Reducing the UK’s aid spend in 2021 and 2022

In 2021, UK aid spending fell 21% compared to 2020 to stand at £11.4 billion.

The fall reflected the Government’s decision to reduce aid spending from 0.7% to 0.5% of Gross National Income (GNI) as a “temporary measure” in response to the pandemic’s effects on the UK’s public finances and economy.

2021 was the first time since 2013 that the UK did not meet the UN target to spend 0.7% of its GNI on Official Development Assistance (ODA). Following the November 2022 Autumn statement, spending is not expected to be restored to 0.7% until after 2027/28 at least.

ODA is aid that promotes the economic development and welfare of developing countries. It’s reported under rules set by the Organisation for Economic Cooperation and Development (OECD).

This paper sets out the effects of a reduced aid budget on the UK’s aid spending in 2021, and the continuing pressures the budget faces in 2022.

What are the priorities for UK aid spending?

UK aid spending in 2021 and 2022 has been governed by two strategies.

Both these strategies build on the 2021 Integrated Review of Security, Defence, Development and Foreign Policy, which set out aims to use diplomacy and development to strengthen UK engagement in the Indo-Pacific and Africa and said climate change is the UK’s “number one” global priority.

Aid spending for 2021/22 took place under seven priorities, which included girls’ education, climate change, and responding to the Covid-19 pandemic.

A new aid strategy, which runs for ten years, was published in May 2022. This retains the earlier geographic focus and has four priorities: Reliable investment and trade, empowering women and girls, humanitarian assistance, and climate change, biodiversity, and global health.

What countries were affected by the changes?

For 2021, the Government said the Indo-Pacific and Africa, and humanitarian crises in Yemen, Syria, Somalia and South Sudan were aid priorities.

Almost all countries had large reductions in aid in 2021, compared with the amount they had received in 2020. This included these four countries: Yemen (£221 million to £114m), Syria (£181m to £91m), Somalia (£232m to £101m) and South Sudan (£156m to £96m). South Africa was one of the few that saw an increase, largely due to an increase in climate finance (up £54 million) to become the sixth largest recipient of UK bilateral aid in 2021.

How did thematic spending change?

The FCDO identified seven priority areas for 2021/22 spending, in addition to the legislative requirement for development assistance to reduce poverty and gender inequality. Data released in November 2022 does not align to these categories, but the National Audit Office (NAO) in March 2022 said all seven categories apart from climate change saw a reduction in spending in 2021/22.

How well were the 2021 reductions managed?

The FCDO says its equalities assessments found programmes targeting those with protected characteristics were no more likely to be reduced than other programmes. However, a leaked report to the International Development Committee (IDC), drafted in March 2021, suggested there would be reductions in programmes targeted at women, girls, and those with disabilities.

In May 2022, the NAO said it was “too early” to assess the impact of spending changes on long-term value for money.

The IDC has been critical of the level of transparency of the changes (PDF) and said this affected its ability to scrutinise aid spending. The FCDO says it remains committed to transparency and that the re-prioritisation of aid due to the pandemic affected its ability to publish timely forward plans.

What pressures will continue in 2022?

Aid spending will remain “around 0.5%” of GNI until at least 2027/28. The Government says it currently stands at 0.55%.

While this allows some stability in the budget, some pressures will continue:

• The new aid strategy’s aim for more aid to be delivered directly to countries, rather than via multilateral institutions such as the World Bank, will lead to further changes in UK international commitments.
• The costs of hosting Afghan, Ukrainian and other refugees for the first 12 months they are in the UK, allowed under international aid rules, has put pressure on aid spent overseas. The Government has announced £2.5 billion in additional funding in ODA for 2022-25 in response.
• 25% of the £3 billion in humanitarian aid for 2022-25 is already committed to the humanitarian crises in Yemen, Syria, Afghanistan and Ukraine, suggesting other situations may see further reductions.

The FCDO has delayed publication of its forward plans for country spending for 2022/23 due to the uncertainties in spending following the war in Ukraine. In October 2022, it said it will provide an update “in due course.”

Update log

13 December 2022: Updated following release of FCDO spending statistics for 2021, timeline on returning to 0.7%, and added information on outlook for 2022/23