Help Make UK Aid More Cost Effective (Another Opportunity)

1. Regularly Collect and Publish Unit Cost Data

There should be better systems for developing VFM evidence, this would involve routinely collecting and publishing unit cost data. Making available reliable and comparable cost data is absolutely necessary for evidence-based decision making. Routine practice for collecting & publishing such data could include engaging in a cross-agency community that shares the data as well as using tools like Dioptra. FCDO partners (e.g. nonprofits) should have a mandatory requirement to collect unit cost data. The collected cost-data can be fed into cost-effectiveness modelling to identify the best buys per thematic sector and overall best buys across sectors (simply collecting cost data will not be sufficient on its own). Having this transparency would increase accountability to taxpayers as well as enable better benchmarking of program performance. 

Rigorous analysis of best-in-class development programs suggests that systematic benchmarking against proven interventions can improve program cost-effectiveness by 40-60% on average. The FCDO could establish a global cost-effectiveness standard by creating a comprehensive, publicly accessible database of evidence-backed interventions, listing their unit cost data. This would not only improve FCDO's own resource allocation but could catalyze a broader shift toward evidence-based programming across the development sector. 
 

2. Strengthen the use of evidence, specifically in strategic planning

There should be a greater overall use of evidence, specifically in strategic planning. There is currently too much focus on the business case, as often teams have already determined their plans and are just developing them. To properly inform the priorities of the FCDO, VFM evidence should be used in strategic planning. Initially this requires formalising the six (mostly) internal "Best Buys" papers, which sought to summarise the evidence base on cost-effectiveness for different sectors. These six papers should be utilised more and improved upon for use in strategic planning. Instead of using the papers in an ad hoc manner, there should be formalised process for their use and updating.

Furthermore the FCDO should implement mandatory evidence checks in project proposals and strategic planning documents, requiring explicit reference to the best available evidence on effectiveness. This practice, successfully implemented by several European development agencies, ensures systematic consideration of cost-effectiveness data in decision-making. When properly integrated into existing processes, evidence checks significantly improve resource allocation without creating undue administrative burden. In general, development agencies should systematically prioritize interventions with the strongest evidence of cost-effectiveness in their Official Development Assistance portfolios.
 

3. Leveraging Partnerships for Transformative Impact

FCDO should strategically amplify its impact by prioritizing partnerships with highly cost-effective multilateral institutions and pioneering a Best Buys Alliance for transformative development projects. Evidence consistently shows that multilateral institutions like Gavi and the Global Fund achieve exceptional value for money through economies of scale, with some programs demonstrating benefit-cost ratios exceeding 20:1. This is backed by independent evaluations such as the Center for Global Development’s Quality of Official Development Assistance tool, the Multilateral Organisation Performance Assessment Network (MOPAN) and additional evaluations. 

When multiple donors coordinate around proven "best buy" interventions - such as structured pedagogy in education or immunization programs in health - the pooled resources and shared implementation infrastructure can reduce per-beneficiary costs by 40-60% compared to bilateral approaches. I therefore recommend FCDO initiate a Best Buys Alliance that would systematically match co-financing partners for the most cost-effective development interventions, particularly in least developed countries. This alliance would serve as a force multiplier, enabling FCDO to leverage its resources several-fold through matched funding while simultaneously promoting the adoption of rigorously proven approaches across the development sector. Drawing on successful models like the Global Education Evidence Advisory Panel, such an alliance could start with education and health sectors where evidence bases are particularly robust, before expanding to other areas with strong randomized trial evidence. Early pilots of this matching approach have already generated significant interest from major development agencies, suggesting strong potential for transformative impact through coordinated investment in proven solutions.
 

4. Investing in Knowledge to Maximize Value for Money

The World Bank's Development Impact Evaluation department has demonstrated that even modest investments of less than 1% of project costs in high-quality evidence generation can improve operational effectiveness by at least 50%. It would is strongly recommended that the FCDO increase its Monitoring, Evaluation, Research and Learning investments to a minimum of 5% of total ODA, with clear prioritization of three high-leverage areas: First, systematic research into the cost-effectiveness of FCDO's most-used funding mechanisms and instruments, filling critical evidence gaps that currently hamper strategic resource allocation. Second, the establishment of formal, iterative processes for developing and maintaining sector-specific "best buy" lists, creating a dynamic evidence base that ensures funds flow to the most impactful interventions. Third, the development of AI-augmented knowledge management systems that dramatically reduce the time and expertise required to access and apply high-quality evidence in decision-making. These investments would rapidly pay for themselves through improved program effectiveness, reduced duplication, and better-targeted innovations.
 

5. Improving Monitoring & Oversight Mechanisms

To improve oversight and ensure Value for Money, the FCDO should establish a dedicated Evidence & Impact Unit modeled after successful examples like Norway's Development Learning Lab. There is already an existing history of a similar unit; the DFID Evidence into Action team which was absorbed shortly after the merger. It needed improving but it's good to recognise that there is a history there. This unit would maintain an evidence portal synthesizing findings from rigorous impact evaluations, provide rapid evidence assessments for strategic decisions, and support program teams in designing robust evaluations. Our experience implementing similar systems shows they typically generate evidence that enables 20-30% efficiency gains through better resource allocation. The unit should also coordinate with multilateral partners to leverage shared evidence resources and evaluation capacities, as demonstrated by effective cooperation between development agencies in the DACH region.
 

6. Financial Instruments

Debt relief mechanisms like Debt2Health have proven highly effective at mobilizing additional health funding while improving development outcomes. The Global Fund's implementation of this approach has generated over $200 million for health systems strengthening, with independent evaluations showing strong value for money. Building on this success, the FCDO could expand debt-for-development swaps focused on evidence-based and high-impact interventions in priority sectors. This approach aligns with emerging best practices in development finance and creates sustainable funding streams for proven programs.