Britain's foreign aid: Where does the money go?

LONDON -Britain is "haemorrhaging" foreign aid and diverting money to the home front, a government watchdog committee said on Thursday, calling for cash to be safeguarded for the world's poorest countries.

It said taxpayer money meant to alleviate poverty and famine overseas was instead funding refugee programmes at home and it urged Britain to live up to its foreign policy commitments. 

"The haemorrhaging of funds ... to the Home Office  (interior ministry) is robbing Peter to pay Paul," said Sarah Champion, the chair of the International Development Committee (IDC) of lawmakers and a member of the opposition Labour party. 

"It's time to face up to ministers and say hands off the aid budget," she said in a statement.     

A government spokesperson said the UK has been supporting Ukrainian and Afghan refugees in Britain, and is still one of the largest foreign aid donors in the world.

“We report all aid spending in line with the OECD’s rules – which allow funding to be spent on food and shelter for asylum seekers and refugees for their first year in the UK,” the spokesperson said in an email to Context.

“The UK Government … remains one of the largest global aid donors with most of it still going towards supporting the poorest communities around the world.”

Britain's Conservative government reduced overseas aid from 0.7% to 0.55% of gross national income (GNI) in 2020 in order to free up more cash for domestic spending during the COVID-19 pandemic, despite a law that enshrined the higher figure.

The move slashed billions from the annual foreign aid budget, and has impacted almost all international programmes dealing with global health and humanitarian work, according to Bond, a network of British development agencies.

Aid and justice groups say the shortfall would be a huge blow to poorer countries as they struggle to recover from the pandemic and grapple with a global cost-of-living crisis exacerbated by the war in Ukraine.

Here are all the details:

How much does Britain spend on overseas aid?

In 1970, Britain pledged to spend at least 0.7% of GNI on foreign aid as part of a U.N. pact.

It is among 30 wealthy countries including the United States, Germany and Japan that have vowed to meet this minimum commitment each year.

Britain's overseas aid spending last year totalled $15.7 billion, down from $18.6 billion in 2020, according to 2021 data from the Organisation for Economic Co-operation and Development (OECD).

How does other countries' aid spending compare?

Several countries have exceeded the U.N. aid target including Luxembourg (0.99%), Norway (0.93%), Sweden (0.91%) and Germany (0.76%), according to the OECD.

The United States was the biggest cash donor in 2021. It spent $47.8 billion, followed by Germany ($33.3 billion), Japan ($17.6 billion), Britain, and France ($15.5 billion).

Total official development assistance (ODA) in 2021 rose by 4.8% from the previous year, the highest figure on record, the OECD said. The spike was mostly due to funds being spent on COVID-19 vaccine donations, it added.

Why is Britain changing the way aid money is spent?

Britain has been reviewing foreign, defence and security policy following its departure from the European Union.

In 2020, it merged its diplomatic and aid departments to form the Foreign, Commonwealth and Development Office (FCDO).

Charities have said that scrapping a separate development body risked money being diverted to address foreign policy interests rather than alleviating poverty, which itself fuels migration and insecurity.

Dominic Raab, the former foreign minister who oversaw the department merge, has defended the measure, saying the pandemic had shown how security, prosperity, development and foreign policy were inextricably interlinked.

Which countries receive UK aid money?

The top five countries to receive UK aid money in 2021 were Afghanistan, Nigeria, Pakistan, Ethiopia and Yemen, with almost all funds going to countries in Africa and Asia, according to government data.

In 2021, about 743 million pounds was spent on humanitarian assistance such as disaster relief, a decrease from 1.53 billion pounds ($1.85 billion) during the previous year, government data showed.

Nearly a third of the aid budget was spent by departments outside the FCDO - the biggest spender being the Home Office, which increased its spending by 74% to over 1 billion pounds ($1.21 billion) due to a rise in asylum seeker accommodation costs, according to official data.

Government aid spending per refugee in Britain almost tripled to 21,700 pounds per capita in 2021 from 6,700 pounds per capita in 2019, the IDC report said.

That accounted for more than 8% of Britain's aid budget that year, the Independent Commission for Aid Impact (ICAI) watchdog said as it launched a review in November.

A September report by the U.S.-based nonprofit Center for Global Development said Britain could be using up to 3 billion pounds for hosting refugees in 2022 - a quarter of its aid budget - mainly to accommodate Ukrainians.

It comes as Britain sees rising numbers of people arriving via small boats. More than 40,000 - a record number - arrived from France last year, sparking calls for tougher border security from some quarters.

But charities and politicians have raised concerns over the detention centres and hotels that house newly-arrived migrants, with the Independent Chief Inspector of Borders and Immigration describing the conditions of one centre as "pretty wretched".

How could recipients of UK aid be impacted by these cuts?

Aid groups say reducing the aid budget will harm the world's poorest, hinder climate action and damage Britain's reputation as a leader in international development.

Groups such as the Tropical Health and Education Trust, which supports maternal care in poorer countries, and Water Witness International, which runs climate resilient projects in Tanzania, have said all their government funding has halted.

"The UK government needs to restore aid spending to 0.7% of GNI to prevent a continual yearly cycle of uncertainty and project cuts, which leads to devastating consequences for the world's poorest people," said Richard Watts, a development finance expert at charity Save the Children.

This article was updated on March 2, 2022 00:01 GMT to include details of a report by the International Development Committee.

($1 = 0.8791 pounds)

(Reporting by Lin Taylor; Editing by Helen Popper)