Development Update

Foreign, Commonwealth and Development Office written statement – made on 26th January 2021.

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Photo of Dominic Raab Dominic Raab The Secretary of State for Foreign, Commonwealth and Development Affairs

As agreed with the Prime Minister and the Chancellor of the Exchequer at the last Spending Review, I have completed the cross-government review of how Official Development Assistance (ODA) will be allocated against the government’s priorities for 2021. This statement sets out the process and conclusion of the review, which has ensured that UK ODA is focused on our strategic priorities, spent where it will have the maximum impact, has greater coherence and delivers most value for money.

The UK is facing the worst economic contraction in over 300 years, and a budget deficit of close to £400 billion. At 19% of GDP this is around double that of the last financial crisis. As announced last year, given the impact of this global pandemic on the economy and, as a result, the public finances, we will move to a target of spending 0.5% of GNI as ODA in 2021.

This is a temporary measure and we will return to 0.7% when the fiscal situation allows.

We remain a world leading donor, and based on current GNI forecasts will spend over £10bn of ODA in 2021.

At the same time, we will ensure the maximum impact from our aid budget by changing the way we allocate ODA to support a more integrated approach. This will allow us to drive greater impact from our ODA spending.

This review has agreed ODA allocations for all government departments, sharpening our focus on the core priorities I set out to Parliament in November in the overarching pursuit of poverty reduction: climate and biodiversity; Covid and global health security; girls’ education; science and research; defending open societies and resolving conflict; humanitarian assistance; and promoting trade.

This settlement gives us the best possible launch pad to champion our international priorities for the coming year, as we commence our G7 Presidency and look ahead to hosting COP26. It maintains the Prime Minister’s promise to double UK international climate finance to £11.6bn over the next five years. It sustains our commitment to the world’s poorest people, advances our strategic interests overseas, and delivers on the Prime Minister’s ambition to bring greater coherence and strategic oversight to the UK aid budget. The government will drive forward that agenda in 2021 through clear ministerial accountability and oversight for all our development spend. Looking further ahead, I will lead a cross-departmental review on a new development strategy to ensure close alignment of UK aid with the objectives to be set out in the Integrated Review.

Departmental ODA allocations, 2021/22

Department

21/22 Allocation (£m)

FCDO

8115

BEIS

706

CSSF

337

DCMS

6

Defra

92

DHSC

207

HMRC

4

HMT

3

Home Office

470

ONS

3

Other[1]

42

[1] Includes DfE, DWP, MOD and Barnett given to the devolved administrations as a result of UK Government spend on ODA. These budgets include fixed ODA eligible costs.