The Foreign Office is having to make “fierce and draconian” cuts of about 30% to the bilateral overseas aid program because of the cost of hosting Ukrainian refugees, development minister Andrew Mitchellhas said.
The Foreign Office (FCDO) aid budget has to cover the first year of costs of refugees in the UK, and the costs have boomed due to the exodus of Ukrainians from the Russian invasion. By some estimates more than half the aid budget is now being spent in the UK.
Mitchell also admitted to MPs that Britain was no longer a development superpower. A fierce critic of the merger between the Foreign Office and the department of international development as a backbencher, he rejoined the government in October.
He said: “Let us be blunt we are no longer a development superpower.” He said the UK’s reputation could only be restored by structural changes to the department to create a London hub of expertise to major thematic issues such as climate change, migration, pandemics and girls’ education.
Mitchell’s remarkable admission that he was having to impose fierce and draconian cuts of 30% to his department’s bilateral aid program for the rest of this financial year came in evidence to the international development select committee on Tuesday.
He said the aid budget had been “out of control” since his department was having to carry the first year costs of a fast growing number of refugees coming from official development assistance (ODA) eligible countries such as Ukraine, Afghanistan and Syria.
The Home Office estimates it is spending £2bn on refugee accommodation and a further £1bn on food and travel for refugees, with the entire cost taken out of the overseas aid budget.
Mitchell confirmed the Treasury had provided an additional £1bn this year and £1.5bn next year to cover these unexpected costs, but he admitted the costs were “open ended, very significant and very difficult to quantify”. The Home Office demands on the aid budget had risen by 75% on last year, and he admitted he could not know how the costs would escalate next year.
Such was the unexpected scale of home office demands, he said a total pause had been imposed on all aid spending followed by 30% cuts to the bilateral program, the third year of such cuts.
Mitchell said the use of the aid budget to cover Home ffice refugee costs was in line with international rules on aid spending, and he could not pick and choose what spending was classified as ODA .
He said under Tony Blair and David Cameron the UK was a global superpower but he admitted: “Let us not beat about the bush. We are not a development superpower at the moment and that is something that is bemoaned around the world”. He added: “If we are going to get that back we are going to have make some structural changes in the department.”
He identified a loss of morale amongst development staff, manifested by 200 vacancies. The merger of the Foreign Office and the department for international development had left the FCDO less than the sum of its two previous parts, he said, partly because the merger was handled in a sub-optimal way. The merger of the department’s IT had been a nightmare, he said.
Mitchell also said he was “rather surprised” to see Britain still spends foreign aid in China, conceding this could do “great damage” to the reputation of the development budget.
“By and large, bilateral programme spending in China has stopped, but the areas where it is continuing, and which does great damage to the reputation of the development budget, include Chevening scholarships, for example, and the British Council and most people would say that both of those two types of spending were a good thing to do,” he said.
