The Chancellor of the Exchequer, Jeremy Hunt, published his Autumn Statement on November 17, 2022, setting out the UK government’s tax and public spending policies for the next five years.
Against a difficult UK economic and fiscal background, the budget delivered £25 billion (US$30 billion) in tax raises and £28 billion (US$33.5 billion) in public spending cuts. Many of the spending cuts will be back-loaded until after 2024, when the next general election is scheduled to take place.
There were no new cuts to the UK’s ODA budget, but the statement assumed the UK ODA budget will remain at the reduced level of 0.5% of gross national income (GNI) until 2028. The reduction timeline is five years longer than was initially expected. The 2021 UK Comprehensive Spending Review assumed the ODA budget would go back to 0.7% of GNI in fiscal year (FY) 2023/24 and set aside £5.2 billion (US$6.2 billion) to scale up resources. The Statement indicated that the £5.2 billion (US$6.2 billion) will be absorbed as part of the public spending cuts.
In addition to the continuation of the 0.5% ODA/GNI cap, the bleak economic outlook for the UK economy – which is forecast to go into a recession in 2023 - does not bode well for the UK ODA budget. The Office for Budget Responsibility’s 'November 2022 Fiscal and Economic Outlook' indicated that there will only be a marginal nominal increase in the UK ODA budget in the coming years.
While the development community lamented the continued reduced ODA budget, there was one ray of sunshine for international development in the statement. Hunt committed to keeping the UK ODA budget at ‘around’ 0.5% indicating new flexibility to see the target as a floor, not a ceiling. He also announced a welcome additional £1 billion (US$1.2 billion) in FY2022/23 and £1.5 billion (US$1.8 billion) in FY2023/24 to cover escalating costs of housing refugees in the UK, which are currently funded through the ODA budget. The funding will not completely fill the gap in the ODA budget for housing refugees, which the Centre for Global Development estimates could be as much as £3.1 billion (US$3.7 billion) in 2022.
The additional funding was welcomed by Save the Children UK and many other NGOs, but most of the UK development community is calling for a return to 0.7% as soon as possible.