UK Autumn Statement 2012: An Analysis of the Impact on UK Aid Volumes
The UK government has set a clear precedent that Overseas Development Assistance (ODA) volumes will be proportionally pegged to the size of the UK’s Gross National Income (GNI). It was re-confirmed today that ODA will be funded at 0.7% of GNI from 2013, making the UK the first G8 country to reach the target set by the United Nations in 1969.
In today’s Autumn Statement, economic growth forecasts were also revised down again meaning that the projected ODA budget has been reduced by a total of £680m over the next two financial years (2013-14, 2014-15). This will still be equivalent to 0.7% GNI. This year ODA is expected to be 0.56% of GNI.
ONE expects the reduction in projected aid volumes to come entirely from DFID’s budget (other government departments were expected to spend around 6% of UK ODA over the next two years).
Last year’s Autumn Statement announced a £1.17bn downward revision in ODA, meaning that in addition to today’s announcement, compared to plans at the start of this Parliament in 2010, we expect the total volume of aid will be at least £1.85bn lower than expected. Over the next two years this means a reduction in budget of approximately 6% against the settlement DFID used as input to their operational plans at the start of 2011.
DFID officials believed that with last year’s reduction they could still meet their bilateral and multilateral commitments. We will be pushing for DFID to be transparent about the potential effects of today’s announcement.
Finally, today is the first time that the government has projected ODA in 2015-16 at 0.7% GNI. This is positive as it makes clear that the government is preparing to hold ODA at 0.7% beyond the lifetime of the 2010 Spending Review.
Responding to the announcement ONE’s Europe Executive Director Adrian Lovett said:
“That economic reality makes the Chancellor’s confirmation that Britain is committed to meeting its target of spending 0.7% of GNI on international assistance in 2013 and thereafter all the more important.
The UK must now play a vital role in bringing other countries up towards 0.7%, through protecting European aid in the ongoing EU budget negotiations and through their leadership of the G8 next year.”
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