In 2008, the United Kingdom’s total official development assistance (ODA) reached just under US$11 billion, excluding debt relief. The larger (62.3%) share (US$6.8 billion) was provided in the form of non-core funding – earmarked and lightly earmarked contributions channelled through UN and other multilateral agencies as well as NGOs/CSOs/Red Cross Movement, the public sector and public private partnerships (PPPs). Just under 38% of total ODA (US$4.1 billion) was provided in the form of core funding – totally unearmarked contributions to UN and other multilateral institutions.
Use of the multilateral system
In 2008, the United Kingdom’s total use of the multilateral system was US$5.7 billion – just under 50% of its total ODA expenditure, excluding debt relief.
The European Commission has been the largest single recipient of the United Kingdom’s core multilateral ODA funding over the last 10 years. Its funding has increased consistently each year since 2004. The International Development Association (IDA, part of the World Bank) and the European Development Fund (EDF) are the next largest single recipients – their funding fluctuates year on year.Non-core ODA
The International Bank for Reconstruction and Development (IBRD) which together with IDA forms part of the World Bank (see above), is the largest single recipient of the United Kingdom’s non-core (or bilateral) ODA. It is the IBRD that provides the funding conduit for multi-donor trust funds (see Use of financing mechanisms, below).
Use of the multilateral system in humanitarian aid
In 2008, the humanitarian aid reported as part of the United Kingdom’s bilateral ODA reached US$667 million. However, this could be said to represent just over 65% of the United Kingdom’s overall humanitarian aid effort; some US$350 million (8.5%) of the core ODA funding (US$4.1 billion) could be considered to have been provided for humanitarian activities.Using this methodology, the United Kingdom’s total use of the multilateral system for humanitarian purposes in 2008 was just over US$407 million – just over 61% of its total humanitarian expenditure.
Use of financing mechanisms
Part of the United Kingdom’s non-core funding is channelled through both humanitarian and development pooled funding mechanisms. There are three main humanitarian pooled funds to which DFID makes unearmarked contributions, these are:
- The Central Emergency Response Fund (CERF), a global fund managed by the UN that allows donor governments and the private sector to pool their financing on a global level to enable more timely and reliable humanitarian assistance to those affected by natural disasters and armed conflicts. At present the CERF can only transfer funds direct to UN agencies which then in-turn can transfer money onto their NGO partners.
- Common humanitarian funds (CHFs), in-country pooled funds, which allow money to be allocated on the basis of needs (as defined in the emergency’s humanitarian action plan). Most of the projects funded by this mechanism appear in the UN’s consolidated appeal process (CAP). The money from this fund is transferred to mainly UN agencies and international NGOs. Currently funds exist in Sudan, Somalia, DRC and CAR.
- Emergency response funds (ERFs) are also country-level mechanisms. They vary from CHFs in that they have the facility to provide finance to small-scale projects, allowing more national NGOs to access resources. At present there are 15 ERFs in operation, the most recent one was established in Pakistan at the start of 2010.
DFID has channelled between a fifth and a quarter of its total humanitarian assistance through these three pooled funds from 2006 to 2009. DIFD has been the largest donor to the CERF since 2006, contributing an average of US$72 million each year and of the total amount contributed to the fund from 2006 to 2009 DFID has provided 20%. Over the same period DFID has also been the top donor to the in-country pooled funds with the exception of 2009 when its ERF contributions were overtaken by those from the Netherlands and Sweden.DFID also channels money through development pooled funds, the most prominent of these are the multi-donor trust funds (MDTFs) which are in operation in Sudan, Afghanistan, Iraq, Indonesia, Palestine and Sierra Leone. These funds have been established to fund reconstruction and recovery activities and are managed by either the World Bank or UNDP or a combination of the two. In 2008 DFID channelled as much as 66% of its non-core ODA to Palestine through the country’s MDTF, whereas it only channelled 4% through the National fund in Sudan.
Basic concepts, notes and definitions
- Our figures relate to official development assistance (ODA) expenditure as reported to the OECD DAC aggregate tables and Creditor Reporting System (CRS). The figures reported here exclude debt relief, which amounted to US$115.6 million in 2007 and US$549.3 million in 2008 (constant 2008 prices).
- The ‘multilateral system’ is taken to mean: UN agencies; the World Bank Group; regional banks; the European Institutions; and ‘others’ included in DFID’s Multilateral Aid Review Annex 1.
- Core ODA (labelled as ‘multilateral ODA’ in DAC reporting tables), is that which donors contribute in assessed or voluntary contributions to UN agencies as part of their core funding – it is totally unearmarked.
- Non-core ODA (referred to as ‘bilateral ODA’ in DAC reporting) is that which is earmarked, however lightly, for specific sectors, themes, countries or regions and routed through multilateral agencies. It includes funding through the CERF and MDTFs.
- ‘Total use of multilateral channels’ means the combined use of multilateral channels for core and non-core funding.
- The World Bank includes: International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA).
- 7. It should be noted that the data measures outflows of aid to first level recipient only – the first level recipient may then work through other partners. For example, funding reported in the DAC figures to the International Bank for Reconstruction and Development (IBRD) may go to an MDTF. The MDTF then spends the funds through a UN agency, NGO/CSO or other implementing partner.
Acronyms and abbreviations
- African Development Bank (AfDB)
- Asian Development Bank (AsDB)
- Caribbean Development Bank (CDB)
- Central Emergency Response Fund (CERF)
- European Commission (EC)
- European Development Fund (EDF)
- European Bank for Reconstruction and Development (EBRD)
- Food and Agriculture Organisation (FAO)
- Global Alliance for Vaccines and Immunisation Alliance (GAVI)
- Global Environment Facility (GEF)
- Global Facility for Disaster Reduction and Recovery (GFDRR)
- Inter-American Development Bank (IADB)
- International Committee of the Red Cross (ICRC)
- International Development Association (IDA)
- International Bank for Reconstruction and Development (IBRD)
- International Fund for Agricultural Development (IFAD)
- International Finance Corporation (IFC)
- International Federation of the Red Cross (IFRC)
- International Labour Organization (ILO)
- International Organization for Migration (IOM)
- Peace Building Fund (PBF)
- United Nations Joint Programme on HIV and AIDS (UNAIDS)
- United Nations Department of Peacekeeping Operations (DPKO)
- United Nations Development Programme (UNDP)
- United Nations Educational, Scientific and Cultural Organisation (UNESCO)
- United Nations Environment Programme (UNEP)
- United Nations Population Fund (UNFPA)
- United Nations High Commissioner for Refugees (UNHCR)
- United Nations Children’s Fund (UNICEF)
- United Nations Development Fund for Women (UNIFEM)
- International Drug Purchasing Facility (UNITAID)
- United Nations Office for Coordination of Humanitarian Affairs (OCHA)
- World Food Programme (WFP)
- World Health Organisation (WHO)