FCDO development pipeline skyrockets to £1.2 billion

Early last month, the United Kingdom’s Foreign, Commonwealth & Development Office published its only commercial pipeline in 2023 — containing opportunities worth at least £2 million each. The pipeline provides a preview of where the department is planning to spend its money in the coming months. Overall, it included 121 opportunities, worth £2.2 billion — a 478.6% real-term increase from the previous forecast published in October 2022, which was worth £382.3 million in 2023 prices — £359.4 million in cash terms. Of this, around $1.2 billion will go to development. This shows a massive leap not just in terms of the total estimated amount, but also in terms of budget for development-related contracts. Moreover, it is also FCDO’s biggest forecast to date since it first published its commercial pipeline in December 2020. The U.K. is now entering its third year of significant aid budget cuts, which began after its government decided in November 2020 that it would lower its official development aid spending from 0.7% of its gross national income to just 0.5%. Additionally, much of the U.K. budget has been consumed with spending on in-country refugees, with a commensurate reduction in spending overseas. In July, the government said that it would significantly increase its overseas aid spending next year, but only after another 12 months of massive cuts. The current pipeline somehow shows some positive development in line with this announcement. What the overall numbers say Although FCDO often classifies the opportunities by category or function, it does not identify which ones in the pipeline are for development and which ones are for the operations of its offices. Devex looked into the purpose of each of the contracts to differentiate development from nondevelopment. We found that more than £1.2 billion of the total will go to development — £820 million for 46 new contracts and £422.9 million for eight re-advertised contracts. This is 25 times more than the £30.7 million — £32.7 million in 2023 prices — allocated for development in the previous forecast. This is by far the biggest forecasted amount for development-related contracts among the published commercial pipelines. The rest of the budget, worth £959.1 million, will be spent on contracts related to the functions and operations of FCDO — mostly for refurbishment works and the provision of security services in country offices. Zooming into development The commercial pipeline did not include the list of recipient countries or regions. Instead, we identified this by looking into the project title and description. We found that the largest portion of development contracts, worth £645.1 million, will go to regional and multicountry recipients. Among the countries, the biggest budget is earmarked for South Sudan, worth £90 million. Nepal ranked next, with £79 million, Rwanda and the Democratic Republic of Congo, with £70 million each, and Nigeria, with £51 million. The rest, worth £237.8 million, will go to 14 other countries. Although the pipeline provides a classification by category, it tends to use a looser definition than most bilateral and multilateral donors. For instance, the humanitarian aid and relief category includes not only emergency response, but also gender, reproductive health, and environment. In our analysis, we found that more than a quarter of the total budget for development contracts, worth £351.9 million, will go to environmental and climate-related activities. While in theory, under an agreement signed in Copenhagen in 2009, climate finance is supposed to be additional to development spending, in practice this promise has been largely ignored by most major donors. Humanitarian aid and relief ranked next, with £264 million, then education, with £220 million, and health, with £83.5 million. The remaining portion, worth £322.5 million, will go to other sectors, including some large multisectoral contracts. The following are the largest forecasted development-related contracts: • £264 million for the Humanitarian Emergency Response Operations and Stabilisation Programme 2 — FCDO’s initiative for global humanitarian disaster response. • £101.5 million for the initial component of the Investment in Forests and Sustainable Land Use Phase II Project. • £90 million to increase the access to education of girls and children with disabilities and provide training to teachers in South Sudan. • £60 million for the Climate and Ocean Adaptation and Sustainable Transition, or COAST, Programme. • £55 million for the Congo Basin Forest Action Programme, which aims to address deforestation in the Democratic Republic of Congo. Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content.