Members of Parliament are concerned the United Kingdom’s foreign aid budget could plunge as low as 0.3% of gross national income, as the government grapples with turmoil and scrambles to get a grip on public finances, with widespread spending cuts feared.
The aid budget is under “very significant pressure” as a result of two “extreme shocks,” the COVID-19 pandemic and the war in Ukraine, Philip Barton, permanent under-secretary of the Foreign, Commonwealth & Development Office, told the International Development Committee on Tuesday. Barton left out other challenges to the aid budget that Devex has previously identified, such as political instability at home.
Committee Chair Sarah Champion told Barton that MPs had heard the aid budget might drop to 0.3%, which would be less than half of the legally binding figure of 0.7% of GNI. In 2020, that was cut to 0.5%, causing £4.6 billion in aid cuts. There was also another smaller aid cut in 2020. The current 0.5% budget is around £12 billion.
“I’m not hearing 0.3 [%] mentioned. We’re in a discussion with the Treasury around the size of the pressure over this year and potentially over future years, and how that’s dealt with. No decisions have been taken by the ministers,” said Barton.
“Your budget is fluid and opaque,” replied Champion.
The hearing also revealed management problems facing the aid budget, with FCDO officials unable to answer how much money had been saved by the freeze on “nonessential” aid spending — now extended until Oct. 31, when the government will set budgets. They also couldn’t answer how much the department has continued to spend and exactly on what, and how much it will have to spend in the future.
Whatever aid is currently being spent is not guided by strategy but by a weekly review process, said the civil servants. Barton also admitted the FCDO is no longer seen as a reliable partner by some contractors.
Preet Gill, Labour’s shadow international development secretary, told Devex that Barton’s comments were “shocking” and showed the FCDO was in “absolute chaos” and “nobody knows what’s being spent, where it’s being spent, what’s been cut — there’s been no evidence base, there’s a lack of transparency.”
The U.K. government is facing major economic headwinds, with new Chancellor of the Exchequer Jeremy Hunt asking fellow ministers to cut spending to help fill a £40 billion budget black hole. Hunt has not ruled out spending cuts to areas of public financing once considered sacrosanct by the ruling Conservative Party, like defense or pensions protections.
A major strain on the aid budget is how much the Home Office is taking from the foreign aid budget to spend on domestic refugee costs, which external analysts have estimated could cost up to £3 billion. Barton said this was a “very significant pressure” but could not “put an absolute” cost on it because it was a “dynamic situation” with refugees still arriving. FCDO was having an “active discussion” with the Treasury about the amount, added Barton. When Devex reached out to the Home Office for the figure, the response was to obtain it through a Freedom of Information request, which has not yet been answered.
The exchange about the prospect of a 0.3% aid budget sparked a fresh flurry of anxiety from weary development advocates.
“The Conservatives have already done enough damage to Britain's international reputation these last few weeks. If they make such a foolish decision and decide the days of our development superpower status are well and truly over, China and others will not believe their luck,” tweeted Layla Moran, Liberal Democrat spokesperson for foreign affairs and international development.
“Not content with trashing the U.K. economy, the government seems intent on abandoning its international obligations,” said Daniel Willis, campaigns and policy manager at Global Justice Now, an advocacy group.
Citing humanitarian crises in Somalia, Pakistan, and Afghanistan, Willis said “this government has taken a wrecking ball to its historic international responsibility. If correct, a reduction in aid spending to 0.3% would be a near-complete abandonment of the UK’s overseas development and climate commitments.”
“The ODA [official development assistance] budget can’t stretch any further. Needs have only risen as the UK’s ODA budget has already been exposed to two years of cuts,” said Simon Starling, director of policy, advocacy and research at Bond, the U.K. network for NGOs.
He said the U.K. was “increasingly less able to contribute to tackling global crises,” which risked tarnishing its reputation.
“Rumours of further cuts are making matters worse — the ODA budget cannot continuously be raided to balance our books,” Starling wrote in an email to Devex. “The government has an opportunity to demonstrate reliability, trustworthiness, and sound decision-making to our partners around the world by protecting the existing ODA budget, honouring existing commitments and being more transparent about how and where ODA is being spent.”
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.
