Humanitarian emergency fund: independent review

3 Concluding reflections, recommendations and options for the future

3.1 Concluding reflections

Reflections regarding the achievement of the HEF's purpose

The HEF's primary aim is to provide assistance for a large number of people in crisis. Clearly the vast majority of the Fund has been directed to this goal (minus the relatively low sums for running the Secretariat and for indirect cost recovery to Panel members). It has not been possible for this review to identify the overall numbers of people reached or the impact of projects on the ground due to the absence of clear figures presented in the HEF integrated and annual reports. However, the Fund has disbursed and reported on over £2.1m of assistance grants to people in need since its establishment.

The fund has three secondary aims. The first is to build public awareness and raise additional funding. This aim was originally established in the hope that a distinctive Scottish Fund would galvanise greater support for humanitarian responses from Scotland, including increased profile, increased public giving to HEF charities and potentially increased corporate support. This original hope has been a little lost in the operational focus on setting up the processes of the Fund. There has been no public reporting against this aim, and there are no indicators in place to measure success. Whilst this is clear in the aims of the fund, it is not clear at an operational level whose responsibility it is to raise public awareness. External communications and public awareness raising appear to be explicitly excluded from the contracted Secretariat responsibilities^[62] and there is no awareness-raising function included in the Operations Manual which guides the work of the Panel.

Panel members believe they have generally done what is proportionate, by providing the Scottish Government with case studies as part of their reporting, and promoting the funding they have received through press releases and social media activity. Although they do reflect that they could do more, they feel more guidance is needed and believe action against this aim should be driven by the Scottish Government. The Scottish Government is however clear that this work is part of the Panel's responsibilities and there was some frustration evident about lack of progress.

Regarding the aim of raising additional funding, some anecdotal evidence was provided by a small number of HEF members about access to HEF funding allowing them to leverage additional funding. This cannot be quantified and has not been included in reporting to date. There have been no structured approaches to raise additional funds for the Panel, and it is not clear who would undertake this task.

The second aim is to demonstrate the Scottish Government's role as a responsible global citizen. Beyond the comments above on press releases of funding agreements, it is not possible to take a view as to whether this aim has been achieved. It should be noted that none of the humanitarian experts interviewed (outwith the HEF Panel NGOs) had heard of the HEF, including those two consulted with Scottish connections or residency.

The third secondary aim is to bring enhanced transparency and predictability to emergency funding. On this point internal stakeholders (Scottish Government and Panel members) agreed that it had to some extent been achieved. Predictability has been established through the annual HEF budget and the quarterly drawdown process. Transparency has been achieved internally for Panel members through a clear and regularly updated process for activations and peer review of proposals, which Panel members saw as particularly valuable. It has been achieved to some extent for Scottish Government, although reporting on need for activations and achievements of projects could be improved. For external stakeholders, transparency was less convincing, partly due to the unusual structure of the fund (where Panel members make decisions on funding which they may themselves receive) and partly due to the poor communications noted above. The term 'closed shop' was used by more than one external party, although the peer review approach was seen as positive by others.

It should be noted that there is no guidance on who is responsible for meeting the secondary aims of the Fund, how these should be measured or reported, within the HEF Operations Manual or elsewhere. In this respect, the aims of the HEF as a Fund differ from those of the HEF Panel, which has no formally articulated responsibilities for fund-raising or public awareness-raising. To date the focus of the Panel has been in line with the Operations Manual, on internal processes for spending the annual fund and on building relationships among the Panel members. That is perhaps to be expected at the beginning of a new funding system. This review offers the opportunity to reflect and go further.

Box 8: Reflections regarding the functioning of the HEF Panel

The following conclusions can be drawn about the HEF at this stage in its development:

• The Fund has achieved some of its stated aims, by providing a predictable, semi-transparent funding stream aimed at those in need during humanitarian crisis, and by delivering a steady stream of activities which have disbursed the full funding allocation over the two-year period since its establishment.
• The Fund is reaching people in immediate crisis through Stream 1 (DEC appeal) funding and through Stream 2, although numbers and impact are hard to determine, particularly for Stream 2.
• More could be done to communicate the work of the Fund to the public in Scotland, the INGO sector and the global humanitarian community.
• Regular direct meetings and exchange points are likely to benefit communication between the HEF Panel and Scottish Government and to help address identified areas for improvement.
• It is not possible to review whether the HEF has made the best use of the funds available.
• While the HEF Panel's methods of work to allocate and distribute the funding respond to a number of important good practices in the sector, more could be done to ensure adherence to standards and ensure key issues are addressed in the Panel's work and HEF-funded projects.
• HEF Panel members feel proud of what they have achieved and believe it is a good foundation for future working, hoping their collaboration can continue, ideally with an increased fund.

3.2 Recommendations for the improved functioning of the HEF

Going forward, options for the future of Scottish Government humanitarian funding depend on the budget available. These are set out below in Section 3.4. However, regardless of budget size, if the Panel is to continue as at present, the following recommendations are proposed:

Proportionality

Any increased expectations of the HEF must be balanced with an awareness of the need for proportionality. The size of ambition and the structure of the Fund should match the funds available.

Focus

Some thematic or geographic focus would help to achieve and evidence greater impact and to communicate the aims of the funding to political stakeholders and the Scottish public, as well as guiding the Panel's selection of potential activation requests and review of proposals. This focus should fit with the Scottish Government's wider international strategy and resonate with domestic priorities, for example climate change or supporting refugees. Broad themes such as these would help to define the distinct added value of the Scottish fund, while still offering scope for engagement in a range of humanitarian contexts. A geographic focus would help to respond to sector good practice as it could be leveraged to promote improved humanitarian and development policy coherence, for example on Yemen or the Syrian crisis.

Communications

Greater clarity is needed on how the distinctive value of Scottish humanitarian funding will be communicated to the Scottish public and the global humanitarian sector to help achieve the secondary objectives of the HEF. Communications expectations must be explicitly built into future agreements.

In addition:

• Scottish Government and the HEF Panel should meet and agree how expectations should be met and who is responsible; this is likely to require revisiting the current DEC Secretariat contract if a role is envisaged for the Co-ordinator.
• Scottish Government should clarify what public information products should be produced on the HEF by which party.
• Scottish Government should improve the public website presentation of the HEF and make case studies etc. available in a more attractive format with regular updates.
• Activation requests should include a section on external communications.
• Panel members should include in project proposals how they will communicate the crisis and the funded project to the public; proposals should not be submitted if the applicant is unable to dedicate communications resource within the project period.
• A system for media monitoring should be developed and reporting on this should be included in interim and annual reporting to Scottish Government. Responsibilities would need to be clearly allocated and, as noted above, this is likely to require revisiting the current DEC Secretariat contract if such a role is envisaged for the Co-ordinator.
• A part-time communications post could be considered, though would have cost implications - either working through DEC Secretariat if their contract is adjusted, or to the Chair directly.

Learning, good practice and reporting

While the HEF work processes already respond to a number of important good practices in the sector, some small adjustments would provide for consistency and help ensure that the spending of HEF funds reflects relevant international policy commitments, as well as contributing to improved measurement, reporting on impact and learning for the future.

• The timelines for Stream 2 activations and proposal recommendations should be reviewed, considering the benefits that more time to prepare and consider approvals could bring to proposal quality.
• HEF proposal and PCR template requirements for i. beneficiary disaggregation by age band, gender and vulnerability, and, ii. budget percentage breakdown for local and national NGOs, should be consistently met in order to use this data to track progress towards Grand Bargain commitments and support improved HEF annual reporting; if only estimates are available in the planning phase these should be provided and then updated subsequently and in final reporting.
• A new section should be added to the proposal and reporting templates to require organisations to explain what sustainability measures are proposed / have been implemented in relation to the project, including capacity building for local actors and support for potential future development efforts.
• A new section should be added to the proposal and reporting templates to require organisations to explain what safeguarding systems and capacities exist in their organisation and how these will be/have been contextualised to the particular intervention proposed.
• The annual report on the HEF Panel should include consideration of the learning exchange undertaken through the year (whether of practice among organisations, on cross-sectoral trends, or issues from an external party) and of any subsequent changes to practice. The disaggregation of beneficiaries by age group, gender and particular vulnerability should be presented in total for the year, as should the percentage of budgets which have be transferred on to local and national NGOs.
• An annual summary for public audiences should be prepared (and if possible structured around a selected focus theme or geography) to present a clear picture of what the funds have achieved in the year, supported by case studies, personal stories and embedded video material wherever possible.

Structure, roles and fundraising

While currently the HEF Panel's work systems are detailed in the Operations Manual, there is less clarity on some of the broader HEF structures. There is a Role Description for the Chair, but no detailed Terms of Reference (ToR) have been developed for other key roles, including the Panel members, Deputy Chair, or the disability advisor role.

Scotland's International Development Alliance (SIDA) has invested significant resource in helping to establish the HEF and in chairing the Panel. This has been unfunded. Some internal and external interviewees suggested that SIDA may be able to play an even greater role as honest broker, including acting as Secretariat in future, leading external communications work for HEF, and/or acting as an independent reviewer of proposals.

While fundraising and the possibility of blended financing has been discussed, the HEF Panel is structured as an advisory body: there is currently no vehicle to manage and account for any incoming funds and doing so would likely require the setting up of a new legal entity for the HEF (or to have an account positioned within an existing external partner). Until an assessment is undertaken it is unclear how much funding could be available, how attracted donors are to match funding, or how much new funding could be garnered rather than simply attracting sources already available.^[63]

• ToRs should be developed for Panel members, the Chair and Deputy and any advisory roles.
• Retaining the original and appropriate criteria of adherence to the CHS, a Scottish presence and active engagement in international humanitarian activity, consider a refresh or review of HEF Panel membership, with careful advertising to ensure all eligible actors are aware, and an independent selection process.
• Going forward, SIDA's important role in supporting the Panel should be considered carefully and discussed to mutual agreement. Any core activity, including the role of Chair, should be funded.
• The HEF should consult with Scottish Government and clearly define and publish its policy, protocol and systems for reporting and responding to safeguarding incidents.
• An assessment is required of funding available from other sources to inform thinking and expectations for future fundraising models, either additional contributions to individual organisations or for potential match to the HEF.
• If funds were to be attracted to the HEF itself, rather than HEF grants helping to encourage additional donations directly to HEF Panel members, independent expertise would then be required to attract this funding. There would be obvious conflicts of interests if this fundraising were to be done by individual Panel members or even by the DEC Secretariat.

3.3 Options for the future

The following options are presented for consideration and to inform subsequent policy decisions on the spending of Scottish Government funds dedicated to humanitarian assistance.

They have been presented in three main sectors or groups: those which see the HEF modality continuing in a familiar shape; those which involve other existing capacities and strategic partners; and, those which involve new, bolder thinking requiring new or additional capacities and structures.

Sector I - Options which are based on the continued functioning of the HEF and Panel

3.3.1 Option 1 - Retain current HEF model with some improvements

Implications	Maintain a fund of £1m per annum Maintain a panel of Scotland-based INGOs to recommend to Ministers when responses should be activated and who funded Maintain an independent, funded Secretariat and Chair Funds could be focussed on a broad theme or geography resonant in Scotland Improve external communications Improve reporting processes Agree responsibilities and modalities if felt relevant for attracting additional funds Panel membership to be reviewed every three years, providing opportunity to include new members and enhance diversity and learning opportunities
Pros	Builds from recent learning Makes sizable contribution to humanitarian need Engages most key players in Scotland SG funding could be reduced over time if other funds attracted Transparent, predictable humanitarian financing mechanism
Cons	May remain a 'closed shop' if does not engage all INGO humanitarian players in Scotland Will remain hard to measure impact and efficiency without reporting improvements Is likely to require additional capacity or resources, including from SG officials, to improve current processes for external communications

3.3.2 Option 2 - Retain current structure and aims, expanded £1.5 m p.a. budget

Implications	Fund expands to £1.5m per annum The panel of Scotland-based INGOs continues to recommend to Ministers when responses should be activated and who funded Maintain an independent, funded Secretariat and Chair (potentially establish a new part-time Communications post). Improve external communications and reporting processes Funds could be focussed on a broad theme or geography resonant in Scotland Agree responsibilities and modalities if felt relevant for attracting additional funds Panel membership to be reviewed every three years, providing opportunity to include new members and enhance diversity and learning opportunities
Pros	Builds from recent learning Increased funding will mean larger grant sizes and easier to demand improvements to project design and reporting Would allow for dedication of more resources to external communications Likely improvements in reporting quality will support better impact measurement Makes more sizable contribution to humanitarian need Engages most key players in Scotland SG funding could be reduced over time if other funds attracted Transparent, predictable humanitarian financing mechanism
Cons	May remain a 'closed shop' if does not engage all INGO humanitarian players in Scotland Is likely to require additional capacity or resources, including from SG officials, to improve current processes for external communications Increased funding may not necessarily lead to increased impact or accountability Opportunity cost - what will lose out if extra funding is moved to HEF?

3.3.3 Option 3 - Retain current structure and aims, reduced £0.5 m p.a. budget

Implications	Fund reduces to £0.5m per annum The panel of Scotland-based INGOs continues to recommend to Ministers when responses should be activated and who funded Maintain an independent, funded Secretariat and Chair Funds would need to be focussed on a broad theme or geography resonant in Scotland Number of activations may need to be reduced Improve external communications and reporting processes if possible Agree responsibilities and modalities if felt relevant for attracting additional funds Panel membership to be reviewed every three years, providing opportunity to include new members and enhance diversity and learning opportunities
Pros	Funds will be released to be spent on other priorities Other sources of funding could potentially be attracted to make up the shortfall Funding limitations may encourage increased innovation or collaboration Transparent, predictable humanitarian financing mechanism
Cons	May remain a 'closed shop' if does not engage all INGO humanitarian players in Scotland Likely that some panel members will cease participation in the fund as the cost-benefit in terms of staff time and funding income is affected Unlikely that improvements to project design or reporting will be possible with reduced funding Will remain hard to measure impact and efficiency without reporting improvements Will require capacity from SG officials to improve current processes for external communications

Sector II - Options which are based on existing SG capacities and strategic partners

3.3.4 Option 4 - Retain Stream 1 (DEC) funding only

Implications	Straight-forward alignment with national NGO-led mechanism and decision-making Would effectively remove role and function of HEF Panel and Secretariat Little functional value for continued funding to the three non-DEC members
Pros	Stream 1 funding mechanism is simple to trigger and proportionate to manage Can function with 50% of current annual HEF funding Impact can be measured via DEC reporting High public visibility of DEC appeals Opportunity for SG funds to 'pump-prime' Scottish DEC appeal
Cons	Limited access to funds for non-DEC members would need to be addressed; if continued funding to the three non-DEC members was desired, it would leave questions over what modality or process would be used for supporting any (DEC crisis-related or other humanitarian assistance) grants to them. SG would lose control over activation and it may be harder to develop a coherent/themed narrative. Only funding major, high profile emergencies, lost opportunity for support to situations where need is great but media attention low.

3.3.5 Option 5 - 'Crisis modifier' funding

Implications	Adapting Scottish Government's existing international development main grants to include crisis modifiers, i.e. proportions of budget that are pre-agreed for use to respond to humanitarian needs or crises in the target country based on an agreed trigger, usually data-driven (e.g. rainfall, UN data on numbers of vulnerable, etc.).
Pros	Immediate response possible Coherent narrative and 'story' for external communication Supports sector good practice in terms of encouraging humanitarian and development coherence and 'nexus' thinking. Could offer valuable opportunities for local capacity building. Could be a possible addition as well as alternative to the HEF in the Scottish Government international funding portfolio.
Cons	Limited to IDF priority countries Would require adaptation of existing Scottish Government proposal, reporting and budgeting templates. Requires main development grantholders have sufficient flexibility and capacity to incorporate this into proposals and deliver if needed; unlikely to be all grantholders/applicants. Budget uncertainty: if there is no humanitarian crisis in the priority countries there will be no humanitarian assistance spend - unless agreement to build local resilience capacities if not needed for humanitarian assistance.

Sector III - Options which would require new structures and new or additional capacities

3.3.6 Option 6 - Innovation Fund

Implications	Establish a new funding programme with a focus on innovation in humanitarian assistance, potentially drawing on elements of the existing Scottish Government HEF and Climate Justice Innovation Fund. Proposals would need to trial a new approach or relevant technology as part of humanitarian response to a particular current emergency, and present the potential impact, relevance and dissemination of learning for the humanitarian sector.
Pros	Would continue to provide funding for humanitarian emergency response Would additionally offer a clear 'niche' for Scottish humanitarian funding and potentially large footprint for relatively small funds Could tie in to Scottish identity and history of innovation Promotion of learning from the fund would be an opportunity for global recognition for both Scottish Government and organisations with a Scottish presence.
Cons	Would require clear policy architecture to identify the kinds of innovation sought Would require internal expertise to assess proposals in terms of level of innovation, quality and fit with policy context Would require significantly heavier management resourcing than HEF to ensure quality of evidence and reporting needed for external and international promotion of learning Would also require Secretariat resources to include an advocacy function to support promotion of learning and publication in international fora.

3.3.7 Option 7 - Humanitarian Seed Fund

Implications	Scottish Government provides only 'start-up' funds for sudden onset crises to pre-agreed partners with a potentially pre-agreed grant sum, e.g. £150,000, which provides for organisations with a Scottish presence to make an immediate start with crisis response operations while undertaking fundraising for subsequent support. Potential change to current HEF system of peer-reviewed proposals
Pros	Could continue with current HEF peer review system Could switch to very simple templates for approval by Scottish Government or other management facility. Would provide a strategic focus / angle / 'hook' to define Scottish Government support
Cons	If HEF Panel disbanded, even if simple templates were used, this would mean additional workload for Scottish Government or an alternative management facility. Would need to have a very simple project format to function, could prove challenging to pull out more attractive narratives and 'stories' for external audiences.

3.3.8 Option 8 - Innovative humanitarian financing initiative

Implications	Undertake further research to identify an appropriate initiative (or support the development of a new initiative) for innovative humanitarian financing, e.g. social impact bonds, targeted insurance products, commercial investment in R&D for 'humanitarian products', Education in Emergencies Fund, potential GEFI linkage, etc. Invest funds earmarked for humanitarian assistance to design / trial of new initiative
Pros	Responds to current sector thinking around and exploration of public-private partnerships and blended finance opportunities Could draw on (and promote) Scottish financial sector expertise in the funding design If successful, could make valuable contribution to humanitarian financing
Cons	High risk option which might take several years to bear fruit. Complex narrative to communicate, could undermine public awareness raising efforts If no Scottish actors involved in R&D this could undermine Scottish identity of initiative Could prove challenging to existing Scottish Government procurement modalities