Immediate changes to UK aid budget outlined in Minister letter to IDC – Bond reaction

In a letter from Minister for International Development, Baroness Chapman to Parliament’s International Development Committee (IDC) published yesterday (Thursday 27 March) she confirmed that the UK aid budget will no longer be linked to changes in the UK’s gross national income.

In the letter, Minister Baroness Chapman said the Foreign, Commonwealth and Development Office (FCDO) will lose its role as the Government’s aid ‘spender and saver of last resort’, meaning that it will no longer need to adjust its budgets to hit a spending commitment if gross national income (GNI) changes or other department’s costs increase.

The Minister also confirmed that “bilateral aid spending has been set to meet only existing contracts, suggesting that with a few exceptions there will be no new additional bilateral aid programming in 2025/26. Exceptions include full UK aid allocations for Ukraine, the Occupied Palestinian Territories, Sudan, and the Overseas Territories. She also confirmed that for multilateral payments, Financial Transactions (FTs), Arm’s-Length Bodies, International Subscriptions and Scholarships, initial 2025/26 ODA allocations have been set at the full planned level.” This includes planned funding for British International Investment (BII), British Council and scholarships to UK universities.

In reaction to the letter, Gideon Rabinowitz, Director of Policy and Advocacy at Bond, the UK network for organisations working in international development and humanitarian assistance, said:

It is deeply concerning that the government is prioritising UK aid funding for BII and university scholarships over critical humanitarian support for countries like Afghanistan, DRC, Ethiopia, Uganda and Yemen. This decision not only abandons communities facing unimaginable hardship but also undermines efforts to achieve global stability and damages the UK’s credibility as a reliable partner. The government needs to urgently publish an impact assessment explaining these decisions and whether the impact of the cuts has been thought through.
The government is repeating the previous government’s past mistakes by focusing on short-term decisions instead of long-term impact. Stop-start funding disrupts development progress and is poor value for money.
Ending the FCDO’s role as the ‘spender and saver of last resort’ is a stealth cut to the UK aid budget since FCDO will not be able to benefit from any improved GNI or any money recovered back from spending on asylum accommodation.

ENDS.

Notes for editors

Read the letter.
According to the Spring Statement (p.25) the UK aid budget is planned to be reduced to 0.48% of GNI in 2025/26, and to 0.34% of GNI in 2026/27.
Read Bond’s latest blog on the four ways the government can manage the planned UK aid cuts to limit their damage.
Read Bond’s latest briefing on how the government can limit the damage of the cuts to UK aid and development programmes, including reducing spending to BII.
On Tuesday 25 February, the Prime Minister announced that the UK Official Development Assistance (ODA) will be reduced by 0.2 % of GNI, to fund an increase in defence spending from 2.3 to 2.5% of GDP by 2027. This cut will bring UK ODA as a percentage of GNI to 0.3%. Read Bond’s reaction.
Bond is the UK network for organisations working in international development. Bond unites and supports a diverse network of over 350 civil society organisations from across the UK, and allies to help eradicate global poverty, inequality and injustice.
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