The UK government is expected to slash aid spending when Chancellor Rishi Sunak unveils the government’s Spending Review on Wednesday (25 November).
Boris Johnson’s ministers are preparing new laws that will reduce UK aid spending next year to just 0.5% of national income, down from the legally binding target of 0.7%.
It is unclear, however, whether this cut will be permanent or a short-term money saving measure in the wake of the COVID-19 pandemic.
Aid spending in 2020 has already been revised down by £2.9 billion from £15.8 billion because of the recession caused by the health crisis.
Although meeting the 0.7% spending target is enshrined in UK law, a measure put in place by David Cameron’s government, it does allow the goal to be missed if there is a substantial change in the country’s national income.
Cameron warned last week that scrapping the 0.7% target would be a “moral, strategic and political mistake”.
The government is expected to run a £300 billion budget deficit in 2020 as a result of massive emergency spending programmes to support businesses and employees who have lost income due to the restrictions imposed to control the spread of COVID-19. The UK’s debt burden now stands at 100.8%, the highest level in over 50 years.
In that context, and with ministers unwilling to increase taxes because of the fragility of the economy, aid spending is seen as low-hanging fruit.
Last week, Johnson announced an £18 billion increase in defence spending over the next four years. Reducing aid spending to 0.5% of national income would save around £4 billion per year.
Britain is currently one of Europe’s biggest aid donors, and among the handful of EU countries to have met the 0.7% target set by the United Nations.
However, there have been other signs that development policy is low down the Johnson government’s list of priorities and the bulk of the governing Conservative party is keen to re-direct aid money to domestic priorities.
Earlier this year, Johnson scrapped the Department for International Development, one of the world’s most respected, merging it with the Foreign Office. Prior to the merger, DFID had already paused some aid decisions and been instructed to prioritise “lifesaving aid” and the pandemic.
Meanwhile, the Johnson government has prioritised the roll-over of the EU’s trade deals with developing economies.
The UK’s aid spending in 2021 already faced a 15% funding gap when the post-Brexit transition ends on 31 December.
While the G20 has agreed to suspend debt payments for 73 of the world’s poorest countries until June 2021, and is moving closer towards a debt restructuring programme, development aid is likely to suffer major cuts in the coming years. EU countries are facing an average GDP fall of 8% in 2020, which will, in turn, inevitably lead to lower budgets, and pressure.
Earlier this year, members of the Development Assistance Committee of the Paris-based Organisation for Economic Co-operation and Development vowed that they would “strive to protect aid budgets”.
[Edited by Frédéric Simon]