Charities urge Government to stop aid budget falling to 17-year low

Overseas aid spending could fall to its lowest level since 2007 unless the Government takes action at the Budget in October, a coalition of charities has warned.

Leaders of 122 UK charities including ActionAid, Oxfam and Save the Children have called on the Government to maintain aid spending at its current level and prevent more of the aid budget being diverted to support refugees and asylum seekers in the UK.

The group also called for ministers to set out “fair and transparent fiscal tests” for restoring the aid budget to 0.7% of GDP after it was cut to 0.5% in 2021.

In a statement published on Wednesday, they said: “As leaders of the UK’s development, humanitarian and peacebuilding sector, we are deeply concerned that the spending plans the new Government has inherited from the previous government will slash UK aid programmes to levels not seen since 2007 including under recent Conservative governments.

“If these plans are not urgently revised, the Prime Minister and his Government will be withdrawing vital services and humanitarian support from millions of marginalised people globally and turning up empty-handed to global forums over the coming months.”

She added: “Failure to do so would undeniably put the UK at risk of further diminished credibility as a dependable agent in addressing urgent global crises.”

Although the aid budget was cut in 2021, the previous government provided £2.5 billion of “top up” funding over the last two financial years to help fund increased spending on refugees in the UK.

But that money ran out in March, which the UK international development group Bond said would mean a £1.8 billion cut to the aid budget this year.

Bond also pointed to a recent trend that has seen more of the aid budget spent within the UK to support refugees and asylum seekers in the first 12 months of their arrival.

International aid rules allow countries to include these costs, but require a “conservative approach” to avoid too much money being diverted from overseas aid.

The UK has previously been criticised for including some costs, such as child benefit or administrative costs, that other countries do not count towards aid spending.

Labour MP Sarah Champion, who chairs the Commons International Development Committee, criticised “reckless spending” on “extortionate hotel bills”, saying it “deprives millions of marginalised people around the world of the vital humanitarian support they need to stay safe in their own countries”.

She added: “In the short term, we need the UK Government to top up the UK aid budget to cover these additional costs, so we don’t see further cuts to programmes.

“The UK aid budget is meant to tackle global poverty and instability, not to cover the costs of a broken asylum system at home.”

Housing asylum seekers and refugees in the UK in 2023 amounted to more than a quarter of the UK’s total aid budget for the second year running, according to figures published in April.

During the election campaign, Sir Keir Starmer expressed opposition to the use of the aid budget to cover asylum costs, but said any change to the system would not be immediate.

Other Labour figures including Foreign Secretary David Lammy and Culture Secretary Lisa Nandy, who was previously shadow development minister, have also criticised the practice.

But departments are already face straitened circumstances as the Chancellor prepares her first Budget, due on October 30, after claiming the previous government had left a significant gap in the public finances.

The Foreign, Commonwealth and Development Office has been contacted for comment.