I wish to thank the Chairman and other members of the committee for the invitation to address this session. My colleagues and I look forward to answering any questions the committee may have, as well as discussing the important partnership between the Government and non-governmental sector in order to maximise Ireland's influence and impact in the fight against global poverty and hunger. I hope the presentation will not be too technical but there are various issues, to which the Chairman adverted, which we need to cover.
The first point to make is that Irish Aid is an integral part of the Department of Foreign Affairs and Trade, and that development policy and the development programme are central to Ireland's foreign policy. That is an important point to make before we start talking about this partnership. For many years, the Irish NGO sector has been a key partner for the aid programme. This partnership recognises the shared commitment to prioritising the fight against poverty and the agreement, which is supported strongly by the Irish public, that Ireland has an obligation and an interest in working to improve the lives of poor people and communities in the developing world.
Irish development agencies and charities, as well as individual volunteers, missionaries and aid workers, consistently receive strong support from the public, even at times of difficulty at home. The Government's aid programme recognises the significance of this support and, in turn, channels a higher proportion of its aid budget through NGOs than virtually any other international aid donor. It is just over 30% of the Irish Aid budget, amounting to €174 million in 2010. About €90 million of this went directly to Irish NGOs and missionaries for long-term development work. They also receive significant funding for emergency and humanitarian assistance as well as lesser amounts for development education.
The work of the NGOs is an important part of Ireland's overall contribution to development, and it is important to ensure that official and non-official assistance is complementary, and not competitive or overlapping. NGOs have a particular role to play through their direct access to vulnerable or excluded groups, their work at household level, their ability to provide assistance when circumstances in a country make structured intergovernmental relationships difficult, and of course, for their policy work at home and in developing countries.
NGOs involved in international development are independent, autonomous organisations. They have their own resources and corporate governance structures and are responsible for setting their strategic direction, ensuring transparency and sound management practice. When they receive official funding, Irish Aid's responsibility is to establish transparent criteria and standards on which funding decisions can be made.
Over the last decade, international thinking on aid effectiveness - and increasingly on the broader concept of development effectiveness - has challenged governments and NGOs alike to examine their ways of working. This has resulted in a rethink by NGOs of their role in service delivery, and the relationship with the Government role. Greater emphasis is now placed by NGOs in their long-term development work on partnership with local civil society organisations. It is widely understood that NGOs are not there to replace the role of the State but to act in a complementary manner to build capacity and achieve clear development results.
There is a long tradition in Ireland of missionaries and development workers engaging in development co-operation. It is sometimes a revelation for people to realise that this tradition is not matched in many other European countries. That tradition is probably one of the fundamental bases for the success of Ireland's aid programme. In the years to 2008, as the development co-operation budget increased, Irish Aid built strongly on this tradition. During this period, there was also a significant increase in the number of NGOs established in Ireland. Branches of international NGOs - such as Plan, Sightsavers and Voluntary Services Overseas - set up offices here, while smaller Irish-based charities emerged or grew substantially. Between 2000 and 2008, the range, volume and scope of NGO grants increased significantly. While this contributed to the development of the sector, some organisations developed high levels of dependency on Irish Aid funding.
In order to deal strategically with the larger more established organisations such as Concern, Trócaire and GOAL, multi-annual framework agreements were put in place from 2003, in order to provide predictable funding for multi-country, multi-sector programmes of long-term development work based on the organisations' strategic plans.
Mid-sized organisations, such as World Vision and Oxfam, also received grants on a multi-annual basis but tied to specific projects. In 2007-08, a further 18 organisations began to receive multi-annual grants on the same basis. They included Frontline, Aidlink, Vita and branches of international NGOs mentioned earlier. I am setting this out to give an idea of the range of funding and extent of partnerships with organisations that were developed in that period.
Between 2008 and 2011, Irish Aid carried out extensive monitoring of NGO partners' projects and programmes. Findings indicated that many NGO partners were implementing effective projects and programmes, delivering important services at the household and community level, and working with local civil society partners and governments. While there was much that was positive, there was also evidence of some missed opportunities. In some cases, NGOs were failing to plan adequately in the context of what others, including government, were delivering. In other cases, they were not targeting adequately to ensure that the most vulnerable were reached, and some became so focused on implementing activities that they were in danger of losing their strategic vision.
Overall, there was a general weakness in systems for tracking results and sustainable outcomes. This is not a criticism of the NGOs because this challenge was faced equally by the Government and all donors. It was a weakness which Irish Aid also had to recognise some years ago, and which has been addressed to the extent that Ireland is now recognised as a world leader in making aid more effective.
It was broadly recognised by the NGOs themselves and by Irish Aid that stronger planning and monitoring systems were needed to set out and track intended results. There was also general acknowledgement that effective programmes at local level need to be complemented by work to influence policy at national level.
We all recognise that in Irish Aid programme countries, our embassies and the NGOs working in the field constantly need to consult, co-ordinate and learn from each other, while recognising their distinct roles. Last year, presented an opportunity to act on these studies, reviews and evaluations. Most grant agreements were coming to an end in 2011. In consultation with the NGOs, Irish Aid concluded that a new approach to funding should promote stronger analysis at the developing country level, strategic decision-making on best use of resources, and a greater degree of clarity on intended results. Organisations were encouraged to clarify their added value and their specific development expertise in advance of the new programme cycle.
A stronger and more transparent basis for deciding the level of grant allocations was developed, taking into account organisational size, funding track record and the quality of the proposed programme of work. The first step in that process involved clarifying the eligibility criteria. This allowed Irish Aid to draw a clear distinction between organisations with a sufficient level of capacity suitable to programme funding and those which were more suited to funding for specific projects.
The new eligibility criteria require that organisations be based in Ireland - or, in exceptional cases, be invited to apply on the basis of their particular niche expertise - have a formal and established governance structure, audit their financial statements on an annual basis and place these accounts on their website. A further dependency criterion was established so that no NGO receiving programme or project funding would be more than 70% dependent on Irish Aid. This ratio will be reduced gradually over the coming years. In this programme funding round, none of the larger NGOs comes close to having such a ratio. It probably applies more to the smaller NGOs.
These criteria were set as the core criteria for all funding to NGOs. Two additional criteria were established for organisations wishing to be considered for long-term development programme funding. They focus on organisational size and a funding track record in the previous three years. Irish Aid applied the criteria to existing partners and invited 24 NGOs to apply for programme funding.
During 2011, a series of consultations was held with the NGO sector to discuss how new funding arrangements should be designed to ensure greater development effectiveness. Critical elements of effectiveness include the need to pay greater attention to context – that is, the political, economic and social situation in a country or region; the link with local actors, including government, civil society and private sector actors; a specific area of expertise; and the results to be achieved. These were translated into appraisal standards to be applied to funding applications.
The applications, or proposed programmes of work, were then appraised by teams of Irish Aid officials against a detailed set of standards. An external quality-assurance expert was appointed to review the process for consistency and fairness. This resulted in a set of recommendations to the Minister on the percentage of the available funding to be allocated to the 19 NGOs, amounting to a total of €65 million for 2012. Each NGO had an assessment resulting in the determination of the percentage of the €65 million it would receive this year. The grant allocations are performance based, but as this is the first cycle of these grants they are also linked proportionately to organisational size and previous grant record. This is so there will not be a totally new basis on which we fund organisations with a track record with Irish Aid. The performance element will, it is hoped, be increased in future rounds.
The Minister approved the allocation for programme funding at the beginning of February. Organisations are now developing detailed results frameworks and budgets so funding can be disbursed at the end of April. Irish Aid officials are meeting all the NGOs which applied for programme funding to provide oral and written feedback on the appraisal process. The percentage grant allocations will be applied again next year. There then will be a review of the performance element at the end of 2013 to determine whether grant allocations need to be adjusted for the remaining two years of the cycle, to the end of 2015.
This new funding model is in line with best practice internationally. It provides transparency. It enables Irish Aid and organisations to identify clear strengths and areas for development, and it enables us, together, to track improvements in capacity and delivery over time. This is all with a view to delivering sustainable development results for poor countries and communities.
In the coming weeks, a separate memorandum of understanding will be signed between each NGO and Irish Aid. It will include benchmarks on accountability and transparency where necessary. The new approach to funding aims to strengthen the results focus of the Irish Development NGOs, provide a framework for multi-annual programming and enhance the strategic focus of the programmes supported by Irish Aid. While, inevitably, every organisation will not be fully satisfied with the allocations provided, which allocations I will not elaborate on in this presentation, we can collectively take satisfaction from the collaborative effort that has resulted in a more transparent and effective partnership between the Government's aid programme - the people's aid programme - and the NGO sector in Ireland.
Those are my introductory remarks. The purpose of this session, however, is to hear from the members. We will do our best to answer their questions.