Only one-third of a big increase in the United Kingdom’s aid budget can be spent on frontline development because the rest of the money must be invested in private sector assets instead, an expert is warning.
Andrew Mitchell, the international development minister, has hailed a welcome turnaround after years of painful spending cuts at the Foreign, Commonwealth & Development Office, or FCDO, with a forecast 12% rise — amounting to £900 million ($1.14 billion) — in the financial year 2024-25.
But the small print of the U.K.’s spending plans suggests around £600 million of this £900 million will be swallowed up by a Treasury demand to allocate it to “financial transactions” — meaning private sector investments by British International Investment and other development finance bodies.