Donor Profile

UK

Last updated: April 25, 2023


Data for UK climate ODA was retrieved from the OECD-DAC CRS report in April 2023. The 2021 climate data for the UK was incorrectly under-reported to the OECD-DAC CRS at this time, and the content of this page reflects these discrepancies. The page will be updated with correct 2021 amounts following the release of new OECD-DAC CRS data in late January 2024.


Summary



ODA Spending


How much ODA does the UK contribute?


2022 preliminary data shows that the UK is the fifth-largest ODA donor country in absolute terms, falling from fourth-largest donor in 2021.


The UK was the eighth-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.



How is UK ODA changing?


ODA volumes fell by 22% in 2021 as the UK government decided to temporarily provide ODA equivalent to only 0.5% of GNI, down from the legally enshrined 0.7%.


The reduction to 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.

The UK government’s 2022 Autumn Statement lifted the non-essential ODA spending freeze from 2022. The freeze was imposed by former Prime Minister Boris Johnson due to concerns that the escalating in-donor refugee costs could lead to a breach of the UK’s 0.5% ODA/GNI target. The statement also committed to providing an additional GBP1 billion ( US$1.2 billion) in FY2022/23 and a further GBP1.5 billion ( US$1.8 billion) in FY2023/24 to help meet the escalating IDRC within the UK.


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.


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 was 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 IDRC and a sharp increase in multilateral core contributions for FY2023/24. FCDO noted that the cuts to UK ODA are projected to have a negative impact on thousands of vulnerable people.


In November 2023, UK Chancellor of the Exchequer Jeremy Hunt unveiled the UK government’s 2023 Autumn Statement, outlining the government’s tax and spending plans for the forthcoming years based on current economic forecasts. Hunt confirmed to the House of Commons’ Treasury Committee that the UK’s ODA/GNI budget would not be restored to 0.7% before FY2028-29, but stated that UK ODA is an important statement of UK values and that the government is committed to achieving 0.7% when fiscally possible.



Where is UK ODA allocated?


The UK channels US$10 billion of its ODA bilaterally, accounting for 61% of its total ODA in 2021, including US$1.9 billion in earmarked funding through multilaterals. This is above the OECD DAC average of 59%. Despite the focus on bilateral spending, most of the cuts from the ODA reduction in 2021 came out of the UK’s bilateral programs, which saw a 27% decline in funding, according to FCDO provisional data. Despite this drop, bilateral funding bounced back to 74% of total ODA in 2022, the highest bilateral percentage share of UK ODA to date. This marked a 32% increase from 2021 levels and was driven by the large increase in in-donor refugee costs.


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 said 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 2022-2023 will be GBP290 million ( US$399 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.


In spite of the focus on bilateral spending, bilateral FCDO ODA spending is scheduled to take a 13% hit in FY2023-2024, down by GBP320 million ( US$394 million).


NGOs and CSOs implemented US$1.5 billion, or 15%, of the UK’s bilateral programs in 2021, in line with the DAC average of 17%. 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 (12%), also near 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.


In August 2023, FCDO released 43 Country Development Partnership Strategies for FYs 2023/24 and 2024/25. The new budgets maintained projected ODA/GNI at 0.5%. FCDO reiterated the commitment to raise the ODA/GNI ratio to the DAC commitment of 0.7% when fiscally appropriate and cited unexpected in-donor costs for Ukrainian and Afghani refugees as complicating ODA allocation.



Multilateral Spending and Commitments


The UK provided 40% of its total ODA as core contributions to multilaterals in 2021, up from 36% in 2019. This is in line with the DAC average of 41%. The largest recipients of the UK’s core contributions to multilaterals in 2021 were the EUI (US$1.8 billion or 28%), the World Bank (US$1 billion or 16%), the IMF (US$906 million or 16%), UN organizations (US$719 million or 11%), and regional development banks (US$341 million or 5%).


In 2022, the EU was the largest recipient from the UK, though the volume of funding decreased. The second-largest recipient of UK multilateral ODA was the Global Fund, followed by the World Bank’s IDA, the ADF and the GCF.


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, for example through making funding commitments for international initiatives. All large funding announcements must be approved by the Prime Minister’s Office; however, in practice, the Prime Minister’s degree of involvement varies.


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. There is also a Minister of State for Development and Africa that reports to the Foreign Secretary, who also has a seat in the UK Cabinet and National Security Council. 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. The May 2022 International Development Strategy commits to giving UK Ambassadors and High Commissioners greater control over decision-making and speeding up UK program delivery time.


Who is responsible for allocating UK ODA?



What are the UK's development priorities?


In 2021, the UK published its Integrated Review of Security, Defence, Development and Foreign Policy, which sets out a high-level strategic framework to guide the UK’s foreign, development and security and defense policy priorities over the next ten years. In May 2022, the UK government published a new development strategy, which was framed by the Integrated Review, and aims to integrate UK development policy with the UK’s wider defense and security efforts in the coming years. At the strategy’s core is a focus on trade and economic development.


In 2023, the UK Government published a refresh of its Integrated Review considering the evolving geopolitical situation. Tackling climate change and protecting biodiversity remain the core thematic priorities for the UK government, but supporting the SDGs and addressing poverty are now additional key priorities. The refresh also identified seven new international development campaign priorities for 2023 that follow priorities set out in the 2022 International Development Strategy:

  • Reforming and greening the global financial system to ensure the International Financial Institutions;
  • Championing global efforts to make global tax systems fairer and ensure that revenues and assets lost to illicit finance are identified and recovered;
  • Delivering clean, green infrastructure and investment;
  • Leading a campaign to improve global food security and nutrition;
  • Leading a global campaign on “open science for global resilience”;
  • Catalyzing international work to prevent the next global health crisis; and
  • Coalescing a collective response to the accelerating, well-financed and organized attacks on the rights of women and girls.

While the UK officially left the EU in January 2020 and finalized its formal transition period in January 2021, the new development strategy additionally highlights the need for shared security goals and increased development partnerships and investments between the UK and the EU. The strategy mentions the development of “architecture that will underpin future European security” and the need to “build those economic and social freedoms which will underpin lasting resilience of societies and economies,” emphasizing economic and social stability as the core of long-term regional assistance.


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. A large part of the decline in multilateral assistance will be accounted for by this steady decline in funding to EU development programs.


By issue


The UK's development strategy’s four key focus areas are:


Supporting economic development through British Investment Partnerships: Partnerships are aimed at delivering honest and reliable investments to partner countries and the strategy commits the UK to mobilize GBP8 billion ( US$11 billion) a year by 2025 in UK-backed financing for LICs both from the private sector and beyond.


‘Providing women and girls with the freedom they need to succeed’: The strategy focuses on three key areas in advancing gender equality: 1) education, 2) empowerment, including a commitment to addressing SRHR and supporting WEE, and 3) ending violence.


Delivering humanitarian leadership: The strategy commits the UK to provide GBP3 billion ( US$3.7 billion) in humanitarian assistance through 2025, and to use its diplomatic strengths to continue to reform the international system to be more proactive in anticipating and managing future humanitarian crises.


Tackling issues tied to climate change, nature, and global health: The strategy reiterates the UK’s commitment to double its contribution to international climate finance to at least GBP11.6 billion ( US$14.3 billion) between 2021-2026, and commits to ensuring that this funding is equally split between mitigation and adaptation finance. The strategy also commits the UK to ensuring all new bilateral ODA is aligned with the Paris Agreement. For global health, the strategy focuses on supporting the COVID-19 response and preparing for the next pandemic, strengthening health systems, integrating the One Health approach, ending preventable deaths of mothers, babies, and children; and improving R&D.


READ MORE

UK’s ODA to Global Health

UK’s ODA to Gender Equality

UK’s ODA to Climate Change


Neither agriculture nor education are major priorities for UK, however, both issues are considered components of the UK’s support for countries’ advancement on climate and gender equality, respectively. Education is particularly highlighted within the International Women and Girls’ strategy, which was published in March 2023.

READ MORE

UK’s ODA to Agriculture

UK’s ODA to Education


By region


Africa: Cooperation with Africa is a strategic objective of the UK, and future ODA flows are expected to focus on supporting prosperity and enhancing security. The UK's 2022 strategy states that the UK will sustain its commitments in Africa with a particular focus on South Africa, Nigeria, Ethiopia, Kenya, and Ghana. The strategy also commits to channeling the majority of UK ODA toward LICs and supporting the global goal of providing at least 0.2% of 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). FCDO's 2022/23 report projected that regional funding would fall by 15% in FY2023/24 to GBP645 million ( US$795 million) and then to rise by 111% to GBP1.3 billion ( US$1.6 billion) in FY2024/25.


Asia: Beyond priority countries noted in the Integrated Review and its 2023 refresh, the new strategy mentions the UK-India and UK-Indonesia Roadmaps, which outline comprehensive, strategic bilateral partnerships with the two countries through 2030. In addition, the 2030 Small Island Developing States strategy works to advance qualifying nations to be economically sustainable and climate resilient. In 2022, Asia received GBP938 million ( US$1.2 billion) in total region-specific bilateral ODA from the FCDO, down from GBP1.1 billion ( US$1.5 billion) in 2021. In addition, major development partners to the UK, Afghanistan and Pakistan, are scheduled for a 53% reduction in FCDO funding in FY2023/24.


Indo-Pacific: The May 2022 International Development Strategy signals a tilt towards building critical development partnerships in the Indo-Pacific. According to the Provisional UK Aid Spend 2022, the Pacific region received a 33% percent bump from 2021 to 2022 in region-specific bilateral ODA spend from the FCDO, but plans to reduce its FCDO investment in Southeast Asia and the Pacific by 27% in FY2023/24.


Ukraine: The UK has committed GBP2.3 billion ( US$2.8 billion) in military support for Ukraine in 2022 and has made available up to GBP3.5 billion ( US$4.3 billion) of UK Export Financing capacity to support UK exports to Ukraine, which includes up to GBP2.3 billion ( US$3.2 billion) to support Ukrainian defense capabilities.


The UK has also provided GBP1.5 billion ( US$1.8 billion) of economic and humanitarian support and around GBP1.3 billion ( US$1.6 billion) in fiscal support, including loan guarantees to support Multilateral Development Banks. 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 2022 (59.7%), however, this total is a net decrease compared to 72% in 2021 and is the smallest share of FCDO ODA to date. 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 the FCDO. The Home Office and Former BEIS were the two largest non- FCDO providers of ODA in 2022. The Home Office accounts for 18.7% of all funding and the former BEIS accounts for 4.4%. The former BEIS is now split into three new departments: the Department for Science, Innovation, and Technology; the Department for Energy Security and Net Zero; and the Department for Business and Trade.


These two departments were followed by the cross-departmental DHSC (3.6%) and CSSF (2.5%). Other departments, providing for 11.1% of ODA, include the Department for Environment and Rural Affairs, Department of Education and the Department for Levelling up, Housing and Communities, which is responsible for some refugee funding costs.


In 2022, most non- FCDO spending came from an increase in spend on IDRC through a number of other departments. FCDO has the most direct intergovernmental engagement with the former BEIS, responsible at the time for some UK’s ODA -related funding for climate change and R&D, and the DHSC, which manages 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.


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