Final UK ODA statistics for 2023 – The legacy of recent cuts and what is at stake in the budget

The publishing, today, of the FCDO’s “Statistics on International Development: final UK ODA spend 2023” provides further illustration of the devastating impacts of recent aid cuts.

It also provides a stark warning about what additional damage will be done to the communities and partners the UK supports around the world and to our own global reputation, if new aid cuts – which Bond has warned about – are introduced in October’s budget.

The FCDO’s latest statistical release on Official Development Assistance (ODA) presents final and detailed data on the UK’s ODA spending in 2023. Overall, as we already reported on in April, the picture looked positive in 2023, with total UK ODA increasing by 20% to £15,344 million (0.58% of GNI), helped by additional funding allocated to the ODA budget by the Treasury in order to manage the impact of large levels of ODA being used to support refugees in the UK

However, because in 2023 UK ODA for refugees rose to record levels (£4.3 billion, 28% of the UK ODA budget) and there were significant increases in multilateral ODA spending (by £2.2 billion, to £5.3 billion), the level of bilateral ODA available for the poorest countries and for supporting sectors vital to tackling poverty, marginalisation and insecurity, have continued to fall. In 2023, UK bilateral ODA for:

• humanitarian support fell to £878 million, a decrease of 21% compared to 2022, 43% since 2020 and its lowest level since 2014
• health fell to £764 million, a decrease of 21% compared to 2022, 52% since 2020 and its lowest level since 2014
• education fell to £346 million, a marginal decrease compared to 2022, but a decrease of 64% since 2016 and its lowest level since 2009
• water and sanitation fell to just £38 million, a decrease of 17% compared to 2020, 82% since 2018 and its lowest level since 2009

Regarding country recipients, UK bilateral ODA to Least Developed Countries (LDCs), African countries and lower middle-income countries fell further in 2023, whereas ODA to upper-middle income countries increased marginally. The level of UK ODA to African countries in 2023 was just 59% of (and £1.8 billion less than) its level in 2019.

Although overall levels of UK bilateral ODA have fallen significantly in recent years, the share of UK bilateral ODA received by LDCs continued to plummet, to 47.2% in 2023, compared to 53% in 2018, and from a peak of 60% in 2011. Although the share of UK bilateral ODA to African countries increased from 42% to 46% in 2023. it was still well below 2019 (51%) and 2015 (55%) levels. These trends highlight growing questions about the degree to which levels of poverty and need are driving UK bilateral ODA allocations by country.

Positively, significant increases in FCDO bilateral country programmes are planned for 2024/25, especially in Africa, which will likely help to initiate some of the rebuilding of UK bilateral programmes that are so urgently required. However, there remain very significant questions about whether these spending plans can be delivered and, if so, whether this level of ambition can be sustained beyond this year.

These questions are driven by two key decisions on ODA spending the new government has inherited from its predecessor – 1) To return UK ODA to 0.5% from 2024 by not allocating any additional budget to manage spending pressures and 2) The continued near-record levels of UK ODA being utilised for supporting refugees in the UK (which we estimate will be around £3.6 billion in 2024).

Bond’s analysis is that the combination of these factors will result in UK ODA, excluding ODA used to support refugees in the UK, will fall to just 0.36% of GNI in 2024, its lowest level since 2007. The resulting spending pressures will be enormous, especially when it is considered that in, next two years, the UK has committed to deliver significant increases to its climate finance (at least £2.5 billion in 2024/25 and £3.4 billion in 2025/26).

Of course, these spending plans are far from set in stone and these spending pressures can be eased. The upcoming budget on 30 October provides the government with an important opportunity to change course.

Bond and over 120 of our members are therefore calling on the government to use this budget to:

• Allocate the additional ODA required to maintain an ODA budget of 0.58% of GNI (2023 ODA level) for 2024/25 and 2025/26 to reflect the large volumes of ODA still being spent on refugees in the UK.
• Reform the widely criticised (by ICAI and the OECD) methodology it has inherited for reporting ODA spending on refugees – which has resulted in the UK claiming the highest costs per refugee of any donor – whilst over the long-term fund vital support for refugees from other budgets outside of ODA.

It is also important that the government uses the budget to set out new plans for how and when they  will return the UK ODA budget to 0.7% of GNI, by introducing fair and transparent fiscal tests and committing to scale up UK aid as progress is made towards meeting these tests.

Without these steps the new government’s welcome commitment to rebuild its reputation on international development will look like mere rhetoric, and it risks turning up empty-handed to key global moments, including the G20 Leaders Summit, the climate and biodiversity COPs, IDA replenishment conference and the Financing for Development summit, over the next year.