On 24 June 2021, the House of Lords is due to debate the following motion:

Lord Campbell of Pittenweem to ask Her Majesty’s Government what impact assessment they have undertaken of their proposed change to the target of spending 0.7 per cent of Gross National Income on Official Development Assistance.

Background to the decision to reduce UK ODA

The Government is under a statutory duty to meet the target of spending 0.7% of gross national income (GNI) on overseas development assistance (ODA) each year. This is set out in the International Development (Official Development Assistance Target) Act 2015 (the 2015 act). The act also says that if the target is not met, the secretary of state must make a statement to Parliament explaining why, referring if relevant to: economic circumstances (for instance, a substantial change in GNI); fiscal circumstances and the likely impact of meeting the target on taxation, public spending and public borrowing; and circumstances arising outside the UK. The statement must also set out what steps the secretary of state has taken to ensure the target will be met the following year.

Spending review 2020

At the spending review in November 2020, the Chancellor, Rishi Sunak, announced a cut in UK aid spending. Instead of meeting a commitment to spend 0.7% of GNI on ODA, he said the Government would spend £10 billion in 2021–22, the equivalent of 0.5% of GNI. Mr Sunak said that because of the unprecedented emergency caused by the coronavirus pandemic, the Government had to make tough choices and needed to prioritise limited resources on jobs and public services. He said the Government’s intention was to return to the 0.7% target when the fiscal situation allowed. This intention was reiterated in the Government’s background briefing notes on the 2021 Queen’s Speech.

The Government faced some criticism for this decision. For instance, all five living former prime ministers called on the Government to rethink the planned target cut. Sarah Champion (Labour MP for Rotherham), chair of the House of Commons International Development Committee, argued that “supporting the world’s poorest is the right thing to do” and that the Government should be “defining Global Britain as a force for good”. However, Rishi Sunak argued at the spending review that the UK would remain the second highest aid donor in the G7, according to data from the Organisation for Economic Cooperation and Development (OECD). The most recent data from the OECD shows that in 2020, of the other G7 countries, Germany spent 0.73% of its GNI on ODA, France spent 0.53%, Canada and Japan both spent 0.31%, Italy spent 0.22% and the United States 0.17%, although the US expenditure was the highest in monetary terms.

The Institute for Fiscal Studies and the Center for Global Development described the projected 24% fall in UK aid spending between 2020 and 2021 as “a steep one-year fall and a potentially significant policy change”. They called for more clarity from the Government about how it will assess when to return to meeting the 0.7% target.

Reducing ODA expenditure: is legislation required?

The Government suggested in 2020 it would legislate for the change of target. Dominic Raab, Secretary of State for Foreign, Commonwealth and Development Affairs, said after the spending review that “given the requirements of the act, the fact we cannot at this moment predict with certainty when the current fiscal circumstances will have sufficiently improved and our need to plan accordingly, we will need to bring forward legislation in due course”. Mr Raab said in January 2021 he was studying the requirements of the legislation “very carefully” and would set out further detail in due course on how the Government planned to proceed. He rejected suggestions the Government was “flouting” the requirements of the 2015 act by having announced a reduction in the target. Speaking in the Commons on 16 March 2021, the Prime Minister argued that the legislation allowed the Government to vary the ODA target in exceptional circumstances:

[T]he law makes it very clear that when we have exceptional circumstances—I do not think anybody in this House or around the world would contest that we have had exceptional circumstances—we are entitled to vary that 0.7% commitment, and that is what we are doing.

On 28 April 2021, responding to a Lords debate on aid and the Government’s recent integrated review, Lord Goldsmith, Minister of State at the Foreign, Commonwealth and Development Office (FCDO), said the Government would act in line with the [2015] act, which he stated “explicitly envisages that there may be circumstances where the 0.7% target is not met”.

Several politicians have expressed concern about the Government’s position. Lord Garnier (Conservative), a former solicitor general, and Lord Macdonald of River Glaven (Crossbench), a former director of public prosecutions, have both argued that although the current legislation sets out what the Government must do if it fails to meet the 0.7% target, it may be unlawful for the Government to take a decision in advance not to meet it.

UK ODA expenditure

UK ODA spending in 2020

Provisional figures released in April 2021 show the Government met the 0.7% target in 2020. The UK’s ODA spending was £14.5 billion in 2020, compared to £15.2 billion in 2019—a decrease of 4.7%. This fall was driven by a decrease in GNI, and therefore a reduction in the value of the 0.7% target, because of the effect of the coronavirus pandemic on the size of the UK economy.

The Government identified a package of £2.9 billion reductions in planned ODA spending in mid-2020 to allow it to meet, but not exceed, the lower 0.7% target for 2020. It said this was made up of “underspends, delaying activity and stopping some spend”. The Independent Commission for Aid Impact is currently conducting a review of the management of the 0.7% ODA spending target in 2020 but that review will not cover the decision to lower the spending target to 0.5%.

UK ODA spending in 2021–22

Further work has been ongoing to allocate the overall ODA budget for 2021–22. Dominic Raab carried out a cross-government ODA review after the spending review which concluded in January 2021. It set departmental ODA budgets in line with seven core priorities “in the overarching pursuit of poverty reduction”. These priorities were: climate and biodiversity; Covid and global health security; girls’ education; science and research; defending open societies and resolving conflict; humanitarian assistance; and promoting trade.

In April 2021, Mr Raab set out how the FCDO will spend its allocation of the overall ODA budget for 2021–22. This amounts to £8.1 billion, approximately 80% of the UK’s total ODA spending. The breakdown by thematic area is shown in the table below:

FCDO ODA allocation, 2021/22
Thematic area £m
Climate change and biodiversity 534
Covid and global health 1,305
Girls’ education 400
Humanitarian preparedness and response 906
Open societies and conflict 419
Science, research and technology 38
(plus thematic R&D)
Trade and economic development 491
Financial transactions 863
Programmes with cross-cutting themes 1,940
Arm’s-length bodies, international subscriptions and other fixed costs 1,219
Total 8,115

Mr Raab did not set out a country-by-country breakdown of planned aid spending, but he said the FCDO would spend around half its bilateral aid budget in Africa, and one third in the Indo-Pacific and South Asia to promote open societies, reinforce trade links and promote climate change collaboration. The FCDO’s ODA to China will be reduced by 95% to £0.9m to fund programmes on open societies and human rights, although there would be some additional ODA this year only to meet the contractual costs of exiting former programmes. On 3 June 2021, Mr Raab wrote to the House of Commons International Development Committee. An annex to the letter set out those countries that the FCDO had allocated bilateral ODA funding to in 2021–22. The department would also be spending through regional bilateral programmes “to reach countries not included on this list, such as in the Sahel, Caribbean, and Western Balkans”. Mr Raab also said that bilateral budget allocations did not include “imputed funding provided through UK core contributions to multilateral agencies”.

In March 2021, UK Research and Innovation (UKRI), the national funding agency for science and research, said its planned ODA funding from the Department for Business, Energy and Industrial Strategy (BEIS) for 2021–22 had reduced significantly. This left a £120m gap between allocations and commitments to grant holders. UKRI said the reduced ODA allocations would have “whole-system impacts in the UK and overseas”, including having to reprofile, reduce or terminate grants, and would mean it could not award new grants.

The House of Commons Library has published a briefing that examines UK ODA spending in further detail. This provides an analysis of spending from 2021, including a comparison of funding at 0.5% and 0.7%:

Current GNI estimates suggest that the economy will be larger in 2021 than in 2020, so if the aid target had remained at 0.7 percent, aid levels in 2021 would have been around £15.3 billion, higher than in both 2020 and 2019. However, the shift to the 0.5 percent target means it will instead be lower than this by nearly £4.4 billion.

Recent attempts to reverse the cut in ODA

Andrew Mitchell (Conservative MP for Sutton Coldfield), a former Secretary of State for International Development, tabled a new clause to the Advanced Research and Invention Agency Bill at its report stage in the House of Commons. The bill would establish the Advanced Research and Invention Agency (ARIA) as a statutory corporation. It would be a “new type” of funding body for conducting, commissioning and supporting scientific research. Mr Mitchell described the effect of his tabled new clause as follows:

This new clause is intended to reaffirm the duty in the International Development (Official Development Assistance Target) Act 2015 for UK official development assistance (ODA) to amount to 0.7% of gross national income each year. It would require ARIA to make up any shortfall in that proportion from January 2022.

On 7 June 2021, the Speaker determined that the amendment was outside the scope of the bill and therefore could not be debated. The Speaker also said that he expected the Government to “find a way” of having the change in the aid target debated “and to allow the House formally to take an effective decision”. Speaking in the Commons following the Speaker’s determination, Andrew Mitchell said that he believed that the new clause would have been agreed by the Commons “by not less than a majority of nine, and probably of around 20 votes”. On 8 June 2021, BBC News reported that the Government had said it had “no plans” to arrange a vote on the cut to the 0.7% target.

Potential impact of the cuts

The House of Commons International Development Committee is conducting an inquiry into the future of UK aid, which includes scrutiny of the cut in UK aid.

A number of organisations have submitted written evidence to the committee, including, for example, the World Health Organisation (WHO) and Médecins Sans Frontières. Both have expressed concern about the impact of funding changes to the UK’s Accelerating the Sustainable Control and Elimination of Neglected Tropical Diseases programme (ASCEND), and therefore on efforts to combat neglected tropical diseases (NTD). The WHO said ASCEND provides “crucial funding to national control, elimination and eradication programmes in 19 countries”. It also stated there were no obvious alternative sources of funding to “fill the funding gaps that will be left by the exit of ASCEND”. In its written evidence, Save the Children UK said that because UK aid predominately targeted the world’s poorest people, cuts to the UK’s aid budget “cannot be made without impacting the poorest and most vulnerable people in the world”.

The Foreign, Commonwealth and Development Office (FCDO) has also provided written evidence to the committee. On the impact of the changes, the FCDO said it had worked “over the last year with our supply partners in both the private and voluntary sector to help them adapt to the impact of the pandemic on the UK aid programme”. It said that allocation decisions for 2021–22 had been taken in line with objectives set out in the Integrated Review (for further information see the Lords Library’s briefing: ‘UK development aid and the Integrated Review’). The FCDO also said it was mindful of the impact of reducing or closing programmes on its supply partners and had considered FCDO programme managers’ advice on managing changes to specific programmes.

The International Development Committee has also held a series of oral evidence sessions.

The potential impact of funding cuts has been covered by several news organisations, including:

On 12 May 2021, Daniel Zeichner (Labour MP for Cambridge) asked the Government in a written question “whether an impact assessment was carried out prior to the decision to reduce the Official Development Assistance budget (a) in general and (b) on UK research and development”.

Answering the question on 21 May 2021, the Government said:

The UK is facing the worst economic contraction in over 300 years, and a budget deficit of close to £400 billion. Given the impact of this global pandemic on the economy and, as a result, the public finances, the UK has moved to spend 0.5% of GNI as Overseas Development Assistance (ODA) in 2021.

To ensure coherence and maximum value for money from ODA spending, the Foreign Secretary ran a cross-government process after the 2020 Spending Review to allocate ODA against the government’s priorities this year. During the following ODA allocation process for FCDO budgets in 2021/22, officials considered risks and impacts to inform advice to Ministers.

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Cover image by DFID on Flickr.