We must not repeat the mistakes of past cuts to the aid budget

4 min read23 July

Whether it is the impact of cuts on women and girls or the money spent on asylum hotels, we will not shy away from scrutinising the government's aid plans.

When I arrived as Chief Commissioner of the UK’s aid watchdog in January, I expected to spend my four-year term generating evidence and scrutiny that would support the newly elected government to chart a path back to spending 0.7 per cent of national income on development. Yet just a month later, the Prime Minister announced that the aid budget would instead be reduced further, from 0.5 per cent to 0.3 per cent of national income in 2027, to fund increased spending on defence.

While the commitment to spend 0.7 per cent remains enshrined in law, the aid spending target is unlikely to return to that level in the foreseeable future, and the development minister has described 0.3 per cent as the ‘new normal’. At the International Development Committee last week, the Foreign Secretary said leaders of developing countries are tired of the global ‘ping pong’ in which major donors take different approaches and can turn aid on and off at short notice. What they want, he said, is trade, investment and jobs.

But there is no doubt that aid still plays an important role. Our report from earlier this year shows that aid remains particularly important for the poorest countries in the world, where its support for services including education and health has made a critical contribution to progress against the Sustainable Development Goals. Similarly, humanitarian aid for those caught up in deadly conflicts, such as in Gaza and Sudan, is lifesaving.

The latest reductions will bring UK aid spending to its lowest level in decades. The government has committed to avoiding in-year cuts, but to reduce the budget this sharply requires significant decisions to be made and executed quickly.

The Independent Commission for Aid Impact (ICAI) was set up in 2011 as the government pledged to hit the 0.7 per cent target. Our job is to ask challenging questions and publish our findings for Parliament, government and the public. We're independent from government, which means we can provide candid assessments of whether, where and how the delivery of aid has impact.

Last month, we held an event in Parliament, hearing from MPs, peers and civil society on how scrutiny can remain robust, relevant and responsive in these challenging times. Everyone agrees that when money is tight, every pound must work harder.

Key questions ICAI will ask include: Is the government using solid evidence to decide what to fund? Is it prioritising the poorest and most vulnerable in its decisions? And how does aid work with other levers. such as private investment or diplomacy?

Ensuring lessons are learned from previous budget reductions is key. When aid was reduced from 0.7 per cent to 0.5 per cent of national income in 2021, an equalities impact assessment showed that projects supporting women and girls were hit particularly hard. ICAI has heard real concerns that they could lose out again.

Another area of concern is the amount of the aid budget that is spent on hosting refugees and asylum seekers in the UK. This spending has risen dramatically in recent years – from £628m (4.3 per cent of UK aid) in 2020 to a record high of £4.3bn (30 per cent) in 2023, most recently totalling £2.8bn (20 per cent) in 2024. The Prime Minister has committed to reducing these costs further. But if they are not brought under control, a report we published last week found they could absorb a fifth of the reduced aid budget in 2027, leaving only 0.24 per cent of national income to spend on tackling poverty overseas.

Another important lesson is the need for transparency. When timely and accessible information isn’t available to clarify why and how decisions about aid spending will deliver government objectives, trust in the UK as a reliable partner is damaged. The government has made progress in this area, improving its rating in the international aid transparency index, as ICAI had called for. This positive trend needs to continue as the most difficult decisions are made and implemented.

Even with a smaller budget, UK aid can still make a huge difference to the world's poorest. In this situation, independent scrutiny isn't just a nice-to-have – it's essential. ICAI and Parliament both have a crucial role to play.

Jillian Popkins is Chief Commissioner of the Independent Commission for Aid Impact.