The Recent Decision on UKAID Reduction

By Dr Muna Ismail and Davina Patel

Dr Muna Ismail and Davina Patel

Is the UK losing its moral stance by not keeping up with its overseas aid contribution?

There has been a lot of pushback from all corners of the country since the Chancellor of Exchequer announced the decision to cut the UK’s commitment to spend 0.7% of national income on overseas aid to 0.5%. It is encouraging that the mindset of cross-party leadership, civil society and academics are aligned in their disagreement of the issue. But aside from these, the rationale of the reduction to save 0.2% aid budget from the overall contribution itself, amounting to £4 billion will not make much difference to fiscal spending levels. At the same time, it puts the UK’s global commitment and development goals into question.

The three-way hit  

In the first of these three hits, it needs to be clarified that the level of the actual contribution of UK aid is aligned and has been locked in with the Gross National Income (GNI) and not the Gross Domestic Product (GDP). So taking this into account paying UK aid contribution at the rate of 0.7% GNI would have been a diminished contribution this year and for the next few years due to the low outputs from much of 2020 and the projected recovery. 

The second hit for consideration is the actual 0.2% of the proposed reduction, which if paid at current UK GNI, amounts to a much further reduction considering the current output in the pandemic year and the subsequent growth trajectory. The Chancellor would not put a date when the target would be restored but only indicated that spending would rise back to 0.7% “when fiscal circumstances allow”. 

The third hit comes out of the fact that on 2 September, the FCO and Department for International Development merged with integrated service deliveries. This merger which was also seen as a negation of the UK’s commitment to the world’s most vulnerable and international collaboration. Therefore any budget allocation via UKAID is expected to pay for both diplomacy and international development. It looks that the UK government had already made a conscious decision not to prioritise its aid commitments, before the proposed cuts.

The human cost

UK charities, MPs and aid experts have warned the cut to UKAID will see women and children hardest hit and at least 100,000 preventable deaths. According to the Guardian, a million girls will lose out on schooling, nearly three million women and children will go without life-saving nutrition, and 5.6 million children left unvaccinated, causing up to 100,000 deaths. Decades of progress in poverty reduction, access to healthcare and education has been reversed globally due to the pandemic. Cutting the budget will impact heavily on the millions of lives that are dependent on UKAID, which is needed more now than in previous years. The UN has reported that we should expect famines of ‘biblical proportions’ in 2021 if billions of aid is not provided. 

The impact beyond

The outcome of this decision puts everything on the backfoot of international diplomacy, with a prospect of the UK having less influence on the world arena. Not the same in outlook amongst other OECD member nations which contributed a total of USD 150 billion for global development assistance, in 2019

The pandemic year has affected the economies of the global south, and there has never been a time more pertinent than in the post-covid era that the UK is needed to meet its commitment to overseas aid. As the 5th largest economy in the world and a member of the G7 wealthy club of nations, it is morally and ethically incumbent on the UK to help mitigate the economic losses of less-developed countries that have suffered during and the aftermath of the pandemic year. 

Moreover, as the UK readies itself to go into Brexit, it should be thinking of how to strengthen its network and friendship with the global south—expanding its outreach for potential trade and multilateral deals. If, however, the UK is seen to not keep its promises on overseas aid at the levels it set itself, then how can it be seen as a trustworthy partner in any global trade deals? 

The 0.2% of cuts the UK saves is approximately £4 billion in the budget deficit, which is itself a drop in the ocean, in the country’s GNI. Which begs the question, is it worth losing leverage on global standing in diplomacy and influence, with the world being ever more in need of leadership on ethical grounds?

Next year, the UK takes on the rotating presidency of the G7, an opportunity to show what “Global Britain” really means. It’s also the president of COP26 and shouldering these two heavy global leadership responsibilities; it diminishes its credibility to renege on its aid commitment level for growth and development.

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