The United Kingdom’s international development programs are expected to endure their third major cut in three years, as the government suspends “non-essential” aid spending, a change attributed to rising Home Office costs for refugees.
While it is unclear how much funding the Home Office will claim, experts fear it could amount to billions, which would have to be paid for with unprotected parts of the aid budget, already highly stretched from previous cuts and now facing spending restrictions.
In 2020, £2.9 billion was cut after a fall in the value of U.K. gross national income, to which the aid spending target is tied, and another £4.6 billion was cut in 2021, when the target of 0.7% of national income was reduced to 0.5%.
Government departments are to decide what programs they determine to be essential. Sources at the Foreign, Commonwealth & Development Office told Devex their teams were still deciding what that was Monday, after the Financial Times reported the Treasury, now led by Nadhim Zahawi, had instructed nonessential payments to be suspended until a new prime minister is in place following Boris Johnson’s resignation on July 7.
The newspaper said this was to keep spending within 0.5% of national income, but there is no legal requirement to treat the aid spending target as a limit.
The Conservative leadership contest to replace Johnson is due to end Sept. 5, with either former Chancellor Rishi Sunak or Foreign Secretary Liz Truss taking his place the next day.
"Essential spending will get a meaning as 'what Liz Truss or other FCDO ministers value' as there really isn't a proper definition of what is essential or not," Stefan Dercon, a former policy adviser to the foreign secretary, wrote to Devex, with "Essential vs non-essential risks then turning into easy to cut or not.”
Spending that is easier to cut will likely come from the resource departmental expenditure limit category of government financing and includes some money for NGO contracts, United Nations agencies, and humanitarian spending, according to Dercon. “From past experience, they may well protect the BBC, British Council, certain NGOs with better connections, or cuts that would just be too painful from a political point of view at this stage,” he said.
FCDO directed inquiries from Devex to the Treasury, which provided a statement saying: “The Government is currently prioritising essential overseas aid funding such as providing humanitarian support to the people of Ukraine. The UK has a long history of helping others in their hour of need and we are one of the largest aid spenders globally, above the OECD [Organisation for Economic Co-operation and Development] average.”
Afghan refugees in the U.K. were not mentioned as part of that statement, but they are understood to be part of the ballooning Home Office costs too.
Concerns have been mounting in the U.K. development sector for some time over how much aid the Home Office would claim for refugee costs — made worse by the absence of forward-looking budget allocations in FCDO’s annual report, published last week.
Spending the aid budget on domestic refugee costs for a year is within the rules of OECD’s Development Assistance Committee. But it is a controversial area, and many development experts believe the rules are problematic, as domestic refugee funding does not contribute to the development of lower-income countries — the main purpose of international aid. Norway and Sweden planned similar moves at the expense of their international programs but partially walked these back after criticism.
The U.K. government has not provided complete figures on how many migrants are expected to arrive, how much is being budgeted per person, or how much of that money is to be counted as official development assistance.
However Devex understands that around 160,000 Ukrainian refugees are expected, with costs potentially exceeding £20,000 ($24,000) per head for some, particularly children who will need education. More refugees are expected from Afghanistan, and further costs are likely due to nearly 114,000 overseas British passport holders from Hong Kong being granted visas. On this basis, the total cost to the British government could pass £3 billion, of which well over £1 billion is likely to be counted as ODA.
The move was met with condemnation from development experts.
“It’s brutal. It will cost lives. And it’s unnecessary,” Ranil Dissanayake, a policy fellow at the Center for Global Development, wrote to Devex, adding that it “Destroys the illusion that the UK still wants to be a serious development player.”
“The UK Government is effectively creating a death-trap for many in some of the most deprived communities across the globe,” Bernard Aryeetey, the international affairs director at WaterAid, said in a statement.
Humanitarian groups are calling for an exception because of the urgent nature of their work.
“It is critical that the UK government ensures humanitarian aid is exempted from any suspension of new FCDO spending,” said Martin Hartberg, the director of the Norwegian Refugee Council in London. “Multiple global crises mean that a freeze on new overseas aid payments would have a catastrophic impact on millions. Wars and disasters will sadly not be put on hold over the summer.”
David Ainsworth contributed reporting.
About the author
William Worley@willrworley
Will Worley is the Climate Correspondent for Devex, covering the intersection of development and climate change. He previously worked as UK Correspondent, reporting on the FCDO and British aid policy during a time of seismic reforms. Will’s extensive reporting on the UK aid cuts saw him shortlisted for ‘Specialist Journalist of the Year’ in 2021 by the British Journalism Awards. He can be reached at william.worley@devex.com.
