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In 2020, the UK Government announced it would reduce its aid spending from 0.7% to 0.5% of Gross National Income (GNI), in response to the impact of the Covid-19 pandemic on the UK’s economy and public finances. It’s unlikely spending will return to 0.7% of GNI until after 2027/28 at least.

Additional pressure on the UK’s reduced aid budget has come from the requirement to meet existing commitments to international organisations, increasing humanitarian aid to Afghanistan and Ukraine, and hosting an increased number of refugees and asylum seekers in 2022 and 2023.

This briefing explains the international rules that apply on reporting aid spending on refugees in aid-donor countries, the patterns of past UK aid spending on refugees, and the significance of this to spending in 2022/23.

Spending aid in the UK

Under international aid rules, many of the costs of hosting refugees can count towards the aid budget for the first 12 months refugees are in the UK. This includes basic subsistence costs, such as food and accommodation.

A growing amount of UK aid has been spent on UK-based refugees, with spending increasing from £410 million in 2016 to £3,690 million in 2022 (rising from 3.2% of the aid budget to 29%). The Home Office was responsible for £2,382 million of this aid spending in 2022. Most of this money went towards providing food and shelter for refugees. Other aid, such as on scholarships and administration, is also spent in the UK. In 2022, this totalled £775 million.

How is the aid budget being managed from 2022?

The Government has acknowledged that the costs of supporting those arriving from Ukraine, the resettlement of Afghans, and other asylum applications has put a pressure on its aid budget for 2022.

In March 2023, while acknowledging the aid budget can meet these needs, the Independent Commission for Aid Impact (ICAI) argued the UK is not adopting a conservative approach to its reporting, in comparison to many other European countries.

Both the ICAI and Commons International Development Committee have recommended the Government introduce a funding floor or ring-fence to ensure a proportion of the UK aid budget is spent overseas.

In response to the Committee’s recommendation, in May 2023 the Treasury rejected it as “unaffordable” in current circumstances. The Government has previously announced an additional £2.5 billion in aid for 2022 to 2024 to help restrict the impact of in-donor refugee costs. This funding will be classed as aid spending, and see the aid budget rise above 0.5% of GNI.

Update log

31 March 2023: Updated with reports issued by the International Development Committee and Independent Commission for Aid Impact (ICAI)

27 April 2023: Updated with new FCDO statistics on spending. 

30 May 2023: Updated with UK Government response to International Development Committee report (page 15). 

30 October 2023: Updated with new FCDO statistics on spending and the Government response. 

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