Before members of the U.K. parliament, George Osborne promised to honor the British government’s commitment to spend 0.7 percent of gross national income on aid. But with the proud statement comes a caveat: the 2013 development budget will actually be lower than previously planned.
In his autumn statement, the Treasury chief stressed that the United Kingdom will not spend more than 0.7 percent of GNI on development assistance despite lower economic growth forecasts for the next two years. So while the United Kingdom’s official development assistance budget will increase from an estimated 8.65 billion pounds ($13.93 billion) in 2012, or 0.56 percent of GNI, to 11.3 billion pounds in 2013, or 0.7 percent of GNI, next year’s allocation would be 254 million pounds lower than 2011 projections. The 2014 ODA budget, meanwhile, would reach 11.77 billion pounds, 388 million pounds lower than the 2011 estimate.
The “savings” gained as a result of lower development spending, compared with 2011 estimates, will form part of the 5 billion pounds that will be invested in Britain’s infrastructure, such as roads and schools.
As expected, aid groups welcomed Osborne’s commitment to follow through on the United Kingdom’s promise to spend 0.7 percent of GNI on aid. VSO Chief Executive Marg Mayne saw the move as possible inspiration to other donors and an affirmation of the United Kingdom’s aid leadership. Emma Seery, Oxfam’s development finance head, said Osborne “deserves credit for sticking to his promises to the world’s poorest people during these difficult economic times.”
But Adrian Lovett, ONE’s executive director for Europe, pointed out that the resulting reductions in the Department for International Development’s budget over the next two years are “the second largest of any government department.”
Further, Seery expressed her disappointment that there will be “less UK aid available to pay for the medicines, teachers and clean water that make such a difference to millions in poor countries.”
U.K. Secretary of State for International Development Justine Greening, however, glossed over her agency’s reduced budget, and instead trumpeted the fact that Osborne’s commitment means the United Kingdom “will be the first G-8 country” to spend 0.7 percent of GNI on aid.
Meanwhile, Sol Oyuela, Christian Aid’s senior political adviser, called for a complementing tax strategy. “Aid has not been immune to the economic downturn and the absolute spend will be less than originally forecast. This is all the more reason to ensure the money is well spent,” Oyuela said.
“Despite the Chancellor’s tough rhetoric on tax avoiders, it is once again the squashed bottom who will feel the biggest pinch,” Oxfam’s U.K. poverty director Chris Johnes said. “The Government should be going further and faster in clamping down on tax avoidance rather than making the poorest people foot the bill for economic failure.”
Tax is one of the topics Osborne touched on his autumn statement, along with other sectors grouped under three action areas: protecting the economy, growth and fairness. This is one of two statements the Treasury department releases following the publication of economic forecasts.
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