The UK spent more than three times its overseas aid budget on housing refugees in Britain than on helping to alleviate poverty in Africa in 2022, figures from the Foreign, Commonwealth and Development Office show.
The official provisional figures for 2022 show that spending on refugees increased from £597m in 2020 to £1bn in 2021 and reached £3.7bn in 2022. No other major country in the world is cutting its mainstream aid budget to cover the cost of housing refugees in this way, said the aid campaign group Bond.
Over the same period as the rise in Home Office spend from the aid budget, FCDO bilateral aid to Africa has fallen from £2.3bn in 2020 to £1.7bn in 2021, to £1.1bn in 2022, the figures published on Wednesday show. Bilateral aid to Asia has also fallen by £127m to £938m in 2022.
The figures show the Home Office, and the Department for Levelling Up, Housing and Communities are spending 29% of the total aid budget, up from about 10% last year, largely due to their inability to control the costs of housing more than 200,000 asylum and refugee claimants, primarily from Ukraine and Afghanistan. Last month, the Home Office was using more than 386 hotels to house these refugees.
Last week, the Foreign Office published projections for the next financial year showing bilateral aid to Africa will drop further to a minimum of £764m in the financial year 2022-23, and then to £648m by 2023-24. The projections, likely to rise a little, mean Foreign Office bilateral aid to Africa will then have fallen by about two-thirds in less than four years.
The projected cuts over the next two years are likely to reflect internal Whitehall estimates showing an expected further £1.5bn in refugee aid costs will be taken from the budget in 2023, meaning a total of £5bn will have been removed from the UK aid budget in two years to house refugees.
Governments are allowed by controversial and porous rules set by the OECD Development Assistance Committee to use their aid budget to fund the first year costs of housing and feeding refugees, but Ian Mitchell at the Centre for Global Development said few European governments, apart from Sweden, load so much of the cost of housing refugees on to the aid budget as does the UK.
Ministers will try to deflect focus on the cuts to the aid programme by making further announcements on how they are going to house refugees on barges. They are under pressure to act since many refugees will soon have been in the UK for a year, and after that their housing costs can no longer be subsidised through the aid budget.
The figures for 2021 aid spend published on Wednesday cover the second year since the government decided to cut the level of UK aid spending from 0.7% of gross national income to 0.5%. Due to the rise in refugee costs, total UK aid spend rose to £12.7bn in 2022, up from £11.42bn in 2021, after a fall of £3bn from the previous year. Some of the refugee costs were funded by an injection of emergency cash from the Treasury in November.
The figures show total bilateral aid rose from £7.1bn in 2021 to £9.4bn in 2022, while multilateral aid fell from £4.3bn to £3.3bn, figures again distorted by the refugee costs.
The Foreign Office is spending only 59.8% of UK aid, compared with 71.6 % last year. This is the lowest proportion of UK aid spending by the department or its predecessor on record. In 2009, government departments other than DfID spent only £0.2bn of the aid budget.
The figures published on Wednesday underline why the Foreign Office aid minister Andrew Mitchell has been complaining for months that his budget had become prey to another department that had no incentive to rein in its costs.
The chancellor, Jeremy Hunt, has been urged by the official aid watchdog, the Independent Commission on Aid Impact, to place a cap on the amount of money the Home Office can claim, but ministers say the fall in the number of first-year refugees likely to be in the system in 2023 means the aid budget should not be such a ready source of Home Office funds from now on.
The Conservatives have said they will restore the target of spending 0.7% of gross national income on overseas aid when economic circumstances allow.
Ranil Dissanayake, from the Centre of Global Development, said: “The amount of aid spent in the UK on costs associated with refugees was even higher than the estimate provided by the Independent Commission on Aid Impact last week, reaching £3.7bn – more than three times the total FCDO spend in Africa.
“Though we will have to wait to see exactly how much more the UK has spent at home than in Africa, the shift is clear: we now spend more on aid at home than in the poorest places in the world. It’s a complete break with the past, and a total transformation of our aid budget. No one could possibly justify these allocations on development grounds.”
The Foreign Office said: “It is right the government has acted decisively, using our aid budget, to help people from Ukraine and Afghanistan seeking refuge in the UK.
“The UK remains one of the largest global aid donors, spending nearly £12.8bn in 2022 to save lives and protect the most vulnerable around the world, including through our support for women and girls and to tackle humanitarian crises and climate change.”
It said aid had risen in 2022 as a result of the rise in growth.
