Rishi Sunak is being urged to boost aid UK spending in this week’s mini-budget after an in-depth study by a leading thinktank showed government cuts had the biggest negative impact on the world’s poorest countries.
The campaign group One said the aid budget was at “breaking point” and would come under renewed pressure as a result of humanitarian and refugee spending in response to the war in Ukraine.
One’s UK director, Romilly Greenhill, called on the chancellor to use his spring statement on Wednesday to accelerate the return to Britain spending 0.7% of national income on overseas assistance.
A study from the National Institute of Economic and Social Research thinktank – commissioned by One – concluded the £4bn aid cut had implications both for the UK and recipient nations.
“The recent cuts in UK aid provide negligible direct savings for the UK, come at a cost to the UK economy, and poses significant humanitarian and social costs in many poor countries,” the NIESR report said.
Sunak announced a reduction of aid spending to 0.5% of national income in November 2020 when the Treasury was faced with the mounting cost of the Covid-19 pandemic, but in the following year’s budget pledged a return to 0.7% by the end of the parliament provided certain conditions were met.
The independent Office for Budget Responsibility is likely to report on Wednesday that the government finances are in a healthier state than thought at the time of last October’s budget, giving the chancellor some extra spending power.
NIESR said aid delivered good value for money, helping recipient nations financially but also raising UK national output. It said cutting overseas assistance had cost the UK between £322m and £423m in lost exports.
“The chancellor argued that the aid cut is required on fiscal grounds. This paper, however, argues that restoring the aid budget would not worsen the fiscal position in the UK significantly, and could actually support the UK exports whilst also supporting the livelihoods and food security of many poor people in many developing countries.”
Greenhill said: “We’re in a different world to when the aid budget was first cut. Since the chancellor announced the cut in 2020, circumstances have changed, and the justification that was used then no longer holds.
“The government cannot deliver on its own agenda at the current budget, and with more and more spend being added, UK aid is being stretched to breaking point. It’s pushing existing anti-poverty work out.”
A government spokesperson said: “The UK has a long history of helping others in their hour of need and we are one of the largest aid spenders globally, above the OECD average.
“We will continue to help protect people fleeing the conflict in Ukraine and have already provided £220m in aid, including for life-saving medical supplies, shelter and hygiene kits, and pledging £25m for the Disasters Emergency Committee appeal, as part of our largest-ever aid match contribution.”
Separate research by One into the impact of the war in Ukraine on the rest of the world showed rising food and fuel prices and increasingly fragile supply chains risked pushing millions of people into extreme poverty, destabilising parts of the African continent and leading to new geopolitical alliances.
“Conflict in Ukraine is already pushing up wheat prices, which in turn hits those in Africa facing food insecurity the hardest, all while many of these people are having essential nutrition programmes cut,” Greenhill said.
“It’s absolutely the case that people fleeing violence in Ukraine need to be supported and people facing famine in east Africa need to be supported. But by keeping our aid budget unnecessarily reduced, the UK is not in a position to do both, it’s forcing itself into a situation where it has to choose between people in crisis.”
The NIESR report said aid cuts had fallen heavily on sub-Saharan Africa. Up to 1.5 million people in the region may remain malnourished as a result, it concluded.