From slashing 0.7% to Yemen cuts: what’s happening with UK aid?

So much has happened regarding the UK’s aid budget cuts, which have hit NGOs, programmes and the world’s most marginalised.

To help you stay up to date, here’s our summary of the key facts and stats on what’s been going on, from dropping the 0.7% commitment to the recent cuts to Yemen and other countries experiencing humanitarian disasters.

Initial aid cuts in 2020

The pandemic has hit economies around the world hard, including the UK. The decrease in the UK’s GNI in 2020 led to a decline in what spending adds up to 0.7%. This decline has resulted in significant cuts to the UK’s aid budget, in line with the government’s commitment to meet the 0.7% commitment.

Amidst dire projections for economic growth, the government identified a £2.9 billion package of reductions, including underspends, activities to be delayed and spending to be stopped. These cuts were meant to be implemented immediately, with provisions to adjust further as GNI became clearer. This £2.9 billion package of reductions would have been a 19% decrease from 2019, higher than the estimated 10-14% reduction in GDP the Office for Budget Responsibility was predicting at the time. Read Bond’s summary of the 2020 aid cuts plans and Development Initiatives’ analysis of 2020 IATI Data.

The government’s process of identifying savings was opaque, completed without consultation and implemented with limited scope for appeal. As 2020 progressed and the cuts were implemented, the government continually resisted sharing any details of the official development assistance (ODA) cuts with Parliament, the development sector or the public.

But ICAI’s rapid review of UK aid spending during Covid-19 shed some light on the cuts. ICAI reported that 68% were achieved by rescheduling payments to multilaterals, 21% were made by deferring payments to the CDC and 11% were made to bilateral programmes implemented by NGOs and private sector suppliers. Beyond that little is known.

In February 2021, the government rejected our freedom of information request seeking information about the 2020 cuts. Bond criticised the rejection, saying the public and sector had a right to know details of the cuts.

Dropping the 0.7% commitment

The UK government committed to the UN target of 0.7% in 2013 and enshrined at commitment in law in the 2015 International Development Act, with cross-party support since. The commitment featured in all major parties’ manifesto commitments at the last election.

However, in the November 2020 Spending Review, chancellor Rishi Sunak announced the intention to reduce the government’s commitment from 0.7% to 0.5% of GNI, citing the financial impacts of the pandemic. This came shortly after the government allocated an additional £16.5 billion for defence spending over the next four years (taking it 2.2% of GNI). The additional £4 billion a year will more or less offset the savings from cutting the aid budget.

This move cuts the aid budget by 30% on top of any further reductions caused by the continuing poor prospects for economic growth. The announcement was met with an immediate backlash from the international development sector, former prime ministers, and across Parliament.

Development priorities

The following day, the foreign secretary, Dominic Raab, appeared before Parliament setting out a £10 billion aid budget alongside seven strategic priorities. Observers were quick to comment on the absence of a commitment to poverty reduction within the foreign secretary’s new strategic approach to ODA.

UK’s seven strategic priorities for ODA in 2021:

• Climate change and biodiversity
• Covid-19 and global health
• Girls’ education
• Science, research and technology
• Open societies and conflict resolution
• Trade and economic development
• Humanitarian response and preparedness

Raab also told Parliament that, according to legal advice taken by the government, without “a path back to 0.7% in the immediate, foreseeable future then legislation would be required”. No doubt primarily as a result of the passionate and growing backlash by Conservative MPs, no legislation has been brought forward to date, and there is a concern that they may try to avoid bringing the necessary legislation altogether. It was recently endorsed by former solicitor general and member of the House of Lords, Lord Edward Garnier.

Although 0.5% still hasn’t been legislated, the government has been acting to make it a reality. Once again, decisions have been taken without consultation and at speed. The government has continued to rebuff parliamentary questions and sector requests for information on the plans for allocating the new aid budget. A recent interview with minister James Cleverly gives the clearest statement yet that the government has no intention of discussing the aid cuts with international development experts until after the decisions had been made.

2021 and beyond

Nonetheless, a picture of UK aid in 2021 and beyond is emerging. We know from departmental allocations that the aid budget is being re-centralised in the hands of the new Foreign, Commonwealth and Development Office (FCDO), reversing the five-year trend of increasing the aid allocations of other departments. In 2021, the FCDO will be responsible for 81% of the aid budget, more than the combined total for DFID and FCO in 2019.

We can also start to estimate how much of the budget will need to be spent against existing commitments, particularly commitments to multilaterals, the CDC group, and allocations for in donor refugee and administrative costs. We can also estimate the annual aid commitments for climate change.

An estimate of the largest existing commitments for UK aid in 2021
World Bank commitments estimated…………………………….. £1000 million
European Union, including EU-Turkey Trust Fund ………….£1200 million
Global Fund for Aids, Malaria & TB …………………………………£440 million
GAVI…………………………………………………………………………………£330 million
CDC Group……………………………………………………………………….£782 million
In donor refugee costs …………………………………………………..£400 million
Administrative costs, including front line diplomacy……..£500 million
Climate change, annualised commitments…………………….£2300 million
Total…………………………………………………………………………………£6952 million

This estimate includes only the largest multilateral commitments. In 2019, multilateral commitments alone totalled £5 billion or half of the aid budget for 2021. The total here doesn’t include commitments to major UN agencies, such as OCHA, UNHCR, UNICEF, WHO or WFP.

This list, supported by analysis from Coalition for Global Development, indicated that we should expect painful cuts to bilateral funding across the board. It raises immediate questions as to how the government would meet its own strategic priorities.

Details emerge of cuts to Yemen and other countries

On 1 March, at the Yemen Pledging conference, the first concrete evidence of the scale of the cuts was made public. The UK pledge went down 60% from 2019, provoking renewed condemnation of the decision to scrap the 0.7% commitment. By the end of the week, and thanks only to a leak from within government, the details of proposed cuts country by country revealed the full scale of the costs of the move to 0.5%.

Despite the inclusion of humanitarian response and preparedness as a strategic priority, countries experiencing the world’s largest humanitarian disasters can expect cuts from 58–93%. Yemen, South Sudan and Nigeria, which top the UK government’s famine watchlist, will have their aid budgets slashed by over 50%. Others, like those in the Sahel, will see their budgets slashed by 93%.

The aid cuts are a false economy. It has always been clear that cuts of this scale this quickly will result in lives lost and the loss of hard-won development gains. Even by the government’s own measure of aid in the national interest, the cuts make no sense. They will damage the UK’s international reputation, hurt relationships, and undermine the UK’s security and ability to achieve foreign policy objectives.

The cuts to UK aid break a Tory manifesto commitment and are taking place with no transparency, consultation or meaningful strategy. If taken without parliamentary approval, the cuts will contravene the law.

In our recent letter with 100 INGOs, we called on the prime minster to reverse the decision to cut the aid budget by 30% and to reinstate the government’s commitment to 0.7%. Failing that, we call for an immediate vote in Parliament before further damaging and irreversible cuts to humanitarian and development programmes are made.