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The overseas aid budget cuts explained
On 25 November 2020, in his one-year spending review, Chancellor of the Exchequer Rishi Sunak announced cuts to the overseas aid budget, ending the Tory commitment to spend 0.7% of gross national income (GNI) on aid. On 26th November, Foreign Secretary Dominic Raab confirmed that the government will seek to introduce legislation next year to change the commitment from 0.7% to 0.5% GNI; a reduction of almost a third.
The decision has been met with anger and disappointment across multiple sectors, as well as serious concerns as to what this means for the world’s poorest people.
What is the Official Development Assistance (ODA)?
Official development assistance (ODA) – generally known as overseas aid – is the internationally agreed criteria for funds provided to developing countries to fight poverty and promote development. Essentially, it is where one government helps the people of another country by supplying support, expertise, or finance.
Up until recently, the UK government is the only G7 country to have met the UN’s target to spend 0.7% of gross national income on overseas aid. And, as stated on the UK’s very own public sector information site, gov.uk, this is because it “is not just the right thing to do, but firmly in our own national interest as well.” However, the target was slashed to 0.5%, which will come into force next year, and as many have pointed out - including Conservative party members - goes against a key promise in the party's 2019 general election manifesto.
The facts about overseas aid
- International aid accounts for 0.7% of the UK government’s overall budget. This means, for every £1 you spend in tax, 0.7p goes on foreign aid.
- Why 0.7%? Since 1970, the UN has urged wealthy countries to spend 0.7% to support poorer countries and meet worldwide goals on eradicating poverty. In 2013, this target was enshrined in law in the UK.
- The top three recipients of overseas aid in 2019 were Pakistan, Ethiopia and Afghanistan [FCDO]. Many of the people living in these countries face conflict, extreme poverty and unstable climates.
- The largest amount of overseas aid in 2019 was focused on humanitarian aid, health and multisector [FCDO].
Why has 0.7% been cut to 0.5%?
The main reason given for the cut is to help the UK deal with the coronavirus crisis and its economic impact at home. However, this argument does not stand up to scrutiny.
Firstly, the 0.7% commitment is already designed to go up and down, depending on the health of the economy. So, in fact, we have already seen cuts to the aid budget this year as a result of the economic downturn.
Secondly, the amount recouped from cutting the aid budget to 0.5% GNI next year (circa £4 billion) actually does little to help with the budget deficit, which currently stands at close to £400 billion. Whereas the impact of cutting the aid budget by this much could be extreme. It is estimated that more than 100,000 lives could be lost as a result. At a time when we all face a global health crisis and food insecurity is expected to double, this money can have a far greater impact helping the world’s poorest people cope with the impact of the pandemic.
Why is overseas aid important?
First and foremost, overseas aid works. Since 1990, the number of people living in extreme poverty has more than halved.
UK aid aims to reach people living in some of the poorest and most vulnerable places in the world. It saves lives, reduces poverty and helps build a better world for everyone. From the locust invasion that ripped through East Africa earlier this year, destroying food sources and livelihoods, to the Beirut explosion in August, to reducing the number of deaths in children under 5 through a long-term project, the UK has provided lifesaving aid when people need it the most.
UK aid also has strict reporting arrangements in place ensuring best value for money for the taxpayer. These structures also guarantee that aid reaches the poorest people. It is not only crucial in times of crisis and disaster, but in the long-term fight against poverty and the injustices that hit the poorest people hardest.
Why is this cut so worrying?
Putting aside political contentions opposing the cut, such as reducing British influence across the globe, which Conservative MP Tobias Ellwood, chairman of the Commons defence select committee, said will "allow China and Russia to take advantage" by moving quickly to fill the "vacuum", it also means that less support will be going to those who need it most. It is estimated that the reduction in the aid budget could cost over 100,000 lives, as people lose out on life-saving support.
What’s more, Dominic Raab has stated that he intends to focus on countries where there is greatest alignment between the UK’s development, security and economic interests. This could mean what aid remains is not spent as well as it could be, on helping the world’s poorest people build a better life out of extreme poverty.
In light of the announcement of cuts to the UK's Official Development Assistance (ODA), Danny Harvey, Executive Director of Concern Worldwide (UK), said:
At a time when global poverty is rising for the first time in decades and severe food insecurity is set to double as a result of the pandemic, this is a devastating move which will cost lives. The 0.7% legal commitment already ensures that UK aid goes up or down depending on the strength of the economy. This is not the answer to meeting the economic challenges which Covid-19 response poses
Rather, 0.7% supports people living in already fragile places to respond to the Covid-19 pandemic – especially where health services are weak and overwhelmed. It enables communities to get their livelihoods back, to sell in the markets, to rebuild their lives.
This cut to aid also weakens the UK’s global leadership position. With the UK poised to take over the Presidency of the G7 and to host COP26 next year, to renege on the commitment to the world’s most vulnerable people diminishes the UK on the global stage.
What we are asking
We believe that it is critical that UK aid is well spent and focused on the poorest and most vulnerable people. We call for the government to commit to spending at least 50% of the ODA budget in fragile and conflict-affected states - where 80% of the world’s poor are forecast to live by 2030 – and to ensure aid is spent on programmes which have the greatest impact on lifting people out of poverty, such as health and nutrition, education, social protection and building resilience to conflict and climate change.
Fundamentally, no one is safe until we are all safe and we will continue working to ensure support reaches those who need it most.
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