Attachments
by Laura Chappell Sam Hughes and Ian Mitchell
This brief is co-published with the Institute for Public Policy Research (IPPR). The IPPR version is available here.
Summary
Following the recently announced cuts to aid spending—taking official development assistance (ODA) from 0.5 percent of GNI to 0.3 percent—it is time for the government to act, to ensure that asylum- and refugee-related costs[I] take up a smaller proportion of the ODA budget. Without action, refugee-related costs could exceed a third of total ODA spending.[ii]
At present the FCDO effectively funds any ODA-eligible asylum-related cost that the Home Office can identify. This has contributed to significant unnecessary expenditure on refugee-related costs, with the UK now spending over two-and-a-half times more ODA per refugee than any other G7 economy**.** This approach also generated extremely high levels of unpredictability in the aid budget, with in-year budget changes larger in percentage terms than, for example, the annual cuts expected of any government department during coalition government austerity.
But with a reduced overall ODA budget, the UK must do more to reduce the impact of refugee spending on aid spending. In a much more fiscally constrained environment, every available pound will be required for vital international work. And the FCDO will not have the budget latitude to absorb significant fluctuations in refugee spending, if—as could be the case—its allocable budget is not much larger than potential refugee hosting costs.
We identify five options for improving the situation that could be adopted at the forthcoming spending review—or sooner. These options would provide additional downward pressure on refugee-related costs, while also increasing the predictability of the UK’s international spend.
Each of these options represents an improvement on the status quo and offers a different balance between the three criteria we identify. We recommend that the government urgently select one, and suggest that option 2 is the strongest overall.