adcom, november 2013

medium term strategy (mts) blueprint

planning department

1

Table of contents

part heading page

A. Introduction 2

B. MTS structure and content 3

C. strategic context 5

D. Medium term operational strategy 7

E. strategic response plans 14

F. costing the MTS and resource mobilization 16

G. Financial forecasts for the agency’s general fund 17

H. Consequences of underfunding 19

mts blueprint | 2

2

A. Introduction 1. By the time it is finalized, the MTS will be the product of many months of analysis, planning and consultation. Significant consultations have been held between May 2013 – October 2013 with senior UNRWA management and with external stakeholders. These consultations have focused particularly on principles presented at the Advisory Commission in June 2013 that will guide UNRWA’s strategic thinking, on financial projections and on UNRWA’s strategic and planning architecture. This MTS Blueprint is a reflection of those discussions and is being presented to the Advisory Commission at its meeting in November 2013.

2. The design of the MTS Blueprint is not a reflection of the design of the MTS document. The Blueprint:

- provides a possible shape for the MTS; - provides a more complete definition of the MTS Principles as listed at the AdCom in June 2013; - provides financial projections for UNRWA’s General Fund; - presents the consequences of financing gaps; - describes possible opportunities for strategic partnerships; and - presents a list of strategic issues raised during consultations with AdCom members.

3. At this stage of the process, the MTS Blueprint offers the AdCom members the opportunity to provide advice on whether UNRWA is ―on the right track‖ on those issues that are of most concern to them. The MTS is being developed at a time of transition in UNRWA’s leadership and, as such, the Blueprint is also meant to facilitate the role of the incoming Commissioner-General – likely to be appointed towards the end of 2013 and to take office in 2014 - by providing him/her with the guidance and advice needed to move forward in the MTS’s development once he/she is appointed.

4. This does not represent the last time that the AdCom membership will be consulted on the contents of the MTS. Indeed, considerable work will still need to be done to develop the strategy itself and how the strategy will apply to each area of UNRWA’s operations.

5. Attention in the months ahead will turn to:

- Further development of UNRWA’s Poverty Strategy which will be an integral part of the

Agency’s Medium Term Strategy. - Preparing the ground for the development of an UNRWA Strategic Response Plan for each

geographical location (see Part E below in particular). - Further consultation on the strategic issues listed herein (see Part D below). - Programme/Sub-Programme specific reviews / policies / plans / strategies ensuring

consistency with the MTS principles and responding to, where relevant, the strategic issues. - Continued (or accelerated) implementation of programme reforms. - Consultations with staff and refugees. - Establishing strategic partnerships.

- Development of the results framework for the MTS including indicators and baselines.

mts blueprint | 3

3

B. MTS structure and content

6. The MTS will build on UNRWA’s contemporary mandate from the General Assembly, including: (i) the Agency’s role in human development and protection of Palestine refugees; (ii) promoting their economic and social stability; (iii) the importance of UNRWA’s services in the five fields, including emergency assistance; and (iv) the role of human rights in its operations, notably the rights of children, women and persons with disabilities. The MTS is time-bound and sets out specific strategic priorities and objectives in response to refugee needs. The MTS must be understood by reference to a larger strategic and planning architecture comprising systems, structures and procedures. Key features of this architecture are set out in Parts C, D, E and F of this Blueprint.

7. Strategic Context (see Part C of this Blueprint) consisting of:

- Macro-environment. Context and assumptions. - Contextual analysis of the human development needs of all Palestine Refugees focusing on

2021. - Human development goals and indicators on a life-cycle. - Two defining characteristics of the refugee condition: poverty and the lack of enjoyment of

rights. - The need for an international response. The role of UNRWA and other actors.

8. Medium Term Operational Strategy (see Part D of this Blueprint) consisting of:

- Strategic vision – includes the principles of universal access to quality primary health and

quality basic education, poverty mitigation, registration, protection, emergency preparedness, youth as an at risk group.

- The financially constrained environment in which the Agency works. - Strategic objectives for the Agency’s operations. - The Agency’s core programmes. - Working with others in the delivery of programmes and improvement of quality. - Identifying the boundaries of UNRWA’s action. - Responding in times of Emergency and post-conflict. - Institutional effectiveness and managing for results, including Agency undertakings to control

cost drivers.

Parts C and D of this document are presented graphically in Figure 1 below.

9. Agency Operational Strategic Response Plans, 2016 – 2021, by Field (see Part E of this Blueprint) – i.e., how the MTS will be operationalized.

10. Costing the MTS and Resource Mobilization (see Part F of this Blueprint)

mts blueprint | 4

4

Figure 1: The Context and human development needs and the agency’s operational strategy

mts blueprint | 5

5

C. Strategic context

Assumptions and context

11. The MTS will describe the context in which Palestine refugees live and in which the Agency operates. In so doing, assumptions will be drawn about the environment that will prevail during the strategic period. 12. It is assumed that the West Bank will continue to experience crisis with economic, social, political, institutional and humanitarian dimensions, due to persistent Israeli occupation. The political climate is not expected to change dramatically, either positively or negatively regarding the needs of the refugees or UNRWA’s operations. 13. It is assumed that Gaza will remain physically and economically isolated from the West Bank and its neighbours. The Israeli economic blockade is expected to remain largely in place and will continue to affect movement of people and goods. The security environment continues to be characterized by periods of relative calm, punctuated with conflict. 14. Jordan is expected to remain stable and will continue hosting the largest numbers of Palestine refugees in the region. 15. In Syria, it is assumed that the widespread instability experienced in 2013 will end during the MTS period. Accordingly, the strategic period will be characterized by a transition from conflict to reconstruction and rebuilding. 16. Lebanon will continue to host refugees seeking safety from the conflict in Syria for as long as it continues. The political landscape will continue to challenge the rights of Palestine refugees prolonging existing protection gaps. Reconstruction of Nahr el Bared Camp (NBC) will continue as a priority and will be completed early in the Strategic period. 17. These key assumptions can rapidly change. The regional changes now underway can lead to a very different political landscape affecting UNRWA’s ability to conduct its operations. Furthermore, a peace agreement resolving the conflict cannot be excluded which would redefine the role of UNRWA in the region and may result in a change in the substance of the mandate given to UNRWA by the UN General Assembly. 18. Given these uncertainties, UNRWA, donors and hosts would need to be prepared to reassess the MTS should these key assumptions drastically change.

The human development needs of Palestine refugees

19. UNRWA undertakes to (i) analyze and report on the overall human development needs of refugees irrespective of whether they are accessing UNRWA’s services, and (ii) identify gaps in service delivery and take steps in ensuring those gaps are addressed. The issues that will be explored in the analysis will be closely linked with the Post 2015 Sustainable Development Agenda which, it is hoped, will give greater recognition than the current Millennium Development Goals to the root causes of poverty and unmet basic needs and to the rights and needs of marginalized groups, including refugees.

20. It is proposed that UNRWA will measure and report on the same indicators that are used to measure levels of human development in countries. Many of these indicators are expected to be the same as those reflected in the Post 2015 Global Sustainable Development Agenda.

21. UNRWA will approach the human development needs of the refugees according to a life-cycle approach identifying risks and vulnerabilities (e.g. what opportunities are refugees losing) across life-cycles. In keeping with the fact that the MTS is time-limited, the needs analysis will focus not only on current needs but on levels of need in the future. The MTS will forecast the human development needs of refugees in 2021. In so doing, it will be necessary to make forecasts about the size of the eligible population and served population. Such forecasts are

mts blueprint | 6

6

under development but can be expected to reveal significant needs for aged, children and youth, especially for those living in refugee camps.

22. The study will not only place UNRWA’s direct-delivery operations in the broader context, but also has the potential to be a very strong advocacy tool for all those who are interested in improving the conditions of the Palestine refugees over the medium term. 23. Given what is known about the socio-economic conditions of Palestine refugees in the region, it is expected that the aforementioned analysis will reveal two particularly acute, but related, needs that should be a focus during the strategic period – a lack of enjoyment of human rights, and high levels of poverty that are being transmitted from one generation to another.

An international response

24. Addressing the human development needs of Palestine refugees will require more than UNRWA, alone, can provide directly. The achievement of human development goals depends first and foremost on the generosity and support of host countries and their own strategic investments and progress in human development terms. UNRWA has established close relationships with Government counterparts and the Agency will look for opportunities to further strengthen these relationships for mutual gain.

25. UNRWA will work with international aid and development organizations to build common projects/programmes to (i) improve the quality of, and (ii) complement, UNRWA’s services to achieve maximum impact for refugees. UNRWA has had in place for a long time valuable relationships with organizations like UNESCO, WHO, WFP and the international human rights system. Opportunity exists for UNRWA to both deepen these relationships and to establish new relationships with other organizations that have a common interest in other areas including areas in which the Agency does not deliver significant programmes including, for example, the World Bank, UNDP, UNICEF, UNFPA, ILO and organizations in the private sector. Opportunity also exists to benefit from other inter-agency for a including UN humanitarian/cluster systems.

26. Through these alliances, UNRWA will seek to (i) produce a bigger and more effective impact with its operations, (ii) improve the quality of the Agency’s operations through, for example, the provision of technical assistance and capacity building, (iii) establish referral networks at local levels, (iv) establish stronger links through partnerships with host country bodies, (v) expand the reach/impact of UNRWA’s services through better community awareness activities, and (vi) open new opportunities for resource mobilization for the Agency’s core operations.

mts blueprint | 7

7

D. Medium term operational strategy

27. UNRWA’s programmatic/operational role should be determined in each Field of operation by reference to a number of factors including, among other things, (i) human development needs that are not being adequately addressed; (ii) the existence of other actors to address those needs, (iii) what the Agency’s programmes are currently contributing to the human development of Palestine refugees; (iv) the Agency’s strengths and comparative advantage in delivering different forms of service; and (v) the availability of resources.

Principles guiding the agency’s operational role

28. The MTS will set out the Agency’s strategic vision for the MTS period. For the purposes of this Blueprint, the vision will be a reflection of seven principles that were listed in the Advisory Commission in June 2013. These principles are rooted in the terms of UNRWA’s contemporary mandate and provide useful filters for UNRWA in determining what it should do directly, and what it should ensure is being done by others. The principles furthermore help identify exceptional circumstances in which UNRWA will intervene directly to provide a service until such time as the underlying need for UNRWA’s intervention has been addressed.

Principle 1: UNRWA will register Palestine refugees

29. UNRWA will continue to register Palestine refugees thus ensuring their access to services and contributing to their protection under international law.

Principle 2: UNRWA will provide universal access to quality basic education

30. All Palestine refugee children have a right to access UNRWA’s basic education facilities.

31. UNRWA must offer basic education in each of its fields of operation. What constitutes ―basic education‖ is determined by reference to host-country systems. In West Bank, Gaza and Jordan, it comprises Grades 1 – 10. Currently, however, in these three Fields, UNRWA only provides Grade 10 in Jordan and in one school in the West Bank.

32. UNRWA must provide basic education to an acceptable standard of quality. UNRWA defines what constitutes an acceptable level of quality by reference to its mandate, strategy, Palestine refugee needs and host country, regional and international standards. Current survival rates, learning achievement etc. are below what UNRWA considers acceptable. The Education reforms currently being rolled out will achieve an acceptable standard and will lay an important foundation for what UNRWA will do in the MTS period. Improvements in the built environment also have the potential of improving access to quality basic education.

33. UNRWA must research and study why some Palestine refugees are not attending UNRWA’s basic education facilities. If it is found that they are not attending basic education facilities from any source, UNRWA must see how this can be addressed.

Principle 3: UNRWA will provide universal access to quality primary health

34. All Palestine refugees have a right to access UNRWA’s primary health services.

35. UNRWA must offer primary health in each of its fields of operation. It is for UNRWA to decide what constitutes a basic primary health package. What constitutes ―primary health‖ depends on need and may include slight variations from one Field to another. This will be clearly defined in the MTS.

36. UNRWA must provide primary health to an acceptable standard of quality. UNRWA defines what constitutes an acceptable level of quality by reference to its mandate, strategy, Palestine refugee needs and host country, regional and international standards. The introduction of the Family Health Team approach (currently being rolled out) is expected to satisfy this minimum standard and will lay an important foundation for what UNRWA will do in the MTS period.

mts blueprint | 8

8

Improvements in the built environment can also contribute to the well-being of refugees as well and may reduce the cost of primary health care.

37. UNRWA must research and study why some Palestine refugees are not attending UNRWA’s primary health services. If it is found that they are not attending primary health services from any source, UNRWA must see how this can be addressed.

Principle 4: UNRWA’s role in the mitigation of poverty

38. Poverty is one of the defining characteristics of too many of the Palestine refugees served by UNRWA in the five Fields. It is an issue of serious concern to host authorities and donors. It is a problem that would be far worse if it were not for UNRWA’s programmes and projects but more must and can be done by UNRWA and its partners to interrupt the intergenerational transmission of poverty.

39. UNRWA’s poverty strategy is currently under development and will feature prominently in the MTS. UNRWA will present to the November 2013 AdCom, a paper setting out the themes that will underpin a poverty strategy for the Agency for the MTS period. The paper emphasizes, amongst other things, the multidimensionality of poverty, and the positive contribution that UNRWA’s education, health and infrastructure and camp improvement programmes make to poverty alleviation. The paper explains that UNRWA will focus on the abject poor (the food insecure) and, within this group, particularly on the youth and the vulnerable. The paper furthermore explains that UNRWA will work towards interrupting intergenerational transmission of poverty and will evolve its approach to services to refugees from one of sectoral analysis and response to a life-cycle approach. The paper explains why UNRWA will focus, in particular, on children between the age of 1 – 5, and on the adolescent and young adult years. The paper notes the importance of focusing on family planning. The paper also recognizes the contribution that the built environment in camps (including, in particular, shelter and environmental infrastructure) makes to health, education and poverty.

Principle 5: UNRWA is mandated to protect Palestine refugees

40. UNRWA’s protection mandate is now well acknowledged. It is an integral part of a holistic approach to meeting refugee needs in education, health, relief and social services, microfinance and for infrastructure and camp improvement, and to contributing towards the achievement of full respect for the rights of refugees under relevant international law. UNRWA’s commitment to protection is four-fold:

(i) ensuring that protection needs are addressed in all aspects of programming, project

design, policies, protocols and procedures, as well as in staff training (―protection in programming‖);

(ii) delivering services in a manner that promotes and respects the rights of beneficiaries and ensures the security and dignity of beneficiaries and of UNRWA personnel (―protection in and through service delivery‖);

(iii) promoting respect for Palestine refugee rights through monitoring, reporting and intervention (―international protection‖); and

(iv) highlighting to the international community by the Commissioner-General the urgent need for a just and durable solution to the plight of the Palestinian people and helping to ensure that in its elaboration the rights and interests of the refugees are safeguarded (―A just and durable solution‖).

Principle 6: UNRWA must be emergency prepared and ready

41. UNRWA as an Agency and the refugees it serves face repeated - and in some cases such as in the Gaza Strip - chronic emergencies. UNRWA has a well-established track record of responding to emergencies including during the two Intifadas in the occupied Palestinian territory (oPt), the Lebanese civil war, the 2006 Israeli military operation in Lebanon, the Nahr el Bared response, the 2008-2009 Israeli military operation in the Gaza Strip, the ongoing Gaza blockade, and the Syria conflict – to name just a few. UNRWA has responded to these emergencies in two broad ways. First, UNRWA has provided resilience and safety nets through the continued and

mts blueprint | 9

9

dependable provision of basic services. Second, by providing programmes and services that respond to acute and immediate needs resulting from emergencies.

42. The MTS will include a set of emergency principles, framed as Agency policy, to improve the preparedness posture of UNRWA overall and to assure swift, agreed, quality response to emergencies in a manner which is strategic and takes into account some of the wider issues facing UNRWA such as, for example, the need to continue to build deeper partnerships and operate as efficiently as possible in a resource-constrained environment.

43. Illustratively, these principles will address minimum standards for timely risk analysis updates and preparedness plans, as well as the structure and composition of emergency response teams within each field and how they are linked together in an Agency wide structure. The principles will also offer broad guidelines for how UNRWA addresses some of the basic requirements of emergency response such as procurement, finance, protection and training of staff, and chains of command. The principles may also examine UNRWA’s areas of particular operational advantage – and consequently those areas that are not particular areas of strength to UNRWA and might be best, therefore, left to other partners in a coordinated response.

44. Work to develop these principles will continue in 2014.

Principle 7: UNRWA will focus particularly on the needs of the youth

45. UNRWA should be particularly interested the needs of the youth. As noted at a conference convened by UNRWA in Brussels in March 2012: ―Young people across the Middle East have been at the forefront of momentum for change and their voices must be listened to by global leaders, statespeople, humanitarians and those responsible for the security and prosperity of our world. Palestine refugee youth represent an opportunity that must guide our strategic planning. UNRWA must engage with youth in ways that promote initiative and productivity and introduce more meaningful and effective approaches to employment and participation.‖

46. Investing more effectively in its young population will enable UNRWA to support a stronger base for economic growth and security in the region. Healthy, educated, engaged, employed, and productive youth are key to breaking the intergenerational cycle of poverty, achieving sustained growth, and building security. When given a chance to participate and contribute, the young may provide much-needed innovation and play a catalytic role in promoting democracy and economic growth; they can create enterprises and generate employment, increase incomes and help connect the country to the rest of the world; they can help younger children—and whole communities—to develop; and they can contribute to conserving the environment with responsibility.

47. The cost of not investing later involves high unemployment, higher health and social welfare costs, insecurity and lower economic growth.

Financial resources

48. While financial considerations cannot be the only consideration in designing UNRWA’s strategic response, resource mobilization forecasts are needed. Part F of this Blueprint contains a forecasting of cash in-flow and out-flow for UNRWA’s General Fund in 2021. Part F does not constitute a ―costing‖ of the MTS. It is intended to give an indication of the resource mobilization challenges ahead and, in so doing, help inform strategic thinking and decision-making.

UNRWA’s strategic objectives and programmes

49. UNRWA’s strategic objectives will reflect the fact that the Agency’s most powerful tools in addressing the human development needs of refugees (including the poor) will continue to be its main programmes.

50. There have been relatively small variations developed over the decades in these programmes across Fields. Different needs will continue to require slight adjustments to the basic approach of each Programme in each Field. The aforementioned life-cycle approach to

mts blueprint | 10

10

identifying need in each geographical area will help (i) ensure an integrated response across operational/programmatic sectors, (ii) identify priority areas for project interventions, and (iii) identify opportunities for strategic partnerships.

51. The seven principles listed above may require a revision of what defines ―success‖ for one or more sub-programmes. Amongst other things, a more poverty-centered approach will require more attention be paid in UNRWA’s results framework to programmatic objectives and indicators that relate to poverty. Similarly, success should be defined also in protection terms which will, amongst other things, require that we monitor and report on the population that is not attending UNRWA’s installations, why they are not, and what UNRWA should do about it.

52. The Agency’s strategic objectives will not be limited to programmes/sub-programmes funded by the Agency’s general fund. The Agency will include objectives that will depend on extra-budgetary project funding.

Identifying the boundaries of UNRWA’s action

53. The human development character of UNRWA, the 7 principles noted above and the life-cycle approach to identifying risks, vulnerabilities and missed opportunities offer filters that will help determine whether there are activities or sub-programmes that the Agency is currently doing that, by 2021, it should not be doing so that UNRWA may invest its scarce resources in higher priority activities including, amongst other things, in securing universal access to quality basic education and primary health.

54. Some activities/sub-programmes noted below have been identified as possibly falling into this category. 55. All issues require careful exploration and study in each concerned Field of operation. In the event that a change in programming is required, it would need to be carefully managed in light of associated risks and consequences. Needless to say, any change to programming/operations should not make refugees more vulnerable and therefore should be properly managed by ensuring, for example, that other service providers are available to fill any gaps. Risks and consequences can be accepted, mitigated or managed. Or the risk/consequence may be reason enough not to embark on the change.

Vocational training Can UNRWA find ways to recover at least some of the cost of its Vocational Training Centres – including through agreements with private/commercial institutions and through tuition fees from those students who can afford to pay? Risk associated with change: Vocational training provides a valuable contribution to UNRWA’s strategy in combating poverty by providing refugees with a crucial stepping stone to employment and self-reliance. Shifting the programme to one that is too focused on the poor may have a negative impact on the reputation of the VTC’s, which must remain good if VTC certifications are to be valued by potential employers. Charging refugees fees for services will meet with resistance. Pre-Teacher training and educational science faculties Can the same principle as for the VTC’s, be applied to Pre-Teacher Training? Does there remain today the same imperative for UNRWA to run pre-teacher training programmes? UNRWA is not the only provider of teacher-training certificates/degrees, and the need for more teachers is less than perhaps it has been in the past. Risk associated with change: Graduates of educational science faculties have good chances of employment even in the absence of a job with UNRWA. The same risks as listed above under Vocational Training apply.

mts blueprint | 11

11

Mental health and oral health Should UNRWA review the limits of sub-programmes like mental health and oral health to ensure they are truly regarded as ―primary health‖ and, therefore, are focused on preventative care and not providing free treatment on optional curative care? Risk associated with change: If UNRWA limits its involvement to preventative care without exception, there is a risk that the organization will not be able to establish referral mechanisms with organizations/providers who can provide affordable and vital curative treatment. MCSP, CBO’s Should UNRWA reduce its involvement in small Social Service sub-programmes (Community Based Organizations, MCSP) which can perhaps be carried out just as effectively by others at a local/community level. Risk associated with change: In some Fields, these sub-programmes provide assistance and support in the absence of other providers. The programmes, although small, are a welcomed and appreciated contribution to families and local communities. Secondary schooling in Lebanon (grades 11 – 12) Should the Agency be providing free Secondary Schooling in Lebanon given that it does not fall within the definition of ―basic education‖? Risk associated with change: UNRWA’s Secondary Schools in Lebanon provide an opportunity for refugee youth – especially those who cannot afford to go to other schools – to choose a path to higher learning outside of the vocational stream. Any move away from Secondary Schooling will meet with resistance from the community. French curriculum schools in Lebanon Should the Agency continue to run French-curriculum schools in Lebanon? Hospitalization and Qalqilya hospital Should UNRWA be applying a different approach to its hospitalization programme than it has been in the past? The programme could be reformed into a safety net programme thus making it more equitable (not necessarily less expensive, but ensuring it is more effective in helping those most in need). Should UNRWA look for an exit strategy for the only hospital run by UNRWA, namely Qalqilya Hospital, by the end of 2021? Risk associated with change: Any change in hospitalization services - even if the result is greater equity - will be met with resistance from refugees and community groups. Reductions in hospitalization for some persons may result in greater reliance on other insurance providers/public health institutions.

Solid waste removal Should UNRWA be looking to end, where possible, the provision of environmental health services in camps like solid waste removal? If these (vital) services can be carried out by municipalities, then UNRWA can redirect valuable resources into schools and health centres (etc). Risk associated with change: Solid waste removal is necessary. UNRWA could not end such a service without the certainty of the service being taken over by other providers. The programme comprises, primarily, a large, hardworking and dedicated workforce of unskilled and possibly poor camp residents. The welfare of these workers needs to be protected. The programme is a very visible and appreciated symbol of UNRWA’s (and international

mts blueprint | 12

12

community’s) support of Palestine refugees. A move away from this programme will be viewed negatively by staff and community. Microfinance programme UNRWA’s Microfinance programme is regarded as a success story for the Agency. The Agency has, for some years, been considering and exploring the possibility of separating the programme from the Agency and making it independent. Management has considered it important to ensure the operating environment is favorable for such an action. The economic blockade in Gaza and the Syrian conflict in particular have worked against this. The issue must, however, remain on the table for consideration as part of the MTS.

56. These questions will be studied in the months ahead.

Institutional effectiveness and managing for results

57. The Strategy will also deal with the mechanics of UNRWA – i.e., the way in which UNRWA manages and supports its operations. It is important that UNRWA employ best-practice management tools and systems in support of its operations. It is also important that UNRWA have oversight systems and controls in place to ensure that the organization meets the standards (including ethical) expected of a United Nations Agency.

58. There are several examples of best practice already being firmly in place in UNRWA. There are, however, other opportunities that UNRWA must explore in advance of the MTS and have in place by the start of the MTS period to ensure optimal cost-efficiency and cost-effectiveness.

59. The Agency has much to gain in terms of cost efficiency and effectiveness by improved information management systems. By way of example, the Agency is currently investing in the development of information management systems for its health and education programmes. Such systems, when combined with the ERP and UNRWA’s data warehouse, will bring with them the potential to greatly improve evidence-based decision-making at all levels of the Agency’s hierarchy.

60. Opportunity also exists, particularly with the implementation of the Agency’s ERP, to generate more information on resource use and financial expenditure at the level of the Agency’s installations, thereby allowing the Agency to more easily recognize the most cost-efficient/effective installations and the least cost-efficient/effective installations and to make the needed management interventions. It is also hoped that the foundation will be established to allow the Agency to decentralize more decisions to field/area/installation managers in order to improve organizational responsiveness.

61. UNRWA also stands to benefit in the context of institutional effectiveness from strategic partnerships through, amongst other things, the provision of technical assistance or by collaboration with other organizations carrying out similar activities.

62. UNRWA will, in the context of the MTS, need to revisit – and, if necessary, refresh - management systems, structures and procedures relating to human resources, supply, resource mobilization, information technology, and oversight.

63. Specifically with respect to the field of human resources and management, UNRWA will endeavor to strengthen leadership throughout the organization not only for the benefit of the refugees it serves, but also as a contribution to building greater leadership within the broader Palestinian society.

Cost drivers

64. UNRWA’s two largest cost drivers are staff numbers and staff salaries. UNRWA’s staff are its most valued asset and it is the daily interaction between refugees and 30,000 staff that represents the biggest contribution UNRWA makes to the human development of the population. Nevertheless, UNRWA must manage its staff numbers and salaries effectively to ensure the

mts blueprint | 13

13

financial sustainability of the General Fund through the MTS period and to maximize the cost efficiency and effectiveness of the Agency’s operations.

65. In excess of 80% of UNRWA’s regular budget is spent on salaries for the Agency’s workforce of more than 30,000 staff. UNRWA’s pay policy states that the Agency should pay its staff salaries that are comparable to salaries of host government counterparts. The need to increase/adjust staff salaries during the strategic period depends on the increases/adjustments made by host countries. UNRWA will exercise the highest degree of diligence in applying the pay policy. This means that compensation should ideally not be less than those paid to public sector counterparts. But it also means that the compensation package should not be significantly in excess of those paid to public sector counterparts.

66. Through programme reforms such as those currently being rolled out in education and health, UNRWA will produce a greater quality impact without significant increases in its workforce. It is vital that UNRWA’s reforms in education and health be fully funded in order to be implemented. It is also important that UNRWA have sufficient project funds to enable it to make short-term investments to achieve long-term efficiencies (examples may include the construction of purpose-built schools and health centres to replace less-efficient-and-effective rented installations).

67. The forecasting scenarios used in Part F assume that some increase in UNRWA’s workforce will be required, but that the Agency will seek to limit this increase (to the extent possible) to the education sector in Gaza Field where the number of children seeking admission to UNRWA schools is expected to continue to grow in every year of the MTS period (a pattern that is not expected to be the same in other Fields).

68. Programmatic changes to respond to the strategic questions raised above could, if effectively rolled-out, help UNRWA manage its staff numbers.

mts blueprint | 14

14

E. Strategic response plans

Strategic response plans for each field of operation

69. UNRWA’s current strategic and planning architecture involves a six-year Agency-wide strategy, biennial ―implementation plans‖ for each Field and for Headquarters, and annual budgets. This architecture is being reviewed in the context of the MTS.

70. It is proposed that the Agency develop strategic response plans for each Field of operation. These plans would reflect the differing levels of vulnerability that exist in each Field and different levels of reliance on UNRWA. Each plan will reflect Field-specific opportunities for strategic partnerships and will identify areas of common interest with other planning frameworks including UN Development Assistance Frameworks (UNDAF).

71. Each strategic response plan will:

- have a common format and overall structure, - reflect the fact that the largest contributions of UNRWA will be by virtue of Agency-wide

programmes; - analyze need according to a common approach (including, for example, use of the life-cycle

and common tools like the Proxy Means Test Formula); - employ a common results framework; and - reflect that UNRWA has common support structures, systems and processes.

72. UNRWA will work over the coming months on developing these Plans. In developing these Plans, the Agency will endeavor to set measurable, ambitious and achievable targets. By way of example, the Agency should set a target of making a substantive and meaningful improvement in the living conditions in a small number of high priority camps in each Field rather than making aspirational targets of improving living conditions in an unrealistically large number of camps in the area of operations.

Planning framework

73. Strategic Response Plans for each Field of operation would call into question the need (or not) for biennial implementation plans. It is proposed that, if the Agency develops strategic response plans for each Area of operations, biennial implementation plans will no longer be required.

74. UNRWA would, however, look to strengthen its planning systems and procedures at the same time through the development of annual workplans, budgets and cash-flow forecasts. The details of these planning documents and tools are still the subject of internal discussion and development within UNRWA. Reporting cycles will be set to be in line with requirements of donors, with Advisory Commission procedures and with UN-wide requirements. UNRWA will continue to report against the Harmonized Results Reporting framework that has been the subject of considerable work between the Agency and donor representatives in recent times.

75. Together, these structures, systems and procedures will support efforts to further strengthen accountability of managers inside UNRWA and of the Agency to external stakeholders and refugees.

76. The following diagrams are purely for the purpose of illustration. Whether and how much of the details need be included in the MTS is yet to be decided.

mts blueprint | 15

15

Figure 2: Annual operational plans – reporting cycle

Figure 3: Annual Operational plans – workplans, budgets and cashflow forecasting

mts blueprint | 16

16

F. Costing the MTS and Resource Mobilization

Costing the MTS

77. UNRWA will not carry out a costing of how much would be required by the international community to respond to the entire human development needs of Palestine refugees.

1

78. UNRWA will cost the Operational Strategy and Strategic Response Plans. In so doing, UNRWA will aim to identify the resources that will be required to conduct the operations seen as being essential to satisfy the seven principles set out above. Amongst other things, it will quantify:

- the investment that will be required to deliver an acceptable level of quality in its universally

accessible programmes (this investment will be consistent with costings carried out in the lead up to the joint UNRWA/DfID review of cost efficiency and cost-effectiveness of the Health and Education reforms);

- the cost of implementing UNRWA’s poverty strategy; - the cost of implementing the Agency’s protection operations; and - the cost of ensuring UNRWA is emergency prepared and ready.

Resource mobilization strategy

79. The Agency will develop a resource mobilization strategy in support of the MTS. This strategy will concern all funding streams and not be limited to the General Fund.

1 Reference may, however, be made to the investment that is being made by host countries to address the needs of

Palestine refugees (where the quantification of that investment is known).

mts blueprint | 17

17

G. Financial forecasts for the agency’s general fund

80. As noted above, while financial considerations cannot be the only consideration in designing UNRWA’s strategic response, resource mobilization forecasts are needed to help define UNRWA’s financial strategic space and, thereby, help inform strategic thinking and decision-making.

81. The following table focuses on the Agency’s General Fund and: (i) forecasts the required level of cash in-flow required in 2021 to cover the cost of normal operations after taking into account the impact of current reforms in health and education; (ii) forecasts the level of cash out-flow that can be expected on the basis of current contribution levels and expectations; (iii) estimates the value of further possible efficiencies; (iv) approximates the value of reductions in expenditure if certain programmatic changes listed above are made; and (v) adds the expected cost of enhancements to UNRWA’s programmes to better address strategic gaps.

# Step Risk

1 Calculate the cost in 2021 of current operations based on realistic scenarios for main cost drivers. Includes the impact of Health and Education reforms.

Range: $823,000,000 - $865,000,000 $823,000,000 based on: Increase of 200 mid-level staff per annum to allow for population growth. Staff salaries increase at 3% per annum (including step increases) Non-Staff Costs increase at 1.5% per annum $865,000,000 based on: Same as above except staff salaries increase at 4% per annum (including step increases)

Under-estimation of the cost

2 Estimation of likely income in 2021 based on realistic scenarios.

Range: $766,000,000 - $816,000,000 $766,000,000 based on: Traditional donors $630m; UN Regular Budget (int’l staff) $35m; PSC of $30m Interest $1m; Arab Donors $50m; Other donors $20m $816,000,000 based on: Same as above except Traditional donors $650m Arab Donors $80m Other donors $20m

UNRWA’s resource mobilization efforts will not be as successful as hoped.

Financial Gap $7,000,000 - $99,000,000. Mid-point: $53,000,000

3 Opportunities for further cost efficiencies

$2m - $10million from: - Efficiencies that would be realized with the construction of purpose-built schools to replace double-shift and rented schools. - Overhead reductions from efficiency reform in support services.

UNRWA does not realize all of the efficiency gains intended by the reforms

4 Opportunities to reduce expenditure or recover costs provided that risks can be managed and that consequences are accepted.

Education: $9 - $14million Health: $5 – 7million Youth: $10 - $15million Relief: $1 - $2million Camp services: $20 - $30million Total: $45 - $68million If 25% of the above is realized: total savings = $11m - $17m

UNRWA may not be able to implement the changes and therefore fully realize the forecast ―savings‖.

6 Calculating the additional cost [Providing Grade 10 in oPt; UNRWA may not

mts blueprint | 18

18

of programmatic changes to better satisfy the principles.

Providing food assistance to all food insecure]

correctly estimate the cost of additional/enhanced activities.

7 Identifying opportunities for strategic partnership

Examples may include: UNFPA: Support to Health: family planning UNICEF: Support to Early Childhood Development – Health and Education. ILO: Support to Youth employment initiatives. UNDP: Support in the area of research WFP: Assistance for some of the food insecure caseload. World Bank.

The identified strategic partnerships may not materialize. The content of the Strategic Partnerships may not relieve the General Fund of current costs.

mts blueprint | 19

19

H. Consequences of underfunding Introduction

82. The consequences of underfunding will be different depending on when the forecast shortfall is identified and whether UNRWA is willing to accept the risk of not being able to bridge the gap. If the shortfall is identified far enough in advance, UNRWA can respond with well-planned strategic decisions and take the necessary steps to mitigate any impact that the decision would have for the refugees.

83. UNRWA’s yearly operational plans are constructed based partly on the level of resources that it expects to be able to mobilize. In every planning cycle, UNRWA takes a risk that it will not be able to mobilize the necessary resources during the relevant year. If, during the year, UNRWA foresees that it will not be able to mobilize the necessary cash to meet its cash-outflow obligations, the Agency is compelled to adjust its expenditure plans. UNRWA will, for example, defer procurement and recruitment decisions, building maintenance/repairs or vehicle replacement. Such actions can overcome a short-term cash-flow problem, but can have larger long-term implications.

84. The situation is different if, during the annual planning process, UNRWA forecasts a financial gap that is so significant that the Agency is unwilling to accept the risk of bridging the gap during the relevant year. UNRWA is, in these circumstances, compelled to take decisions that will reduce service levels over the planning period. Several consecutive years of taking such action can have dangerous consequences at different levels. The following represent some examples of the possible consequences to Agency programmes and to served refugees in the event that UNRWA is unable to mobilize sufficient funding and resources to carry out planned activities.

At the output and activity/input level

85. UNRWA will have less resources to provide the needed inputs.

Examples may include: - Class-sizes increase. - Doctor-patient ratios will increase. - Doctor-patient consultation times reduce. - Under-provision of essential (life-saving) NCD medicines. - Less teaching/instruction materials are available for educational and training facilities,

jeopardizing the chances of delivering the curriculum. - Installations and vehicles are inadequately maintained and repaired and become dangerous

for staff and refugees. Remedial repair/replacement action increases. Increased financial exposure to liability.

86. UNRWA may need to make decisions during the strategic period that compromise on refugee access to services.

The consequences of underfunding depend upon the strategic decisions made above about what UNRWA should do and not do during the strategic period. Examples may include: - Reducing entitlements to hospitalization cover in the absence of other providers to ensure the

provision of life-saving interventions. - Reducing the number of poor persons who benefit from a social transfer in the absence of

other providers to provide safety net assistance.

At the outcome and objective level

87. UNRWA may be unable to deliver an acceptable standard of quality in its programmes.

Examples may include: - Patients are provided with less access to preventative health care, increasing the cost of

treatment interventions (medications, hospital care etc).

mts blueprint | 20

20

- Continuous poor health outcomes can affect reproductive health for women. - Malnutrition in mothers resulting from poor health care aggravates risks for child mortality and

malnutrition. - Child malnutrition raises the risk of child mortality and poor performance in school in later

years. - Limited care provision and unavailability of medicines may contribute to critically disabling

(even life-threatening non-communicable disease complications) including, by way of example, gangrene/limb amputations, retinopathy with loss of vision, and renal failure.

- School attendance rates reduce. - Pass-rates in schools decrease. - Drop-out rates increase and survival rates decrease. - Increased wastage of resources in schools. - Vaccination rates reduce.

At the human development level

88. UNRWA provides a smaller contribution to human development needs of Palestine refugees

Consequences may include: - Unemployment and under-employment rates increase. - Food insecurity and poverty levels increase. - Mean years of schooling and expected years of schooling reduce. - Life expectancy at birth reduces. - Increased involvement in dangerous behavior (crime, substance abuse, militant activity)