Breaking: UK cuts aid budget to 0.5% of GNI

Chancellor of the Exchequer Rishi Sunak. Photo by: Pippa Fowles / No 10 Downing Street / CC BY-NC-ND

LONDON — The U.K. government will not spend 0.7% of gross national income on official development assistance next year, Chancellor Rishi Sunak confirmed Wednesday, despite being legally committed to the target.

The government will instead allocate 0.5% of GNI — expected to be around £10 billion ($13 billion) — to the aid budget in 2021, according to Sunak.

That is a cut of around £5 billion compared to the 2019 budget and will have a significant impact on the programs it is able to support.

“During a domestic fiscal emergency, when we need to prioritize our limited resources on jobs and public services, sticking rigidly to spending 0.7% of our national income on overseas aid is difficult to justify to the British people,” Sunak said as he delivered the spending review for the 2021-2022 financial year to Parliament.

“I have listened with great respect to those who have argued passionately to retain this target, but at a time of unprecedented crisis, government must make tough choices.”

Elizabeth Sugg, a minister in the Foreign, Commonwealth and Development Office, reportedly submitted her resignation shortly after the announcement in protest at the cut.

The U.K. has spent 0.7% of GNI on aid since 2013, and enshrined it in law in 2015. Retaining the target was a Conservative Party manifesto promise, and until as recently as September the government was insisting it would not be cut.

However, it is thought there will be no legal penalty for failing to meet the target — under the 2015 law, the responsible secretary of state simply owes Parliament a statement on why it was not achieved. 

Ministers have also not ruled out tabling changes to the U.K.’s development legislation, although Sunak stated that “Our intention is to return to 0.7% when the fiscal situation allows,” allaying concerns that the government would seek to alter the 2015 law in the immediate term.

But Ian Mitchell, senior fellow at the Centre for Global Development, said it was “hard to see [the] ‘fiscal situation’ improving any time soon, so this is surely an indefinite reduction under this government.”

The announcement will come as a severe blow to the country’s struggling global development sector, which is already experiencing a funding crisis because of the pandemic and a last-minute cut to the 2020 budget announced in July.

Sara Pantuliano, chief executive of the Overseas Development Institute called it a “serious error of judgment,” while Andrew Norton, director of the International Institute for Environment and Development, said the move was “deeply damaging” to the government’s fight against the climate crisis.

There was also outrage from NGOs that campaigned hard for the 0.7% target. Romilly Greenhill, U.K. director of The ONE Campaign, likened the timing of the move amid the pandemic to “defunding the RAF [Royal Air Force] at the height of the Battle of Britain.”

“It’s bad economics that will end up costing more than it saves, and bad foreign policy that reduces Britain's influence around the world. And it couldn’t come at a worse time,” Greenhill said.

“Yet again, for all the talk of Global Britain, this approach is more at home in Little Britain,” she added. “For the U.K. to be a serious actor on the world stage this cut must be kept to the shortest period possible.”

There is also concern about the reputational effects of cutting the target — which has been used as an example to encourage increased generosity from other donors — as the U.K. prepares to host the G-7 and COP26 summits next year.

The United Nations recommends the 0.7% aid spending target for donors but the U.K. was the only major economy to consistently meet the target. For example, although the United States is the world’s largest bilateral donor by cash value, it spent just 0.16% of GNI on ODA in 2019, while Germany, the world’s second-largest donor, contributed 0.6% of GNI.

Mark Sheard, CEO at World Vision, urged “the government to reverse this decision immediately.”

“Today’s move risks undermining the U.K.’s global reputation and credibility ahead of a year in which it will co-host the G-7, COP26, and the Global Education Summit, and while the coronavirus pandemic continues to rip through vulnerable communities,” Sheard said.

He added: “The U.K.’s commitment to ending poverty worldwide has always been something of which we could be rightly proud, but just when global leadership is most needed we are stepping back. The government has today relinquished its right to talk about ‘Global Britain’ leading the world.”

Sarah Champion, chair of the International Development Committee, a group of politicians responsible for scrutinizing aid policy, called on the government to clarify the impact of the decision on development programs. “What is the criteria for the cuts, will there be impact assessments, will the sector, or parliament, be consulted?” she asked.

The government has been criticized for a lack of transparency on previous rounds of aid cuts.

Nov. 25, 2020: This article has been updated with extra reporting.

About the author

  • William Worley

    William Worley is the U.K. Correspondent for Devex, covering DFID and British aid. Previously, he reported on international affairs, policy, and development. He also worked as a reporter for the U.K. national press, including the Times, Guardian, Independent, and i Paper. His reportage has included work on the Rohingya refugee crisis in Bangladesh, drought in Madagascar, the "migrant caravan" in Mexico, and Colombia’s peace process. He can be reached at william.worley@devex.com.