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    • News
    • UK Aid

    In Brief: UK aid cut 'could last several years'

    A new report from the Institute for Fiscal Studies predicts aid cuts could have more staying power than many in the sector hoped.

    By William Worley // 13 April 2021
    UK aid shelter kits being distributed to thousands of people in remote parts of Nepal. Photo by: Russell Watkins / DFID / CC BY

    It “should not come as a surprise” if the supposedly temporary cut to the United Kingdom’s aid budget “lasts for several years,” according to a new report by the Institute of Fiscal Studies.

    The reduction to 0.5% of gross national income from the legally enshrined level of 0.7% does “little to alter [Britain’s] long-term fiscal outlook,” according to the document.

    Chancellor Rishi Sunak justified the aid cut, announced in November 2020, as necessary in the face of economic damage wrought by COVID-19, which required the government to borrow billions to support jobs and businesses. He promised that the aid budget would return to 0.7% “when the fiscal situation allows” — a line ministers have since stuck to, though no criteria or specifics about what that means have been forthcoming.

    “If the rationale underpinning the reduction in the aid budget is the size of the U.K.’s debt, then a temporary cut helps to achieve this a little, although in the context of the overall level of borrowing in this period, the impact is small,” the report said. “If it is an enduring budget deficit that the Chancellor is most concerned about, then a temporary cut will not impact the long-term fiscal outlook – a more permanent policy change would be needed.”

    Why does it matter: More cuts could be on the way, as might new legislation on development. There’s also the transparency aspect: Britain’s government has been repeatedly criticized for its secrecy over the aid cuts, and this report will likely fuel further distrust with the sector.

    The IFS’s director, Paul Johnson, wrote in the Times of London that he suspected the government's “intention is really to stick at the new lower level of spending,” calling on politicians to “be honest and tell us so.”

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    About the author

    • William Worley

      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.

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