headlines that have punctuated her six-month tenure as UK development secretary – Poverty barons make a fortune from taxpayer-funded aid budget, Snouts in the aid trough, Foreign aid cash wasted on consultants – would almost have you believe she does little else.It seems reasonable to assume that Justine Greening didn't go into politics to distribute money to consultants. Yet some of the more garish headlines that have punctuated her six-month tenure as UK development secretary – Poverty barons make a fortune from taxpayer-funded aid budget, Snouts in the aid trough, Foreign aid cash wasted on consultants – would almost have you believe she does little else.
In reality, largely in response to such criticism – not least claims that the Department for International Development spent almost £500m on consultants in a year under her predecessor, Andrew Mitchell – the new broom has been sweeping furiously. An internal inquiry was swiftly followed by the introduction of a code of conduct for external agencies, and Greening has shown a determination to lead from the front, meeting with DfID's dozen biggest suppliers to talk them through the new rules and personally reviewing all new contracts worth more than £1m. How she must wish the phrase "clipped wings" held the same rhythmical allure for headline writers as "fat cats".In reality, largely in response to such criticism – not least claims that the Department for International Development spent almost £500m on consultants in a year under her predecessor, Andrew Mitchell – the new broom has been sweeping furiously. An internal inquiry was swiftly followed by the introduction of a code of conduct for external agencies, and Greening has shown a determination to lead from the front, meeting with DfID's dozen biggest suppliers to talk them through the new rules and personally reviewing all new contracts worth more than £1m. How she must wish the phrase "clipped wings" held the same rhythmical allure for headline writers as "fat cats".
Greening is not alone, however; consternation about consultants is a global phenomenon. AusAID has also come under fire for its use of contractors, while Rajiv Shah's reforms at USAid have been notable for a determination to curb the excesses of the so-called Beltway bandits . It's a similar story everywhere from Quebec to Kathmandu: consultants are portrayed as parasites, feeding off public money intended for the world's poorest people before it can even reach them.Greening is not alone, however; consternation about consultants is a global phenomenon. AusAID has also come under fire for its use of contractors, while Rajiv Shah's reforms at USAid have been notable for a determination to curb the excesses of the so-called Beltway bandits . It's a similar story everywhere from Quebec to Kathmandu: consultants are portrayed as parasites, feeding off public money intended for the world's poorest people before it can even reach them.
That being so, why do major funders continue to bankroll contractors, willingly thrusting themselves under the moral microscope? Why run the gauntlet of public, political and media opprobrium? The explanation offered by DfID echoes a recurring refrain among funders: "Taxpayers rightly expect DfID to deliver the very best value for their money, and sometimes this can only be achieved by bringing in expertise from outside government."That being so, why do major funders continue to bankroll contractors, willingly thrusting themselves under the moral microscope? Why run the gauntlet of public, political and media opprobrium? The explanation offered by DfID echoes a recurring refrain among funders: "Taxpayers rightly expect DfID to deliver the very best value for their money, and sometimes this can only be achieved by bringing in expertise from outside government."
Critics counter that staff cuts have left DfID with little choice but to look beyond Whitehall. The use of external agencies such as Triple Line Consulting, a London-based contractor that reportedly made £1.9m in the 12 months to October 2012 for assessing applications to DfID's global poverty action fund, has been a focal point for such misgivings.Critics counter that staff cuts have left DfID with little choice but to look beyond Whitehall. The use of external agencies such as Triple Line Consulting, a London-based contractor that reportedly made £1.9m in the 12 months to October 2012 for assessing applications to DfID's global poverty action fund, has been a focal point for such misgivings.
"I find it strange that DfID are relying on consultants rather than making these decisions themselves," says Dave Pearce, chief operating officer at Operation Wellfound, a British charity that has just had an application for funding to build wells and latrines for disadvantaged communities in Burkina Faso refused for a second time."I find it strange that DfID are relying on consultants rather than making these decisions themselves," says Dave Pearce, chief operating officer at Operation Wellfound, a British charity that has just had an application for funding to build wells and latrines for disadvantaged communities in Burkina Faso refused for a second time.
"I've been doing grant applications for 12 years, and I thought the bid we put in was very strong. This project would have saved lives. But while Justine Greening is rightly assessing the big applications, the little grassroots charities like ourselves are at the mercy of a consultancy assessor.""I've been doing grant applications for 12 years, and I thought the bid we put in was very strong. This project would have saved lives. But while Justine Greening is rightly assessing the big applications, the little grassroots charities like ourselves are at the mercy of a consultancy assessor."
From a funder perspective, however, it can be as difficult to live without external agencies as it sometimes is to live with them. Susan Reichle, assistant to the administrator at USAid, notes that the use of contractors can present challenges, but says it would be unrealistic to rely solely on internal expertise, arguing that the effective deployment of contractors supports both the efficiency and sustainability of programmes.From a funder perspective, however, it can be as difficult to live without external agencies as it sometimes is to live with them. Susan Reichle, assistant to the administrator at USAid, notes that the use of contractors can present challenges, but says it would be unrealistic to rely solely on internal expertise, arguing that the effective deployment of contractors supports both the efficiency and sustainability of programmes.
"We should never have all the capacity within USAid," says Reichle, "because it would become a huge bureaucracy if we had to implement all the programmes directly, and that wouldn't be efficient."We should never have all the capacity within USAid," says Reichle, "because it would become a huge bureaucracy if we had to implement all the programmes directly, and that wouldn't be efficient.
"Our ultimate goal is sustainability, and a lot of the things that we partner with external contractors on in the short-term ultimately become part of a country's systems in the medium to long-term.""Our ultimate goal is sustainability, and a lot of the things that we partner with external contractors on in the short-term ultimately become part of a country's systems in the medium to long-term."
Consultancies offer additional manpower when emergency humanitarian assistance is required and, says Reichle, have greater freedom of movement in conflict-affected areas, since they utilise local staff subject to fewer security constraints than US expats. For other major funders, using contractors is simply a matter of putting square pegs in square holes.Consultancies offer additional manpower when emergency humanitarian assistance is required and, says Reichle, have greater freedom of movement in conflict-affected areas, since they utilise local staff subject to fewer security constraints than US expats. For other major funders, using contractors is simply a matter of putting square pegs in square holes.
"Our staff are primarily international development or humanitarian assistance workers," says Beris Gwynne, partnership leader for global accountability at World Vision International."Our staff are primarily international development or humanitarian assistance workers," says Beris Gwynne, partnership leader for global accountability at World Vision International.
"When it comes to developing official systems in areas like information management, fleet management, supply chain management, you wouldn't ask an amateur. We know that we need to have the benefit of best practice from private sector partner experience.""When it comes to developing official systems in areas like information management, fleet management, supply chain management, you wouldn't ask an amateur. We know that we need to have the benefit of best practice from private sector partner experience."
Crucially, World Vision's use of consultants is underpinned by both a strong emphasis on transparency and a willingness to admit that things sometimes go awry. The organisation's 2010 accountability report, for example, identified a series of weaknesses in its procurement system, including one instance where an office overpaid on transactions to the tune of $102,537. In response, World Vision introduced supply chain management procedures more befitting of a $2.8bn (£1.9bn) operation.Crucially, World Vision's use of consultants is underpinned by both a strong emphasis on transparency and a willingness to admit that things sometimes go awry. The organisation's 2010 accountability report, for example, identified a series of weaknesses in its procurement system, including one instance where an office overpaid on transactions to the tune of $102,537. In response, World Vision introduced supply chain management procedures more befitting of a $2.8bn (£1.9bn) operation.
"We want to demonstrate that we are going to be transparent about these situations, and not be tricked into thinking that by covering them up we somehow preserve our reputation," says Gwynne. "Our belief is that by being transparent, people will be more confident, so that we are able to manage these processes and be honest and objective when things don't go as we had wanted. It's a difficult task because, in economically difficult times, philanthropic or humanitarian work comes under a lot of pressure.""We want to demonstrate that we are going to be transparent about these situations, and not be tricked into thinking that by covering them up we somehow preserve our reputation," says Gwynne. "Our belief is that by being transparent, people will be more confident, so that we are able to manage these processes and be honest and objective when things don't go as we had wanted. It's a difficult task because, in economically difficult times, philanthropic or humanitarian work comes under a lot of pressure."
One might imagine that applies more to governments than NGOs, but Gwynne disagrees. "All development work is political," she says.One might imagine that applies more to governments than NGOs, but Gwynne disagrees. "All development work is political," she says.
"I think lots of organisations, including World Vision, are concerned that being more transparent and open can inadvertently fuel a lack of confidence. Government donors, in particular, can be quite punitive. Instead of rewarding an agency for having identified a problem – for being transparent about it and taking steps to ensure it doesn't happen again – they often reduce funding to that organisation.""I think lots of organisations, including World Vision, are concerned that being more transparent and open can inadvertently fuel a lack of confidence. Government donors, in particular, can be quite punitive. Instead of rewarding an agency for having identified a problem – for being transparent about it and taking steps to ensure it doesn't happen again – they often reduce funding to that organisation."
DfID, which topped the 2012 Global Aid Transparency Index, has a strong record on transparency. But the department is not noted for highlighting the shortcomings of its contractors.DfID, which topped the 2012 Global Aid Transparency Index, has a strong record on transparency. But the department is not noted for highlighting the shortcomings of its contractors.
For anyone willing to read between the lines, however, the new code of conduct for suppliers speaks volumes. The guidelines urge contractors to be "realistic about capacity and capability when bidding". They are also encouraged to apply "a zero tolerance approach to corruption and fraud", be "honest when things go wrong", and demonstrate a tangible commitment to poverty reduction.For anyone willing to read between the lines, however, the new code of conduct for suppliers speaks volumes. The guidelines urge contractors to be "realistic about capacity and capability when bidding". They are also encouraged to apply "a zero tolerance approach to corruption and fraud", be "honest when things go wrong", and demonstrate a tangible commitment to poverty reduction.
Are we really at the point where the need for basic honesty has to be explicitly and repeatedly spelled out?Are we really at the point where the need for basic honesty has to be explicitly and repeatedly spelled out?
"These sorts of issues should be self-evident, a no-brainer," Gwynne adds. "But the world is a complex place and we've found that you can't just assume everybody is on the same page." The solution, she says, lies not only with strong procurement, monitoring and evaluation procedures – a major focus for all the big funders – but also shared responsibility and accountability."These sorts of issues should be self-evident, a no-brainer," Gwynne adds. "But the world is a complex place and we've found that you can't just assume everybody is on the same page." The solution, she says, lies not only with strong procurement, monitoring and evaluation procedures – a major focus for all the big funders – but also shared responsibility and accountability.
"By working together, we have a much better possibility of ensuring that aid monies and contributions from NGOs are used in the best possible way. For me, that is the trend – a multi-stakeholder approach, so that agencies can pool services and, through that economy of scale, get better services and accountability for everybody.""By working together, we have a much better possibility of ensuring that aid monies and contributions from NGOs are used in the best possible way. For me, that is the trend – a multi-stakeholder approach, so that agencies can pool services and, through that economy of scale, get better services and accountability for everybody."
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