The SG’s report on UN Development System reform – 5 key ideas and 5 questions

On 30th June the Secretary-General released his report on UN Development System reform. As a candidate, António Guterres signaled his determination to reform the system: this is the first of a series of ideas expected on development, on peace and security and on management systems. How does it stack up to expectations?

The brevity and clarity of this report is extremely welcome. It should help foster a good strategic discussion amongst member states on a subject that is often deemed too complex to build clear political momentum. There are five big ideas in the report that deserve attention and support:

  1. Give the system clear leadership globally and at country level. Globally, the report proposes that the Deputy Secretary-General take over chairmanship of the UN Development Group. At country level, it proposes establishing clear accountability lines from all country team members to the Resident Coordinator, and from Resident Coordinators to the Secretary-General.  Both measures delink strategic direction from the fundraising interests of any one UN entity. This addresses a long-standing critique: that the “first among equals” coordination system created a difficult conflict of interest for UNDP, requiring it to defend its own role and funding while impartially representing the interests that the whole UN system serves.
  2. Decrease the number of small separate offices at country level. The fragmentation of the system at country level has been much criticized – past analyses indicate over 1,400 offices worldwide, with some costing as much money to maintain as they deliver in program funds. The report is clear on the intention to “rationalize physical presence by individual entities” – through colocation, virtual support and shared back office functions.
  3. Strengthen the regional level while eliminating regional duplication. There are overlaps and disconnects between the regional commissions, regional UN development groups and regional offices of individual agencies.  This misses opportunities to strengthen knowledge-based and normative work that is sensitive to the needs of each region, and wastes money on multiple regional presences. The report highlights the need to clarify division of labour and to explore the possibility of pooling capacities.
  4. System-wide results and predictable multi-year funding. The report argues for predictable, sustained, flexible, timely and multiyear funding. It recognizes that such funding will need to be clearly linked to country level results. It proposes a system-wide results framework and working with Member States on a Funding Compact to achieve this.
  1. Strengthen member state oversight by progressively merging governing boards. A final problem within the system is the fragmentation of member state governance, with each entity having its own governing board and different strategic cycles for decision making. The report takes a sensible step in asking member states to consider the progressive merger of the governing boards of NY-based funds and programmes.

These are five important ideas. They address most of the major problems long identified in the UN system, and they chart for the most part a very smart course between ambition and political feasibility on reform. So what is missing? Here are five areas that will need more work – unsurprisingly, most involve financial questions:

  1. What’s the “ask” from donors and what results would be achieved from the reforms? The Funding Compact is a good idea, but the report is ambiguous about whether UN leadership aims to target more single entity core funds, more pooled cross-agency funding, or both. Previous decades when high levels of core funding to single agencies were the norm tended to exacerbate the stove piping within the UN (if you have your own predictable and generous funding, why cooperate with others?). This may have mattered less when mandates were less interlinked: by contrast, the integrated nature of the SDGs would strongly argue for prioritizing more multi-year cross-agency funding, tied to country-driven results under the SDGs. Putting in place a system to significantly increase the proportion of funding going to pooled, multi-year activities will require careful work to understand donor and program country perspectives and to deliver the kind of results linkages that will attract more predictable funding. It would also be useful to attach some numbers on increased effectiveness as part of this – how much, for example, will be redirected into program funds from common back office savings, and when?
  2. How will the RC system be financed, and what is the future role for UNDP? The report notes that “we are set on a path that would delink the functions of the Resident Coordinators from UNDP Resident Representatives”, but it also describes UNDP as the “arrowhead of a new generation of country teams” and states that the Resident Coordinator system function must remain “with UNDP as its key instrumentality”. Breaking these concepts down into some very practical options for further consultation on organigrams and financing flows would be a critical part of the preparations for the December proposals.
  3. What’s the eventual vision for the structures dealing with coordination and policy integration? The UN system has many fragmented coordination and development policy functions. The report outlines action on at least six of these: DESA, the CEB, the UNDG, UNDP’s integrator role, the relationship UNDG-IASC and OCHA-UNDP (even the number of acronyms indicates the degree of bureaucratic complexity). But these are all described as separate streams of work. As this work gets started, it may help to think about reaching a simplified end point for coordination and integrated development policy analysis, with clear accountabilities and economies of scale.
  4. What will the overall package cost the regular budget? The report mentions costs savings in several places, but it does not specify whether the regular budget of the development pillar will increase, decrease or stay flat: nor does it give much idea of where reallocation will be needed. Shifts in the regular budget are always highly political: to reach consensus in the fifth, member states will likely want to see a full package of administrative and budgetary reforms, including the peace and security and management tracks. While it is a good idea to debate strategic objectives first, member states will want much more on costs before they endorse the full package of reforms.
  5. What changes will be needed to open the development system up to partnership? The primary partnerships referenced are the Global Compact and the UN office for south-south cooperation: while extremely laudable in their work, it is unclear that either could drive the scale of partnership transformation needed to implement the SDGs. An interesting strengthening of this point would be to map more broadly where the UN’s comparative advantage in private sector and civil society partnerships lies: what, for example, can the UN do to anchor partnerships that governments and the IFIs cannot achieve alone? The report is also largely silent on complementarity and partnership between the UN development pillar and its human rights and peace and security pillars. Future phases of reform - such as the overlapping timing of the December development proposals and the Sustaining Peace report – should allow for more exploration of these issues.

The report also notes that system-wide outline of functions and capacities will continue to be updated. This is an excellent exercise to have launched, but some care should be taken with the data presented. For example, this report shows UNDP spending USD $1.4 billion, UNICEF $879 million and UNOPs $706 million on SDG16; with 10,447 personnel across the UN system on this goal. This does not appear to match with other data sources. For instance, UNDP reported to the DAC in 2015 on the cluster of government and civil society (including legal and judicial reform and civilian peace-building) a total expenditure of $420 million. This cluster is actually much wider than SDG 16 (it includes for instance projects supporting specific sector ministry capacity, such as energy) yet the amount reported is 70 per cent less than the Dalberg figures. The report does note that in some cases (e.g. Afghanistan) the whole country program has been counted as SDG16, although in fact this would include other SDGs and would therefore greatly overestimate the spend on peace, justice and inclusive institutions. But these are issues that can easily be addressed in future updates.

In summary, this report does what the first of a series should: it focuses on a few priority issues and it is clear on strategic directions while allowing space for further consultation on detailed solutions. It will be important though to recognize that the Secretary-General is already one tenth of the way through his term: to land these reform directions will need some heavy lifting on the details, and the relationship with other reform tracks to take advantage of the “honeymoon” period for change.

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Jul 10, 2017
Sarah Cliffe
United Nations