United Kingdom

At a glance

Funding trends

  • The United Kingdom (UK) is the third-largest donor country in absolute terms, spending $18.6 billion (current prices) on official development assistance (ODA) in 2020 according to the preliminary data from the Organisation for Economic Co-operation and Development (OECD).
  • The UK is the sixth-largest donor when considering ODA as a proportion of gross national income (GNI). ODA volumes fell by 10% from US$19.4 billion in 2019 to US$17.4 billion in 2020 (2019 constant prices) as the UK government reduced ODA in response to the shrinking UK economy in order to meet, but not exceed, the 0.7% ODA-to-GNI target. It has met the target every year between 2013 and 2020 and enshrined it into law in 2015.
  • In 2021, the UK government decided to temporarily provide ODA equivalent to only 0.5% of GNI (down from the legally enshrined 0.7%) because of the negative economic impacts of COVID-19. This reduction will be maintained until two fiscal tests are met: 1) no government borrowing for day-to-day spending according to the Office for Budget Responsibility (OBR), and 2) a falling ratio of underlying government debt to GDP. ODA spending is unlikely to meet both fiscal tests until at least 2024. The UK’s Comprehensive Spending Review 2021 notes that the UK Treasury has set aside US$7 billion to enable funding to go back up to 0.7% if the fiscal tests are met in 2024, to be decided by the winning party during that election year.
  • The allocation of ODA between departments and various government priorities remain unclear. Vaccine doses may also be counted towards 0.5% ODA budget which may put more pressure on the already shrinking envelope.

Strategic priorities

  • In September 2020, the UK launched the new Foreign, Commonwealth and Development Office (FCDO) by merging the former Department for International Development (DFID) with the Foreign and Commonwealth Office (FCO). The government seeks to promote greater alignment between the UK’s development assistance and foreign policy objectives. The UK government published an Integrated Review of UK Security, Defence, Foreign Policy and Development in March 2021 to enhance its global reach by aligning these thematic areas. The 2021 Integrated Review called for the UK to focus on science and technology, climate change, global health, and supporting an open international order.
  • The former FCDO Secretary of State, Dominic Raab, also announced in April 2021 seven key priorities for guiding UK ODA in fiscal year (FY) 2021/22. These priorities align with the priorities of the Integrated Review and the UK’s  Comprehensive Spending Review 2021 which include a focus on girls’ education, global health security, and climate (see ‘Policy priorities’).
  • Dominic Raab was replaced by Liz Truss on September 17, 2021. Truss is the Foreign Secretary for the FCDO and also retains her former post as Minister for Women and Equalities.
Download

Outlook

  • The government is working on a new international development strategy (IDS) to align UK development assistance with the strategic objectives laid out in the Integrated Review; due to be published in 2022.
  • The UK has committed to double its International Climate Finance (ICF) providing US$14.8 billion of climate finance between 2021-2025 – approximately 14 to 17% of the annual ODA budget up to 2024. The UK also committed an additional US$1.3 billion in ICF during its hosting of the COP26, but this appears to be conditional on a return to 0.7% in 2024.
  • The UK’s post-Brexit collaboration with the EU on development assistance remains undefined and is likely to be tied to the outcome of negotiations in other areas.

Policy Priorities

Alignment between the UK’s development strategy and foreign policy objectives is increasing

The UK Government plans to set out a new international development strategy to align UK development assistance with the strategic objectives of the 2021 Integrated Review of UK Security, Defence, Foreign Policy and Development published in March 2021. The new strategy is also likely to be aligned to the outcomes of the UK Treasury’s Comprehensive Spending Review in October 2021. The Integrated Review sets out four strategic objectives: 1) promoting the UK’s strategic advantage through a focus on science and technology; 2) continued UK leadership to shape an open international order including upholding democratic values and human rights including gender rights; 3) strengthening security and defense at home and overseas; and 4) building resilience at home and overseas (e.g., climate change and global health).         

The Integrated Review combines the various interests of the UK Government in its global outreach. It identified the increasing strategic importance of China and the Indo-Pacific region, the rising competition between states and between democratic and authoritarian values, the fast pace of technological change, and transnational challenges such as climate change, global health risks, terrorism, and organized crime. It called for an Indo-Pacific tilt that goes beyond development cooperation with the goal of the UK having the most integrated presence in the region of all European partners by 2030. The review also highlights South Africa, Nigeria, Kenya, Ethiopia, and Ghana as key partners in shared prosperity goals, democratic values, and security interests.

In April 2021, the Secretary of State for the Foreign, Commonwealth and Development Office (FCDO) provided further policy guidance on UK’s ODA for the FY2021/22. The FCDO budget sets out the following seven key priorities: 1) climate change and biodiversity; 2) COVID-19 and global health security; 3) girls' education; 4) science, research, and technology; 5) open societies and conflict resolution; 6) trade and economic development; and 7) humanitarian preparedness and response. These priorities were also largely reflected in the UK’s 2021 Comprehensive Spending Review.  The Center for Global Development suggests that climate change and biodiversity, COVID-19 and global health security, and humanitarian preparedness and response will comparatively increase in importance in 2021.

Most of the ODA cuts between 2019 and 2020 came from the UK’s bilateral programs. Bilateral funding saw a 15% decline, from US$13.1 billion in 2019 to US$11.4 billion in 2020, according to OECD preliminary data. The FCDO’s '2020-2021 Annual Report and Accounts' also reveals some of the impacts of the UK's cuts to ODA in FY2021/22. The FCDO plans to spend £1.8 billion (US$2.4 billion) in direct country bilateral ODA in FY2021/22; 45% cut compared to FY2020/21, mainly driven by reductions in funding to fragile states and countries on the African continent. In response to these cuts, the UK’s Foreign Secretary Liz Truss, will re-balance funding towards promoting the bilateral program in the forthcoming new international development strategy.

The FCDO launched two new papers on global health on December 14, 2021, which set out its agenda on health system strengthening and on ending preventable deaths; core priorities for UK development assistance moving forward. The papers do not, however, set out any financial commitments or specific results targets, except contributing to meeting key UN Sustainable goals.

The FCDO also unveiled a new five-year (2021-2026) global action plan on girls' education with the following commitments: 1) shape a renewed international effort to ensure the world is on track to reach the United Nations (UN) Sustainable Development Goal (SDG) 4 on 'Quality Education'; 2) use its network of British Ambassadors and High Commissioners to support committed national governments in enhancing their efforts to improve girls’ education; and 3) establish global public goods for education.

The UK sees itself as a world leader on gender equality. In 2014, the International Development (Gender Equality) Act made it a legal requirement that UK development assistance delivers poverty reduction in a way that also contributes to reducing gender inequality. The former Department for International Development (DFID) ‘2018-2030 Strategic Vision for Gender Equality’ highlights the government’s five key priorities, which are 1) addressing gender-specific barriers to inclusive economic growth; 2) increasing the number of women in informal and formal decision-making structures, including conflict prevention and peacekeeping; 3) girls’ education, particularly girls with disabilities; 4) promoting universal sexual and reproductive health and rights (SRHR); and 5) eliminating gender-based violence. The 2021 Integrated Review of UK Security, Defence, Foreign Policy and Development calls upon the UK government to defend gender equality  by ‘working with women’s rights organizations to tackle the discrimination, violence and inequality that hold women back’.

The Bilateral Development Review (BDR), Multilateral Development Review (MDR), Civil Society Partnership Review 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.

UK ODA will be used in support of 7 key global channels:

  1. Climate change and biodiversity

  2. COVID-19 and global health security

  3. Girls' education

  4. Science, research, and technology

  5. Open societies and conflict resolution

  6. Trade and economic development

  7. Humanitarian preparedness and response

ODA Breakdown

UK’s mix of bilateral and multilateral spending is stable and aligns with DAC averages

The UK provided US$6.3 billion or 32% of its total ODA as core contribution to multilaterals in 2019, down from US$7.0 billion or 36% in 2018. This is below the DAC average of 41%. The UK channeled (US$4.0 billion) or 20% of its total ODA as earmarked funding through multilateral organizations, meaning funding designated for a specific sector or region, slightly above the DAC average of 14%. The remaining (US$9.3 billion) or 48% was spent bilaterally, in line with the DAC average of 45%.

The UK channels US$1.2 billion or 9% of ODA through private sector institutions, above the DAC average of 4%. The large share of funding through private sector institutions reflects in part the UK’s reliance on private sector contractors and consultants to carry out project implementation.

Non-governmental organizations (NGOs) and civil society organizations (CSOs) implemented US$2.0 billion or 15% of the UK’s bilateral programs in 2019, below the DAC average of 20%. CSOs in the UK play a strong role in implementing development funding and shaping the UK’s development agenda. Disbursements to CSOs are framed by the Civil Society Partnership Review which outlines a competitive and results-focused civil society organization funding model.

 

Humanitarian assistance and global health are the biggest sectors of UK bilateral ODA

Reflecting its strategic priorities, the UK focuses a significant share of its bilateral ODA on humanitarian assistance and global health, as well as financial services and business support.

Humanitarian assistance was the largest sector of bilateral funding in 2019, accounting for US$2.0 billion or 15% of bilateral ODA, a 16% increase from the US$1.7 billion provided in 2018. The related sector of conflict, peace, and security accounted for an additional US$543 million or 4% of bilateral ODA, down from US$597 million in 2018. Global health is the second-largest sector of bilateral support in 2019, accounting for US$1.9 billion or 14% of ODA, up from US$1.8 billion in 2018.

Other large sectors in 2019 included other multisector activities (US$1.3 billion or 9%), financial services and business support (US$1.2 billion or 9%), and government and civil society (US$1.2 billion or 9%). Consistent with the importance the UK is placing on promoting economic growth and prosperity in partner countries, financial services and business support grew by 78% between 2016 and 2019.

Download

Bilateral ODA focuses on the poorest countries and Africa, MENA, and Asia

According to OECD data, 22% of the UK’s ODA allocation by income in 2019 was channeled to low-income countries (22%) and lower-middle-income countries (18%). More than half (52%) of the UK’s bilateral ODA was not allocated by income.

The top recipients of UK ODA in 2019 were Afghanistan (US$403 million), Pakistan (US$390 million), Ethiopia (US$383 million), Bangladesh (US$334 million), Yemen (US$332 million), and Nigeria (US$330 million). Pakistan, Ethiopia, and Nigeria are likely to remain high on the list of recipients as they are of strategic importance to the UK in their respective regions and contain a large and growing number of the world’s poor.

The FCDO’s geographical focus for bilateral support in FY2021/22 is Africa (±50%), South Asia, and the Indo-Pacific region (±33%). In Africa, the focus will be particularly on East Africa.  In September of 2021, the FCDO’s Annual Reports and Accounts revealed the FCDO’s planned regional bilateral ODA spending for FY2021/22 will be £1.8 billion (US$2.4 billion). This represents a 45% cut of £3.4 billion (US$4.3 billion) compared to the FCDO’s regional bilateral program spending in FY2020/21. This does not represent the totality of the FCDO’s bilateral spending at the country level, it could impact FCDO’s focus countries. Nigeria, for example, is planned to receive £95 million (US$121 million) in FY2021/22, less than half of what it received in FY2020/21 (£209 million or US$267 million). Ethiopia will receive £107 million (US$137 million) in 2021/22, down from £240 million (US$306 million) and Pakistan will receive £97 million (US$124 million), down from £159 million (US$203 million).

Download
Download

The UK is one of the largest donors to multilaterals

The UK was one of the largest donors to multilaterals in 2019 in absolute terms. It provided US$6.3 billion or 32% of its total ODA in core contributions to multilateral organizations and US$4 billion or 20% of its total ODA in earmarked funding to multilaterals. The UK will remain a large donor to multilateral organizations, but there will be rebalancing of funding towards bilateral program under the forthcoming new international development strategy. The UK has pledged US$1.9 billion (£1.4 billion) to International Development Association (IDA20); 54% less than committed to the previous replenishment. The UK will thereby become the third-largest donor to IDA.

The largest recipients of core funding from the UK in 2019 were the European Union institutions (EUI; US$2.3 billion) and the World Bank (US$1.2 billion). The UK also made substantial core contributions to a host of multilaterals including the Global Fund to Fight Aids, Tuberculosis and Malaria (Global Fund; US$472 million), Gavi, the Vaccine Alliance (Gavi; US$255 million), and the International Finance Facility for Immunization (IFFIm; US$152 million).

The UK also contributed to several United Nations (UN) agencies, funds, and commissions including the Central Emergency Response Fund (US$383 million), the UN Development Programme (UNDP; US$70 million); and the World Food Programme (WFP; US$51 million).

2019 was the first year since 2014 that the UK did not make any core contributions to the International Monetary Fund (IMF). Disbursements were significantly lower in 2018 than in previous years (US$108 million compared to US$964 million in 2017 when the UK made substantial contributions to the IMF’s Poverty Reduction and Growth Trust).

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.

For more granular and up-to-date development finance data on the UK, including information on where and in which sectors it is spending both ODA and non-ODA funds, please consult the IATI d-portal. IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation.

Main Actors

The newly created FCDO leads on strategy setting and funding decisions relating to 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.

The Foreign, Commonwealth and Development Office (FCDO), created through a merger of the Department for International Development (DFID) and the Foreign and Commonwealth Office (FCO), was established in September of 2020. It leads on strategy setting and funding decisions on the UK’s development policy and is led by  UK Foreign Secretary Liz Truss who represents both foreign affairs and development within the UK Cabinet. Liz Truss retains her role as Minister for Women and Equalities.  Liz Truss was the Secretary of State for Trade from 2019 to 2021.

At a recipient country level, UK Ambassadors 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 is based on the budget given to FCDO  by the Treasury through the Comprehensive Spending Review (CSR) process. The  CSR for 2021 has  set FCDO’s budget for 2021/2 for the next three years.  Following the CSR, the government departments normally set out high-level priorities based on this budget in a multi-year business plan referred to as the Outcome Delivery Plan. The FCDO is currently using its FCDO Outcome Delivery Plan for 2021 and 2022. The FCDO’s Embassies will then develop Operational Plans (OPs) to guide bilateral cooperation within each partner country based on the priorities of the Outcome Delivery Plan.

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. The FCDO was responsible for 74% of ODA in 2020 (according to UK government provisional ODA statistics), 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) was responsible for 7%; the Conflict, Stability and Security Fund (CSSF) was responsible for 4%; the Department for Health and Social Care 2%; and the Home Office 4%.

Cross-government oversight:  The FCDO is responsible for the final allocation of ODA to other government departments in a drive to improve coordination. The FCDO will assess all programs on their alignment with UK's strategic objectives, value for money, and impact and will result in almost 94% of the UK's ODA being managed or allocated by the FCDO in FY2021/22. Respective government departments remain accountable and responsible for ensuring the programs meeting the ODA definition and delivering impact.  The former DFID was not responsible for cross-governmental ODA allocations.

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 is the select committee responsible for scrutinizing the UK’s ODA policies and expenditure, and monitoring organizations receiving UK ODA funding. It has not been merged into the International Foreign Affairs Committee after the creation of the FCDO and remains a separate committee.

The UK has an Independent Commission for Aid Impact (ICAI) which sits outside of government but reports to the International Development Committee. The ICAI conducts in-depth reviews of the governance, policy, and financing of the UK’s development assistance. After the merger of DFID and FCO, the UK government reviewed ICAI and has called on the ICAI’s role to be expanded so that it can provide advice and evidence to Ministers beyond evaluation.  ICAI also supports the work of the UK’s International Development Committee.

All-Party Parliamentary Groups (APPGs) are also 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 Health etc.).

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 civil society organizations, has more than 400 member organizations and has been key in maintaining the UK’s strong commitment to development. The FCDO directly funds these organizations, both through its country offices and at headquarters.

UK Org Chart

Budget Structure

Newly-formed FCDO is responsible for three-quarters of the UK’s ODA

According to the UK government, the FCDO provided 74% of total UK ODA in 2020, down from the 78% managed by the former DFID and FCO in 2016. This is part of a deliberate effort to promote cross-government allocation of ODA which presents increasing avenues to shape UK development efforts through engagement with actors outside of the FCDO, including the Department for Business, Energy and Industrial Strategy (BEIS; responsible for some of the UK’s ODA related funding for climate change and R&D) and the Department for Health and Social Care (DHSC; which manage some ODA funding for anti-microbial resistance surveillance, research into vaccines for diseases with epidemic potential, and health research for low- and middle-income countries).

BEIS was the largest non-FCDO provider of ODA in 2020, accounting for 7% of all funding, followed by the Home Office (4%), the cross-departmental Conflict, Stability and Security Fund (CSSF; 4%), and DHSC (2%).

According to the December 2020 Spending Review by the HM Treasury, the ODA budget for FY2021/22 was forecast at £10.0 billion (US$12.8 billion). Most of this budget (£8.1 billion or US$10.3 billion) was allocated to the new FCDO and a further £1.9 billion or US$2.4 billion to other government departments (see Table 1 and 2). According to the FY2020/21 FCDO Annual Reports & Accounts, in FY2020/21 the FCDO spent £11.2 billion (US$14.3 billion) through its various programs. For FY2021/22, the FCDO’s ODA planned programs stand at £7.6 billion (US$9.7 billion; see Table 3). This final figure is subject to revision and reflects differences in the time of setting up and creating new programs and changes to the UK’s economic growth. It should be noted that the FCDO thematic departments do not reflect the totality of FCDO thematic spending, some of which will go through its country program. 

FY2021/22 ODA allocations across FCDO departments as reported in April 2021

millions
£

millions
US$

Climate change and biodiversity 534 681
COVID and global health 1,305 1,665
Girls' education 400 510
Humanitarian preparedness and response 906 1,156
Open societies and conflict 419 535
Science, research and technology (plus thematic R&D) 38 48
Trade and economic development 491 627
Financial transactions 863 1,101
Programs with cross-cutting themes 1,940 2,476
ALBs, International Subscriptions and other fixed costs 1,219 1,556
Total 8,115 10,356

 

 

FY2021/22 ODA planned allocation across FCDO departments and themes as reported in September 2021 

millions
£

millions
US$

Chief scientific adviser 270 345
Climate & Environment 214 274
Conflict,
Stabilization &
Mediation
27 35
Delivery & Analysis 906 1,156
Economic
Cooperation &
Growth
85 108
Education, Gender
& Equality
124 159
Europe 1,183 1,510
Health 916 1,169
Humanitarian 278 355
International
Finance
1,219 1,556
Multilateral, Sanctions, Strategic Engagement Directorate 27 35
Open Societies 122 156
Trade 13 16
Delivery & Analysis 3 4
Open Societies and Human Rights 5 6
Other 2,585 3,299
Total 7,566 9,655

 

Budget Process

The UK’s fiscal year runs 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 an important opportunity to shape the UK’s overall long-term funding levels for development. In 2019 and 2020, the government conducted one-year Spending Rounds due to the economic uncertainty of Brexit and then the COVID-19 crisis.

The last multi-year CSR in 2015 coincided with the creation of the UK’s current global-development strategy and contained explicit targets drawn from the strategy that DFID and other parts of the UK government committed to delivering within the CSR period. The UK government is set to hold its next CRS in October or November 2021 and it is hoped it will set the expenditures for multiple years.

From FY2019/20, the UK intends to have a single ‘fiscal event’ each year, i.e., an annual budget in October or November. 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.
  • Chancellor presents the budget to Parliament: Usually October/November, the Chancellor presents the annual budget to Parliament. The budget proposals do not include detailed budget lines for individual departments and therefore do not have a significant impact on ODA-related funding or policy decisions.
  • Parliament debates and adopts the annual budget: In 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 fiscal year begins in April.
  • FCDO adjusts budget based on budget speech: 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 “Autumn” budget, originally scheduled for November 2019, was delayed until March of 2020 due to the UK’s delayed exit from the EU. Given the economic uncertainty caused by the second wave of COVID-19, the Chancellor did not hold another budget in Autumn 2020 as originally intended, instead opting for additional budgetary statements. The FY2021/22 budget was presented in March 2021.

budget process chart