Intervention Summary
Improving Food Security levels for people in Gaza
What support will the UK provide?
UK funding to the World Food Programme (WFP) will enable over 37,000 people to have better access to essential food items, and support to the United Nations Relief and Works Agency (UNRWA) will mean that 5,300 vulnerable refugees per year can meet their basic needs. We will contribute £9.6 million to WFP and £14.4 million to UNRWA up to March 2015 (a total of £24.1 million including an additional £100,000 for an independent evaluation of our support).
Why is UK support required?
What need are we trying to address?
Food insecurity prevalence remains high in Gaza both among the refugee and non-refugee population
(1.1 of the 1.5 million Gazans are refugees) and this is going to remain the reality for the foreseeable future. 66% of the population are currently either food insecure or vulnerable to food insecurity 1 . The new access regime put in place by the Government of Israel in June 2010 has had no impact on food security. Although the market is generally adequately supplied with basic food commodities the problem for most households is that it is difficult for them to afford these.
As people compromise on both the quantity and quality of food, this is having a direct nutritional impact on the Gazan population. The World Health Organisation has highlighted that children and women of child-bearing age will be the worst affected 2 . Persistent poor nutrition has long term detrimental effects on health.
What is the rationale for intervention?
The UK sees food insecurity as the most pressing of Gaza’s humanitarian challenges. Public intervention to address food insecurity is warranted as it benefits both the individual, and society - a healthy individual is more likely to be productive and contribute to the public good.
3 Our support seeks to correct the under-provision of health and nutritional interventions by the de facto authorities in
Gaza, and to benefit the poorest and most vulnerable people.
We have previously funded interventions of this nature in Gaza and their track record is good. This project builds on that experience by providing predictable financing to support cash-based approaches, in line with the recommendations of a recent review of DFID’s humanitarian work. Both UNRWA and
WFP want to use our approach as a model of best donor practice and our funding will allow the WFP to roll out a successful pilot to scale. Food insecurity in Gaza is the result of structurally predictable causes such as the ongoing conflict and blockade, making predictable, long term support more appropriate than the traditional annual support approach. Certainty of funding will allow better financial management by our partners, lower transaction costs for DFID and better measurement of impact
(including of benefits which are not purely humanitarian such as market stimulation and improving people’s skills).
What will we do to tackle this problem?
DFID will support two existing cash transfer programmes with the aim of helping the most food
1 World Food Programme, Gaza : eased or un-eased?, 2011
2 WHO Gaza Health Assessment – July 2009
3 If left to market forces such services would normally be underprovided as market makers do not factor in the social benefits, they only provide enough to satisfy private benefits.

insecure sections of the population. This will be done through improving food consumption at household level by either making food more available directly or by increasing the ability of people to buy it. Added benefits are that the temporary jobs created through our support to UNRWA will support local businesses and improve the provision of services.
Who will be implementing the support we provide and what will be the results?
We will be supporting the main actors addressing food insecurity in Gaza: UNRWA for refugees, and
WFP for non refugees 4 .
The Gaza Urban Voucher Programme (UVP) is a part of WFP’s 2011 Emergency Operation (EMOP). It is being implemented in 3 out of Gaza’s 5 governorates (Gaza, Khan Younis and North Gaza). With previous DFID support, the programme has already provided 2,335 households (15,000 people) with a voucher-procured food basket comprising nine food commodities which can be collected from any of
23 participating shops. The basket covers some 70% of a household’s food needs. DFID support for this programme will enable the participation of around 5,750 households (affecting over 37,000 people) by March 2015.
The Job Creation Programme (JCP) is part of UNRWA’s Emergency Programme, established in 2001.
By the end of 2009, it had created 15,247,970 work days for 227,442 unemployed, vulnerable refugees. This is the equivalent of 7,330 full time jobs over 12 months. The programme gave the refugees and their 1,205,442 5 dependants a dignified way to support themselves. DFID ’s four year funding for UNRWA will enable 5,300 vulnerable refugees per year to meet their basic needs through the provision of temporary jobs. The jobs themselves will increase the capacity of UNRWA's health and education facilities and other community organisations as well as providing necessary human resources for the private sector. The programme is expected to benefit: 48 community based organisation and NGOs providing essential social services to communities; 238 UNRWA schools, attended by 213,000 pupils; 20 UNRWA health clinics; 8 refugee camps on infrastructure maintenance;
11 fishery and agricultural projects and 2,032 private sector businesses.
These two programmes directly address the primary issues of food insecurity and poverty. They also provide wider benefits including stimulating the market and improving people’s skills.
OUTPUT 1 UNRWA JCP
Improved household income for refugees
OUTPUT 2 WFP UVP
Reduced household poverty and improved food consumption amongst vulnerable
Gazans
Reduced economic hardship and hunger amongst food insecure, abject and absolute poor refugees and non refugees in Gaza Improved access to sufficient food for non refugees
As with all cash transfers, an important assumption is that the beneficiaries can be trusted and empowered to spend effectively. Given that people are spending less on food because of poverty, this is a reasonable assumption. Evidence from focus groups conducted by UNRWA show that most benefiting households increased their expenditure on food, but also spent money to meet other needs like health and education. UNRWA will conduct assessments to verify how the money is spent.
4 Gaza population estimated at 1.56 m, of which 70% are refugees (Palestinian Central Bureau of Statistics,
2007)
5 This represents total JCP results, not just those attributable to DFID

The vouchers can only be spent on a pre-determined basket of food at selected shops. In July 2011,
WFP started using electronic vouchers in Gaza, which reduce the risk of monetising the vouchers. In addition, WFP conduct household visits to verify that the food is purchased and used.
How will we determine whether the expected results have been achieved?
Both programmes will be monitored throughout the four year implementation period, and subject to external evaluations. Scheduled Socio-Economic and Food Security surveys will be examined to ensure that results are achieved and maintained.
Strategic Case
A. Context and need for DFID intervention
Context
The current situation in Gaza
As a result of the restrictions on imports and the almost complete ban on exports from Gaza since
2007, the legitimate economy of Gaza has all but collapsed. The blockade has resulted in the closure of 80-90% of businesses, and the laying-off of approximately 120,000 people. Establishments that are still operating are working at 10-60% capacity 6 . The loss of jobs has translated into decreasing household expenditure. Less money is spent on food, affecting the quantity and quality of food consumed. 66% of Gaza’s population is affected by or vulnerable to food insecurity.
Even with the relaxations brought in by the Israeli Government in June 2010, structural food insecurity is going to remain the reality in Gaza for the foreseeable future. Since the easing of the blockade more consumer goods are available at somewhat lower prices. However, people’s ability to afford these is still limited. Purchasing power has been eroded by an increasing Consumer Price
Index, a decline in real wages, and high unemployment, which now stands at around 37.4% 7 . Without a significant change in the access regime to allow normal economic activity the situation is unlikely to improve. DFID has identified food insecurity as the most pressing of Gaza’s humanitarian challenges.
As people compromise on both the quantity and quality of food, this is having a direct nutritional impact on the Gazan population. WHO has highlighted that children and women of child-bearing age will be the worst affected. 8
Support to refugees and non-refugees in Gaza
70% of the 1.56
9 million Gazans are refugees 10 . UNRWA is the main provider of basic services
(education, health, relief and social services) for these people. The agency relies on voluntary funding to its General Fund (GF) and its Emergency Programme to meet the refugees’ basic needs.
The non refugee 11 population rely on the public sector for basic services. The delivery of basic services is at a very low level, mainly due to the four years of blockade (which also affects UNRWA’s ability to deliver) but also due to disagreement between the Palestinian Authority (PA) and Hamas.
Food insecurity is marginally more prevalent amongst the non-refugee population (68%, 55% food
6 Palestine Trade Center, Gaza Strip Crossing Annual Monitoring Report Oct 2009 – Sept 2010
7 World Bank report to the AHLC 2011:
8 WHO Gaza Health Assessment – July 2009
9 Estimate (PCBS - Palestine in figures 2010). Last population census was in 2007.
10 Palestinians who lost their homes in the 1948 Arab-Israeli conflict and their descendants
11 Palestinians, and their descendants, who lived in Gaza pre 1948 Arab-Israeli conflict

insecure and 13% vulnerable) compared to the refugee population (63%, 50% food insecure and
13% vulnerable to food insecurity) 12 . As refugees account for 70% of Gaza’s population, this still means that around 515,000 refugees are food insecure.
The need for intervention
The DFID programme in the Occupied Palestinian Territories (OPTs) is supporting UK Government objectives for a successful Middle East Peace Process (MEPP) by helping build Palestinian institutions and promoting economic growth, so that any future state will be stable, prosperous, wellrun, and an effective partner for peace with Israel. Poverty is widespread in the OPTs and we address this problem by responsive and targeted services to the most vulnerable groups. We provide direct financial assistance to the PA (some of which is used to benefit the population of
Gaza) and work closely with them to ensure that the needs of this part of Palestinian society are met as far as possible. We are also the second largest bilateral donor (behind the US) to UNRWA ’s regular budget, which provides basic services to 4.7 million Palestinian refugees across the region.
Poverty and vulnerability are most widespread in Gaza. In response, we work closely with other members of the international community to seek further relaxation of the access restrictions put in place by Israel, while also supporting the provision of basic services by the PA and UNRWA, the recovery of the Gazan private sector, and direct responses to humanitarian needs.
As food insecurity remains the most pressing humanitarian problem in Gaza, affecting around
821,000 people, it is right that DFID should continue to prioritise action to tackle it. Doing so has particular benefits for children and women (especially pregnant and lactating women), who are vulnerable to nutrient deficiency resulting from the inability to access a regular diversified diet.
Statistically, children suffering from stunting tend to have long-term health problems, lower life expectancy and lower levels of productive capacity throughout their lives. This is discussed in more detail in the Appraisal Case.
The intervention
What is the best approach?
Traditionally, food insecurity is addressed by General Food Distribution (GFD) and is planned on an annual basis. The Humanitarian Emergency Response Review (HERR) recommended the use of innovative approaches, using predictable financing to build the resilience of the affected populations in humanitarian contexts including areas affected by conflict. It also stated that DFID should “use cash-based responses more routinely in our humanitarian response as a way of empowering those affected and stimulating local enterprise ” 13 . Cash-based approaches directly address food insecurity but also, by moving away from food aid, provide an opportunity for early recovery (through modest market stimulation and building human capital) within the highly constrained Gaza environment.
In line with these conclusions, the proposed intervention will provide predictable funding over a four year period in order to support cash-based approaches to reducing food insecurity. As well as addressing the key concern of food insecurity, this has the additional benefits of helping our partners in their financial management (UNRWA and WFP will use our approach as a model of best practice for other donors), reducing transaction costs for DFID, and allowing us to better measure the full range of impacts, including on the labour market and with regards to local business. This programme is likely to provide a model for other humanitarian interventions by DFID throughout the world.
WFP’s Pilot UVP was positively evaluated in March 2011. Predictable funding over four years will allow WFP to build on this learning and to invest in greater programme efficiencies (for example the
12 Socio-Economic and Food Security Report - 2010
13 HERR response – recommendations annex.

introduction of e Vouchers). In turn, a more developed, better evaluated programme should help catalyse other donors to provide further funding.
What we have done so far?
We have already supported cash-based programmes addressing food insecurity in Gaza set up by
WFP and UNWRA. Results have been good;
The Urban Voucher Programme (UVP) is a part of WFP’s 2011 Emergency Operation (EMOP). It is a pilot project being implemented in 3 out of Gaza’s 5 governorates (Gaza, Khan Younis and North
Gaza). With previous DFID support, the programme has already provided 2,335 households
(covering 15,000 people) with a voucher-procured food basket comprising nine food commodities which cover some 70% of a household’s needs. Items can be collected from any of 23 participating shops.
The Job Creation Programme (JCP) is part of UNRWA’s Emergency Programme, established in
2001. With previous DFID support, in 2009 and 2010, it has provided 443,144 paid work days for
10,620 refugees allowing them to meet their basic needs through the provision of temporary jobs.
What will additional funding do?
Our cash based approach will have two elements, a voucher based scheme and a job creation scheme to put money into the pockets of families in need.
The UVP programme will potentially benefit over 37,000 people by March 2015. Funding will allow the scaling up of what is a highly successful pilot.
The JCP will enable 5,300 vulnerable refugees per year to meet their basic needs. The temporary jobs provided will also increase the capacity of UNRWA's health and education facilities and other community organisations as well as providing necessary human resources for the private sector. The jobs created will benefit: 48 community based organisation and NGOs providing essential social services to communities; 238 UNRWA schools, attended by 213,000 pupils; 20 UNRWA health clinics; 8 refugee camps on infrastructure maintenance; 11 fishery and agricultural projects and 2,032 private sector businesses.
Why DFID funding?
Our proposed new contribution represents a reasonably high percentage of the total UVP four year budget (65%) 14 . We consider this a sound use of UK funds as:
- our support helps overcome a structural problem. DFID’s flexibility to fund WFP cash based approaches is critical, as most major donors, with the exception of European Community
Humanitarian Aid Office (ECHO), are restricted to providing the majority of their support either “in kind” or “cash for kind” due to stipulations imposed by the Food Aid Convention (FAC). Partly resulting from the success of this type of programme, the FAC is being re-negotiated at present to allow for more flexibility in the future.
- our funding will allow the programme to go ahead at scale. We will work with the UN to encourage other donors to provide funding to allow the programme to expand. While our contribution will increase each year, its percentage of the total UVP budget will decrease from 74% in year one to approximately 40% in year four.
The JCP is part of UNRWA’s annual Emergency Appeal (EA) which is always underfunded. A four
14 Based on forecast provided by WFP

year investment in humanitarian activities is particularly valuable for the agency because predictability provides greater security for the programme beneficiaries and allows lessons learned to be drawn to make the programme more efficient. DFID is planning an evaluation of the JCP within the first six months of our support to better assess the impact of the programme. Better understanding of the impact of the JCP will help UNRWA market their work more effectively with other donors and promote more predictable funding, with the improved economic security this brings for the beneficiaries.
DFID is committed to providing the bulk of its support to UNRWA via the General Fund (GF).
However, UNRWA only reaches 32% of the abject and absolute poor in Gaza through the GF and from support provided to it by the European Commission. The majority of the poor rely on the assistance provided through the Emergency Appeal so if DFID is to provide equitable support for the refugee and non-refugee population in Gaza, support through the EA is currently essential.
We are working with other donors to encourage UNRWA to move towards a consolidated budget as, with the exception of those who are poor as a result of a recent event/conflict, poor refugee cash schemes should be part of the GF. To ensure we don’t send mixed messages to UNRWA, we will be clear with them that we will commit to the JCP under the EA, but that this will be reviewed in 2013 in light of progress made on the consolidation of the budget for 2014-15.
Links to other HMG/DFID strategic priorities.
As outlined in the DFID’s four-year Operational Plan for the OPTs, our programme supports the UK government objective of realising a successful Middle East Peace Process (MEPP). This project fits within this approach by addressing the humanitarian symptoms of the ongoing conflict. This support is consistent with British government policy on Gaza (reaffirmed by FCO Minister Burt during his recent visit to Gaza) whereby we seek, together with international partners, to ease conditions for the people of Gaza both through humanitarian and development assistance and through lobbying the
Israeli Government on access issues with the Israeli Government.
B. Impact and Outcome

Improving food security levels for people in Gaza
OUTPUT 1 UNRWA JCP
Improved household income for refugees
OUTPUT 2 WFP UVP
Reduced household poverty and improved food consumption amongst vulnerable
Gazans
Improved access to sufficient food for non refugees
Reduced economic hardship and hunger amongst food insecure, abject and absolute poor refugees and non refugees in Gaza
UNRWA JCP
Number of work days created annually
Average number of work days per beneficiary
Number of JCP direct beneficiaries employed annually
WFP UVP
INDICATORS
Average number of food vouchers booklets
(containing 4 vouchers each) distributed monthly
Total monetary value equivalent of commodities indirectly supplied to beneficiaries (US$)
UNRWA JCP
The percentage of abject and absolute poor benefiting from programme
WFP UVP
Number of households with improved Food
Consumption Score
(FCS) amongst non refugees
Percentage of participating shops which show at least
25% increase in sales one year after their inclusion in the programme
UNRWA JCP & WFP UVP
Poverty Gap Index
Food Insecurity in Gaza
(disaggregated by refugees and non refugees)

Appraisal Case
A. Determining Critical Success Criteria (CSC)
Each CSC is weighted 1 to 5, where 1 is least important and 5 is most important based on the relative importance of each criterion to the success of the intervention.
Weighting (1-5)
5
CSC Description
1 Cost effectiveness of improving household
food consumption for target non refugee population
2
3
Cost effectiveness of increasing household
income for target refugee population
Secondary effects on local services (schools, clinics, infrastructure) and economy (producer, supply chain and retail)
5
4
B. Feasible options
Different options are required to address the needs of the refugee and non-refugee population.
Intervention options at scale for nonrefugees in Gaza are limited to WFP’s General Food Distribution
(GFD) programme and the expanding UVP. Intervention options for the refugee population are limited to UNRWA’s GFD (using similar commodities and modalities to WFP GFD for the sake of comparison here) and the JCP.
DFID analysis in the Multilateral Aid Review identifies WFP as the only UN multilateral agency capable of delivering emergency food assistance at scale in an environment that is difficult and often dangerous 15 . In Gaza, WFP complements the work of UNRWA.
Other existing cash transfer programmes ( the PA’s Cash Transfer Programme, which we support through our financial assistance to the PA, and UNRWA’s Social Safety Net Programme which is part of UNRWA’s General Fund) are not considered as options as:
- The PA’s Cash Transfer Programme is not yet operational in Gaza due to political reasons. If it becomes so we could consider a gradual transfer of support to the programme.
- As noted in the Strategic Case, only 32% of the poor refugees are reached through UNRWA’s
Social Safety Net Programme In order to provide equitable support to the entire Gaza population, support to UNRWA’s Emergency Appeal is essential. If the SSNP covers all or at least a high percentage of poor refugees, we will consider transferring funds to the GF.
The counterfactual (do nothing) option should be discounted for many reasons including:
 The long-term costs of a rise in stunting, malnutrition and issues of infant mortality, maternal mortality and long term health problems associated with malnutrition, will manifestly outweigh the costs of providing either GFD, vouchers or JCP opportunities.
 From a humanitarian perspective, it would be unconscionable to allow a completely avoidable chronic nutritional situation to occur in a blockaded population with no freedom of movement to escape the territory.
 The associated benefits of ensuring a basic minimum of nutrition are widespread, and include improved/maintained levels of school enrolment and levels of school achievement, economic output of the labour force, and issues relating to security and political instability
15 Multilateral Aid Review: Assessment of Relevance, Effectiveness and Reform Scope for WFP – October
2010

How the feasible options will enable the impact and outcome to be achieved.
Theory of change for all feasible options
IMPACT
Reduced economic hardship for food insecure and poor Gazans
Reducuded hunger for food insecure and poor
Gazans
Outcomes
Reduced household poverty
Improved food consumption
Outputs
Improved household income for refugees
Improved access to sufficient food for non refugees
Inputs
Option 3
Paid jobs (Cash for Work)
Option 1
Food
Option 2
Food Vouchers
Theory of Change
The above diagram shows the inputs for each of the feasible options and how they contribute to the achievement of the outputs, outcomes and impact. The description of the options below explains this process and outlines evidence that supports it.
Option 1: GFD intervention through WFP and UNRWA
The (existing) programmes comprise a general distribution of five basic food commodities determined on the basis of beneficiary type (refugee or non-refugee) and degree of vulnerability (food insecurity and deep poverty). Targeting for both WFP and UNRWA is undertaken using the same Proxy Means
Testing (PMT) formula as that used by the PA Ministry of Social Affairs (MoSA) for its social welfare programmes in the West Bank. WFP additionally uses a Food Security Score (FSC) for monitoring at household level to measure the impact on improving the quality of diet. There is no seasonal variation in the assistance provided. The ration will be either eaten by the household or part of the ration exchanged (or sold) for other foodstuffs or household essentials which are not provided. People may get a low price for commodities that they sell or exchange.
GFD is a basic type of humanitarian intervention. As shown in the diagram, physical food distribution
(the activities/inputs) cover the shortfall in available food in households leading to improved access to food (the outputs).
Long experience, especially that of the WFP, shows that GFD improves food consumption in households and frees up residual household income to buy other household essentials.
WFP and UNRWA procure the GFD commodities internationally. While this may reduce the cost of commodities as they buy in bulk, it means that the local economy and producers are not benefiting.
Option 2: UVP through WFP (for non-refugees)

Recipients (95% of those selected are considered to be in deep poverty) get vouchers redeemable at local shops where they can be exchanged for certain food commodities on a weekly basis. Targeting is determined on vulnerability using the same PMT Formula.
There is good evidence 16 that cash transfers (which include vouchers) improve food security outcomes. The vouchers can be exchanged for various quantities of up to nine commodities according to household need at the time providing flexibility and a direct cash-equivalent injection into the household economy which reduces poverty at that level. The nine key food inputs are of high nutritional value and so this method is more effective than GFD at improving food consumption. A secondary outcome of the programme is to enhance the capacity of agricultural and food production
(especially the dairy sector) and increase turnover of local shops involved in the programme.
The programme activities should lead to the outputs if the following conditions are met:
- The key food inputs are available in the shops;
- Beneficiaries are able to access the shops;
- Beneficiaries do not monetise the vouchers or the food to use cash for other purposes (which are possibly not beneficial to the household). WFP started using electronic vouchers in Gaza in
July 2011. Beneficiaries are not able to monetise the voucher and can only exchange it for food. The fact that the choice the vouchers provide is wider than it is with GFD reduces the chances of people exchanging the food for other food and/or other items. WFP conducts household visits to verify that the food is purchased and used.
I ncreased violent conflict or a stricter access regime would affect the programme’s implementation and the achievement of the outcome by affecting beneficiaries’ access to the shops, shops ability to provide the required items and the ability of local producers to meet demand (although some goods come from Israel).
The achievement of the outcome will contribute to the impact. However, a shift change in food insecurity and poverty levels requires a meaningful change in the access regime to allow business revival and economic regeneration. Without this, vulnerable Gazans will remain dependant on aid for a wide range of services, including systems which promote the availability of food in the household.
WFP analysis (2011 Mid Term Review of the UVP) says that each dollar transferred through vouchers is two times more cost effective than GFD in improving food consumption at household level.
Option 3: JCP through UNRWA (for refugees)
The JCP in Gaza supports vulnerable refugee families with no breadwinner through the provision of temporary jobs. An additional benefit of this type of support is that the placement of the beneficiaries will assist UNRWA and other organisations to maintain better levels of services in sectors such as health and education and to carry out necessary rehabilitation work. Another advantage of the JCP is its flexibility to range from some 7,000 to 22,000 employees at a time, making it suitable for volatile contexts such as Gaza where needs may rapidly change.
As already stated there is
good evidence 16 linking cash transfers (which include JCP wages) to food
security outcomes at scale.
The wages allow more to be spent on food and yet as a smaller proportion of the new higher level of income, allowing more purchases of other essential household needs and/or potential savings.
The project activities should lead to the outputs if the following conditions are met:
16 Cash Transfers Evidence Paper – DFID 2011

- Beneficiaries are able to complete their job assignments;
- Jobs offered/available are fit for vulnerable people to take on (for example, suitable jobs for the disabled);
Cash is used to procure food and other household essentials, or/and saved. Focus groups conducted by UNRWA found that most families increased their expenditure on food, but also spent the money to meet other basic needs like health and education. UNRWA will conduct beneficiary assessments to verify how beneficiaries spend the cash.
As with Option 2 Increased violent conflict or a stricter access regime would affect the programme’s implementation and the achievement of the outcome by affecting the beneficiaries’ ability to reach the work place, and the availability of cash, food and other essential items and a fundamental change in the impact would require a shift change in the access regime to allow business revival and economic growth .
This approach has a more beneficial effect on household income than GFD and, on its own, a slightly lesser impact on food consumption than UVP.
In the longer term, and should the situation improve in Gaza, the work experience provided by JCP, exposure to commercial activities and the ability to maintain expertise and levels of training puts beneficiaries in a stronger position to access employment when the situation allows. In the meantime, a secondary outcome of the programme is to enhance the capacity of local business, agricultural projects and service provision in the health, education and public infrastructure sectors.
Climate change and the environment:
The intended impact of all of the options above will help break some of the negative links between poverty and environmental degradation. The poor will not be forced to deplete and degrade their surrounding environment in order to subsist due to a lack of alternatives.
The likely impact of the three options on climate change and the environment is assessed as medium/manageable.
Overall, it is assumed that the humanitarian situation is more likely to change due to political rather than external environmental factors. While this is the case, it is acknowledged that Gaza ’s environment is extremely fragile and is further degraded as a result of the hostilities 17 . Therefore, it is important to take environmental factors into account in the execution of all humanitarian, recovery and development projects. Failure to do so will undermine the potential gains of these projects.
The environmental appraisal did not give any order of preference for the above options. However, it recommends that DFID check WFP and UNRWA policy on re-use and recycling of packaging materials, and also in general terms regarding environmental management/policy and reduction of their carbon footprint/s.
In the table below:
 the quality of evidence for each option is rated as either A, strong, B, partial, C, limited or D, no evidence
 the likely impact on climate change and environment as categorised as A, high potential risk / opportunity, B, medium / manageable potential risk / opportunity, C, low / no risk / opportunity, or D, core funding to a multilateral organisation
Option Evidence rating Climate change and environment category (A, B,
17 UNEP Environmental Assessment of Gaza

1
2
3
Partial
Limited
Limited
C, D)
Medium opportunity
Medium opportunity
Medium opportunity
C. Appraisal of Options
The strategic case outlines the need not only to address food security at an individual/household level, but also to address the broader issues related to an economy that is – due to political obstacles and access restrictions - highly dependent on external assistance. We judge that Options 2 and 3 provide more scope for benefiting the local market, thereby easing some of the broader problems. Given the importance that the UK and EU (as described in EU Foreign Affairs Council Conclusions of December
2010) attach to improving the general situation in Gaza, we judge that Option 1 would be a missed opportunity. We have therefore chosen to discount Option 1 and focus the full economic appraisal on
Options 2 and 3. This judgement is also supported by a cost effectiveness argument (see section B), which shows that Option 2 is clearly more cost effective in improving food consumption than option 1.
A summary of the economic appraisal is given below:
Option 2: UVP
Incremental costs
The total budget is $24m. DFID’s budget contribution is $15.7m, 65% of the total.
Incremental benefits
There are two broad categories of benefits:
1. Immediate consumption benefits – the direct value of the vouchers, and the income effect that this produces on the household in freeing up resources to spend household income more efficiently, optimising consumption of food, health, education 18 .
2. Longer term ‘externalities’ or investment leverage benefits of the vouchers, in the form of: a. Nutritional gains: for adults improving quality of life , health and labour productivity. b. Nutritional gains for under 16s: giving rise to better cognitive development, performance at school, thus contributing to longer term productivity gains in the labour market. c. Local economy multiplier effects: increasing demand for local products and shops. d. Increased social cohesion: as economic hardship is reduced (not quantified) e. Avoided healthcare costs: as households are healthier (not quantified) f. Household investment gains: as households use the money to invest more in productive assets (not quantified )
Balance of costs and benefits
Table 1 below summarises the quantitative findings on costs and benefits for the central case scenario. This indicates a positive rate of return using conservative parameters, such as a relatively high discount rate of 8.9% to account for the higher catastrophe risk in the OPTs. The benefits to cost ratio (BCR) is 1.03 (for every $ invested, a return of $1.03 is expected in monetised benefits). This is better than a breakeven rate, which is considered respectable and likely to be an underestimate given that not all the benefits have been quantified (those excluded are household investment gains, avoided healthcare costs and the value of social cohesion). Using an alternative benefits valuation method in which benefits distributed to the extreme poor are valued more highly, the BCR rises to
1.15. Moreover, an emergency relief programme such as this is not normally expected to generate high returns, such humanitarian programmes are normally of a short term nature with other public interest objectives.
18 WFP, Evaluation of the vouchers programme in the West Bank. a study of Ecuadorian children, Paxton and Schady (2005)

Table 1: Summary of benefits with the central case scenario
Benefit component Discounted values ($m)
14.2 Actual value of immediate transfer of vouchers
Welfare returns
Labour market returns: over 16s
0.44
2.8
Labour market returns: under 16s
Risk adjustment
Macro multiplier effects
0.55
-10%
1.7
17.8 Total discounted benefits
Costs
Net Present Value
Benefits to Cost ratio
17.3
0.51
1.03
Sensitivity analysis indicates that the modelling appears to be robust to uncertainty.
In terms of the incidence of the benefits, the Proxy Means Testing approach appears to be successful in targeting the poorest and most food insecure households. However, further monitoring and evaluation will confirm this in due course.
In terms of other metrics of Value for Money, the UVP programme does well. On economy , the unit cost per beneficiary of the programme is $284, and the alpha ratio (proportion of total budget actually transferred to beneficiaries) is 83% which is good. In general, cash/voucher transfers are considered to be much more cost effective given the lower unit cost of transferring vouchers as opposed to actual food. Under efficiency measures, the WFP Mid-Term Review suggests that the UVP programme is more effective in terms of securing the right mix of nutrients for beneficiaries compared to general food distribution.
Option 3: Job Creation Programme
Incremental costs
The total budget is $246m. DFID ’s budget contribution is $23m, 10% of the total.
Incremental benefits
There are three broad categories of incremental benefits:
1. Short term direct benefits of increased income transfers to target beneficiaries to meet immediate needs enabling short term improvements in nutrition, health, education, and a reduction in negative coping strategies due to consumption smoothing;
2. Longer term direct benefits of a reduction in the extent and depth of poverty , and through skills development, better permanent employment opportunities and improvements in health and human capital accumulation.
3. Secondary benefits of infrastructure development and public services available to poor people.
Balance of costs and benefits
It has not been possible to directly value the full range of benefits from this programme due to difficulties in sourcing data on wider costs of the employment and rates of returns on the programmes and organisations that the employees are deployed in. However, in terms of cost effectiveness , the programme scores highly relative to international comparators. The World Bank has developed a measure of how much it costs to transfer $1 to the target beneficiary population as a means to compare job creation schemes. Using this measure, the total cost under the programme of transferring
US$1 in net wage benefit to a food insecure person is $1.62. This is lower than similar job creation programmes internationally e.g. Liberia ($1.98), India ($4.02), Ethiopia ($1.80), Bangladesh ($3.85),

and Niger ($2.23). This high level of cost effectiveness is due to the high labour intensity of activities, the effective geographical and household level targeting, and the low foregone income from participation given the high unemployment rate in Gaza.
In addition, although public works are relatively more expensive mechanisms to transfer income to poor households, they generate additional benefits for the targeted groups, including the positive impact of the infrastructures on the economy, the additional spending generated in the economy, and other social benefits like reduction in seasonal migration.
For more information including the evidence base underpinning the above judgements, Annex II provides a detailed economic appraisal.
D. Comparison of options
Food and cash transfer options are likely to offer similar benefits in terms of humanitarian impact, and are both likely to achieve intended impact and outcomes, although the evidence around cash transfers is less well established. Cash transfers are likely to represent a more sustainable solution, through stimulation to the local economy, and represent a more dignified and socially acceptable solution to beneficiaries, with a more cost effective impact on alleviating absolute and abject poverty and improved food consumption.
The choice between the food and cash options partly rests on setting VFM against impact and risk. It is clear that a cash transfer would represent significantly greater cost effectiveness than a food intervention, but GFD is more cost efficient when measured commodity to commodity for bulk staples. However the additional benefits of the JCP and UVP (dignity, improved education and health services, work experience for beneficiaries, access for women, dietary diversity, micronutrient and good animal protein consumption, and boost to local production and retail sectors) outweigh the basic commodity provision of the GFD.
For Option 2, analysis suggests that the UVP will produce a positive rate of return, with a Benefit to
Cost Ratio of 1.03. This is better than a breakeven rate, which is considered respectable and is likely to be an underestimate given that not all benefits have been quantified. Analysis also suggests that this programme will perform very well in terms of equity, efficiency and effectiveness.
For Option 3, cost effective analysis indicates that this programme is very cost effective relative to international counterparts.
The same weighting is used as for CSC above. The score ranges from 1-5, where 1 is low contribution and 5 is high contribution, based on the relative contribution to the success of the intervention.
We therefore advance Option 2 (Urban Voucher Programme) and Option 3 (Job Creation
Programme) as the preferred options.
Option 1: GFD Option 2: UVP Option 3: JCP
CSC Weight
(1-5)
5
Score
(1-5)
3
Weighted
Score
15
Score
4
Weighted
Score
20
Score Weighted
Score
4 20 Cost effectiveness of improving
HH food consumption
Cost effectiveness
5 3 15 4 20 4 20

of increasing
HH income
Secondary effects
Totals
4 1
7
4
34
3
11
Assessment of gender-sensitivity in Options 2 and 3
12
42
3
11
12
42
As a humanitarian intervention, the WFP food insecurity and nutrition programme targets the population according to vulnerability. Vulnerable groups in most contexts include the elderly, the disabled, minority groups, specific group at risk (such as young men of military age and young women and girls) and in many cases women in general. Because women are repeatedly identified as being amongst the most vulnerable groups in Gaza (and form a disproportionate component of the food insecure), well-targeted interventions will favour women as well as other vulnerable groups. The result is that because such a high proportion of the population of Gaza receive humanitarian assistance, while women remain vulnerable overall, women-headed households are rarely in the most vulnerable categories because of the assistance they usually receive. Therefore one would expect to see women
(if not necessarily all women-headed households) well represented in the target population of both interventions. This is reflected in the make-up of the UVP caseload, which is 55% female and the employment provided by JCP which aims for 35% of all jobs created to be undertaken by women.
A full assessment of WFP’s gender approach is provided in the Multilateral Aid Review (MAR). This shows that WFP has a well-developed approach, with which DFID is satisfied. A food security intervention, insofar as it addresses acute socio-economic needs, should contribute towards improving conditions for women. The Mid Term Review of the UVP identifies a wide range of benefits for both men and women, including areas of choice, flexibility and dignity, as well as addressing the relationships between men and women within the household itself.
The targeting criteria of the JCP ensures the inclusion of the most vulnerable groups including the elderly (people between the age of 60-65 are allowed to apply if there is no other eligible person in the family), youth, disabled persons, and women, including those abandoned by their husbands.
UNRWA's JCP has adopted a Gender Mainstreaming Strategy, with a special focus on empowering the most vulnerable women-headed households. UNRWA aims to provide 35% of the jobs for women.
Increased social and religious “conservatism” in Gaza is placing constraints on women’s freedom of movement, freedom to work and freedom of expression. UNRWA Gaza has consistently pushed back against these trends and gender issues are taken extremely seriously throughout the organisation.
E. Measures to be used or developed to assess value for money
An evaluation planned within the first six months of the programme will examine the assumptions underpinning the value for money analysis (see section D. Monitoring and evaluation for details).
The following methodologies were used in the cost benefit analysis to assess value for money:
For the UVP:

Welfare benefits have been valued using Disability Adjusted Life Years (DALYs) and economic labour market benefits have been valued using standard human capital wage equations. Local multiplier effects have been modelled using information from the UVP MTR.

Unit costs (cost/beneficiary and cost/commodity) are being developed for comparison between
WFP GFD programmes and UVP programmes in the Gaza Strip and West Bank – as part of the
UVP MTR.

The UVP MTR is also comparing GFD and UVP programmes against criteria for food security and nutritional elements of both programmes

For the JCP
Cost effectiveness has been measured using World Bank methodology based on net wage gains, targeting effectiveness and labour intensity.
Commercial Case
Direct procurement
A. Clearly state the procurement/commercial requirements for intervention
Intervention title : Improving Food Security levels for people in Gaza
Sub - project: UNRWA JCP
Procurement route: Indirect, third party
Sub - project: WFP UVP
Procurement route: Indirect, third party
B. How does the intervention design use competition to drive commercial advantage for
DFID?
N/A
C. How do we expect the market place will respond to this opportunity?
N/A
D. What are the key underlying cost drivers? How is value added and how will we measure and improve this?
N/A.
E. What is the intended Procurement Process to support contract award?
N/A
F. How will contract & supplier performance be managed through the life of the intervention?
N/A
Indirect procurement
A. Why is the proposed funding mechanism/form of arrangement the right one for this intervention, with this development partner?
The Memorandum of Understanding (MoU) is the only permissible option with UN agencies. It will set out the arrangement by which DFID funds will be spent and managed.
UNRWA is mandated by the UN to provide basic services and relief to Palestine refugees. In Gaza, it is the main provider of those services. The agency has a long experience in providing relief services in Gaza (63 years). We are closed engaged with UNRWA on reforms through our support to its
General Fund. Good progress was made in some areas, but a critical strategy for the Relief and

Social Services (RSS) department is still to be delivered in 2012. The delays in delivering the RSS strategy have meant that field offices are going ahead with poverty reduction plans without an overall agency strategy. We will review the RSS strategy when it’s delivered and request an assessment from UNRWA on how it will be used in the field, especially given the work that has already been done.
WFP was highlighted in the Multilateral Aid Review as the only agency capable of delivering emergency food assistance at scale in an environment that is difficult and often dangerous 19 . The voucher scheme is relatively new for WFP in the OPTs. Therefore, rigorous monitoring and evaluation is being implemented and support is provided by their headquarters. Our humanitarian adviser was consulted in the last MTR of the UVP and was satisfied that it covered important issues including cost effectiveness and relevance.
Cash transfers, whether via vouchers or through employment opportunities, are likely to benefit and stimulate the local economy. The findings of WFP’s MTR show that the UVP is making no measurable negative impact on the local market place in terms of inflationary pressures, and is boosting local production and retail capacity in the process. WFP estimate the programme can expand to 60,000 beneficiaries immediately without an adverse effect on the local economy.
UNRWA’s JCP has been running since 2002 and has had no measurable negative impact on the economy. It generates a positive impact on the economy by generating additional spend and improving infrastructure and service delivery.
B. Value for money through procurement
UNRWA will directly manage job applications and the replacement of workers. The Project Support
Cost (PSC) is at 11% which is within DFID’s limit for multilaterals (up to 13%). This means that a high percentage of our funds will be paid in cash for vulnerable people.
WFP’s Indirect Support Cost (or PSC) is capped by the WFP Executive Board at 7%. This includes activities at headquarters and country level that are not directly associated with the project. This may include headquarters support, audits, inspection and financial management.
Another cost is the Direct Support Costs (DSC) and delivery partners cost. DSC control is an area of concern to DFID across WFP operations. The rationale for arriving at DSC is not clear, and there are justifiable VFM concerns 20 . The DSC items include staff, duty travel, training, office rent and running costs, communication, vehicles, security, M&E, surveys. WFP justifies this comparatively high cost on the grounds of high overheads because of high insecurity levels and arduous access procedures imposed by the Israeli authorities. The logistics costs of the GFD are amongst the highest in the world and so by comparison the reliance of the UVP on local markets is relatively very cost effective.
WFP’s delivery partner is Oxfam GB. The selection of Oxfam is based on experience in the field and operational capacity. WFP allows a standard management charge of 5% to cover NGO HQ administrative costs. This is reasonable (DFID typically allows NGOs a 7% overhead).
19 Multilateral Aid Review: Assessment of Relevance, Effectiveness and Reform Scope for WFP – October 2010
20
Multilateral Aid Review : Assessment of Relevance, Effectiveness and Reform Scope for WFP – October 2010

Financial Case
A. How much it will cost
The UK will provide total contributions of up to £24.1 million (£9.6 million for WFP and £14.4 million for UNRWA). £100,000 will be set aside for external evaluation.
B. How it will be funded: capital/programme/admin
The programmes will be funded from DFID OPTs Programme Resources
C. How funds will be paid out
DFID and its partners will agree on a payment schedule. Funds will be paid out at the receipt of a satisfactory financial report and cash request.
It is DFID’s policy not to pay funds in advance of need. However, UNRWA and WFP will require funds in order to start contracting. Therefore, we will make six monthly advance payments based on forecasts. This is in line Finance & Corporate Performance Division advice.
D. How expenditure will be monitored, reported, and accounted for
DFID will receive six monthly financial reports from UNRWA and WFP. We will compare the financial reports with the approved budget and the agreed results. If we have concerns, we will discuss them with WFP at the appropriate level, and involve others within DFID (for example the divisional accountant) as appropriate.
The two agencies are subject to audits by the UN Board of Auditors. Should an audit report of the
Board of Auditors to the organisations’ Executive Board contain observations relevant to the contributions, such information will be made available to DFID.

Management Case
A. Oversight
Primary stakeholders in this interventions are UNRWA, WFP, Oxfam as the NGO implementing partner, the Palestinian Authority, the beneficiaries themselves and other donors
 Oxfam works in close operational dialogue with WFP on the intervention. Oxfam is a key source of feedback for the WFP on the perceptions of beneficiaries;
 The Food, Agriculture and Nutrition sub-clusters (part of the local humanitarian architecture) provide an important forum where stakeholders ( UN, NGOs and the Palestinian Authority ) can voice their opinions and represent their perspectives. The sub-clusters also fulfils an important function as a forum in which stakeholders can hold each other to account for performance.
 Informally and in the spirit of Good Humanitarian Donorship, donors compare funding approaches in Gaza, including approaches to new types of interventions such as cash transfers and vouchers.
 Beneficiary voice is represented through three main channels:
1) Informally through the implementing partner to WFP
2) More formally through Focus Group Discussions held by UNRWA and WFP
B. Management
These two grants will be managed from DFID Jerusalem by a Project Officer, with support provided by the Programme Manager. DFID Jerusalem will be assisted by 25% of the time of the MENAD
Humanitarian Advisor who will monitor the programmes, and carry out visits throughout their lifetime as access and security conditions best allow.
A linkage will be maintain ed with CHASE’s WFP/FAO focal point (based in Rome), to ensure that operational aspects relevant to DFID’s institutional relationship with WFP are transmitted to WFP and their Executive Board.
C. Conditionality
N/A
D. Monitoring and Evaluation
Lessons Learned
Both existing programmes were subject to DFID PCRs last financial year. The main recommendations were incorporated into the final design of the new programmes.
WFP Pilot Programme
The pilot WFP UVP programme has been closely monitored by WFP field teams and by its implementing partner – Oxfam. The most recent review (internal to WFP but undertaken by an independent consultant and with DFID humanitarian advisers input) input is the Mid Term Review
(MTR). This shows a highly effective programme, providing a more cost effective way of achieving the desired impact than other types of interventions such as GFD.
Main MTR Findings

The composition of the voucher improved food consumption with 88% of beneficiaries moving to a good consumption level and less than 1% remaining in the poor consumption group.

Six out of the nine food commodities purchased through vouchers were locally produced either in Gaza or in the West Bank, comprising 53% of the total amount transferred through

vouchers.

The MTR showed the value of the voucher covered 40% of the average household food expenditure compared with 28% coverage in the baseline survey.

The UVP beneficiaries were selected from the GFD caseload then subjected to a PMT formula evaluation. The targeting was not fully tested in this evaluation although focus groups found the selection process to be transparent and effective, with no type of discrimination towards social, geographical, ethnical or political belonging being raised.
The main recommendation to be followed up through this new programme is to improve the targeting to ensure resources are concentrated on the poorest. This is addressed in the evaluation section.
This intervention reflects well-established good practice in cash transfer programmes. The design of the Gaza Strip pilot project has been heavily influenced by the West Bank pilot, which was initiated earlier. The operational guidelines, monitoring and reporting forms as well as the criteria for beneficiaries and shop selection developed for the West Bank provided the initial template for the
Gaza Strip pilot. Refinements made during the West Bank project (such as decreasing the frequency of voucher distribution and the use of electronic vouchers) have been applied directly in the Gaza pilot.
UNRWA JCP
The UNRWA JCP has not been externally evaluated, but a review conducted by the European
Commission (EC) in May 2010 scored the programme between a to b (very good to good) for quality, effectiveness, efficiency and impact prospects.
UNRWA is currently in the process of establishing an evaluation framework. Consultations with stakeholders, including DFID, were held in May. This is a good step forward in improving UNRWA’s evaluation function. DFID will follow closely and engage with UNRWA on this issue through our institutional relation.
Monitoring Strategy
The budget for monitoring is built into the project costs as part of the Direct Support Cost element.
Consistent with DFID’s policy of adhering to Good Humanitarian Donorship principles, we will minimise any requests for extra reporting from UNRWA or WFP but will use regular monitoring reports as well as meetings to monitor the project against the targets set in the logical framework.
The main sources of information are shown in the diagram below:

Figure 1: Sources of monitoring information
Results Chain
Indicators Source
Reduced economic hardship and hunger amongst food insecure, abject and absolute poor refugees and non refugees in Gaza
Poverty Gap Index
Annual Palestine
Expenditure &
Consumption Survey,
Palestinian Central
Bureau of Statistics
(PCBS)
Food Insecurity in Gaza (disaggregated by refugees and non refugees)
Annual Socio-Economic and Food Security Survey,
Palestinian Central
Bureau of Statistics
(PCBS)
Reduced household poverty and improved food consumption amongst vulnerable
Gazans
Number of households with improved
Food Consumption Score (FCS) amongst non refugees
Percentage of participating shops which show at least 25% increase in sales one year after their inclusion in the programme
World Food Programme
(WFP) annual progress report
The percentage of abject and absolute poor benefiting from programme
UNRWA Annual progress report
OUTPUT 1 UNRWA JCP
Improved household income for refugees
OUTPUT 2 WFP UVP
Improved access to sufficient food for non refugees
OUTPUT 1 UNRWA JCP
OUTPUT 1 UNRWA
JCP
Number of work days created annually
Average number of work days per beneficiary
Number of JCP direct beneficiaries employed annually
OUTPUT 2 WFP UVP
Average number of food vouchers booklets (containing 4 vouchers each) distributed monthly
Total monetary value equivalent of commodities indirectly supplied to beneficiaries (US$)
UNRWA Annual progress report
OUTPUT 2 WFP UVP
WFP annual progress report
More detail is shown below on each of the information sources:
Annual Palestine Expenditure and Consumption Survey (PECS)
The Palestinian Central Bureau of Statistics (PCBS) conducts an Expenditure and Consumption
Survey every year which follows UN/ILO recommendations for Household Budget Surveys. PCBS is a well respected statistical organisation with high capacity. On the World Bank Statistical Capacity
Building Indicator they score 76 out of 100 compared with an average of 65 out of 100 for “all countries”. They follow international methodologies and have recently received ISO 90001

accreditation.
The latest PECS was conducted in 2010 with a sample size of 3,848. PCBS devoted substantial resources during the past several months in reviewing its original (1997) poverty measurement and trends methodology to meet international best practices and standards that primarily involve the following: (a) adjusting for spatial price differences(1) (b) calculating poverty headcount at individual rather than at the household level, and (c) ensuring that poverty lines over time reflect the same purchasing power, which necessitates that the poverty line is adjusted for price inflation using official
CPI. This resulted in new poverty estimates for 2010 which included the poverty gap index. The methodology was recommended and quality assured by the World Bank.
The PECS survey is analysed widely and made available to the public through a range of mechanisms including the annual publication “Palestine in Figures”.
Annual Palestine Expenditure and Consumption Survey (PECS)
The annual Socio-Economic and Food Security (SEFSEC) survey is conducted jointly by Palestinian
Central Bureau of Statistics (PCBS) and WFP. This provides more detailed information on food security, income and consumption / expenditure patterns and coping mechanisms. It complements the information from the PECS. The 2010 sample size was 6,871 households. The methodology followed international recommendations from WFP and FAO who also supported the 2010 survey. along with poverty gap index information from PCBS will be used for the remaining outcome and impact indicators.
World Food Programme (WFP)
WFP has well-established and proven protocols, universally used across their organisation. The
DRAFT MAR assessment of WFP’s survey capability was positive, noting that:
WFP invests significant resources in vulnerability mapping (VAM) which provides data relied on by the rest of the humanitarian community. It also has strong physical mapping and ground monitoring capability that allow it to identify and target populations in need.
An assessment by the Humanitarian Adviser showed WFP’s monitoring capacity in Gaza is above its wider capacity, as described in the MAR. We therefore assess the quality of WFP’s monitoring as good . This reflects the high data availability in Gaza generally and the high capacity of PCBS in data collection.
WFP has a well-established Management Information System (MIS) that they used to collect data from potential and actual beneficiaries and on implementation of their programme. Extensive data is collected on the beneficiary application forms which is then put onto the MIS system. The data from application forms is quality assured against other existing databases using the beneficiary’s identifier number. This ensures that beneficiaries fill in the data accurately.
UNRWA JCP
JCP is a flagship programme for UNRWA and ongoing methodology development for Gaza builds on the West Bank JCP. UNRWA demonstrates considerable capacity to provide flexible arrangements for monitoring, reporting and analysis if required. UNRWA have an MIS along with a Unified
Emergency Database (UED) and a JCP payroll system. These systems are used to produce their regular and ad hoc reporting.
Reporting Arrangements
WFP and UNRWA will each use their MIS systems to produce a six monthly report on progress. The six monthly reports give detailed information on progress against each output indicator. The annual report will additionally include a report on progress against the outcome indicators relevant to each programme.

The six monthly management meetings will discuss these reports and raise any issues of concern. In addition to six monthly reporting the use of comprehensive MIS systems means it is also possible to conduct real time appraisal and we will be continuing to explore this further with WFP and UNRWA as the programmes are implemented.
Further quality assurance of this data will be provided by quarterly field visits by a DFID humanitarian advisor to observe the WFP and UNRWA interventions, if security and access conditions allow.
During these visits the Humanitarian Adviser will discuss any issues of concern arising from the six monthly monitoring reports.
Overall there is fairly good quality data on both programmes although there are some specific areas which we will seek to strengthen during the period of this programme:

Joint reporting - DFID, other key donors (such as the EU and the US) and UNRWA are in the process of agreeing unified indicators to assess UNRWA’s performance. The framework includes indicators on each area including UNRWA’s response to emergency humanitarian situations. This will help to reduce the burden of reporting.

Real time appraisal – as each agency uses an MIS system there are opportunities to develop real time appraisal which we will take forward during the life of these programmes.

Evaluation and Impact – although each agency has conducted their own evaluations there is further work needed to measure the wider impact of these programmes. This is addressed under the Evaluation Strategy.
Targets
The WFP and JCP programmes are both humanitarian programmes and are based on the annual emergency appeals produced by each agency. Previous humanitarian programmes have been implemented as annual programmes but in response to the recent HERR recommendations this programme has been developed for four years. As such the milestones for the first year are based on the current emergency appeals. The future milestone and targets have been set based on previous performance of each agency and in discussion with each agency to be as realistic as possible.
However, the milestones will need to be reassessed annually once the emergency appeals have been produced as these will reflect the current situation. The milestones will be reviewed as part of each Annual Review process and any changes to the milestones will be agreed as part of the Annual
Review approval process.
Evaluation Strategy
Whilst the logframe indicators measure the anticipated results an important part of the evaluation is to collect wider data that give a more detailed and holistic impact assessment including any unintended consequences, both positive and negative, of the programmes.
Both programmes will be subject to an independent evaluation. DFID will seek to work with other donors wherever possible. A potential 3 years EC funding for JCP will include a budget for evaluation of the entire JCP. Should the EC funding not materialise, then DFID will agree with UNRWA to include an external evaluation in any future funding arrangement. For WFP there will also be an independent evaluation which we will seek to do with the other main donors. Comprehensive Terms of Reference will be written for the evaluations and discussed with each agency and a full evaluation plan will be written by the end of 2011.
The Terms of Reference will cover the main aspects of the evaluation and will set out the role of
Steering Committees for each evaluation and the involvement of each agency. The evaluations will meet the three criteria necessary for the evaluation to be funded by the programme, as set out below:

Independent – the evaluations will be independent. Steering Committees will be used to oversee the evaluations and to ensure independence.

Robust Methodology – the Steering Committees will also agree the methodology for the

evaluation. The MENAD Evaluation Adviser will play a key role in quality assuring the methodology.

Transparent findings – a clear process for agreeing the findings will be set out in the Terms of Reference and the Steering Committee will agree the final report and ensure the findings are published.
The evaluation framework builds on the ex ante Cost Benefits Analysis that has been undertaken within this Business Case and includes assessing the key assumptions underpinning the cost effectiveness analysis and benefits valuation. The framework also builds on the World Bank 21 paper on Public Works which provides a good framework for evaluation of these types of programmes. The draft evaluation framework is set out below:
Evaluation
Criterion
Evaluation Questions
Relevance

How relevant were the two programmes to the situation in Gaza?

Did the activities meet the needs of the people in the region?

How were stakeholders involved in the design and implementation of the programme?
WFP

Did the composition and value of the vouchers meet the needs of the beneficiaries?
Effectiveness
Efficiency

Were the desired outputs achieved?
WFP

How effective was the proxy means testing approach, were the right people included and excluded?

What were the beneficiaries experiences of receiving vouchers?
Were they on time?

What were the beneficiaries experiences in terms of spending the vouchers? Were they able to find shops nearby?
JCP

What were the key characteristics of beneficiaries: gender, age, precious economic activity, education level, number of children?

Did beneficiaries receive payments on time?

How effective was the JCP targeting of beneficiaries?

What were the beneficiaries experience with the payments?

How much did the overall programmes cost?

What has been the overall cost effectiveness of the programmes, including transaction costs?

In particular, assess the assumptions in Section C of the Appraisal case, on the other input costs external to the programme which contribute to the benefits? (Thus a better estimate of the labour intensity figure can be made.)
Impact WFP

What was the impact on beneficiaries to help them to smooth their consumption?
21 Ninno et al 2009

Sustainability
Coverage
Coherence
Co-ordination

What was the impact on reduce the level of poverty and the poverty gap index?

What were the positive and negative changes produced by programmes, directly or indirectly, intended or unintended?
JCP

What was the impact on businesses survival and on longer term employment within the private sector, what impact can be measured?
How can this impact be maximised? What needs to change to do so?

What was the impact in terms of providing skills development to unemployed or women?

What was the impact on infrastructure and services provided by the programme and the impact on the life of the communities? How many people benefitted from the new infrastructure and services?
How did the poor benefit from these?

What was the quality of the work done and the use by community, characteristics of workers, including what was the location of projects?

What were the positive and negative changes produced by programmes, directly or indirectly, intended or unintended?

What steps have been taken to ensure the programmes will be continued?
WFP

What steps are MOSA taking to incorporate these beneficiaries into their own mechanisms?
JCP

How many programme beneficiaries transitioned from JCP to formal sector employment?

What has been the coverage of the programmes?

Were there any systematic inclusions of people who should not have been targeted?

Was there any systematic exclusion of certain groups of people, eg. poor households living with extended families; the “new poor” or foreigners with no passports?

How well were other activities taken into account in these programmes and their implementation?

Were beneficiaries receiving any other forms of assistance?

How well have the programme been aligned with the countries own priorities?

How well have the programmes been aligned with the strategies of other key partners?
E. Risk Assessment
The OPTs country level risks are included in the Operational Plan (OP) and are monitored on quarterly basis. Risks that are included in the OP and are applicable to this programme at a generic level are not included here.

The overall risk of the GSPFSP is rated as medium risk , with no individual killer risks to implementation. Risks and their mitigation are discussed below.
Probability Impact Mitigation measures
Risks applicable to the UVP and JCP
Political interference Medium by Hamas
Financial benefit accruing to Hamas
Medium WFP: Hamas continues to put pressure on iNGOs and local NGOs. In Gaza, WFP is relying on Oxfam which is well-established in
Gaza, and has a good track record of managing to safeguard its work from political interference by Hamas.
UNRWA implements directly with beneficiaries through its own employees. The agency has pushed back robustly when Hamas has attempted to exert influence over areas of
UNRWA’s work.
We rated the impact as “medium” because although it i s outwith Hamas’s ability to interfere with the programme on a scale which would directly affect its ability to deliver for the majority of beneficiaries, some forms of potential interference could provoke donors into withholding support.
High WFP: We take extensive precautions to ensure that Hamas does not derive any financial benefit from UK aid to Gaza – including through avoiding purchase of materials which we believe come through the tunnels. We have
Low done the same for this programme:


The paragraph setting out EU and UK legislation which prohibits direct or indirect financial support to Hamas, and commits WFP to take steps to avoid this, will be in included in our MOU with
WFP.

Generally, UVP commodities are not amongst those that are imported through the tunnels;
The opening up of crossings to a wider range of commercial goods has made tunnel-imported goods uncompetitive;

A number of the 23 shops engaged in the scheme are registered with the facto authorities for VAT. However, de
VAT on these shops has been set at a flat rate. Therefore volumes of sales related to the UVP and our contribution is not being taxed.
UNRWA: The JCP is not procuring material.
The paragraph setting out EU and UK legislation which prohibits direct or indirect financial support to Hamas, and commits
UNRWA to take steps to avoid this, will be in

included in our MOU with UNRWA.
UVP specific risks:
Market volatility makes some commodities unavailable
Deterioration of the access regime:
Decline of the amount of imports makes some commodities unavailable
Voucher generic risk :
Price hiking by shop owners decreases purchasing power of beneficiaries
Voucher Generic risk:
Inflation depresses real value of vouchers
Medium
Low
Medium
Low
Low The Gaza UVP food basket comprises an expanded range of nine commodities to allow beneficiaries to adjust their shopping list to what is available.
Medium The UVP food basket comprises an expanded range of commodities to allow beneficiaries to adjust their shopping list to what is available in the market. Should the situation change significantly we will discuss options with WFP including transferring our funds to the GFD.
Low
Low
To become part of the scheme, shopkeepers sign an agreement with WFP’s implementing partners agreeing to maintain prices within an agreed range. There were unconfirmed reports of price hiking within the West Bank UVP, though fluctuations appear to be within the agreed range.
A readjustment of the voucher value in the wake of Operation Cast Lead took into account price rises at the inception of the Gaza UVP.
Since then, Gaza has shown a comparatively stable inflationary environment (though prices are higher than in the West Bank). WFP will reassess voucher value at MTR stage and make adjustments if necessary
Voucher Generic risk
Security risks for the implementing organization in transporting cash to participating shops
Voucher generic risk :
Misappropriation, seizure or ‘loss’ of vouchers
Low
Low
Low
Low
Gaza remains a comparatively secure environment, with the de facto authorities exerting considerable control and repressing criminal activity. On the part of the authorities themselves, they have no history of this kind of interference.
Evidence from other schemes indicates that the risk of misappropriation is no higher for vouchers than it is for commodities. Even if misappropriated, vouchers are only redeemable by a named beneficiary. A very comprehensive monitoring regime ensures that the opportunities for corrupt practice are minimised.
Voucher generic risk: Vouchers will be monetised and cash will be used for anti-social purposes;
Low Low Evidence from the West Bank indicates an extremely low rate of monetisation of vouchers compared to commodity distribution
F. Results and Benefits Management
As stated in the Appraisal case, the literature does not throw light on any detailed evaluations of programmes of this type. It would be beneficial to use the evaluation process to do so for this

programme.
In terms of identifying and valuing the skills development and employment bridging opportunities that this programme provides, it would be necessary to have detailed consultation with UNRWA to collect the data, asking them questions on their objectives regarding skills transfer, sustainability, any evidence of participants being better placed to find jobs following on from the programme. Surveys and randomised control tests 22 (RCTs) would also prove to be useful in this regard to collect data more rigorously. These would need to take place once the programme has been in place for a while.
These tests could be well positioned to shed light on longer term employment prospects. In addition to this such tests would be useful in understanding the impact of the programme on changes in household wealth, access to health, nutrition status, enrolment rates of schools and other such outcome indicators, demographics of participants as well as the output indicators as in the logframe.
Focus groups would also bolster the information and conclusions drawn from RCTs.
In terms of identifying and valuing secondary benefits, this would involve understanding the returns of the main sectors that the JCP participants work in – namely education and health. The main
UNRWA programmes within these sectors that contain the JCP participants would have to be identified. DFID would either have to work with UNRWA to understand and calculate the returns of these programmes (net present values, cost effectiveness), or use any existing appraisals or evaluations that they already have for those main programmes. Then an estimate would have to made as to the % that the JCP contributes to those programmes, and the returns would be pro-rated accordingly to estimate JCP secondary benefits. This is a fairly lengthy task, and early consultation with UNRWA would facilitate such a process.
To summarise, the World Bank’s review of evaluations of programmes of this type indicate the following characteristics that must be visited during M &E to ensure that the programmes are efficient and effective:
Firstly, it is important to ensure that the programme a) has clear objectives, following examples of patterns present in the regions with similar level of income; b) can result in the creation of valuable public goods; and c) has predictability of funding both for meeting the poverty alleviation objective and for responding to emergencies
Secondly, this review has shown that the success of the programme depends a great deal on careful design and incorporation of all the key design features, such as:
(a) setting the design parameters (such as the level of the wage rate and labor intensity) right, (b) establishing the implementation structure (paying attention to decentralization aspects as needed, depending upon country circumstances.
Thirdly, another important conclusion of this survey is that at every stage from decisions regarding the objective of the program to its design (especially wage setting), to coverage, scope and duration of the program and implementation modalities, countries have to confront a variety of choices and trade offs. Depending on the set of choices made by a country, the outcomes and impacts vary accordingly. These choices and trade offs have to be kept in mind while assessing the impacts and cost-effectiveness calculations of Paid Work program.
22 Surveys where two separate areas are surveyed – a control group that does not have the programme in it, and the area which is covered by the programme. The difference in the data and trends seen can be attributed to the programme.