Foreign, Commonwealth and Development Office permanent secretary Sir Olly Robbins has told MPs he believes the latest cuts to Official Development Assistance will be easier to handle than reductions announced in 2020 and enacted the following year.
In February, prime minister Keir Starmer said the UK would reduce ODA spending – overseas aid – from 0.5% of gross national income to 0.3% of GNI over the coming years to fund an increase in defence spending.
The controversial move built on the Johnson administration’s much-opposed decision to “temporarily” reduce ODA from a mandated 7% of GNI to help the nation deal with the economic impact of the Covid-19 pandemic.
Appearing before members of parliament’s Public Accounts Committee yesterday, FCDO perm sec Robbins said he believed preparing for the latest aid cuts would be easier because the department had more time to plan.
“We have a smoother glide path to 0.3% of GNI in 28-29 than the change that was made from 0.7% to 0.5%,” he said. “That included a small reduction – just over £400m – to the budget in this financial year, 2025-26.”
Robbins said the department was currently advising ministers on a “strategic approach” to achieving the lower ODA commitment in two-to-three years time.
The perm sec said it would be done by focusing on three strategic priorities: “sustaining our commitment to multilateral spending; healthcare, as a cross-cutting priority; and climate change and its implications”.
Robbins added that the approach meant the FCDO “had to give some stuff up”. “We have obviously had to look very carefully at our bilateral programmes,” he told the session.
FCDO second perm sec Nick Dyer said there was a material difference in the preparation time for the latest aid cuts compared with those announced in 2020.
“We have basically got a year’s run-in before we have to start making significant cuts, which is different from the four months we had previously under the cut from 0.7% to 0.5%,” he said.
Dyer told MPs that ministers had decided to protect ongoing programmes this year, meaning legal commitments and live contracts would be honoured. He said humanitarian and multilateral funding would also be honoured, but that all other programmes had been gone through “line by line” to look at whether priorities are being met and whether there are value-for-money reasons to continue with them.
Dyer said bilateral aid – which is provided directly to other countries from the UK – was “clearly going to be squeezed”. He said there would also be a shift away from bilateral aid that is run from the UK in favour of bilateral aid in which choices are made by FCDO’s teams on the ground in recipient countries.
The second perm sec also told MPs to expect a reduction in the number of international aid organisations FCDO works with as a result of the step-down in ODA spending.
“As we make our choices going forward, we will most likely withdraw even further from some of our multilateral partnerships,” Dyer said.
“At the moment, there are over 200 organisations that can receive ODA to spend for development purposes. We fund about 40 of them, so we have already made a huge number of choices about those we are not going to be investing in: We aren’t going to touch 160 of them.
"We have always been making quite hard-headed choices about which multilaterals we think meet our objectives and are effective at delivery, and about where we have a voice and an opportunity to try to shape their operations.
“Ministers are clear that as we go forward with our multilateral funding in the next few years, we need to look again at how we can reform them.”
Size of FCDO’s estate ‘has to come down’
The main purpose of yesterday’s PAC’s session was to question FCDO’s senior leadership on the cost of managing its overseas estate, following a National Audit Office report published in May. It warned that the department has a £450m maintenance backlog on its 6,500 overseas properties that could take a decade to fix.
PAC chair Sir Geoffrey Clifton-Brown asked Robbins whether the FCDO’s plans to reduce headcount by up to 25% – set out before the Foreign Affairs Select Committee earlier this week – would help the department reduce its space requirements and maintenance costs.
Robbins confirmed he would be keen to reduce the size of FCDO’s overseas estate. But he said the situation was “complicated” by the fact that around 5,000 staff "housed" overseas by FCDO were employed by other departments, principally the Department for Business and Trade and the Home Office. By comparison, FCDO has 9,000 staff based outside the UK.
“We have to understand what other departments’ requirements are going to be over the rest of the Spending Review period,” he said. “But you are absolutely right: I am determined that the size of the estate and its complexity over the next three to four years has to come down.
“That, in turn, should then be done in ways, as we have tried to do with our new capital projects over the last few years, that reduce the ongoing maintenance requirement.”
Aborted Glasgow move ‘cost less than £500k’
Robbins was also asked about the cost of the FCDO’s scrapped plans to relocate from the former Department for International Development’s Abercrombie House base in East Kilbride to new offices in central Glasgow, details of which emerged in March.
Around 1,500 FCDO staff work at East Kilbride, which is around 8 miles south of Glasgow. Under the original plans, floated in 2023, the department’s move would have paved the way for HM Revenue and Customs to move staff based elsewhere in East Kilbride into Abercrombie House.
Clifton-Brown asked the perm sec what the cost of FCDO’s cancelled exit from East Kilbride had been.
Robbins said there had been no capital outlay, but he acknowledged that costs had included staff time and advice from professional-services specialists.
“It is not that we took a lease or an option on a lease – let alone a freehold – that we have had to wastefully cancel,” he said.
“We have probably spent less than half a million pounds over the course of the whole programme in thinking about that option and making sure it was real.
“The decision not to take it, therefore, was a real disappointment, but not one that has left the taxpayer with big liabilities.”