At a glance
- The United Kingdom (UK) is the third-largest donor country in absolute terms, spending US$19.4 billion (current prices) on official development assistance (ODA) in 2019 according to preliminary data from the Organisation for Economic Co-operation and Development (OECD).
- The UK is the fifth-largest donor when considering ODA as a proportion of gross national income (GNI). Since 2013, it has met the United Nations (UN) target of spending 0.7% of GNI on ODA and in 2015, it enshrined this target into law.
- The UK government has stated its commitment to maintaining the 0.7% target. As the UK economy contracts in 2020 due to the COVID-19 crisis, ODA volumes are expected to fall as the UK government reduces the ODA budget to meet, but not exceed, the 0.7% target.
- The UK’s current development strategy, ‘UK aid: tackling global challenges in the national interest’, was published in November 2015, and outlines four objectives for UK development spending: 1) strengthening global security, 2) supporting resilience and crisis response, 3) stimulating global economic growth, and 4) addressing extreme poverty.
- Since the publication of the 2015 strategy, additional priorities have gained importance in the UK’s development agenda, including the development of a new strategic partnership with Africa.
- In June 2020, the UK Prime Minister announced the merger of the Department for International Development (DFID) with the Foreign and Commonwealth Office (FCO), creating the new Foreign, Commonwealth and Development Office (FCDO) which aims to unite the UK’s diplomatic and overseas development efforts. The FCDO will be launched in September 2020.
- As well as a new governance structure, the creation of the FCDO signals a change in the strategic direction of UK development assistance policy, and likely, a new strategic framework, as the government seeks to promote greater alignment between the UK’s development assistance and foreign policy objectives.
- New organizational and decision-making structures are likely to significantly change the way UK development assistance is implemented both within headquarters and abroad. Organizational changes are likely to be accompanied by a new strategic framework, that ensures UK development assistance is more closely aligned with the UK’s foreign, security, and trade objectives.
- The future trajectory of UK development assistance in uncertain and likely to be influenced by the conclusions of the UK government’s integrated review of its security, defense, development, and foreign policy due to be completed by the end of 2020. The UK Treasury’s forthcoming Comprehensive Spending Review (CSR), due in November 2020 will set the medium-term budget envelope for the new department.
- The UK officially left the European Union on January 31, 2020 and is now in a formal transition period until the January 1, 2021. How the UK collaborates with the EU on development assistance following the end of the transition period remains undefined and is likely to be tied to the outcome of negotiations in other areas.
UK is the third-largest donor country; 0.7% target enshrined in law since 2015
The UK is the third-largest donor country in absolute terms, after the United States (US) and Germany, and the fifth-largest in relative terms. According to provisional data from the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC), total ODA in 2019 was US$19.4 billion (current prices). According to the OECD, this represents an increase of 2%, compared to 2018 as increases in bilateral assistance offset decreases in multilateral contributions.
In 2013, the UK became the first G7 country to achieve the United Nations (UN) target of spending 0.7% of its GNI on ODA, and it has maintained this level since then. It enshrined the target in law in 2015, meaning that the UK’s ODA has evolved in line with the UK economy. As the UK economy contracts in 2020 due to the COVID-19 crisis, ODA volumes are expected to fall as the UK government reduces the ODA budget to meet, but not exceed, the 0.7% target. The latest forecasts from the International Monetary Fund (IMF, published in April 2020) predict that UK gross domestic product (GDP) will shrink by 6.5% in 2020, and this is expected to translate into a similar reduction in ODA volumes. The OECD has warned in their forecasts, published in June 2020, that the UK is particularly badly affected by the COVID-19 crisis and GDP may remain below pre-crisis levels until the end of 2021.
The Conservative government has committed to maintaining the 0.7% target, so consistent with the target, ODA volumes should start to recover as the UK economy recovers. Ongoing impacts of the COVID-19 crisis or difficulties in agreeing on post-Brexit trade deals with the European Union (EU) and the rest of the world may weigh on the UK’s economic growth and therefore ODA volumes. The government has, however, emphasized that they intend to ensure their spending aligns with UK foreign and trade policy objectives, demonstrated by their decision to merge the Department for International Development (DFID) with the Foreign and Commonwealth Office (FCO) to create the Foreign, Commonwealth and Development Office (FCDO). The government is conducting an integrated review into its foreign, defense, security, and development policy and this is likely to be the vehicle the government will use to set out key reforms with regard to ODA allocation and government machinery for ODA delivery.
The UK Treasury is in the process of conducting the next multi-year Comprehensive Spending Review (CRS) which will set medium-term expenditure limits for government departments including the newly created FCDO. The CRS is expected to be completed by November 2020 to coincide with the Autumn UK budget. Due to Brexit uncertainty and changes in government, this will be the first multi-year CRS since 2015.
The UK officially left the European Union on January 31, 2020, and is now in a formal transition period, which will last until January 1, 2021. About 9% (US$1.8 billion) of the UK’s development assistance or 26% of its multilateral ODA went through the EU in 2018. Following the end of the transition period, this money is expected to be disbursed through other channels. According to the withdrawal agreement, the UK will remain party to the European Development Fund (EDF) until the current funding cycle ends in 2020 (see EU donor profile for more details). The new government’s vision for future collaboration beyond this point remains unclear and is likely to be linked to the outcome of negotiations in other areas. The previous minority-led Conservative government had indicated a willingness to continue to collaborate with the EU on development issues including migration and humanitarian assistance.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
Government aims to further align UK development strategy with the UK’s foreign policy objectives
The creation of a new Foreign, Commonwealth and Development Office (FCDO) signals a new strategic direction for UK development assistance and reflects the government’s intention to ensure greater coherence and alignment between UK development, foreign, security, and trade objectives.
Any new strategic policy framework for guiding UK development assistance is likely to be heavily shaped by the UK’s Integrated Review on security, defense, development, and foreign policy which was launched in February 2020 and is due to be completed before the end of 2020.
In line with this, the UK’s Prime Minister, Boris Johnson, has indicated that the FCDO will identify a new set of country partners for UK bilateral ODA, which are more strategically aligned with the UK’s foreign policy objectives. The FCDO will develop country strategies for each of them; these strategies will be approved by the UK’s National Security Council, led by the Prime Minister.
The UK’s current development strategy (‘UK aid: tackling global challenges in the national interest’) was published in 2015 by the Department of International Development (DFID) and the UK Treasury under a previous majority Conservative government. It highlights four broad strategic objectives for the UK’s development assistance: 1) strengthening global peace, security, and governance, 2) strengthening resilience and response to crises, 3) promoting global prosperity, and 4) tackling extreme poverty (see more details in the box). The strategy explicitly links promoting economic development and reducing poverty in partner countries with strengthening UK trade and investment opportunities.
The 2015 strategy is expected to be updated. Since its publication, four policy areas have become notably more important within the UK’s development agenda:
- Tackling climate change and protecting biodiversity: In June 2019, the government committed to ensuring all UK development assistance will be spent in ways that align with the Paris Climate Agreement.
- Supporting economic growth and driving self-sufficiency in partner countries: Through establishing an International Development Infrastructure Commission in August 2019 and promoting partnerships with the City of London and private sector actors, the government seeks to promote private investment in partner countries (see private-sector approach below). They also continue to invest ODA into the UK’s development finance institute, the CDC Group (see: ‘Main actors’).
- Supporting girls’ education: The government appointed the UK’s first Special Envoy for Girls Education in March 2020. The Envoy is responsible for defining a clear and ambitious strategy to support girls' education through UK ODA over the next five-years.
- Ending preventable deaths of mothers, babies, and children by 2030: The UK continues to prioritize women and children’s health, with a strong focus on ensuring access to family planning, increasing funding for research and development of new health technologies, providing life-saving vaccines for children, and supporting private sector initiatives that increase access to affordable, effective, and critical health technologies.
The government is also seeking to strengthen its relationship with Africa. In 2019, it announced a new strategic partnership with Africa based on “trade, investment, shared values and mutual interest”. As part of this, the government held the first UK Africa investment summit in early 2020 during which it announced £1.5 billion (US$2.0 billion in 2018 prices) worth of initiatives to boost trade and investment, create jobs, and invest in infrastructure. Funding for £370 million ($494 billion) of these initiatives was expected to come from DFID and presumably will come from the FCDO following the merger.
The UK is a strong supporter of multilateral initiatives, particularly in health. It is the largest donor to Gavi, the Vaccine Alliance (Gavi), and virtually hosted Gavi’s third replenishment pledging conference in June 2020. It is also the largest donor to the Global Partnership for Education; the third-largest donor to the Global Fund to Fight AIDS, Tuberculosis and Malaria; and among the largest funders of the Global Financing Facility.
The UK rapidly mobilized significant resources from its development assistance budget for the international COVID-19 response, committing £744 million (US$992 million) by April 2020. Much of this has gone to multilateral initiatives including £250 million (US$333 million) to the Coalition for Epidemic Preparedness Innovations (CEPI) to support international efforts to develop a vaccine. The UK has also committed to supporting vulnerable countries in coping with the economic effects of the crisis, including through a £150 million (US$200 million) commitment to the International Monetary Fund’s (IMF) Catastrophe and Containment Relief Fund (CCRT).
Three review documents used to play a key role in shaping the UK’s bilateral and multilateral approaches to development funding. Under the new FDCO, it is unclear whether these processes will remain.
- The Bilateral Development Review (BDR), last published in December 2016, assesses the composition of DFID’s bilateral portfolio, geographic priorities, and delivery channels.
- The Multilateral Development Review (MDR), published jointly with the BDR, assesses the effectiveness of multilateral organizations and their ‘value for money’. The MDR introduces performance agreements, which restrict the disbursement of funds if agencies do not meet pre-agreed performance targets. DFID plans to link 30% of its multilateral funding to UN development and humanitarian organizations that have demonstrated improved results.
- The Civil Society Partnership Review last published in November 2016, assesses the role, funding options, and effectiveness of civil society organizations (CSOs) in the UK. The review outlines four new mechanisms for CSO funding, and a move away from unrestricted core funding to a more competitive and results-focused funding model, with an expanded network of CSO partners.
DFID’s approach to private-sector development was defined through its Economic Development Strategy, released in 2017. The strategy outlined five priority sectors: 1) infrastructure, energy, and urban development, 2) agriculture, 3) exports, manufacturing, and services, 4) extractive industries, and 5) economic inclusion. The strategy also set out a stronger role for the UK’s development finance institution, the CDC Group, within the UK’s development programs. In line with that strategy, DFID announced in October 2017 that it would channel up to £703 million (US$938 million) a year of capital through the CDC for five years. The move followed the passage of legislation in February 2017 that quadrupled the total funding the CDC can receive from the UK government from £1.5 billion to £6.0 billion (US$8.0 billion).
UK’s mix of bilateral and multilateral spending is stable and aligns with DAC averages
The UK’s ratio of bilateral to multilateral spending is relatively stable. In 2018, 36% of the UK’s ODA was provided as core funding to multilaterals, slightly below the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC) average of 41%. On top of this, the UK channeled 19% of total ODA as earmarked funding through multilaterals organization, (ie. funding designated for a specific region or sector), slightly above the DAC average of 14%. The remaining 45% was spent bilaterally, in line with the DAC average of 45%. CSOs play an important role in implementing UK development assistance; in 2018, 16% of bilateral ODA was channeled through NGOs and civil society, close to the DAC average of 18%. The UK disburses almost all (99.8%) of its bilateral ODA as grants.
Humanitarian assistance and global health are the biggest sectors of UK bilateral ODA
Reflecting the UK’s strategic priorities, global health and humanitarian assistance received the largest volumes of the country’s bilateral ODA in 2018. US$1.8 billion (or 14%) went to global health, a similar proportion to recent years, while US$1.7 billion (or 14%) went to humanitarian assistance, down from US$1.9 billion (or 16%) in 2017.
Other large sectors included other multisector activities (US$1.2 billion or 10%), financial services and business support (US$1.0 billion or 8%), and government and civil society (US$1.0 billion or 8%). Consistent with the importance the UK places on promoting economic growth and prosperity in partner countries, financial services and business support was one of the sectors with the biggest percentage increase in allocation between 2017 and 2018 (US$1.0 billion compared to $0.6 billion in 2017). Education is the sixth-highest funded sector of UK bilateral ODA, receiving US$933 million in 2018, 4% less than 2017 and 30% less than 2016 when the UK made a number of large disbursements to the Global Partnership for Education (GPE) and the Girls’ Education Challenge.
Bilateral ODA focuses on poorest countries and sub-Saharan Africa
The UK’s development strategy, ‘UK aid: tackling global challenges in the national interest’, published in 2015, committed the UK’s Department for International Development to allocating at least half of its annual budget to fragile states and regions. Of total UK bilateral ODA allocated by region, 42% went to sub-Saharan Africa and 23% went to Asia in 2018. In 2018, 49% of bilateral ODA allocated by income group went to low-income countries (LICs).
The top recipients of the UK’s ODA in 2018 were Pakistan (US$444 million in 2018), Ethiopia (US$403 million), Nigeria (US$399 million), Afghanistan (US$333 million) and Syria (US$320 million).
The UK is the largest donor to multilaterals; funding is determined by ‘value-for-money’ assessments
The UK was the largest donor to multilaterals in 2018 in absolute terms. It provided US$7.1 billion (or 36% of its total ODA) in core contributions to multilateral organizations and US$3.7 billion (or 19% of its total ODA) in earmarked funding to multilaterals.
The largest recipients of core funding from the UK in 2018 were the World Bank (US$2.6 billion) and the European Union institutions (US$1.8 billion). The UK also made substantial core contributions to a host of other multilaterals including the Global Fund to Fight Aids, Tuberculosis and Malaria (US$480 million), Gavi, the Vaccine Alliance (US$266 million), the Green Climate Fund (US$261 million), and the International Finance Facility for Immunization (US$147 million).
They also contributed to a number of United Nations (UN) agencies, funds, and commissions including the Central Emergency Response Fund (US$147 million), the UN Development Programme (UNDP; US$73 million); UN Children’s Fund (UNICEF; US$64 million); and the World Food Programme (WFP; US$53 million).
The UK’s contributions to the International Monetary Fund (IMF) were significantly lower in 2018 than previous years (US$111 million compared to US$987 million in 2017 when the UK made substantial contributions to the IMF’s Poverty Reduction and Growth Trust.)
The UK reviews the performance of the multilateral agencies it funds through ‘Multilateral Development Reviews’. These assessments review the effectiveness of the organizations and evaluate the value for money of UK contributions.
Unless otherwise indicated, all data in this section is based on the cash-flow basis measurement system. For more information, see our Donor Tracker Codebook.
The newly created Foreign, Commonwealth and Development Office will lead on strategy setting and the majority of funding decisions relating to the UK’s development assistance
Since December 2019, the UK has a majority Conservative government led by Prime Minister Boris Johnson. The Prime Minister can exercise significant influence over development policy, for example through funding commitments for international initiatives, however, the degree of involvement varies in practice.
In June 2020, the UK Prime Minister announced the merger of the Department for International Development (DFID) with the UK Foreign and Commonwealth Office to create a new department, the Foreign, Commonwealth and Development Office (FCDO). This department will lead on strategy setting and funding decisions on the UK’s development policy. The new department will be led by the former UK Foreign Secretary, Dominic Raab, who will represent both foreign affairs and development within the UK Cabinet. There will no longer be a separate Secretary of State for International Development.
At a recipient country level, UK Ambassadors will lead on all UK foreign and development work. How DFID country offices and staff will be integrated into the UK Embassy system or how decentralized decision-making will be at the country level is not yet clear.
UK country programming was formerly based on the budget given to DFID by the Treasury through the Comprehensive Spending Review (CSR) process. CSRs usually set budgets for three to five years, however in September 2019, the government conducted a fast-tracked one-year Spending Round due to Brexit uncertainty. The next CRS is due in November 2020. Assuming the process remains the same, the FCDO will be expected to set out high-level priorities based on this budget in a multi-year business plan referred to as the Single Departmental Plan. The FCDO’s Embassies will then develop Operational Plans (OPs) to guide bilateral cooperation within each partner country based on the priorities of the Single Departmental Plan.
DFID was formerly the sole shareholder of the CDC Group, the UK’s development finance institution and it is likely that this will transfer to FCDO under the new structure. The CDC invests capital in businesses in Africa and South Asia, focusing on countries and sectors with the greatest potential to create sustainable growth and jobs.
Other government departments: Since 2015, the Conservative-led government has sought to allocate a greater proportion of ODA through other ministerial departments and cross-government funds. DFID was responsible for 73% of ODA in 2019, down from 86% in 2014. Other key actors disbursing UK ODA include the former Foreign and Commonwealth Office (FCO), which focused on strengthening global peace, security, governance, and prosperity; the Department of Business, Energy & Industrial Strategy (BEIS), which largely funds climate-related projects and is now led by Alok Sharma, former DFID secretary of state; the Conflict, Stability and Security Fund (CSSF); the Department for Health and Social Care; and the Home Office.
Cross-government oversight: It is unclear at present what cross-government oversight there will be of UK development assistance within the new structure. In the past, there was a Cross-Ministerial Group, co-chaired by the Chief Secretary to the Treasury and the then Secretary of State for International Development, which scrutinized ODA spending from a value-for-money standpoint across all government departments. There was also a Senior Officials Group on ODA, a director-level group co-chaired by the UK Treasury and the former Department for International Development, which monitored spending relative to the 0.7% ODA-to-GNI target and promoted collaboration across government to help ensure it is reached.
Parliament: The UK Parliament is composed of the House of Commons and the House of Lords. Within the House of Commons, ‘select committees’ review the work of ministerial departments. The International Development Committee was the select committee responsible for scrutinizing DFID’s policies, spending, and monitoring organizations receiving DFID funding. Following the announced merger, the government has written to Parliament asking for the International Development Committee to be dissolved, and its duties to be taken up by Select Committee for Foreign Affairs under a remit expanded to include development. Dissolving the select committee requires a vote in Parliament that has not taken place yet. It is also unclear what will happen to the Independent Commission for Aid Impact (ICAI) which sits outside of government but, under the old structure, reported to the International Development Committee. The ICAI conducted in-depth reviews of the governance, policy, and financing of the UK’s development assistance.
In addition to select committees, All-Party Parliamentary Groups (APPGs) are influential in UK policymaking, bringing together members of Parliament, the private sector, and civil society organizations (CSOs) on key policy issues including international development (e.g., the APPG on the UN Global Goals for Sustainable Development, the APPG on Global Education, the APPG on Global Health, the APPG on Malaria and Neglected Tropical Diseases, and the APPG on Agriculture and Food for Development).
Civil society: CSOs in the UK play a strong role in implementing development funding and shaping the agenda. They frequently engage with the government through formal and informal consultation processes. Bond, the UK’s membership body for development CSOs, has more than 400 member organizations and has been key in maintaining the UK’s strong commitment to development. DFID directly funded CSOs, both through its country offices and through DFID headquarters.
Academia, think tanks, and the media: Academic institutions (e.g., the London School of Economics, Sussex University’s Institute of Development Studies, and Birmingham’s International Development Department) and think tanks (e.g., the Center for Global Development and the Overseas Development Institute) play a significant role in the UK’s development policy. British medical journals (e.g., ‘The Lancet’, ‘The BMJ’, ‘PloS Medicine’) place a strong emphasis on global health issues. The online version of the newspaper ‘The Guardian’ has a designated section on development topics.
DFID was responsible for three quarters of the UK’s ODA
The former Department for International Development (DFID) was responsible for 73% of UK ODA in 2019, according to the UK government document ‘Statistics on International Development’. Most of the remaining budget was managed by other government departments, including the Department for Business, Energy, and Industrial Strategy (6%), the former Foreign and Commonwealth Office (5%), the Conflict, Stability and Security Fund (4%), and the Home Office (3%) in 2019.
The remaining ODA was not attributed to a particular department or ministry. In 2019, non-DFID EU attribution and Gift Aid constituted the largest components (3% and 1% respectively).
In fiscal year (FY) 2019/20, DFID planned to spend £10.3 billion (US$13.7 billion) through its various programs (see table below for detailed breakdown, based on data from ‘DFID’s Annual Reports and Accounts 2018-2019’). This is slightly below the £10.7 billion (US$14.3 billion) spent in FY2018/19. Actual spending for FY2019/20 is expected to be published in DFID’s annual report in July 2020, alongside indicative spending plans by program and region for FY2020/21.
According to the government’s March 2020 budget, £14.4 billion ($19.2 billion) has been allocated to the overall international development budget for capital and resources for FY2020/21, consistent with maintaining the 0.7% target. Funding is however expected to be revised downwards due to the impact of the COVID-19 crisis on the UK economy.
Overview: DFID's budget for FY2018-2019
|East and Central Africa Division||1,189||1,586|
|Asia, Caribbean and Overseas Territories Division||1,038||1,384|
|West and Southern Africa Division||761||1,015|
|Middle East and North Africa Division||660||880|
|Policy, Priorities, International Organisations and Humanitarian||6,213||8,287|
|Economic Development Division||2,441||3,256|
|International Relations Division||1,417||1,890|
|Research and Evidence Division||404||539|
|Conflict, Humanitarian, Security and Stabilization Division||332||443|
|Conflict, Stability and Security Fund||68||91|
|Non-Departmental Public Bodies||28||38|
|Other Central Programs||11||14|
|Crisis Reserve (central reserve)||200||267|
|Total DFID (not including cross-government funds)||10,249||13,670|
Annual budgets run from April to March
The UK budget process usually begins with the Comprehensive Spending Review (CSR), which sets medium term expenditure limits for government departments for the following three to five years and is led by the UK Treasury. The CSR development process is therefore an important opportunity to shape the UK’s overall long-term funding levels for development. In September 2019, the government conducted a fast-tracked one-year Spending Round, given the budget uncertainty associated with the UK’s departure from the EU. The next multi-year CSR is underway and is expected to be completed by November 2020.
The last multi-year CSR coincided with the creation of the UK’s current global-development strategy and contained explicit targets drawn from the strategy that the former Department for International Development and other parts of the UK government committed to delivering within the CSR period.
The UK’s FY runs from April to March. From FY2019/20, the UK intends to have a single ‘fiscal event’ each year, i.e., an annual budget in autumn. The annual process is supposed to be:
- Release of Spring Statement: In April, the UK’s Office for Budget Responsibility (OBR) releases its ‘Spring Statement’ providing an assessment of the UK’s economic and fiscal outlook. The Chancellor begins initial policy consultations on budget proposals for the upcoming fiscal year. The consultations feed into the autumn budget.
- Chancellor presents budget to Parliament: In autumn (usually October/November), the Chancellor presents the annual budget to Parliament, detailing proposals for taxation and overall spending limits for each ministerial department. Members of Parliament debate the annual budget in what is known as the ‘Budget Resolutions’. A Finance Act is then presented to Parliament to enact the budget proposals.
- Parliament debates and adopts the annual budget: Between autumn and spring (approximately October and April), Members of Parliament debate the budget resolutions and scrutinize the budget. A Finance Bill is introduced which aims to be passed by Parliament before the FY begins in April.
- Foreign, Commonwealth and Development Office (FCDO) adjusts budget based on budget speech: Following the Chancellor’s budget speech, the FCDO begins annual resource allocation rounds (RAR) to adjust allocations of its annual budget to align with the budget ceiling set by the Chancellor.
The UK’s failure to leave the EU as planned on October 31, 2019 and the snap election held in December 2019 meant that in 2020, the Autumn budget, originally scheduled for November 6, 2019, had to be delayed till March 11, 2020. The government have stated that they intend to hold another budget in Autumn 2020.