ODA spending freeze hits climate commitments and health inequalities work

FDCO perm sec reveals some of the projects affected by aid cuts in letter to MPs

By Tevye Markson

11 Jan 2024

Projects aimed at meeting climate commitments, tackling health inequalities and driving economic reform in developing countries have been delayed or pared back due to cuts to the Foreign, Commonwealth and Development Office’s aid budget.

In a letter to the Public Accounts Committee, FCDO permanent secretary Sir Philip Barton revealed some of the reductions made to bilateral spending as a result of the need to make £1.7bn in cuts to Official Development Assistance spend.

The FCDO, which is in charge of ensuring ODA spend does not go above 0.5% of gross national income, paused all “non-essential” overseas aid spending for four months in 2022 due to the rising and unpredictable Home Office takeover of the budget.

In the letter to PAC, Barton set out examples of bilateral spending reductions which did “not lead to the removal of critical support and/or essential services”.

These included reductions to funding in the Sahel region by slowing progress on a climate commitment made at Cop26 and reducing contributions in North Africa to the World Bank Trust Fund, which is aimed at spurring economic reform in developing countries.

The FCDO also reduced work to strengthen climate resilience in health systems around the world and spending on access to affordable reproductive health supplies.

Other cuts outlined by Barton included:

  • Delaying implementation of Green Recovery Challenge Fund projects in Brazil, Bolivia, Peru, India, Thailand and Vietnam. The fund supports low-carbon transitions and a green, resilient and inclusive economic recovery across ODA-eligible countries.
  • Delaying implementation of support to three countries through the Just Rural Transition programme, which focuses on repurposing agricultural subsidies to transform food subsidies and land usage

In March 2023, the Independent Commission for Aid Impact, the government’s aid watchdog, found that the suspension of most activity caused delay and a "very limited humanitarian response" in relation to emergencies such as the floods in Pakistan and the famine in Somalia.

In July, the FCDO published an equalities impact assessment on spending plans for 2023-24, which found the impact of the reductions “is expected to be severe” on equalities, including for women and girls, disabled people, and others in humanitarian need.

The FCDO said its “limited funds” meant not “all equality impacts could be mitigated” but added that in response to the equalities impact assessment, it had planned uplifts to aid spending in countries including Afghanistan, Yemen, and Somalia. 

The Home Office spent £3.7bn of ODA in 2022 – more than a quarter of the £12.8bn budget for the year – mainly on hotel accommodation for refugees. The Treasury last year rejected MPs' calls for the aid budget to be ringfenced for overseas spending, saying it is  "not affordable in the current highly challenging economic and fiscal context”.

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