Last November the government provoked outrage when it announced plans to slash foreign aid by roughly £5 billion – from 0.7 to 0.5 per cent of national income – because of the pandemic fallout.
Outlining the autumn spending review on Wednesday, Chancellor Rishi Sunak suggested that because the UK is on track to hit the Treasury’s fiscal targets, these cuts will be likely reversed by 2024.
The move has been cautiously welcomed by the development sector as a “backhanded victory”. They say the damage to Britain’s reputation abroad has already been done, while there is no guarantee that the funding rise will be upheld.
The 200-page spending review also did little to counter growing unease that the aid budget – set at £11.4bn in the next financial year – will be subject to “under the table cuts”, as areas not traditionally deemed overseas development aid (ODA) are included.
While the details remain hazy, NGOs say the wording of the budget document has only increased their concerns that donations of surplus vaccines, debt relief and special drawing rights – reserves released by the International Monetary Fund that the UK is channelling towards lower income countries – will be listed as ODA.
Stephanie Draper, chief executive of Bond, a network for UK NGOS, accused the Treasury of “accountancy trickery”.
“The government is once again balancing the books on the backs of the poorest and jeopardising trust in the UK around the world,” she said. “There will be even less funding for humanitarian and development programmes and potentially a third round of cuts to life saving work.”
Amy Dodd, director of development finance policy at the One Campaign, added: “This lack of clarity is disappointing and strengthens concerns that the Chancellor is using accounting trickery to make further cuts… Implementing further cuts by stealth would exacerbate the challenges of climate and Covid already faced by developing countries.”
A shifting spending strategy
The budget document did, however, restate the UK’s top priorities when it comes to aid spending: women and girls, humanitarian assistance, clean and green infrastructure financing and nature and tackling climate change.
The Telegraph also understands that, over the next three years, the Foreign and Development Office also intends to shift much of its ODA spending from multilateral organisations – such as the World Bank or the Global Fund to fight Aids, Tuberculosis and Malaria – towards bilateral agreements with specific countries.
The Government believes this could ensure greater accountability and value for money, and could bolster diplomatic influence worldwide. It’s not yet clear who will be the winners or losers, but some experts are sceptical of the move.
“While I’d advocate for a balance of both, there’s absolutely no question that the multilateral system has a whole range of benefits,” Ms Dodd told the Telegraph. “It’s more efficient as you’re pooling resources… it’s good value for money, and multilaterals also score well on the effectiveness and quality of their spending.”
There are also some concerns about an apparent increase in capital spending – which goes towards infrastructure projects – over resource spending, amid suggestions this could make the aid budget less flexible.
“By the end of the spending review period, FCDO will be expected to spend about one-third of its budget as less flexible ‘capital’ expenditure; that makes it harder, not easier, for the Government to act on its stated development priorities,” said Ranil Dissanayake, a policy fellow at the Center for Global Development.
“It’s not quite the ‘age of optimism’ if you’re an aid recipient,” he added.
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