The UK government intends to reduce the foreign aid budget to 0.3% of GNI (Gross National Income) by 2027, the lowest level since 1999 [1]. This cutback would halve the already depleted budget of 0.58% (£15.34bn) and would fall well below the recommended United Nations target. The current total makes the UK the ninth biggest global contributor by GNI and the fourth biggest when it comes to the total amount spent.

Although the government wishes to decrease foreign aid to increase defence spending, this intention disregards the key reasons why foreign aid and development are important to the United Kingdom.

Firstly, foreign aid benefits the UK in an economic sense. In 2014, every $1 of UK foreign aid provided generated a $0.22 increase in UK exports, creating 12,000 jobs [2].

Secondly, foreign aid brings about ideological benefits by increasing our global reputation and enabling us to push our political agenda overseas.  This soft power is significant in the post-Brexit era, especially in the context of securing free trade agreements.

Thirdly, there are political benefits to spending on foreign aid. [3]. UK foreign aid can lead to economic partnerships, as seen in Kenya when an economic partnership agreement in 2021 boosted access to Kenyan markets for British companies.

Aid that supports long-term, stable economic, political, and social systems — focused on development and institution-building — strengthens the UKs appeal as a trade partner and tackles the root causes of migration, helping to stem the flow.

Therefore, the UK government should not reduce the aid budget in favour of defence, as doing so overlooks the cost of losing the strategic benefits that aid provides. By diverting funds away from development, we will lose the long-term benefits of economic partnerships, disease control, and global stability created by effective foreign aid —all of which are vital for our national security.

Where the UK spends foreign aid 

UK aid is currently distributed in several forms. Regionally, Africa received the most aid at £1.229bn in 2023. Other recipients of large amounts of UK aid spending are Ukraine, Ethiopia and Afghanistan, who received £250m, £164m, and £115m respectively [4].

UK foreign aid also contributes to fighting three of the deadliest diseases: HIV, tuberculosis, and malaria. The UK treated 148 million cases of Malaria between 2022 and 2024 [5].

Furthermore, in 2019, Britain was the largest government foreign aid contributor towards ending violence against women and girls [6].  The UK started a seven-year plan to reduce violence in regions with high levels. In two areas of Tajikistan, the levels of violence fell from 64% to 34% following ten weeks of counselling, skill training, and mentoring. Suicide rates for women in these regions fell from 20% to 9%; the percentage of men who said they had committed acts of violence fell from 47% to 5%.

These successes highlight the need for UK foreign aid around the world. Despite the evident need for aid, the budget cut from 0.7% to 0.58% meant that 80% of funding for water and sanitation projects was dropped.  This cutback reduced the effectiveness of previous investments and damaged relationships with existing partners [7]. Further cuts could see more valuable projects being dropped.

The root cause

Around two-thirds of the UK population believes that immigration levels, particularly refugees and asylum seekers, are too high [8]. However, foreign aid reductions may increase the net migration to the UK because the root causes of migration- namely poverty, climate crises, and violent conflicts- are not being addressed.

Instead, nearly one-third of aid in 2023 was spent on UK-based refugees and asylum seekers, because this spending also counts as ODA (Official Development Assistance) [1]. This allocation in turn reduces the amount of money spent by the UK  in low- and middle-income countries to address the root causes of poverty and migration, meaning that more people will flee to the UK due to fear of persecution or poverty, further increasing the in-donor ODA costs. It is a cycle that must be ended.

Countries should not be permitted to classify their in-donor refugee costs as ODA  because they would then be encouraged to deal with poverty and socioeconomic development – not simply the visible consequences. Investing in targeted aid to fragile states is fiscally prudent, as it can reduce future costs related to UK defence and immigration.

Where UK foreign aid has gone wrong 

The Labour government not only needs to return the foreign aid budget to 0.7% of GNI but must also recognise where aid has been spent ineffectively and ensure that it does not happen again. In recent years, criticism has been rightfully directed at the FCDO (Foreign, Commonwealth and Development Office) for its handling of foreign aid failures.

For instance, in 2014, the UK government spent £107m  on building 5000 classrooms in Pakistan to support global education. However, it was later discovered that 92% of these classrooms did not meet appropriate safety standards, meaning the pupils had to be taught in alternative facilities. This case not only indicates that foreign aid is being wasted, but also that there is a lack of transparency and communication from the Department for International Development (DFID). The DFID discovered the safety hazards in 2016 but did not pass this information on to local Pakistani authorities until three years later [9].

Additionally, a study by the IEA has revealed that, in the past few years, foreign aid has been given to areas in China, Mexico, and Malaysia. This included areas which are wealthier than some regions of the UK. For instance, Ordos in China has a GDP per capita of £27,500, higher than that of 69 regions in the UK. [10]. Projects also included AI-driven anti-congestion measures in Kuala Lumpur and a rural crafts exhibition in Shenzhen. 

Whilst these are undoubtedly good cultural initiatives, these nations can pay for these initiatives themselves.  This misallocation of UK foreign aid could be better spent on helping those in the poorest regions to gain access to clean water, food, and medicine.

Finally, in Afghanistan, the £3.5bn spent by successive governments between 2000 and 2020 failed to achieve their primary goal of stabilising the country. Instead, the investment was directed towards a US strategy that  Afghanistan privately disagreed with [11]. Afghanistan is now in a state of disarray with inhumane conditions faced by the female half of the population.

The government has acted to identify mistakes, such as sponsoring an independent audit into the misuse and embezzlement of funds during the ‘cashgate’ scandal in Malawi in 2014 [12]. The Foreign, Commonwealth and Development Office currently finances 621 international development projects. However, it is unspecified how many of these projects have effectively dealt with poverty alleviation and environmental protection. In conclusion, although UK foreign aid is largely well spent, individual projects still offer room for improvement – particularly when compared to the approach of our Nordic neighbour, Denmark.

Lessons from Denmark 

Both the UK and Denmark are members of the Council of Europe and NATO; both nations boast relatively strong economies with a focus on exports and a high standard of living. Denmark, Sweden, Norway, Ireland, and Germany outspend the UK in terms of GNI; Norway spent 1.09% in 2023 whilst Germany spent 0.79% (£29.5bn) [1].

Denmark has consistently met the UN target of 0.7% of GNI since the 1970s; they are rated in the top five foreign aid donors for the usefulness of policy advice, agenda-setting influence, and helpfulness in reform implementation by low- and middle-income countries. In comparison, the UK ranks 7th, 9th, and 9th in these respective categories [13]. Whilst the DFID was merged into the FCDO in 2020, DANIDA (Danish International Development Agency) manages Danish foreign aid and, crucially, this agency is separate from Danish foreign policy.

The priorities of Denmark are protecting human rights and democracy, sustainable growth, social progress, and conflict prevention [14]. The stark difference between the Ministry of Foreign Affairs of Denmark and the FCDO is obvious: Denmark regularly produces case studies and reports on their foreign aid objectives, successes, and learnings. 

One example of the more successful spending strategy in Denmark and the aid programme in Bangladesh from 2018 to 2021. The aim was to help women and girls who had to travel long distances to collect water for their families. Danish foreign aid was used to construct a solar-powered water supply from a deep tube well. The area is one of the most affected by climate change in Bangladesh and suffers from flash floods and droughts. Denmark worked with the Ministry of Chittagong Hill Tracts and the UNDP Bangladesh to install 29 water supply schemes and 7 solar lamp posts to reduce electricity costs and avoid wildlife attacks on the electricity supply [15].

A further example is the successful Danish-Ukrainian effort to rebuild Mykolaiv at President Zelenskys request. Partnering with Save the Children, Denmark has helped 10,000 Ukrainian children to benefit from improved access to education during the ongoing war with Russia. Here, Danish foreign aid is being used to rebuild schools and kindergartens, facilitate online learning, and support citizens mental health throughout the conflict [16].

The UK can learn from Denmark — especially in terms of foreign aid and development. Whilst the UK sporadically changes the foreign policy budget, Denmark maintains a regular one, giving partners clear information about the funding they can expect

Secondly, the UK should decentralise foreign aid and hand partners, British embassies, and local NGOs more control over the aid programs because they will best understand their own development needs.

Thirdly, Denmark focuses on fragile states to combat the root causes of poverty, migration, and inequality; the UK should follow suit, rather than spending the foreign aid budget on UK-based matters.

Finally, the UK should publish clear examples of foreign aid successes for the public to view. Such transparency would encourage public support, demonstrate the strengths of our various programs, and allow the UK to swiftly identify errors. The review of the accessibility and transparency of UK aid by Publish What You Fund is an encouraging step in the right direction. I look forward to the results of this review [17].

What other political parties plan to do

Across the political spectrum, parties have different ideas about foreign aid and international development. Reform UK intends to cut the aid budget by 50% to save £6 billion [18]. Whilst the UK may see savings in the short term, a cut of this size would lead to increased global instability and a rise in serious diseases and gender inequality, which we have been working for decades to reduce.

Both morally and economically, cutting the aid budget will not benefit Britain in the long term. Alternatively, the Conservative Party, if re-elected, would return the foreign aid budget to 0.7% of GNI when fiscal circumstances allow. They will help other countries to deliver debt relief and will scale up support for female education, global health interventions, and climate change leadership [19]. The positives here must be acknowledged: by investing in education, particularly for women and girls, the UK would generate long-term human capital that fosters economic resilience and reduces dependence on future aid.

However, the Conservative Party still wishes to continue the merging of the FCDO and the DFID. They insist on a ‘national interest test’ which threatens to divert resources from poverty alleviation. Given that there is no concrete timeline for international development increases, arbitrary targets are likely to be pushed further and further back.

The Liberal Democrats promise to return foreign aid spending to 0.7% of GNI and re-establish an independent international development department [20]. Although their proposals lack detail on a set date or focus, the desire for an independent department heavily suggests that foreign aid will rightly be separated from foreign policy objectives.

Finally, the fourth major English parliamentary opposition party, the Green Party, would increase the budget to 1% of GNI by 2033 and contribute 1.5% to a separate climate finance fund for the global south [21]. This is in line with my policy recommendations below. However, it is doubtful whether the target of 1.5% solely for climate resilience is realistically achievable; 0.5% of GNI specifically for climate change is more achievable.

Aside from political parties, Sarah Champion argues that, morally, foreign aid should be a definite force to stay because, despite the dire state of Britains public finances, our aid budget represents a tiny proportion of government spending. Investment in foreign aid demonstrates our capacity to do good in the world. She also criticises the recent cuts to foreign aid because the reduction undermines a key tool to resolve events diplomatically. She cites the move as hypocritical because the reason for merging the FCDO and the DFID was to combine diplomacy and development, thereby producing better international policy. Now, the effectiveness of both has been reduced. [22]

Reasons for the lack of data 

A damning report from the House of Commons International Development Committee revealed that the previous Conservative government would not or could not provide a sufficient response to how ODA is being spent in the UK [23]. This apparent lack of – or refusal to provide – knowledge is alarming. It may be difficult to track foreign aid because it is spent through different departments, raising significant questions about the governments ability to communicate.

If the British government does not have the will or the ability to provide data to the House of Commons on their aid spending, it is unsurprising that 76% of the British public admitted to possessing little to no knowledge about how and where foreign aid is spent [24]. Even more concerning is that this 2012 survey is the latest piece of information we have on public knowledge about foreign aid. How can the public, let alone politicians and governments, form a well-judged opinion if they do not have the information?

Despite the improvement by the FCDO in the Aid Transparency Index 2024 from ‘good’ in 2022 to ‘very good’ in 2024, they still score well below what the DFID scored in 2020 [25]. Furthermore, the FCDO is underperforming compared to other agencies in several areas. There are gaps in government foreign aid data regarding the organisations used to deliver aid — information crucial to meeting the 2022 Grand Bargain commitments, as well as in finance types and recognised references. Such information is essential for tracking aid from the original provider through to implementation.

Limited transparency weakens engagement from stakeholders, such as NGOs or private companies, creating challenges in monitoring and evaluating the UKs foreign aid process from distribution to delivery. Additionally, public opinion drives political decision-making, including budget cuts. Therefore, more data that is highly accurate and up-to-date would likely lead to increased public and cross-party support. 

The UK governments ‘Development Tracker’ is a valuable initiative to increase information about UK aid spending; the government must continue to develop this website [26]. The website should be widely reachable through an internet search. If a think tank researcher has had to dive deep into the internet to find this page on the UK Government website, then it is not being advertised well enough. 

A final challenge that we encounter in the search for data is the lack of interest from both sides of the argument. Those who want to increase the foreign aid budget are not advocating for more data clarity because they fear it may reveal failures within our foreign aid spending. However, those who are quick to point out our failures, such as in the IEA report [10], are also not hugely interested in doing any more research because they have already made their point. This crossroad is hampering the ability of any organisation to come to a just solution on foreign aid that is backed up by data, because there is little clear data to use. 

Increasing the amount, availability, and readability of collected data for the general public should be the starting point for the government.

Policy recommendations and conclusions

None of these parties is advocating for a greater distribution to local partners — a move which would enhance the effectiveness of foreign aid and increase the sense of empowerment, ownership of responsibility, and accountability. This approach may also reduce overhead costs by lessening dependence on large international organisations, while enabling a faster response to emerging disasters, as demonstrated during the COVID-19 pandemic when travel restrictions limited the deployment of external aid workers.

In 2022, the UK endorsed the Grand Bargain 2.0, which committed signatories to provide 25% of international development funding to local organisations [27]. Whilst data is severely limited on the UKs commitment to this agreement — reflecting the wider lack of clarity on UK foreign aid— the UK delivers most of the bilateral aid through UK-based or large international partners rather than local organisations [28].

Policy recommendations 

1. Return foreign aid spending to 0.7% of GNI by 2030 to keep the UK in line with the global benchmark. The long-term economic, strategic, and ideological benefits outweigh short-term fiscal costs, especially given that the increase can be phased in gradually.
2. Prevent high-income countries from counting their in-donor refugee costs as ODA to tackle poverty reduction rather than migrant processing. This recommendation is targeted at the Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD).
3. Showcase successes online to convince the public that foreign aid is a helpful tool. Publish case studies to promote our aid objectives and improve transparency. Improve data collection on where foreign aid is distributed. Increased access to data would be a high-value measure, being of significant benefit (public support & increased accountability) with a minimal cost (administrative and communications staff).
4. Ensure the correct allocation of UK foreign aid; it should not go to areas richer than parts of the UK. This recommendation requires cross-departmental coordination.  Nonetheless, this policy would ensure that our UK-based needs do not hinder our international commitments.
5. Adhere to the 2022 Grand Bargain, ensuring that at least 25% of aid is distributed to local partners by 2030. Although there may be concerns about corruption and the initial investment in monitoring and building capacity in local partners, the implementation of this policy would result in faster delivery times and a reduction in longer-term aid dependency
6. Decentralise foreign aid delivery. This policy could be put into action by reinstating the DFID as the entity to separate international development from British foreign policy aims.  Whilst this approach may incur some reorganisation costs during the transition, our development expertise would be once again increased.
7. Separate climate change resilience from foreign aid. In the years to come, climate-related problems will increase, and poverty alleviation, global health programs, and female education initiatives must continue to receive funding — irrespective of the climate crisis.

Conclusion

In conclusion, Prime Minister Sir Keir Starmer plans to reduce spending on foreign aid to 0.3% of GNI, equivalent to just £9.2 billion, half of the already reduced budget. For the reasons I have outlined above, it is clear that foreign aid is a vital part of our budget and should be increased. A further reduction is short-sighted and counterproductive: the issue is not whether we should spend foreign aid, but how we can spend it more efficiently.

Bibliography

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