REGIONAL COMMITTEE Provisional Agenda item 7.4 Seventy-sixth Session SEA/RC76/7 New Delhi, India 30 October–2 November 2023 19 September 2023 Sustainable Financing This Working Paper provides an update on progress over the issues emanating from the Working Group on Sustainable Financing. The Working Group was established by decision EB148(12) to enable WHO to have the robust structures and capacities needed to fulfil its core functions as defined in the Constitution: The Working group met seven times and presented a report with recommendations which were adopted by te world Health Assembly in 2022. These recommendations included, among other, an increase of assessed contributions to contribute to financial sustainability of WHO and with its aspiration to reach a level of 50% of the 2022–2023 base budget1 by the biennium 2030–2031, while aiming to achieve this by the biennium 2028–2029, with a targeted first increase of 20%, to explore the feasibility of a replenishment mechanism to broaden further the financing base and establish an agile Member States task group on strengthening WHO budgetary, programmatic and financing governance to analyse challenges in governance for transparency, efficiency, accountability and compliance, and come up with recommendations. The Seventy-sixth World Health Assembly Adopted the Programme Budget 2024–2025 with the inclusion of a 20% increase in assessed contributions. This constitutes the first step of the agreed gradual increase in assessed contributions to reach a level of sustainable financing of 50% of the 2022–2023 Base Budget by the biennium 2030–2031, while aiming to achieve this by the biennium 2028–2029. Based on the Director-General’s report on the Feasibility of a replenishment mechanism, including options for consideration, the World Health Assembly requested the Director-General to: (i) proceed with the planning of a WHO Investment Round for the last quarter of 2024, (ii) draft the Fourteenth General Programme of Work (GPW14) effective from 2025, (iii) develop a target funding envelope for the WHO investment round, and (iv) include an evaluation element in the planning of the WHO Investment Round prior to consideration of additional investment rounds. These four processes are underway and will be achieved in consultation with Member States. The World Health Assembly also discussed the progress of the budgetary, programmatic and financing governance reforms. The eleven recommendations included in the report of the Agile Member States Task Group (AMSTG) were adopted around the areas of Transparency, Accountability, Compliance and Efficiency. In addition, the report on the Secretariat Implementation Plan on Reform was adopted. The actions contained in the Implementation Plan are grouped into seven thematic categories arranged in alphabetical order, as follows: (i) accountability function and systems; (ii) country-level impact; (iii) financing; (iv) governance; (v) human resources; (vi) Budget; and (vii) resource mobilization. This Working Paper was presented to the Sixteenth Meeting of the Subcommittee on Policy and Programme Development and Management for its review and recommendations. The SPPDM reviewed the paper and made the following recommendations. Actions by Member States (1) Engage in future discussions on the subsequent gradual increase of Assessed Contributions. (2) Actively engage in consultations on the Investment Round and implementation of the reforms as laid out by the AMSTG. (3) Provide inputs to the Secretariat Plan for the WHO Investment Round. Actions by WHO (1) Implement the actions set out in the AMSTG report and the Secretariat’s Implementation Plan on reform. (2) Ensure communication with Member States in the implementation of reforms and development of the Plan for the WHO Investment Round. (3) Incorporate the inputs for the Seventy-sixth Session of the South-East Asia Regional Committee into the Secretariat Plan for the WHO Investment Round. The recommendations of the SPPDM Meeting are being presented to the Seventy-sixth Session of the WHO Regional Committee for its review and consideration. SEA/RC76/7 Introduction 1. The WHO Executive Board established the Sustainable Financing Working Group aiming to find a sustainable financial model for the Organization. After prolonged deliberations, the Working Group agreed to (i) boost sustainable, predictable and fully, or at least thematic, flexible funding; (ii) a gradual increase in Member States’ assessed contributions; (iii) cover WHO’s core Programme Budget with fully flexible funds; (iv) strengthen governance, transparency, accountability and compliance; (v) explore the feasibility of a replenishment mechanism for WHO; and (vi) establish an agile Member States Task Group to build on budgetary oversight and accountability initiatives. These recommendations were submitted to and approved by the World Health Assembly in May 2022. 2. Member States agreed to a gradual increase in assessed contributions to contribute to financial sustainability of WHO with an aspiration to reach a level of 50% of the 2022–2023 Base Budget by the biennium 2030–2031, while aiming to achieve this by the biennium 2028– 2029, with an initial first increase of 20% of assessed contributions for the biennium 2022–2023, as part of the Proposed Programme Budget 2024–2025. 3. The Secretariat was requested to explore the feasibility of a replenishment mechanism to broaden further the financing base, in consultation with Member States and taking into consideration the Framework of Engagement with non-State Actors (FENSA). 4. The Agile Member States Task Group on Strengthening WHO’s Budgetary, Programmatic and Financing Governance was established to analyse challenges in governance to transparency, efficiency, accountability and compliance, and come up with recommendations. Current situation, response and challenges 5. Increase in assessed contributions: The Programme Budget 2024–2025 was adopted by the World Health Assembly (A76/4 Add.2) including a 20% increase in assessed contributions. The initial 20% increase in assessed contributions was agreed by Member States as a first step to eventually reach a level of increase of 50% of the 2022–2023 Base Budget by the biennium 2030–2031 or earlier. Member States agreed on a gradual increase adjusted to their financial realities, particularly in the aftermath of the COVID-19 pandemic. Subsequent discussions among Member States will be required to adopt the next increase to achieve the agreed targets. 6. WHO Investment Round: Based on the expressed wish of Member States to differentiate the WHO replenishment mechanism from those of other major heath actors, the Secretariat suggested the term “WHO Investment Round”, which has been adopted in documentations. Following the Director-General’s report on the Feasibility of a replenishment mechanism, including options for consideration, the World Health Assembly requested the Director-General: (i) to proceed with the planning of a WHO Investment Round for the last quarter of 2024, (ii) to draft a GPW14 effective from 2025 with (iii) a target funding envelope for the WHO Investment Round, and (iv) to include an evaluation element in the planning of the WHO Investment Round prior to consideration of additional investment rounds. SEA/RC76/7 Page 2 7. Vide Decision WHA76(19), the Secretariat is requested to provide regular updates to and receive advice from Member States and present a report with a full plan that includes modalities and anticipated costs and efficiencies (including staffing adjustments) for undertaking this exercise, for consideration and approval of concrete next steps by the Executive Board at its 154th Session, through the Programme Budget and Administration Committee at its Thirty-ninth Meeting and to submit an updated report to the Seventy-seventh World Health Assembly in May 2024, through the Fortieth Meeting of the Programme, Budget and Administration Committee. 8. The Secretariat is preparing a full plan for the Investment Round for consideration by the Executive Board in January 2024. This will be done in consultation with Member States, including through regional consultations and multiple dedicated virtual consultations in the period prior to the 154th Session of the Executive Board. 9. The first WHO Investment Round will be fully in line with the principles established by the Working Group on Sustainable Financing. It will be voluntary in nature and will focus to improve the sustainability of the voluntary funding to enable WHO to maintain the robust structures and capacities needed to fulfil its core functions of providing effective and efficient support to its Member States. 10. Work is currently underway to prepare for a draft plan which includes: • proposed modalities for the Investment Round; • development of the Fourteenth General Programme of Work, with a target financial envelope based on the draft Budget for the 2025–2028 period; • an analysis of cost and efficiencies, including benchmarking with other international organizations; • proposed evaluation element of the first WHO Investment Round; and • preparation for an investment case to support the economic and programmatic case of the General Programme of Work scheduled to be launched in the spring of 2024. 11. The AMSTG reforms: The reforms are covered in two complementary reports: (i) The report from the Agile Member States Task Group (AMSTG) on Strengthening WHO's Budgetary, Programmatic and Financing Governance, and (ii) the Secretariat Implementation Plan for Reform. 12. The Seventy-sixth World Health Assembly adopted in May 2023 the eleven recommendations from the report of the AMSTG around the areas of transparency, accountability, compliance and efficiency. SEA/RC76/7 Page 3 13. Member States presented a set of recommendations, identifying the responsibilities of Member States and the Secretariat in the implementation of the recommendations, structured along the following categories as follows: Transparency • Establish a consistent and transparent approach to the establishment of new initiatives and programmes, including the related costing and future funding thereof and consultation with Member States. • Improve the process of costing resolutions and decisions, including by holding discussions with Member States during consultations, addressing the potential financing implications and adding clear sunsetting clauses. • Strengthen the role of the Executive Board and its Programme, Budget and Administration Committee in their budgetary oversight to better engage and provide oversight of future Programme Budgets; and improve the way of working in the governing bodies, including better support to Member States in reaching decisions. • Based on the principles of results-based management, improve the WHO Results Framework and the monitoring of its performance, including joint monitoring with Member States, strengthen international agility and capacity for performance monitoring and delivery of results across the three levels of the Organization. • Improve transparency in the creation and filling of senior-level positions at WHO, with periodic reporting to Member States. Accountability • Improve the information available to Member States on the WHO organigram, including the contact details of technical units. • Reform the WHO ethics function. • Reform the WHO Office of Internal Oversight Services. Compliance • Improve the timeliness of delivery of governing bodies documents and information to Member States. Efficiency • Revise the cost recovery scheme for voluntary contributions. • Develop guidelines, principles and thresholds on earmarking of voluntary contributions, with a view to increasing their flexibility and establishing deadlines for achieving the thresholds. 14. Details of the AMSTG recommendations can be found in the AMSTG report: https://apps.who.int/gb/amstg/pdf_files/AMSTG3/EB_AMSTG3_4-en.pdf. SEA/RC76/7 Page 4 15. The Secretariat’s Implementation Plan on Reform was mandated by Decision WHA75(8) (2022) on sustainable financing. In May 2023, the World Health Assembly adopted the Secretariat report on reform. The actions contained in the implementation plan are grouped in seven thematic categories arranged in alphabetical order, as follows: (i) accountability function and systems; (ii) country-level impact; (iii) financing; (iv) governance; (v) human resources; (vi) Programme Budget; and (vii) resource mobilization. 16. The Implementation Plan contains 96 actions across the seven thematic categories. Between January 2023 and March 2023, at the time of the Secretariat’s Report to the World Health Assembly, 42 actions had already been implemented. 17. Pursuant to the changes requested by the Programme, Budget and Administration Committee at its Thirty-seventh Meeting, the Secretariat Plan for Reform presented to the Seventy-sixth World Health Assembly included the following updates: • The Secretariat has published its new three-year Strategy on preventing and responding to sexual misconduct, 2023–2025, and will ensure alignment, coherence and consistency between the Implementation Plan and the three-year PRSEAH Strategy and its new monitoring and evaluation framework. • Regarding the request to add timelines for relevant actions in the Implementation Plan that go beyond 2025, the Secretariat will continuously adjust timelines for respective actions, and will identify those that will not be achieved by end 2025 in due course. • The Secretariat will engage Member States to prioritize the actions contained in the Implementation Plan. • To enhance country-level impact and strengthen country offices, the Action for Results Group comprising WHO Country Representatives developed a plan of action detailing concrete steps for implementation, with clear timeframes, roles and responsibilities and monitoring indicators. • With regard to the monitoring of the Implementation Plan, the Secretariat is committed to providing visible information on progress and to demonstrating the agility of and momentum behind its plan. A tracking platform has been established to visualize the status of implementation of the reforms. The platform is available to Member States on the “Member State” portal of WHO’s website. 18. The Secretariat Implementation Plan for Reform can be accessed at https://apps.who.int/gb/ebwha/pdf_files/EB152/B152_34-en.pdf. SEA/RC76/7 Page 5 The way forward 19. To implement of the decisions of the World Health Assembly on Sustainable Financing, and move forward the reforms adopted as a result of the discussions in the Agile Member States Task Group, the SPPDM Meeting recommended the following actions to be taken by Member States and WHO: Actions by Member States (1) Engage in future discussions on the subsequent gradual increase of Assessed Contributions. (2) Actively engage in consultations on the Investment Round and implementation of the reforms as laid out by the AMSTG. (3) Provide inputs to the Secretariat Plan for the WHO Investment Round. Actions by WHO (1) Implement the actions set out in the AMSTG report and the Secretariat’s Implementation Plan on reform. (2) Ensure communication with Member States in the implementation of reforms and development of the Plan for the WHO Investment Round. (3) Incorporate the inputs for the Seventy-sixth Session of the South-East Asia Regional Committee into the Secretariat Plan for the WHO Investment Round. Conclusions 20. The World Health Assembly has taken effective measures to ensure a sustainable financing model for WHO. 21. The initial 20% increase to the assessed contributions has been included in the Programme Budget 2024–2025 adopted by the Seventy-sixth World Health Assembly. This is the core measure to ensure a sustainable financing model for WHO. Additional increases need to be agreed upon and adopted by the World Health Assembly. 22. To complement the increase in assessed contributions, and as mandated by the Health Assembly, the Secretariat will engage in discussions with Member States to define the main parameters of the WHO Investment Round. Member States will be invited to consultations during September 2023. Based on the result of these consultations, the Secretariat will seek inputs from the Regional Committees. 23. The Reform Agenda is progressing. Member States and the Secretariat will continue working together to implement the agreed reforms. The Secretariat will engage with Member States in the implementation and monitoring of the reforms. Member States can track the progress of implementation through the dashboards available at the Governing Bodies website [https://apps.who.int/gb/gov/].
REGIONAL COMMITTEE Provisional Agenda item 7.4 Seventy-sixth Session SEA/RC76/7 Rev.1 New Delhi, India 30 October–2 November 2023 27 October 2023 Sustainable financing This Working Paper provides an update on progress over the issues emanating from the Working Group on Sustainable Financing. The Working Group was established by Decision EB148(12) to enable WHO to have the robust structures and capacities needed to fulfil its core functions as defined in the Constitution: The World Health Assembly (2022) adopted the recommendations of the Working Group including, among others, (i) an increase of assessed contributions to contribute to financial sustainability of WHO with its aspiration to reach a level of 50% of the 2022–2023 Base Budget by the biennium 2030–2031, while aiming to achieve this by the biennium 2028–2029, with a targeted first increase of 20%, (ii) to explore the feasibility of a replenishment mechanism to broaden further the financing base and (iii) to establish an Agile Member States Task Group (AMSTG) on strengthening WHO budgetary, programmatic and financing governance to analyse challenges in governance for transparency, efficiency, accountability and compliance, and come up with recommendations. The Seventy-sixth World Health Assembly adopted the Programme Budget 2024–2025 with the inclusion of a 20% increase in assessed contributions. This constitutes the first step of the agreed gradual increase in assessed contributions to reach a level of sustainable financing of 50% of the 2022–2023 Base Budget. The World Health Assembly discussed the progress and adopted the recommendations of the Agile Member States Task Group on budgetary, programmatic and financing governance reforms around the areas of transparency, accountability, compliance and efficiency. In addition, the report on the Secretariat Implementation Plan on Reform was adopted. The Health Assembly also requested the Director-General to proceed with the planning of a WHO Investment Round, with a full plan that includes modalities and anticipated costs and efficiencies, and to develop both an evaluation element and a target envelope for the Investment Round, the latter based on the Base Segment of the Budget required to deliver GPW14. Following this decision, the Secretariat has shared a White Paper for consultation with Member States on the Investment Round, outlining key elements of the plan for the Investment Round as a basis for Member States to provide inputs and comments. The White Paper describes the purpose, vision for success, proposed modalities, cost efficiencies and effectiveness, funding envelope, and the proposed metrics for evaluation of the Investment Round, and outlines the next steps in the process. The Regional Committee offers an opportunity for Member States to discuss and provide individual or collective inputs and comments to the White Paper and to the overall plan for te implementation of the Investment round. This agenda item was presented to the SPPDM Meeting. The SPPDM Meeting discussed it and recommended the following actions: Actions by Member States (1) Engage in future discussions on the subsequent gradual increase of Assessed Contributions. (2) Actively engage in consultations on the Investment Round and implementation of the reforms as laid out by the AMSTG. (3) Provide inputs to the Secretariat Plan for the WHO Investment Round. Actions by WHO (1) Implement the actions set out in the AMSTG report and the Secretariat’s Implementation Plan on reform. (2) Ensure communication with Member States in the implementation of reforms and development of the Plan for the WHO Investment Round. (3) Incorporate the inputs for the Seventy-sixth Session of the South-East Asia Regional Committee into the Secretariat Plan for the WHO Investment Round. The Working Paper and the SPPDM Meeting’s recommendations are presented to the Regional Committee for its review and consideration. SEA/RC76/7 Rev.1 Introduction 1. The WHO Executive Board established the Sustainable Financing Working Group aiming to find a sustainable financial model for the Organization. After prolonged deliberations, the Working Group agreed to (i) boost sustainable, predictable and fully, or at least thematic, flexible funding; (ii) a gradual increase in Member States’ assessed contributions; (iii) cover WHO’s core Programme Budget with fully flexible funds; (iv) strengthen governance, transparency, accountability and compliance; (v) explore the feasibility of a replenishment mechanism for WHO; and (vi) establish an Agile Member States Task Group to build on budgetary oversight and accountability initiatives. These recommendations were submitted to and approved by the World Health Assembly in May 2022. 2. Member States agreed to a gradual increase in assessed contributions to contribute to financial sustainability of WHO with an aspiration to reach a level of 50% of the 2022–2023 Base Budget by the biennium 2030–2031, while aiming to achieve this by the biennium 2028– 2029, with an initial first increase of 20% in assessed contributions for the biennium 2022–2023, as part of the Proposed Programme Budget 2024–2025. 3. The Secretariat was requested to explore the feasibility of a replenishment mechanism to broaden further the financing base, in consultation with Member States, and taking into consideration the Framework of Engagement with non-State Actors (FENSA). 4. The Agile Member States Task Group on Strengthening WHO’s Budgetary, Programmatic and Financing Governance was established to analyse challenges in governance to transparency, efficiency, accountability and compliance, and come up with recommendations. Current situation, response and challenges 5. Increase in assessed contributions: The Programme Budget 2024–2025 was adopted by the World Health Assembly (A76/4 Add.2), including a 20% increase in assessed contributions. The initial 20% increase in assessed contributions was agreed by Member States as a first step to eventually reach a level of increase of 50% of the 2022–2023 Base Budget by the biennium 2030–2031 or earlier. Member States agreed on a gradual increase adjusted to their financial realities, particularly in the aftermath of the COVID-19 pandemic. Subsequent discussions among Member States will be required to adopt the next increase to achieve the agreed targets. 6. WHO Investment Round: Based on the expressed wish of Member States to differentiate the WHO replenishment mechanism from those of other major heath actors, the Secretariat suggested the term “WHO Investment Round”, which has been adopted in documentations. Following the Director-General’s report on the Feasibility of a replenishment mechanism, including options for consideration, the World Health Assembly requested the Director-General: (i) to proceed with the planning of a WHO Investment Round for the last quarter of 2024, (ii) to draft a GPW14 effective from 2025 with (iii) a target funding envelope for the WHO Investment Round, and (iv) to include an evaluation element in the planning of the WHO Investment Round prior to consideration of additional investment rounds. SEA/RC76/7 Rev.1 Page 2 7. Vide Decision WHA76(19), the Secretariat is requested to provide regular updates to and receive advice from Member States and present a report with a full plan for the Investment Round that includes modalities and anticipated costs and efficiencies (including staffing adjustments) for undertaking this exercise, for consideration and approval of concrete next steps by the Executive Board at its 154th Session, through the Programme, Budget and Administration Committee (PBAC) at its Thirty-ninth Meeting, and to submit an updated report to the Seventy- seventh World Health Assembly in May 2024, through the Fortieth Meeting of the Programme, Budget and Administration Committee. 8. The Secretariat has shared a White Paper for consultation with Member States on the Investment Round, outlining key elements of the plan for the Investment Round as a basis for Member States to provide input and comments. 9. The White Paper describes the following elements of the Investment Round: ➢ Purpose and Vision for Success: A key component of the Secretariat’s efforts to ensure full financing of the base budget of GPW14, it seeks to secure predictable funding as the foundation for a stable workforce, to reduce pockets of poverty, and enable WHO to fulfil its core functions in support of its Member States to implement GPW14. ➢ Proposed modalities: It will be member State driven, underpinned by the Member- State developed GPW14, fully voluntary and will include every pledge to the base budget ➢ The Investment Round builds on the Secretariat’s strong relations with sovereign donors and the efforts to expand collaboration with other non-State partners, fully in line with FENSA and with support by WHO Foundation. ➢ At least six co-hosts, one per region, would help champion the Investment Round and advocate for sustainable financing for WHO. ➢ The investment case, currently under development, will present a compelling, evidence-based rationale for investing in WHO. ➢ Cost, efficiencies and effectiveness will the result of a lean mechanism that reduces transaction costs while enabling a more efficient management of financial and human resources. ➢ The funding envelope will be determined to support the still estimated funding needs for the GPW14 Base Budget of US$ 7.1 billion (net of PSC), deducting assessed contributions (assumptions as per decision WHA75.8), and enabling functions. ➢ A set of proposed metrics for evaluation of the Investment Round will support Member States in making informed decisions about future rounds. ➢ A dynamic risk management approach will be used to assessing risks, and applying the appropriate mitigation measures. 10. The AMSTG reforms: The reforms are covered in two complementary reports: (i) The report from the Agile Member States Task Group (AMSTG) on Strengthening WHO's Budgetary, Programmatic and Financing Governance, and (ii) the Secretariat Implementation Plan for Reform. SEA/RC76/7 Rev.1 Page 3 11. The Seventy-sixth World Health Assembly adopted in May 2023 the eleven recommendations from the report of the AMSTG around the areas of transparency, accountability, compliance and efficiency. 12. Member States presented a set of recommendations, identifying the responsibilities of Member States and the Secretariat in the implementation of the recommendations, structured along the following categories as follows: Transparency • Establish a consistent and transparent approach to the establishment of new initiatives and programmes, i • Improve the process of costing resolutions and decisions, • Strengthen the role of the Executive Board and its Programme, Budget and Administration Committee in their budgetary oversight, • Improve the WHO Results Framework and the monitoring of its performance, • Improve transparency in the creation and filling of senior-level positions at WHO, with periodic reporting to Member States. Accountability • Improve the information available to Member States on the WHO organigram, including the contact details of technical units. • Reform the WHO ethics function. • Reform the WHO Office of Internal Oversight Services. Compliance • Improve the timeliness of delivery of governing bodies documents and information to Member States. Efficiency • Revise the cost recovery scheme for voluntary contributions. • Develop guidelines, principles and thresholds on earmarking of voluntary contributions, with a view to increasing their flexibility and establishing deadlines for achieving the thresholds. 13. Details of the AMSTG recommendations can be found in the AMSTG report: https://apps.who.int/gb/amstg/pdf_files/AMSTG3/EB_AMSTG3_4-en.pdf. 14. The Secretariat’s Implementation Plan on Reform was mandated by Decision WHA75(8) (2022) on sustainable financing. In May 2023, the World Health Assembly adopted the Secretariat report on reform. The actions contained in the implementation plan are grouped in seven thematic categories arranged in alphabetical order, as follows: (i) accountability function and systems; (ii) country-level impact; (iii) financing; (iv) governance; (v) human resources; (vi) Programme Budget; and (vii) resource mobilization. 15. The Implementation Plan contains 96 actions across the seven thematic categories. Between January 2023 and March 2023, at the time of the Secretariat’s Report to the World Health Assembly, 42 actions had already been implemented. SEA/RC76/7 Rev.1 Page 4 16. Pursuant to the changes requested by the Programme, Budget and Administration Committee at its Thirty-seventh Meeting, the Secretariat Plan for Reform presented to the Seventy-sixth World Health Assembly included the following updates: ➢ The Secretariat has published its new three-year Strategy on preventing and responding to sexual misconduct, 2023–2025, and will ensure alignment, coherence and consistency between the Implementation Plan and the three-year PRSEAH Strategy and its new monitoring and evaluation framework. ➢ Regarding the request to add timelines for relevant actions in the Implementation Plan that go beyond 2025, the Secretariat will continuously adjust timelines for respective actions, and will identify those that will not be achieved by end 2025 in due course. ➢ The Secretariat will engage Member States to prioritize the actions contained in the Implementation Plan. ➢ To enhance country-level impact and strengthen country offices, the Action for Results Group comprising WHO Country Representatives developed a plan of action detailing concrete steps for implementation, with clear timeframes, roles and responsibilities and monitoring indicators. ➢ With regard to the monitoring of the Implementation Plan, the Secretariat is committed to providing visible information on progress and to demonstrating the agility of and momentum behind its plan. A tracking platform has been established to visualize the status of implementation of the reforms. The platform is available to Member States on the “Member State” portal of WHO’s website. 17. The Secretariat Implementation Plan for Reform can be accessed at https://apps.who.int/gb/ebwha/pdf_files/EB152/B152_34-en.pdf. The way forward 18. To implement of the decisions of the World Health Assembly on sustainable financing, and move forward the reforms adopted as a result of the discussions in the Agile Member States Task Group, the SPPDM Meeting recommended the following actions to be taken by Member States and WHO: Actions by Member States (1) Engage in future discussions on the subsequent gradual increase of assessed contributions. (2) Actively engage in consultations on the Investment Round and implementation of the reforms as laid out by the AMSTG. (3) Provide inputs to the Secretariat Plan for the WHO Investment Round. SEA/RC76/7 Rev.1 Page 5 Actions by WHO (1) Implement the actions set out in the AMSTG report and the Secretariat’s Implementation Plan on reform. (2) Ensure communication with Member States in the implementation of reforms and development of the Plan for the WHO Investment Round. (3) Incorporate the inputs for the Seventy-sixth Session of the South-East Asia Regional Committee into the Secretariat Plan for the WHO Investment Round. Conclusions 19. The World Health Assembly has taken effective measures to ensure a sustainable financing model for WHO. 20. The initial 20% increase to the assessed contributions has been included in the Programme Budget 2024–2025 adopted by the Seventy-sixth World Health Assembly. This is the core measure to ensure a sustainable financing model for WHO. Additional increases need to be agreed upon and adopted by the World Health Assembly. 21. To complement the increase in assessed contributions, the Secretariat is consulting Member States to define the main parameters of the WHO Investment Round. Member States are requested to provide input and comments to the White Paper on the Investment Round. 22. The Reform Agenda is progressing. Member States and the Secretariat will continue working together to implement the agreed reforms. The Secretariat will engage with Member States in the implementation and monitoring of the reforms. Member States can track the progress of implementation through the dashboards available at the Governing Bodies website [https://apps.who.int/gb/gov/].
REGIONAL COMMITTEE Provisional Agenda item 7.4 Seventy-sixth Session SEA/RC76/7 Inf. Doc. 1 New Delhi, India 30 October–2 November 2023 26 October 2023 Sustainable Financing The attached White Paper has been developed by the WHO Secretariat for consultations with Member States on the WHO Investment Round. The purpose of this Paper is to outline key elements of the plan for the Investment Round as a basis for Member States to provide inputs through written comments. White Paper for Consultation with Member States WHO Investment Round Introduction 1. The coronavirus disease (COVID-19) pandemic served as powerful reminder that sustainable financing of WHO is a prerequisite for the Organization to discharge its constitutional mandate fully and effectively. Resolution WHA73.11, adopted in May 2020, requested Member States “to provide sustainable funding to the Organization to ensure that it can respond fully to public health needs in the global response to COVID-19, leaving no one behind”. 2. In January 2021, the Executive Board, through its decision EB148(12)2, set up a time-bound, result-oriented Working Group on Sustainable Financing (WGSF) which focused on enabling WHO to have the robust structures and capacities needed to fulfil its core functions as defined in the Constitution. The WHA in May 2022, adopted the Working Group’s recommendations through its decision WHA75(8)3 including a request for the Secretariat to explore a replenishment mechanism to raise voluntary contributions. 3. In May 2023, the WHA adopted decision WHA76(19) which urged Member States and other donors to ensure the full financing of the base budget segment of the 14th General Programme of Work (GPW14) and requested the Director General to proceed with the planning of a WHO Investment Round and prepare a report for consideration by the 154th Executive Board, through the Programme Budget and Administration Committee, with a full plan that includes modalities and anticipated costs and efficiencies. The decision further requests the Director General to develop both an evaluation element and a target envelope for the Investment Round, the latter based on the base segment of the budget required to deliver GPW14. This plan is being developed in consultation with Member States, including through Regional Committees and dedicated virtual consultations in the lead up to EB154. 4. The purpose of this paper is to outline key elements of the plan for the Investment Round as a basis for Member States to provide input through written comments. 1 https://apps.who.int/gb/ebwha/pdf_files/WHA73/A73_R1-en.pdf 2 https://apps.who.int/gb/ebwha/pdf_files/EB148/B148(12)-en.pdf 3 https://apps.who.int/gb/ebwha/pdf_files/WHA75-REC1/A75_REC1_Interactive_en.pdf#page=1 Purpose and Vision for Success 5. The WHO Investment Round is a key component of the Secretariat’s resource mobilization approach to ensure full financing of the base budget of GPW14. The Investment Round will be carried out in line with the principles established by the Working Group on Sustainable Financing (WHA75.8) and is complementary to other efforts of the Member State-led journey towards the sustainable financing of WHO, including agreements on further increases in assessed contributions as well as the implementation of the reforms. 6. The WHO Investment Round will safeguard political momentum for global health and for a strong WHO after the COVID-19 pandemic and will rally stakeholders around the GPW14. It seeks to secure predictable funding as the foundation for a stable workforce, increase flexible funding to reduce the persistent pockets of poverty, and enable WHO to sustain and further develop systems and capacities needed to fulfil its core functions in support of its Member States to implement GPW14. Proposed modalities for the Investment Round 7. This Investment Round will be developed in line with WHO’s DNA and culture as a Member State organization. It will be underpinned by GPW14, which is being developed and co-created with Member States. 8. The participation will be fully voluntary. Every pledge to the base budget will count. This will include current multi-year agreements beyond 2025 and any commitments for the period of January 2025 to end 2028, independent of the date of agreement or length of the agreement. 9. In line with the purpose and vision for success of the Investment Round, the secretariat is proposing adjustments to: a) the definition of thematic flexible funding; b) allocation mechanism; and c) reporting of funds. a. The definition of thematic flexible funding will be expanded to create greater programmatic and geographic flexibility, thereby making it easier for contributors to pledge flexible rather than earmarked funding. The table below represents the current proposal for this new approach. b. The allocation mechanisms for fully flexible and thematic flexible funding will be further optimized, to facilitate timely implementation and maximize impact against GPW priorities, especially at the country level. c. On the reporting requirements, the Secretariat will work to decrease transaction costs and inefficiencies. This can be achieved through corporate reporting using a standardized report template agreed in advance with donors, as already included in the Secretariat Implementation Plan4. The pooling of funds, without detailed accounting for individual donors, would also be an effective instrument to reduce transaction costs, and has been used in the past for example during COVID-19. 10. The Investment Round builds on the Secretariat’s existing resource mobilization strategy and will rely on its strong relations with sovereign donors as a mainstay, expand longer-term, consolidated outcome-based collaboration with philanthropic and foundation partners, and continue engagement with the private sector, fully in line with FENSA and facilitated by the WHO Foundation. The Secretariat will draw on existing capacity from within the three levels of the Organization and will leverage outreach to contributors using existing meetings, strategic dialogues and other appropriate fora. 4 https://www.who.int/about/governance/member-states-portal/tracking-secretariat-implementation-plan-(sip)- actions 11. The Investment Round will be hosted by at least six co-hosts, one per region, and will take place in Quarter 4 of 2024 as previously agreed. The event will provide an opportunity for all Member States to participate, virtually or in person. Regional co-hosts would help champion the Investment Round and advocate for sustainable financing for WHO. 12. An investment case is under development to present a compelling, evidence-based rationale for investing in WHO. Rooted in GPW14 and WHO’s result framework, the investment case will demonstrate the return on investment and impact of WHO’s work. Cost, efficiencies and effectiveness 13. The efficiency analysis and benchmarking carried out as per Member States’ request demonstrates that WHO’s resource mobilization approach is already lean, the cost for an Investment Round will be reasonable, and the potential for organizational efficiencies and increased effectiveness is significant. 14. An external benchmarking review has shown that WHO’s dedicated resource mobilization team is lean relative to comparator agencies, and notably so in view of the fact that resource mobilization in WHO benefits from neither a structure of national committees nor significant external support for the resource mobilization effort. 15. Based on the benchmarking exercise, the cost of the Investment Round is anticipated to be US$ 2 million to US$ 3 million, plus operational costs (for which the Secretariat will mostly draw on internal resources). 16. The efficiencies stem from two main sources, namely workforce stabilization and talent retention driven by greater predictability of funding, and time savings of technical staff currently spent on donor proposals, reporting, grant management and short-term contracting. The model developed to calculate efficiencies has three scenarios depending on the scale of success of the Investment Round (in terms of improving predictability, flexibility, easing reporting requirements) and in all three scenarios, the expected efficiency savings range from US$ 15 million to US$ 40 million, and outweigh the expected additional costs of the Investment Round. 17. The efficiencies resulting from the Investment Round will be even larger, if we consider the opportunity to refocus the technical workforce on its core mission as a result of the time freed up to deliver core technical work and engage in substantive discussions with Member States. GPW14 funding envelope 18. The indicative financial envelope of GPW14 for the period 2025-2028 is currently under development. The overall estimated budget for GPW14 is around US$ 11.1 Billion. This would result in funding needs for the GPW14 base budget of US$ 7.1 billion (net of PSC), deducting assessed contributions (assumptions as per decision WHA75.8), and enabling functions. The below figure provides an overview of the current estimates. 19. Once the GPW14 is discussed by the Executive Board in January 2024 and the Results Framework (outcome and outputs) is finalized, the Secretariat will run a high-level budgeting process to provide more refined indicative envelopes by outcomes (and where possible, by Outputs) to be ready for consideration at the World Health Assembly in May 2024. 20. While these high-level budget envelopes will not replace the subsequent Programme Budgets in 2026/2027 and 2028/2029, they will guide these Programme Budgets and will enable contributors to make informed commitments at the Investment Round later in 2024. GPW14 indica�ve budget envelope 2 7,928 7,137 2,009 1,837 1,196 2,159 3,995 Flexible Funds (AC + PSC) GPW14 envelope (2025-2028) Technical outcomes funded by VC 11,132 7,137 Enabling func�ons outcomes (4.2 -4.3) Emerging priori�es Technical outcomes (1.1 -4.1) 7,928 11,132 2,009 1,046 Baseline (PB24 -25 Base) Emerging priori�es 150 GPW14 envelope (2025-2028) Technical outcomes (1.1 -4.1) Enabling func�ons (outcomes 4.2 -4.3) Proposed metrics for evaluation of the Investment Round 21. The proposed evaluation metrics focus on predictability and flexibility of funding. The current proposal is outlined in the below list. 1. POLITICAL COMMITMENT TO WHO DEMONSTRATED THROUGH PARTICIPATION IN THE IR 2. FUNDING AVAILABLE AT THE BEGINNING OF A 4-YEAR PERIOD 3. NUMBER OF DONORS THAT PLEDGE FOR THE FULL 4 YEAR PERIOD 4. NUMBER OF DONORS THAT INCREASE THEIR CONTRIBUTION 5. PERCENTAGE OF FLEXIBLE AND THEMATIC VC FUNDING OF THE BASE BUDGET FOR A 4-YEAR PERIOD 6. PERCENTAGE OF DONORS THAT ACCEPT HARMONIZATION OF REPORTING REQUIREMENTS 22. For the Investment Round, the secretariat is using a dynamic risk management approach, regularly assessing risks, and applying the appropriate mitigation measures. Risks are weighted for probability and impact and will inform WHO’s corporate risk framework. At the moment, the most probable and high-impact risk is that the Investment Round may not significantly improve financial predictability and flexibility. The mitigation measures include implementing a clear communication plan highlighting the reform progress, return on investment and effectiveness gained through predictable and flexible funding, working on the definitions of flexible funding as outlined above, and working with Member States toward meeting the evaluation indicators in the list above. Next Steps 23. Member States are invited to provide written comments on this paper by 27 October 2023. 24. Regional consultations are ongoing. The next global Member States consultation will be held on 3 November. 25. Feedback will be incorporated in the plan for submission to the EB in January 2024.