Performance Fund (Hansard, 15 July 2003)

§ Hilary Benn

[pursuant to his reply, 2 July 2003, c. 301 W] The budgeted figures given in the table for Asia for financial years 2000–01 and 2001–02 were unfortunately not correct. The table and the text in the paragraph regarding Asia have therefore been revised as follows:

Divisional performance funds were introduced from 2000–01 as reserves to be allocated in-year by directors, largely to reward good performance but also to respond to unforeseen demands and opportunities, including urgent humanitarian needs. They provide flexibility to allocate additional funds to those countries and institutions where progress on reform enables effective use of funds in pursuit of poverty reduction.

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The table shows the total amounts budgeted:

DFID performance funds
		£ million
Year	Africa	Asia
2000–01	57	20
2001–02	10	36
2002–03	14	18
2003–04	35	0
2004–05¹	151	65
2005–06¹	289	130
¹Includes amounts provisionally earmarked from Director General Performance Fund from 2004–05.

In Africa in 2000–01 there were two payments, one of £29 million to assist copper industry restructuring in Zambia, and another of £28 million as programme aid to support economic reform in Kenya. In 2001–02, a smaller sum was available, of which £7 million was spent on humanitarian assistance: £5 million in the DRC (through the International Red Cross) and £2 million on humanitarian projects in the Sudan. A further £0.25 million was spent on AFRICAP, an African micro-finance investment fund. In 2002–03, £10 million was spent on programme aid to Ethiopia as our bilateral relationship strengthened, £3.2 million on humanitarian work (in Angola, Sudan and the Great Lakes region). and a further £0.8 million contribution to AFRICAP. Some £35 million is available in 2003–04, much of which will be needed for humanitarian work.

In financial years 2000–01 and 2001–02 Asia's performance fund was used for various purposes including transfers to programmes in the Middle East and Pakistan. Not all the funds allocated to the Fund were needed in these years; resources not required were re-allocated to other parts of the DFID's programme. In 2002–03, funds were used for Afghanistan and other humanitarian work. Asia does not have a performance fund allocation for 2003–04.

From 2004–05 onwards, resources for performance funds rise significantly. These funds will be allocated in part before the year commences, although significant amounts will remain to be allocated in-year. They will be targeted at those countries that are currently performing less well or that are in or emerging from conflict. We are already planning high and stable levels of spending in countries with a clear commitment to, and capacity to deliver, poverty reduction.