UK ‘faces ban’ on diverting ODA towards domestic asylum-seeker costs

OECD says government’s new Illegal Migration Act could undermine controversial practice, according to reports
A business hotel that is currently being used to house asylum seekers whose claims are being processed. Photo: Google Maps

By Jim Dunton

31 Jul 2023

The UK’s controversial policy of categorising spending on asylum seekers who arrive on these shores as Official Development Assistance – or overseas aid – may have to end as a result of the government’s own Illegal Migration Act,  according to reports.

Last year, the country spent £3.7bn of its ODA domestically, making use of Organisation for Economic Cooperation and Development rules that allow overseas aid spending to be used for refugees’ hotels and other expenses for a period of 12 months.

The policy, which effectively saw 29% of the ODA budget spent within the UK, has enraged members of parliament’s International Development Committee, and aid organisations.

According to the OECD, provisions in the Illegal Migration Act could block ODA from being used to fund expenses related to many of those who arrive in the UK and seek asylum.

This is because the act, which became law earlier this month, bans people arriving without permission from applying for asylum, and paves the way for them to be detained and deported.

Global-development news source Devex said the OECD had told it that ODA could not be spent on individuals whose claims had been rejected.

“The rules indicate such costs could not be counted as ODA,” Devex quoted an OECD spokesperson saying. “But the OECD has yet to examine the bill in more detail and confirm its position.”

Devex said the situation had come as a shock to ministers and had sparked a battle between HM Tresaury, the Home Office and the Foreign, Commonwealth and Development Office about where the funding to cover ODA currently directed to domestic expenses will be found.

“There’s now a scramble between three departments to avoid responsibility for paying for this,” Devex quoted one source saying.

“The Treasury has told the Home Office it can’t have more money, the Home Office is saying it doesn’t have the budget for it, so it will have to come from FCDO. But the FCDO is saying that if it isn’t ODA, it won’t pay.”

Devex said the Home Office had not responded to a request for comment on the OECD’s provisional evaluation and alternative funding options to replace the use of ODA.

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