UK aid spending will fall to its lowest level since 2007 unless the government takes urgent remedial action in the autumn budget, a group of more than 100 non-governmental organisations (NGOs) in the aid and humanitarian sector jointly warn on Wednesday.
The budget dedicated to providing aid overseas will be just 0.36% of gross national income (GNI) in 2024 largely owing to huge sums in the budget being diverted to hosting asylum-seekers in the UK, the aid organisations say.
The joint statement warns: “If these plans are not urgently revised, the prime minister and his government will be withdrawing vital services and humanitarian support from millions of marginalised people globally and turning up empty-handed to global forums over the coming months.”
It is the first coordinated pressure placed on Labour over cuts to aid spending since the election. It has been prompted by concerns the Treasury will not supplement the aid budget to take into account the large proportion of the budget still being swallowed up by housing refugees and asylum seekers in the UK.
The UK official development assistance (ODA) budget allocated to cover the costs of supporting refugees in the UK has risen from £500m in 2019 to £4.3bn in 2023, partly owing to the rise in the backlog of cases. The £4.3bn, spent largely by the Home Office, represented 29% of the total ODA budget.
Official statistics suggest the refugee housing costs loaded on to the aid budget will be approximately £3.8bn in the current 2024-25 financial year, bringing the aid budget not spent on UK refugees down to 3.6% of GNI, its lowest level in relation to GNI since 2007.
The previous Conservative government injected an extra £2.5bn over two years for the UK aid budget for 2022-23 and 2023-24 to help cover the Home Office’s extra refugee costs, but this extra money expired in April at the end of the 2023-24 financial year.
Aid groups fear the Treasury is not going to repeat this funding increase in what is being touted as a “tough choices budget”.
In a private letter sent to the prime minister, Keir Starmer, the heads of the aid groups say they are concerned the UK will be turning up empty-handed to a succession of world summits including Cop29 and the UN general assembly starting at the weekend.
They say that for the UK to maintain credibility, at the minimum, it needs to keep spending at the current 0.58% of GNI, as well as setting out a plan for how spending can return to the official target of 0.7%. Staying at 0.58% of GNI would require an extra £2.2bn.
The letter has been signed by the UK’s largest NGOs including ActionAid UK, Oxfam GB, Care International UK, International Rescue Committee UK and Save the Children UK.
The letter also has influential support on the Labour backbenches. The MP Sarah Champion, re-elected as the chair of the select committee for international development, said: “It is right that we support refugees and asylum seekers but the reckless spending of the UK aid budget to pay for extortionate hotel bills for this vulnerable group in the UK not only mismanages taxpayer money, but also deprives millions of marginalised people around the world of the vital humanitarian support they need to stay safe in their own countries.
“In the short term, we need the government to top up the UK aid budget to cover these additional costs, so we don’t see further cuts to programmes. The UK aid budget is meant to tackle global poverty and instability, not to cover the costs of a broken asylum system at home.”
Romilly Greenhill, the chief executive of Bond, the UK network for NGOs, said: “We are deeply concerned that more cuts to the UK aid budget are on the way. The government must urgently act in the autumn budget to provide additional funding for vital humanitarian support and services for millions of marginalised people worldwide.”
Halima Begum, the chief executive of Oxfam GB, said: “If the government doesn’t act swiftly to protect UK aid, the consequences will be devastating and far-reaching. With the world facing crucial challenges such as climate change and a growing food insecurity crisis, the new government must restore the UK aid budget.”
In 2021, the Conservatives took the decision to cut the aid budget from 0.7% of GNI to 0.5%, a £3bn cut that it later said would be restored when specific economic conditions were met.
The Foreign Office said: “This government’s development goal is to create a world free from poverty on a livable planet. Our development spending is crucial to achieving our ambition and we are committed to restoring ODA spending to 0.7% of GNI as soon as the fiscal circumstances allow.
“We are committed to transparency, and will publish planned ODA allocations for 2024-25 in due course.”
