What the final 2020 statistics for international development do (and don’t) tell us

The Foreign, Commonwealth & Development Office (FCDO) has released their annual Statistics on International Development, which provide final statistics on how much Official Development Assistance (ODA) the UK provided in 2020.

2020 was a year that put UK ODA under immense pressure. The COVID pandemic created increased unanticipated need globally. Alongside this, the pandemic-related shrinking of Gross National Income (GNI) and the UK government’s choice to treat the 0.7% GNI target as a ceiling led to cuts to the UK’s overall ODA budget. For the first time since the target was enshrined in law, ODA spending fell both against the previous year as well as against planned spending.

These statistics provide us with the actual UK spend in 2020, i.e., the funding the FCDO spent rather than intended to spend, and the opportunity to compare it to actual spend from previous years. What these statistics don’t do, despite the FCDO insisting they would in response to our Freedom of Information (FOI) request, is explain where the in-year cuts were made to meet, but not exceed, the 0.7 target. Because we still don’t know what the planned ODA budget was for 2020 (departmental budgets are set by financial year), we cannot accurately calculate where the cuts fell – for example, a programme may have ceased to be funded between 2019 and 2020, but that may have been a long-planned withdrawal rather than a response to the COVID-related cuts. Equally, there may have been new or increased funding planned for humanitarian and development programmes that were then cut, which we have no way of knowing about despite the very real impacts on partner communities and organisations.

What we can do, is look at the trends between 2019 and 2020 and see what they tell us about the UK’s humanitarian aid and development priorities in 2020 and beyond.

ODA fell overall

In line with the shrinking of the UK’s economy, ODA fell by £700m, or 4.6%, during this period compared to 2019. This meant that the overall budget remained exactly 0.7% of GNI.

The FCDO’s share of ODA dropped from 77.7% to 73.7%, meaning they made proportionately more reductions than other departments. When we split that into the portfolios of former-DFID and former-FCO, most of these reductions were made in former-DFID’s share of ODA. The biggest increase for Other Government Departments (OGDs) was to the Home Office, which increased from 2.9% to 4.1% of total ODA. Department for Business, Energy & Industrial Strategy (BEIS) also continued its trend of increasing ODA, with 6.9% compared to 6.3% the previous year.

There was a shift away from bilateral spending

The majority of spending continued to be bilateral (65.8%) rather than through multilaterals (34.2%). However, compared to 2019, bilateral ODA fell by 8.4% (£871m) whilst multilateral ODA rose by 3.6% (£173m). Either this indicates an existing plan to increase the multilateral share in 2020, or it confirms the findings of the Independent Commission for Aid Impact (ICAI) rapid review on the management of 0.7% ODA spending target in 2020 that cuts disproportionately affected bilateral programmes.

The biggest multilateral recipient was the European Commission’s development budget, receiving £1.149m, an increase of £166m compared to 2019. The UK contributions to the International Development Association totalled £920m, an increase of £29m.

On loans, the UK continued its practice of spending largely through grants. However, the share spent as loans rose from 0% of ODA in 2019 to £1.6% or £255m in 2020.

Asia lost out, whilst the Americas gained

Overall, funding fell to Africa (by 12.6% or £375m), Asia (by 20% or £494m) and Europe (by 11.6% or £22m). Funding increased for the Americas (by 11.7% or £29m) and the Pacific region (by 17.6% or £3m). Africa still received more than half of ODA funding, with its percentage share increasing from 50.6% to 51.8%. Asia was hit proportionately harder by the spending reductions, with its percentage share decreasing from 41.8% to 39.2%.

Of 136 bilateral country partners, 103 received less funding in 2020 than in 2019. The three countries that received the biggest reductions in absolute terms were Pakistan (£105m), Afghanistan (£66m) and Uganda (£64m). The biggest increases in absolute terms were to Somalia (£57m), Sudan (£46m) and Colombia (£24m). Several countries had their funding reduced by 95-100%, including Mauritania, Gabon, Togo, Samoa and Vanuatu.

Least developed countries (LDCs) and other low-income countries (OLICs) received £417m less than in 2019. Compared to middle-income countries, this was a proportionately smaller cut and so the percentage share of ODA going to the poorest countries increased by 0.2%. Lower middle-income countries (LMICs) saw the biggest reductions with an absolute cut of £322m whilst upper-middle-income countries (UMICs) received £16m less. Overall 56.5% went to LDCs and OLICs, 27% to LMICs and 16% to UMICs.

Spend by sector

Unsurprisingly, health became the highest-funded sector in 2020, with an increase of £164m to total £1.6bn or 16.7% of bilateral ODA. Humanitarian funding came second, with a reduction of £5m during the period. Of the 14 sectors by which government categorises its ODA spend, 8 saw reductions between 2019 and 2020. The biggest reductions were to economic and infrastructure services, which were reduced by £427m or 31%, education, which was reduced by £244m or 31%, and government and civil society, which saw a reduction of £259m or 19.9%.

Conversely, in-donor refugee costs increased by £150m (31.5%), matching the £151m increase in ODA spent by the Home Office. Action relating to debt also increased from £0 in 2019 to £194m in 2020, which may include the £150m contribution to the IMF Catastrophe, Containment and Relief Trust for COVID related debt relief.

What does this mean?

With even bigger changes to UK ODA being implemented in 2021, it will be several years before we can see what the long-term trends were. The increase in spending to the Pacific aligns with the strategy laid out in the Integrated Review and we can reasonably expect that to continue, whereas the reduction in Asia does not fit with this strategy and we already know that the reduction in FCDO share of ODA is not going to continue. Whilst the trends are difficult to identify, it is clear that significant reductions were experienced across the board in the UK’s ODA programming in 2020 which we cannot understand without greater transparency.

In many ways, the statistics this year show some continuation of the norm; Africa and LDCs continue to receive the bulk of the funding, the highest-funded sectors remained largely the same and bilateral continued to be prioritised over multilateral. But the changes we can see are concerning, including the shift away from bilateral spend, the severe cuts to education programmes as well as to humanitarian, government and civil society and WASH funding, the rise in spending on in-donor refugee costs and the slight increase in loans. In the context of further cuts to the UK’s ODA budget in 2021, it is vital that the UK prioritises spending for people who need UK aid the most and where it is effective, so we will continue to monitor these trends closely.