UK incorrectly claims it is forced to use aid budget on refugee hotels

The U.K. government has been criticized for wrongly claiming it is forced by international rules to divert billions of pounds from its aid budget to pay the hotel bills of a vast backlog of asylum seekers. Aid organizations reacted with astonishment after the Home Office’s top civil servant told an inquiry last week: “It is not a choice of the British Government to score that money as official development assistance; it is just part of the rules.” In fact, the Paris-based Development Assistance Committee — which oversees official development assistance spending — has urged members to recognize that they “have the option to decide that such costs are additional to their planned development budgets,” as many countries have chosen to do. Only last month, in its scathing review of U.K. aid, the committee called for “a cap on the amount of ODA that can be spent domestically” to “protect” the budget from raids by domestic departments. Furthermore, until the Conservative Party took power in 2010, the U.K. chose not to report domestic spending on refugees as ODA — despite the numbers of asylum seekers rising rapidly in the early 2000s. There is a huge amount of money at stake: In 2023, 27.9% of the aid budget was spent within the United Kingdom — a total of £4.3 billion, of which almost £3 billion was Home Office spending largely on refugee housing and food costs. The U.K. government has declined to ask the DAC if this spending is still legitimate, following a draconian crackdown on refugee rights which bars asylum claims by anyone arriving without permission. Tamsyn Barton, the chief commissioner at U.K. aid watchdog Independent Commission for Aid Impact, said Matthew Rycroft, the head of the Home Office, was wrong in the evidence he gave to a Parliamentary committee last week. “While reporting UK refugee costs within the first 12 months as official development assistance is within the international rules, the UK's current approach of counting everything it possibly can goes further than other major donors,” she told Devex. “The rules make clear that countries are not required to report all of their domestic refugee costs as ODA and indeed many fund some of their support in other ways.” Gideon Rabinowitz, director of policy at BOND, the U.K. network for aid organizations, said of Rycroft’s claim: “This is not the case. Before 2010, the U.K. government did not report refugee spending as ODA on the principled basis that it did not think it was an appropriate way to spend U.K. aid money. “The DAC has urged donors to take a conservative approach and was very clear in its midterm review of U.K. aid that the U.K. is not acting within the spirit of these rules.” In a blog almost one year ago, DAC chair Carsten Staur wrote of so-called in-donor refugee costs, or IDRC: “Even though these costs can be reported as ODA, this does not mean that a country must do so.” A recent DAC survey highlighted how Australia, Luxembourg, and Hungary do not score IDRC as ODA — while Greece does not do so for refugees from Ukraine, and Netherlands and Belgium report only some of their Ukraine costs. Yet Rycroft, who was the last head of the axed Department for International Development, repeated his claim, telling members of Parliament: “There is no choice. It is not a Government policy decision whether or not to count this spending as ODA. It is ODA. It has to count as ODA.” During the evidence session, the Home Office also admitted for the first time that it may have to stop diverting the aid budget when its Illegal Migration Act — creating a legal duty to detain and deport all unauthorized asylum seekers — is fully enacted, as Devex revealed last year. “It is something that is currently being reviewed as part of the overall accounting officer advice,” Dan Hobbs, the Home Office’s director general for migration and borders group. Hobbs was not asked why the U.K. has not consulted the DAC about the controversy.