UK aid cuts: 6 things left to fight for

The United Kingdom government took many in the aid sector by surprise with its recent announcement that its aid spending would fall further in coming years — from 0.5% of gross national income to 0.3% by 2027. But precisely because so many were taken by surprise — including the development minister herself — aid leaders believe there is plenty of opportunity to influence how the cuts are delivered, and how much impact there will be on the most vulnerable. In theory, there may even be an opportunity to reverse public and political opinion, but leaders currently feel it is more realistic to influence how spending will fall – not whether. Devex was joined in a live event by Romilly Greenhill, CEO of Bond, the network for U.K. organizations working in international development, and Ian Mitchell, co-director of the Center for Global Development, to discuss some of the the key questions. 1. When will the cuts start? So far, the government has said only that aid will fall to 0.3% of GNI by 2027. It hasn’t said anything about what might happen in 2026. Right now, said Mitchell, it’s far from clear what will happen, with some people talking of a “glide path” down from 0.5% to 0.3%. “The U.K.’s commitments to multilaterals and everywhere has been predicated on having a 0.5% budget,” he said. “And so the longer you can have a 0.5% budget, the better prepared you are for 0.3%, and the less painful cuts you have to make. So I absolutely think that David Lammy in the Foreign Office and advocates should be pushing hard for that.” 2. Can in-donor refugee costs be brought down — or even excluded from the calculation? The United Kingdom currently spends two and a half times as much, per capita on refugees as any other nation in the Group of Seven advanced economies, Mitchell said — at certain points, around a quarter of the aid budget. Right now, he estimated, it is likely to cost around £3 billion a year in the coming years. Mitchell said that it was time for the Home Office to work to bring down the cost of supporting each refugee, but that it was also time to remove spending on in-donor refugee costs from the aid budget altogether. 3. Can we avoid the impact falling on the poorest? Right now, the U.K. Foreign, Commonwealth and Development Office is involved in a spending review in which it assesses how aid will be spent, which is intended to be published alongside a new aid strategy, although the department may have to go back to the beginning following the decision to make cuts. Additionally, the department has a number of preexisting commitments to multilateral organizations, and is co-hosting the replenishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria, which will likely require a substantial commitment. Panelists called on FCDO to front-load those commitments into the existing budget, in order to ensure that space remained to support bilateral aid to low-income countries — unlike during previous aid cuts, when the government was forced to maintain existing commitments and cut almost entirely from bilateral aid. “One of the things that we’re really calling for is a transparent and consultative process for making these cuts,” Greenhill said. “And if there’s one small chink of light, it’s that they’re not coming in, as we’ve discussed, for two years. So actually there’s time to have consultation with civil society, to have transparency about how the cuts are made, and also an impact assessment.” 4. How do we make the case for increased spending in the future? Broadly, Mitchell said, the U.K. public has supported the decision to spend more on defense and less on aid. Even most aid advocates have said they are supportive of an increase in defense spending, but they want it to come from a wealth tax or from other sources, rather than entirely from aid. Nonetheless, the panelists said, it was clear that the development sector had work to do, in order to convince the public and politicians that money spent on aid was worthwhile. Part of it, Greenhill said, was about making the case better. “If you talk to the public about, do you want to spend on aid, they generally say no,” Greenhill said. “But if you ask, do you want children to be vaccinated, women to have family planning, kids to go to school, conflict to be prevented, nature and climate to be protected? More of them say yes.” “That’s something for us to think about: Are we talking to the public in the right ways? It’s a bit of homework for us in the sector to be honest,” she added. 5. What’s going to happen to British International Investment? In the coming years, the U.K. government is expected to spend significantly more on its development finance institution, British International Investment. But panelists said that in light of the decision to cut aid spending, this is a proposition that could be reconsidered. “I think if this government is saying that this move to 0.3% is temporary, then the recapitalization of BII should be put on a temporary pause,” Greenhill said. “Only 17% of their investment goes to least developed countries. A lot of it goes to middle-income countries. And I think it's estimated that about £900 million a year, annually, is supposed to be going to BII from 2026 onwards. That is a lot of money that could be reallocated into the Global Fund or Gavi, or financial programs or civil society funding, or all sorts of other things.” “I think that is something that should be looked at quite seriously now to mitigate some of the impacts of the cuts,” she added. 6. Where else can the development sector make progress? While spending on official development assistance, or ODA, might be falling, the panelists said, there was plenty of scope for the U.K. aid sector to make progress on other issues that might eventually have more development impact than direct spending. They picked out three issues in particular — debt, taxes, and illicit financial flows. Debt remains one of the most serious issues facing global south countries. Low- and middle-income countries now spend more on debt repayment than they receive in grants and loans, and almost half the world’s population lives in countries which spend more on debt than education or health. Meanwhile, low-income countries continue to lose out on tax that should be paid by individuals and organizations. Given how many debt contracts are held under English law, Greenhill said, there is a lot that the U.K. government can do to influence the situation.