Background

In response to a request by the Secretary General, HLCM tabled a discussion on reforms put in place and/or planned by the UN system in response to budget constraints. HLCM members were asked to share key management actions undertaken or foreseen, both contingent and structural, highlighting their actual or expected impact and implementation challenges.

Discussion

The UK Department for International Development (DFID) was invited to present to HLCM the methodology and design of its Multilateral Aid Review (MAR) framework, as one example for assessing effectiveness and efficiency.

Recognizing the great importance of the UN and the multilateral system in the area of development assistance, DFID explained that the purpose of the assessment was to find out where the UK could expect the best results for its investments as well as to ensure that public support for an increase in ODA could be sustained at a time of financial crisis.  The newly released report from the Multilateral Aid Review (MAR), therefore, also addressed a key domestic political need.

According to DFID, organizations were assessed in relation to high standards, and DFID itself would not score at the top if assessed through the MAR framework.  Accordingly, the analysis was presented as an opportunity for multi-lateral organizations to learn from each other. In the results from the MAR, the lending and grant giving institutions performed well on overall organizational effectiveness criteria, the emergency response organizations next, followed by the remaining organizations.  The general conclusion for the UN system was that organizational effectiveness needed to be improved while, at the same time, the UN system was recognized as having performed particularly well in the areas of partnership and gender.

Emphasizing the UK’s increase in ODA and its commitment to the multi-lateral system, the MAR was not intended to be a cost cutting exercise, but an attempt at identifying which partners DFID judged to be the most effective, at a time when transparency was critical in most donor countries and changes in the UN system were demanded in this area.

The discussion focused on measures the UN system could take to "do business with less" and to address the scarcity of resources and expected budget cuts.

The importance of UN organizations learning from each other to improve efficiency and effectiveness was strongly affirmed, especially at a time when all UN organizations are investing considerable efforts on improving their operations, even independently from any consideration on budgetary constraints.

The increasing demand for additional accountability measures was acknowledged.  At the same time, however, agencies are facing significant challenges in putting in place satisfactory accountability mechanisms that have broad legitimacy and ownership within organizations, particularly in the field and in difficult or sensitive situations, and in sensitive areas of work. It was recognized that there are objective difficulties in measuring results linked to some of the broad activities carried out by the UN, and that reliance on qualitative measures and narratives remains essential to fully capture their level of success – or failure.

Concerns over the methodology used in the Multilateral Aid Review in relation to the role and mandate of different UN organizations were raised.  The potential bias of the methodology adopted was particularly evident for normative organizations, as the results of the Review had shown. DFID acknowledged that there were differences in organizations but that efforts had been made to take such differences into account and to interpret results in a fair and balanced way. However, it was emphasized that, as the purpose of the Review was for domestic use, it had to produce one set of results without being overly complicated.

Several examples of past or on-going internal assessment exercises were mentioned by HLCM members, as well as experiences with monitoring and reporting frameworks, such as the work that the HLCP is undertaking on the Integrated Implementation Framework for MDGs. The need for performance benchmarks and improved reporting were seen as critical as the UN system moves forward.

Action

The Committee:

Took note of the presentation offered by DFID on its Multilateral Aid Review (MAR) framework for assessing effectiveness and efficiency, that could help inform the UN system's efforts in developing and adopting tools for pursuing institutional reform.

Acknowledged the central role of HLCM in leading the effort by the UN system towards greater accountability and towards developing and implementing tools for better understanding and measuring its efficiency and effectiveness.

Agreed to form a special Task Force, led by the HLCM Chair, to identify and share approaches and to develop quick and actionable proposals to: a) pursue efficiency and cost savings; b) develop self-pacing, internal benchmarks of effectiveness and efficiency that can serve as a benchmark for all the UN system; c) identify basic common principles for reporting results to the donor community and the Member States that can be adopted throughout the UN system; and, d) analyse the process aspects of inclusive and successful institutional reform.

As part of this Task Force and with the immediate objective to bring a preliminary set of recommendations to the Chief Executives Board Meeting of 1-2 April, the HLCM Chair appointed a Sub-Committee, convened by Martin Mogwanja, Deputy Executive Director of UNICEF, and supported by UNHCR and WHO. This Sub-Committee would rapidly prepare recommendations on how the UN System could improve efficiency and control costs that do not contribute directly to results.

Requested all HLCM members to provide quick, actionable and high yielding ideas/summaries of experience on how their organizations have successfully increased efficiency or controlled costs in the last one or two years. Organizations could also put forward experiences on ideas that did not work or were found to be inappropriate for a UN entity to undertake, or ideas for increasing efficiency or controlling costs that they would like to pursue but are blocked from doing so for some specific administrative or legislative reason beyond their control.