A group of more than 100 non-governmental organisations (NGOs) in the aid and humanitarian sector jointly warned on Wednesday that UK aid spending will fall to its lowest level since 2007 unless the government makes urgent improvements in the autumn budget.
Aid groups say the country's aid budget will be just 0.36% of gross national income (GNI) by 2024, mainly because huge amounts of the budget will be diverted to hosting asylum seekers in the UK.
“If these plans are not amended urgently, the Prime Minister and his Government will withdraw vital services and humanitarian assistance to millions of marginalized people around the world and sit idle at international forums for months to come,” the joint statement warned.
It is the first concerted pressure on Labour over cuts to aid spending since the election, sparked by fears that the Treasury would not top up the aid budget given that a large proportion of it is still spent on housing refugees and asylum seekers in the UK.
The UK's Official Development Assistance (ODA) budget allocated to cover the costs of supporting refugees in the UK has increased from £500 million in 2019 to £4.3 billion in 2023, due in part to a growing backlog. The £4.3 billion, mainly spent by the Home Office, accounted for 29% of the total ODA budget.
Official figures show that aid budget costs for housing refugees will be around £3.8 billion in the current 2024-25 budget, bringing the UK's aid budget not spent on refugees to 3.6% of GNI, the lowest as a percentage of GNI since 2007.
The previous Conservative government injected an extra £2.5 billion over two years into the UK aid budget for 2022-23 and 2023-24 to cover the Home Office's extra costs for refugees, but this extra funding expired in April at the end of 2023-24.
Aid groups are concerned that the Treasury will not repeat the funding increase, which has been touted as a “budget of hard choices”.
In a private letter to Prime Minister Keir Starmer, aid group leaders said they feared the UK would arrive empty-handed at a series of world summits, including COP29 and the UN General Assembly, starting at the weekend.
To maintain credibility, they say, Britain needs to at least keep spending at its current level of 0.58% of GNI and put in place a plan to bring spending back up to the official target of 0.7%. Maintaining 0.58% of GNI would require an extra £2.2 billion.
The letter has been signed by some of the UK's largest NGOs, including ActionAid UK, Oxfam GB, CARE International UK, International Rescue Committee UK and Save the Children UK.
The letter has also received support from Labour backbench MPs, with Sarah Champion MP, who was re-elected chair of the International Development Select Committee, saying: “It is right to support refugees and asylum seekers, but recklessly spending UK aid budgets on exorbitant hotel prices for this vulnerable group in the UK is not only mismanagement of taxpayers' money, it deprives millions of vulnerable people around the world of the vital humanitarian support they need to stay safe in their own countries.”
“In the short term, the Government needs to increase the UK aid budget to cover these extra costs so we don't see further cuts to the programme. The UK aid budget is meant to tackle poverty and insecurity around the world, not to cover the costs of a broken asylum system at home.”
Romilly Greenhill, chief executive of UK NGO network Bond, said: “We are deeply concerned about further cuts to the UK aid budget. The government must act urgently in the Autumn Budget to provide additional funding for vital humanitarian aid and services for millions of marginalised people around the world.”
Halima Begum, chief executive of Oxfam GB, said: “If the government does not act swiftly to protect aid to the UK, the consequences will be devastating and far-reaching. At a time when the world faces huge challenges such as climate change and a worsening food insecurity crisis, the new government must restore the UK's aid budget.”
The Conservative government decided to cut the aid budget from 0.7% to 0.5% of GNI in 2021, a cut of £3 billion, and it was later announced that the cuts would be reversed once certain economic conditions were met.
The foreign ministry said: “This government's development goal is to create a poverty-free, liveable planet. Development spending is crucial to achieving our ambition and we are working to restore ODA spending to 0.7 percent of GNI as soon as fiscal conditions allow.”
“We are committed to transparency and will make public our ODA allocation plan for 2024-25 in due course.”
