Donor Profile

UK

Last updated: April 25, 2023

Summary



ODA Spending


How much ODA does the UK contribute?


In 2022, the UK was the 5th-largest ODA donor country in absolute terms, falling from 4th-largest donor in 2021.


The UK was the 8th-largest donor in relative terms in 2021, with total ODA representing 0.5% of its GNI. In 2022, there was a marginal increase to 0.51% ODA/GNI, but the UK's relative ranking fell to 13th place.



How is UK ODA changing?


ODA volumes rose by 6% between 2021 and 2022 after falling by 22% between 2020 and 2021, when the UK government decided to temporarily provide ODA equivalent to around 0.5% ODA/GNI, down from the legally enshrined 0.7%. ODA/GNI has remained nearly level since.


The reduction to around 0.5% ODA/GNI will be maintained until two fiscal tests are met:

  1. No government borrowing for day-to-day spending according to the OBR, and
  2. A falling ratio of underlying government debt to GDP.

According to the UK Treasury and its 2023 Autumn Statement, these tests will not be met until FY2028/29. UK Chancellor of the Exchequer Jeremy Hunt stated, however, that UK ODA is an important statement of UK values, and that the government is committed to achieving 0.7% ODA/GNI when fiscally possible.


In July 2023, FCDO released its annual report for FY2022/23 and revealed an anticipated 20% increase in FCDO ODA, from GBP6.9 billion ( US$8.5 billion) in FY2022/23 to GBP8.3 billion ( US$10 billion) in FY2024/25. Most of the increase is planned for FY2024/25, with a marginal increase expected in FY2023/24. Many budget lines cut in FYs 2021/22 and 2022/23 are first planned for additional cuts in FY2023/24 before eventually increasing in FY2024/25. The cuts targeted primarily UK bilateral ODA programs. They resulted from anticipated continued spending on IDRCs and a sharp increase in multilateral core contributions for FY2023/24.


The UK’s provisional ODA data for 2023, released in April 2024, revealed an increase in UK ODA, with the UK providing GBP15.4 billion ( US$18.5 billion) and 0.58% ODA/GNI. Beyond changes to the overall ODA budget levels, the UK government has also been spending an increasingly significant share of its ODA on in-donor refugee costs since 2021. In 2022, the UK spent 28% of its total ODA budget (US$4.5 billion) on IDRCs, a rise from the 9% spent in 2021. In response to these escalating costs, UK Chancellor of the Exchequer Jeremy Hunt provided an additional GBP1 billion (US$1.2 billion) in FY2022/23 and a further GBP1.5 billion ( US$1.8 billion) in ODA in FY2023/24 to help meet the rising costs of IDRCs and to alleviate some pressure on the ODA budget. However, the funding was not enough to cover the full cost of IDRCs. This additional funding appears to have been released in 2023, given the provisional figures show a rise in ODA beyond 0.5 to 0.58% in 2023.



Where is UK ODA allocated?


The UK channeled US$12.8 billion of its ODA bilaterally, accounting for 76% of its total ODA in 2022, including US$2.4 billion in earmarked funding through multilaterals, well above the OECD DAC average of 59%. This represents the highest bilateral percentage share of UK ODA to date and is in line with a commitment made by former Foreign Secretary Liz Truss in the UK’s 2022 International Development Strategy to increase bilateral spending to 75% of UK ODA. This commitment was not reaffirmed in the 2023 White Paper on International Development, and UK provisional data for 2023 shows that the percentage of bilateral ODA declined in 2023 to 64%.


The UK disburses almost all its ODA as grants rather than concessional loans. It indirectly provides equity, debt, and intermediated equity to private sector companies through capital funding to its development finance institution, BII, formerly the CDC Group. The government has committed to ensuring that BII will help mobilize GBP8 billion ( US$11 billion) in public and private sector financing for international projects by 2025. BII’s projected budget for 2023-2024 will be GBP433 million ( US$518 million).



Bilateral Spending

Reflecting its strategic priorities, the UK focuses a significant share of its bilateral ODA on humanitarian assistance and global health, and increasingly, toward in-donor refugee costs in the wake of compounding global crises. According to the FCDO’s Provisional UK Aid Spend 2022, in-donor refugee costs jumped from GBP1.1 billion ( US$1.5 billion) in 2021 to GBP3.7 billion ( US$4.6 billion) in 2022, the largest yearly increase in in-donor refugee costs for the UK to date. The UK government’s provisional 2023 ODA figures show that IDRCs costs continued to rise in 2023, but fell marginally as a share of total ODA.


NGOs and CSOs implemented 10% of the UK’s bilateral programs in 2022, below the DAC average of 14%. CSOs in the UK play a significant role in implementing development funding and shaping the UK’s development agenda, relative to other donors. Additionally, of the US$10 billion spent bilaterally, the UK channels US$1 billion, or 10% 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.


Africa received the largest share of FCDO’s region-specific ODA in 2022 at GBP1.1 billion ( US$1.4 billion), or 42.2% of ODA, though this was a reduced amount compared to the GBP1.4 billion ( US$1.9 billion) spent by the FCDO in 2021. Funding for West and Southern Africa is slated for a further 26% reduction in FCDO FY2023/24 ODA spending. Despite these cuts, cooperation with Africa remains a UK strategic objective, and future ODA flows are expected to focus on supporting prosperity and enhancing security.


Asia received the second-largest share (8%), fallen from previous years and below the DAC average of 14%. While the FCDO has expressed a desire to focus more heavily on the Indo-Pacific region, the FCDO plans to reduce its FCDO investment in Southeast Asia and the Pacific by 27% in FY2023/24.


The FCDO published 55 Country Development Partnership Strategies and Regional Development Partnership Strategies with budget data for FYs 2023/24 and 2024/25.



Multilateral Spending and Commitments

The UK provided 24% of its total ODA as core contributions to multilaterals in 2022, down from 40% in 2021. This is below the DAC average of 41% but in line with the commitment made in by the former Foreign Secretary Liz Truss in the 2022 International Development Strategy to reduce multilateral spending to 25% of total ODA and prioritize bilateral spending. This commitment was not reiterated in the 2023 White Paper on International Development, and the UK’s provisional ODA figures for 2023 indicate that multilateral ODA in 2023 rose back up to 36%.


Multilateral spending by the UK is expected to increase significantly over the next fiscal year, from GBP3.3 billion ( US$4.1 billion) in FY2022/23 to GBP4 billion ( US$5 billion) in FY2023/24.



Politics & Priorities


What is the current state of UK politics?


The UK is a parliamentary democracy under a constitutional monarchy where the monarch, currently King Charles III, is the head of state and the Prime Minister is the head of government. Powers reserved for national government are shared between the Prime Minister and his government and parliament. The two dominant parties are the Labour and Conservative parties.


The prime minister, Rishi Sunak (Conservative Party) since October 2022, exercises significant influence over development policy. All large funding announcements must be approved by the Prime Minister’s Office; however, in practice, the Prime Minister’s degree of involvement varies depending on the context and political priorities of the Prime Minister.


The FCDO, created through a merger of the DFID and the FCO, was established in September 2020. It leads on strategy setting and funding decisions on the UK’s development policy and is led by UK Foreign Secretary David Cameron. The Deputy Foreign Secretary (honorific title) is also Minister of State for Development and Africa, who also has a seat in the UK Cabinet and National Security Council and reports to the Foreign Secretary. The post is currently held by Andrew Mitchell. Due to the merger, at the recipient country level, all former DFID staff now report to the UK Ambassadors who lead all UK foreign and development work in-country.


Who is responsible for allocating UK ODA?



What are the UK's development priorities?


In November 2023, Foreign Secretary David Cameron issued a new White Paper on International Development, the first since 2009. It identified three core goals for UK international development: eradicating poverty, tackling climate change, and addressing biodiversity loss.


The White Paper came relatively shortly after the 2022 UK International Development Strategy, which was developed under former Foreign Secretary Liz Truss. The White Paper set out a whole-of-government approach to accelerate the delivery of the SDGs through 2030 and placed far greater emphasis on poverty eradication as a goal for UK development than the previous strategy. The White Paper called for a new approach to partnership based on country ownership, accountability, and transparency. It also clearly affirmed the UK's desire to regain its reputation as a global leader on international development with a strong focus on leveraging UK policy and diplomatic power to drive change at the global level, alongside working at the national level in partner countries. The paper situated development policy within the UK’s high-level strategic framework, which focuses on the pursuit of security, prosperity and sustainability, as outlined in the UK’s 2021 Integrated Review of Security, Defense, Development and Foreign Policy and its 2023 Refresh.


The UK officially left the EU in January 2020 and finalized its formal transition period in January 2021. The current government continues to seek shared development approaches with the EU on immigration and humanitarian assistance. The FCDO will continue to contribute to EU development programs approved before December 31, 2020, in decreasing amounts until FY2029/30, as determined in the Withdrawal Agreement.


By issue


The UK's White Paper on International Development focuses on six key areas:


Mobilizing international finance (public and private) for climate and development: The UK commits to working with key partners to develop a pipeline of bankable projects in low- and middle-income countries for climate and development; to supporting low- and middle-income countries to deepen their domestic capital markets and productively use local savings; and to leveraging the UK’s expertise in financial innovation to develop new financial instruments to encourage greater private sector flows.


Reforming the MDBs and international development financial architecture: The UK commits to encouraging MDBs to stretch balance sheets to provide more capital where needed, enhancing the voice and representation of the poorest and most vulnerable countries in these organizations and supporting strong replenishments for low-income arms of MDBs. The UK also commits to reforming debt relief, improving trade and strengthening domestic resource mobilization in low- and middle-income countries, and tackling illicit flows.


Tackling climate change and biodiversity loss and enabling sustainable economic growth: The UK reaffirms its commitment to provide GBP11.6 billion ( US$13.9 billion) in international climate finance between FYs 2021/22 and 2025/26, and to triple its adaptation finance between 2019 and 2025 from GBP500 million ( US$599 million) to GBP1.5 billion ( US$1.8 billion). The UK also commits to helping to secure an ambitious new global climate finance goal in 2024 that balances mitigation and adaptation funding, includes a nature finance component in support of the Global Biodiversity Framework, and ensures better targeting of concessional public climate finance for LICs. The UK further commits to supporting the growth of high-integrity carbon and nature markets; accelerating and scaling-up transitions to clean and affordable technology in sectors including energy and mobility; advancing action on climate adaptation by building capacity, planning, and finance at national and international levels; and helping farmers to secure their livelihoods through sustainable and resilient agriculture and food systems.


Ensuring opportunities for all, including gender and broader equality and rights, global health, education, water, and social protection: The UK commits to spearheading a Rights, Freedom, Potential campaign building on their work on supporting gender quality. The UK also commits to supporting peace, justice, and strong institutions in partner countries. On global health, it will continue to strengthen essential health systems, drive reform of the global health architecture, and strongly defend and progress on SRHR. On gender equality, the UK will continue to focus on the three Es: educating girls, empowering women and girls, championing their health and rights, and ending gender-based violence. Regarding education, the UK will continue to focus on ensuring girls and disadvantaged groups have access to quality education including in crisis situations, use technology and innovation to support delivery, and work to unlock additional finance to deliver on the ambition of quality education.


Tackling conflict, disasters, and food insecurity through preparedness and resilience: The UK commits to championing early action to prevent conflict and atrocities, working to strengthen the UN humanitarian system, and supporting locally led and inclusive solutions to humanitarian crises. The UK also commits to supporting Agriculture 4.0, with a focus on supporting climate-resilient, nutritious agriculture and food production to support food security, poverty alleviation and sustainable land and water use.


Harnessing innovation and technology: The UK continues to be committed to ensuring support for R&D remains central to the UK’s offer on development, and commits to supporting digital transformation in low and middle-income countries and promoting responsible and inclusive AI, amongst other things.


READ MORE

UK’s ODA to Global Health

UK’s ODA to Gender Equality

UK’s ODA to Climate Change

UK’s ODA to Agriculture

UK’s ODA to Education


By region


Africa: Cooperation with Africa is a strategic objective of the UK, given that the continent is key to addressing the UK’s global objectives of ensuring a stable global order, tackling climate and security and ensuring prosperity. Out of the 55 Country and Regional Partner Development Strategies published by the FCDO, 21 are focused on Africa, comprising two regional strategies for Pan-Africa and the Sahel and 19 country strategies for Chad, Egypt, the Democratic Republic of Congo, Ghana, Ethiopia Kenya, Liberia, Madagascar, Malawi, Mozambique, Niger, Nigeria, Rwanda, Somalia, South Africa, South Sudan, Tanzania, Uganda, Zambia, and Zimbabwe. The 2023 White Paper on International Development did not specify regions or countries, but does commit the UK to spending at least 50% of all bilateral ODA in LDCs and supporting the global goal of providing at least 0.2% ODA/GNI to LDCs.


According to the FCDO, Africa received the largest share of FCDO’s region-specific ODA in 2022 at GBP1.1 billion ( US$1.5 billion). Bilateral ODA to Africa was GBP942 million (US$1.1 billion) in FY2021/22 and fell by 18% in FY2022/23 to GBP762 million ( US$939 million). According to the FCDO’s provisional 2023 ODA figures, Africa received the largest share of FCDO’s region specific bilateral ODA in 2023,with the sharing increasing from 42.9% in 2022 to 52.4% in 2023. While the share increased, the actual volume of resources fell by 0.8% to GBP1.1 billion ( US$1 billion) This fall in funding represents the smaller share of regional specific bilateral ODA spent in 2023 as a result of rising IDRCs.


Asia and Indo-Pacific: Asia and the Indo-Pacific region is also important for the UK which sees this region as key to delivering prosperity, security and protecting key global public goods, particularly with regard to the climate. The UK has three regional development strategies (Indo-Pacific, Central and South-East Asia) and 15 country-specific strategies (Afghanistan, Bangladesh, Cambodia, India, Indonesia, Iraq, Kazakhstan, Kyrgyzstan, Mongolia, Myanmar, Nepal, Tajikistan, Turkmenistan, and Uzbekistan). In addition, the UK’s 2030 Small Island Developing States strategy, which includes a number of island states in this Indo-Pacific region, works to advance qualifying nations to be economically sustainable and climate resilient. In 2023, the share of region-specific bilateral ODA from the FCDO to Asia decreased from 37.4% to 30.8%. Asia received GBP619 million ( US$753 million), a decrease from 2022, when the region received GBP306 million ( US$366 million) or 33.1% of region specific bilateral ODA


Ukraine: The UK has committed GBP7.1 billion ( US$8.5 billion) ) in military support for Ukraine since February 2022 (as of March 2024). In terms of ODA, the UK is committed to spending GBP588 million ( US$704 million)) between FYs 2022/23 and 2024/25 in bilateral ODA to Ukraine. The UK has also announced GBP4.2 billion ( US$5 billion) of fiscal support to Ukraine via World Bank loan bank guarantees and grants. On top of bilateral ODA to Ukraine, the UK also launched the International Ukraine Support Group with Canada and the Netherlands in March 2022 to bring together global partners committed to providing sustained support for Ukraine. The group aims to ensure that there is long-term assistance to Ukraine by coordinating and encouraging regular financial support from partner countries.


Budget


What are the sources of UK's ODA budget?


According to the UK government, the FCDO provided the largest share of total UK ODA in 2023 (61.6%), an increase in the historically low 2022 share of 59.7% but significantly below the levels of 72% in 2021. This significant decline in the share of ODA managed by the FCDO since 2021 is largely driven by the rise in IDRCs that are mainly handled by the UK Home Office, which was responsible for the second-largest share of ODA at 19.2%. The third-largest share went via DHSC.


FCDO has the most direct intergovernmental engagement with the Department for Energy Security and Net Zero, the Department for Science, Innovation and Technology, which are responsible a for some UK’s ODA-related funding for climate change and R&D spending, and the DHSC, which manages some ODA funding for anti-microbial resistance surveillance, research into vaccines for diseases with epidemic potential, WHO funding, and some health research for low- and middle-income countries.


The UK government does not publish a provisional ODA budget annually. FCDO does annually publish its ODA budget figures, but only for the ODA it is responsible for. It publishes an update of its ODA budget in April for the current financial year, following the Spring Budget, and then publishes a provisional ODA budget for the following financial year in July. The numbers in the table below reflect the provisional budget for FY2024/25 provided by FCDO.



What are the steps and timelines for the UK's ODA budget approval?


The UKs fiscal year runs from April 5 to April 6. 


The Donor Tracker team, along with many DAC donor countries, no longer uses the term "foreign aid". In the modern world, "foreign aid" is monodirectional and insufficient to describe the complex nature of global development work, which, when done right, involves the establishment of profound economic and cultural ties between partners.


We strongly prefer the term Official Development Assistance (ODA) and utilize specific terms such as grant funding, loans, private sector investment, etc., which provide a clearer picture of what is concretely occurring. “Foreign aid” will be referenced for accuracy when referring to specific policies that use the term. Read more in this Donor Tracker Insight.

Our UK Experts

Jacob Sarfo

Jacob Sarfo

Associate Consultant