Making social science accessible

30 Nov 2023

UK in the world

Stephen Hunsaker analyses the recent white paper on international development, highlighting that while it outlines important changes to the UK’s approach, questions over funding remain unanswered and will likely remain so after the next general election.

The newly released white paper on international development seeks to return the UK to its status as a development superpower. However, the question of government aid funding that has plagued UK development work over the past three years remains. So, what strategy does the white paper outline to address these funding issues and how likely is it that a potential future Labour government will commit to and implement the proposals?

This report comes on the heels of a turbulent time for the UK’s global role in development. In the last three years, the budget has been gutted numerous times and the previously independent Department for International Development (DFID) folded into the now FCDO (and representatively placed at the end of the acronym).

The white paper is also of note due to Minister for Development and Africa Andrew Mitchell’s decision to consult the Labour Party on the creation of this white paper, signalling that the government is thinking about the longevity of the strategy beyond the next election.

So, what does the white paper contain and how is it different from the previous strategy? The white paper is impressive in its level of detail, extensively outlining that the UK’s focus is to address climate change and extreme poverty. It also sets out the UK’s intention to pioneer new approaches in climate-directed official development assistance (ODA) and debt repayment structuring of loans, such as pausing repayment for countries hit by extreme weather and health emergencies, especially as vulnerable countries see an increase in the former due to climate change.

Furthermore, the paper outlines the need to modernise the UK’s approach to development by changing the relationship with countries receiving assistance from a donor-receipt model to one which is more of a mutual partnership that gives more ownership to the partner and is locally led. Furthermore, it stresses that past approaches will not be sufficient to address climate change and the lingering effects of the pandemic and the concerning increase in conflicts around the globe.

In addition, the white paper acknowledges there is a funding gap to address. It focuses a lot on what policy reforms can be made to scale up the financial capacity of multilateral development banks (MDBs) allowing them to boost investment in low- and middle-income countries. Most of the suggestions on how to mobilise more money are focused on MDBs. While their role should not be downplayed there is a glaring absence of what the UK government itself needs to contribute.

The UK’s commitment to spend 0.7% of gross national income (GNI) on aid is reaffirmed, however with the big caveat that this will only be ‘once the fiscal situation allows’. This has been the party line since 2020 when the then-Chancellor, Rishi Sunak, cut the aid spending budget to 0.5%. They have since then used that line to stay compliant with the International Development Act of 2015 that committed the UK to the 0.7% target.

That cut amounted to £4.6 billion in annual cuts to the official development assistance (ODA) budget. In addition, further cuts of 16% have been made to aid spending in the last year. This has led to the development agency in the FCDO only administering emergency aid funds, leaving many of their global partners in limbo and uncertain as to when the UK might be able to help with previously funded projects.

On top of that 29% of the ODA budget was syphoned off by the Home Office to pay for domestic costs of housing asylum-seekers under the Illegal Migration Act, something which the OECD has flagged as a violation of its rules on ODA spending.

The white paper does seem to indirectly address these issues by stating that ODA programmes’ primary purpose is poverty reduction, and that the FCDO will prioritise its grants going internationally to the lowest-income countries. This does not come as too much a surprise as the responsible minister, Andrew Mitchell has been vocal in his criticism of cutting the ODA budget to 0.5%.

What did come as a surprise was his decision to consult the Labour Party on the white paper. This was seen as a bid to establish cross-party consensus and ensure the longevity of the paper beyond the next election. It seems clear that Mitchell wants to see the UK return to being a development superpower.

But what difference might a Labour government make, if one is elected at the next general election?

Overall, the white paper looks like something Labour could work with on day one of taking office. However, the questions around funding look set to remain, even if there is a change of government.

Under previous Shadow Minister for International Development, Preet Gill, the Labour Party initially promised a return to the 0.7% target, a promise reaffirmed by Keir Starmer. However, in the last year, the party has dropped the commitment and the current position mirrors that of the current government. Labour has also U-turned on a commitment to restore a separate aid department.

So, would anything change under Labour? Based on the party’s current commitments, no. This is in keeping with the fiscally cautious political strategy Labour is pursuing, aiming to head off Conservative critiques of fiscal irresponsibility.

Yet this provides no reassurance to the international development community that the UK is set to become a development superpower once again.

So, while the white paper feels like a roadmap to the UK’s return as a significant global figure in development, a funding gap remains that won’t be addressed before the next election and with no reassurance of a clear path after it.

By Stephen Hunsaker, researcher, UK in a Changing Europe.


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