Rebuilding Britain’s reputation as a reliable development partner: The state of UK Aid in 2024

Bond Briefing Series: The State of UK Aid 2024 (Briefing Two) – Addressing Poverty and Inequality

The UK’s Official Development Assistance (ODA) has faced severe pressures in recent years following cuts and increased spending on costs associated with housing refugees and asylum seekers in the UK. With nearly a third of the ODA budget in 2023 spent in the UK to support refugees and asylum seekers, there is less funding available for critical ‘overseas’ programmes which provide essential support to groups of people who are most marginalised and in need of assistance.

Following Bond's first briefing released in September on the state of UK aid in 2024, today, Monday 2 December, Bond publishes a second briefing looking at the decline in UK aid going to the least developed countries to tackle poverty and inequality.

The new briefing reveals that:

• There has been a significant decline in UK ODA going to the least developed countries (LDCs). In 2023, the lowest level of UK ODA went to LDCs for more than a decade, both in overall spending terms (£1bn) and as a share of country allocated bilateral ODA (47%).
• The UK has made significant cuts to spending on funding for basic services and needs, such as health, education, water and sanitation, and humanitarian assistance in times of crisis.
• Pre-pandemic health spending allocations fluctuated in the last decade, from a high of 18.1% in 2014 to a low of 12.2% in 2016. In 2022, we saw a new low at only 10%, and 2023 saw the lowest levels of UK aid spending on health in at least 10 years, both in real terms (£764million) and as a percentage share of bilateral ODA (7.6%).
• Between 2015 and 2019, the UK continuously spent over 7% of its bilateral ODA on education. However, since 2020 this share has dropped below 7%, and in 2022 it was only 3.7% and 2023 it was 3.5%.
• In the decade before 2021, the share of humanitarian assistance in UK bilateral ODA was consistently above 14%. However, it dropped to 10.3% in 2021, 11.5% in 2022 and just 8.8% (£878million) in 2023, all while global humanitarian crises have increased in recent years.
• There has been an increase in ODA channeled to the UK’s development finance institution (DFI), British International Investment (BII), which has been scrutinised for its limited focus on poverty eradication. BII lacks the incentives to channel finance to countries that need ODA the most, and it has faced considerable scrutiny on this issue. ODA spending through British Investment Partnerships, of which BII is a major part, increased by 53% from 22-23 to 23-24.

This briefing outlines the immediate steps the government can take to re-focus UK aid on poverty reduction and inequality and help rebuild the UK's reputation in international development:

• Reduce ODA spending on asylum and refugee costs: Urgently reduce ODA spending on the UK asylum system and source funds to support this vulnerable group from a separate government budget.
• Reform reporting on asylum and refugee spending: Work with the Home Office to revise how ODA spending on refugees is reported**,** with the goal of phasing out the use of ODA for supporting asylum seekers inside the UK and refocusing ODA on poverty reduction.
• Ensure that all UK ODA is bound by the 2002 International Development Act commitment to “contribute to a reduction in poverty”, not just FCDO spend.
• Reverse trends of recent years that have deprioritised funding to LDCs and rapidly ensure that the UK once again meets the commitment to deliver 0.15%-0.2% of Gross National Income as ODA to LDCs.
• Maintain the focus on providing the vast majority of the UK ODA budget through grants, given the increasing debt crisis among many LDCs and low-income countries, and the negative impact this has on countries’ capacities to provide basic services.
• Urgently scale up funding to deliver universal basic services by supporting the development of more resilient, equitable and sustainable health, education, social protection, energy, water, sanitation and hygiene systems.
• Significantly reduce the volume of UK aid being used to capitalise BII while it undertakes reforms to ensure its strategy significantly increases its contribution to poverty reduction and sustainability. BII must also end its investments in for-profit education and health services.
• Truly commit to returning to 0.7%: Introduce fair and transparent fiscal tests harmonised with the new general fiscal rules for a return to 0.7%, and scale up ODA as progress is made towards meeting them.

Bond spokespeople available for interviews or to provide comment:

Gideon Rabinowitz, Director of Policy and Advocacy at Bond

Romilly Greenhill, CEO of Bond.

To arrange an interview, please contact Jess Salter, Media Adviser at Bond, at jsalter@bond.org.uk or call 07392972411.

Further information

• Read the Bond second briefing on the state of UK aid: addressing poverty and inequality.
• Read Bond's first briefing on the state of UK aid.
• Bond is the UK network for organisations working in international development. Bond unites and supports a diverse network of over 350 civil society organisations from across the UK, and allies to help eradicate global poverty, inequality and injustice.