UK growth doesn't mean DfID budget increase

George Osborne’s latest statement could well be a source of celebration and contemplation for British charities.

“Britain’s economic plan is working,” the U.K. Chancellor of the Exchequer on Thursday before the House of Commons, and the Office for Budget Responsibility’s growth projections for the coming years have increased. Estimated growth for 2013 and 2014 is now at 1.4 percent and 2.4 percent, respectively, instead of the 0.6 percent and 1.8 percent projections in March.

For the development community, that means Britain’s ODA in real terms could further increase — perhaps even beyond earlier projections of 11.3 billion pounds and 11.7 billion pounds in the next two years — as the United Kingdom maintains its promise to spend 0.7 percent of GNI on aid.

Osborne was clear though that the government will not increase the U.K. Department for International Development’s budget any further.

Any increase in the aid budget would be channeled to other departments such as the Foreign and Commonwealth Office and the Department of Energy and Climate Change — the top two that have taken increasing proportions of the aid budget, according to Development Initiatives Analyst’s Sarah Hénon’s review of the aid budget breakdown based on figures from the Office of National Statistics or the Ministry of Defense, which played an important role in British  humanitarian aid efforts in the typhoon-hit Philippines.

Now this is where the development community will keep an eagle eye on, especially that the way aid is spent in these departments differs from DfID, and their focus is not always about poverty eradication — although the aid agency is currently facing a similar issue with its regional integration program in Southern Africa.

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