UK aid: Reducing spending to 0.3% of GNI by 2027/28

In February 2025, the UK Government announced that UK aid spending will be “gradually reduced” from 0.5% of gross national income (GNI) to 0.3% of GNI in 2027. The reduction is intended to fund an increase in defence and security spending, which will reach 2.6% of gross domestic product (GDP) in 2027.

The International Development Minister, Anneliese Dodds, resigned following the announcement, saying the fall in aid spending will “likely lead to a UK [aid] pull out from numerous African, Caribbean and Western Balkan nations” and a reduced UK role internationally, including in climate negotiations and at the World Bank.

The fall follows a period of extended pressure on the aid budget since 2020, with spending falling from 0.7% of GNI to 0.5% of GNI in 2021. Up to 28% of UK aid has also been on refugees based in the UK. Other major donors, including the US and European countries, are also reducing aid spending.

This research briefing sets out the government’s decision, its plans on managing the reduction, and responses in the UK Parliament and aid sector.

What has been announced?

The government will reduce UK aid spending to 0.3% of GNI by 2027 (PDF). Ukraine, the Occupied Palestinian Territories, the UK’s Overseas Territories, Sudan, and addressing corruption, instability, climate change and global health are stated as continuing UK aid priorities.

In 2025/26, for all other country programmes, new aid spending decisions have been paused, with exceptions for ministerial priorities, humanitarian need and other named criteria (PDF). The government also plans to delay payments to multilateral bodies to give it greater flexibility for spending in specific countries. It also wants to reduce Home Office spending on refugees in the UK, which constituted 20% of UK aid in 2024, down from 28% in 2023.

The Prime Minister, Sir Keir Starmer, has acknowledged the move “remains a cut” and said the government will return to spending 0.7% of GNI as soon as possible. This was not projected to occur during the 2024–29 Parliament, based on existing fiscal tests and economic growth.

The International Development Minister, Annelise Dodds, resigned following the announcement and the Chair of the International Development Committee, Sarah Champion, called the reduction a “false economy”. The Leader of the Opposition, Kemi Badenoch, backed the government’s decision as “absolutely right” while Liberal Democrat Leader, Sir Ed Davey, said the reduction would result in a vacuum for China and Russia to fill.

What are the plans for UK aid spending?

The government expects aid reductions to provide £500 million for defence in 2025/26, £4.8 billion in 2026/27, and £6.5 billion in 2027/28. Aid at 0.3% of GNI in 2027 will total an estimated £9.2 billion, the lowest in cash terms since 2012. It would have reached £15.4 billion if aid had remained at 0.5% of GNI. As a proportion of GNI, spending will be the lowest level since 1999.

The Foreign, Commonwealth and Development Office (FCDO) annual report, due for publication in summer 2025, will set out spending plans for 2025/26. The FCDO is leading a cross-government review of UK aid (PDF) to ensure value for money and “strategic coherence”. The government will consider impact assessments when determining future spending plans.

What alternatives will be pursued?

The government says it will work to raise more private finance, such as through the City of London, to support development, and maximise the impact of UK aid through working with multilateral development banks.

The International Development Committee Chair, Sarah Champion, has suggested that the government act on debt relief for low-income countries to free up their own budgets, consider allowing British International Investment (BII) to borrow (BII already re-invests its profits from its investments), and increase its use of UK Aid Match. Bond, the umbrella organisation for UK civil society groups, has made similar recommendations for UK action, and says the UK must prioritise “leav[ing] no one behind” in development.

What happened to aid from 2020 and 2025? 

The UK aid landscape has changed significantly since 2020, with the creation of the FCDO in 2020, the (immediate and continuing) impact of the covid-19 pandemic on development goals, and the reduction in aid spending from 0.7% of GNI to 0.5% of GNI in 2021. Further pressure came from increased Home Office spending of aid funds on refugees and asylum seekers in the UK.

The Commons Library research briefing UK aid: spending reductions since 2020 and outlook from 2024/25 sets out these spending changes and provides analysis of their effects.