Policy Updates

On December 3, 4, and 5, 2023, the UK government made an array of financing announcements at COP28, including GBP100 million (US$119 million) to climate adaptation in vulnerable countries and GBP480 million (US$575 million) in investments to leverage private sector funding for adaptation and resilience.

The UK’s GBP100 million (US$119 million) announcement to climate-vulnerable countries included:

• Approximately GBP20 million (US$24 million) in funding for disaster risk financing and early warning systems;
• GBP36 million (US$43 million) for clean energy and green growth projects in the Middle East and North Africa to support long-term climate stability;
• Up to GBP18 million (US$22 million) for an innovative new program to adapt and strengthen health systems, which would be the first climate and health program to be announced by a G7 member; and
• GBP20 million (US$24 million) for a new research program to guide the UK’s future work on climate-resilient health systems.

The GBP480 million (US$575 million) investments to green private financing included:

• GBP391 million (US$468 million) to the Private Infrastructure Development Group to build a pipeline of low-carbon, climate-resilient infrastructure projects for private sector investment;
• GBP44 million (US$53 million) from BII for new projects involving clean energy transition and climate resilience in Africa and South Asia; and
• A potential GBP32 million (US$38 million) investment via MOBILIST in the Green Guarantee Company, which offers specialist guarantees for climate adaptation and mitigation projects in LICs.

The UK also announced its first African Climate Resilient Debt Clause for Senegal, allowing Senegal to pause debt repayments in the wake of a climate disaster to promote speedy recovery.

The UK further endorsed the new Global Climate Finance Framework at COP28, calling for reform of international financial institutions to ensure improved equity, efficacy, and greater resources.

Finally, the UK confirmed the launch of Climate Investment Funds Capital Market Mechanism in 2024. The mechanism was originally announced in 2021 under the UK’s COP26 Presidency. The launch of the mechanism comes after in-depth work on its specific financing mechanism design. The bonds are hoped to generate up to US$750 million per year in new climate finance and US$7.5 billion over the next decade.

On December 2, 2023, during the opening days of COP28, outgoing Dutch Prime Minister Rutte announced a commitment of EUR15 million (US$16 million) to help establish the Loss and Damage Fund.

The EUI pledged US$125 million, Germany and the UAE each pledged US$100 million, the UK pledged GBP60 million (US$78 million), the US pledged US$18 million, and Japan pledged US$10 million. The total funds surpass the US$400 million needed to initiate the establishment and operation of the Loss and Damage Fund.

Dutch NGO ActionAid Netherlands responded by commenting that while the pledge is a fair initial contribution to the fund, it is far from a "fair share" for the Netherlands when based on the country’s emissions levels.

On November 30, 2023, the UK ICAI released its rapid review of the UK’s Blue Planet Fund, which criticized management that has led to duplicated work in some areas and gaps in delivery in other areas.

In January 2021, the government established the GBP500 million (US$599 million) Blue Planet Fund, to support low- and middle-income countries reduce poverty and protect ocean biodiversity. The fund is managed jointly by the Defra and the FCDO, with Defra in the strategic lead.

The review found that key management processes were missing, including establishing monitoring, evaluation and learning processes, and that there had been inadequate consultation on country and regional needs. It also found that there was a lack of coordination and coherence between Defra and FCDO, which resulted in duplicated work in some areas and gaps in delivery in others. The review also noted that it was not always clear how the fund was contributing to poverty reduction, and raised concern about administrative costs being charged by Defra’s arms-length bodies to deliver parts of the fund, which were higher than the international development norm.

The review recommended that formal core central management functions be put in place and that cross-government oversight of the Fund be strengthened.

On November 29, 2023, UK Chancellor of the Exchequer Jeremy 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.

Hunt stated that the budget remained too tight to lift the cuts before FY2028-29, but he emphasized that UK ODA is an important statement of UK values and that the government is committed to achieving 0.7% when fiscally possible.

On November 22, 2023, UK Chancellor of the Exchequer Jeremy Hunt unveiled the UK government’s Autumn Statement, outlining the government’s tax and spending plans for the forthcoming years based on current economic forecasts.

Hunt announced GBP20 billion (US$24 billion) of tax cuts to boost business and incentivize work. This was a result of better-than-expected growth in 2023 and increased tax receipts. Experts cautioned that 2024 growth forecasts have been downgraded from previous March 2023 forecasts of 1.8% down to 0.7%, and remaining downgraded for following years.

While international development was not the main focus of the Autumn Statement, the Chancellor did confirm in his Statement that the fiscal tests for meeting 0.7% ODA/GNI were not met in FY2023-24. The forecasts continue to confirm that 0.7% ODA/GNI is unlikely before FY2027-28.

Unlike previous years, Hunt made no commitment to provide additional funding to ODA for FY2024-25, beyond countering extremely high in-donor refugee costs. In 2022, the in-donor refugee costs amounted to GBP3.6 billion (US$4.3 billion). In the 2022 Autumn Statement, Hunt had announced an additional GBP2.5 billion (US$3 billion) for the ODA budget to cover some in-donor refugee costs in FY2022-23 and FY2023-24.

Hunt noted the pivotal importance of the WHO in delivering UK and global security and prosperity. He noted a provision of an additional GBP2 million (US$2.4 million) to the WHO for core funding to help it deliver on underfunded priorities. Hunt also announced a further GBP5 million (US$6 million) for the launch of a new Fleming Centre for antimicrobial resistance in the UK to mark the 2028 centenary of the discovery of penicillin. Imperial College of London is slated to operate the center.

The Labour Party was critical of the Autumn Statement, focusing on the failing economy and the overall increase in the tax burden over recent years. These factors imply that even taking announced cuts into account, most UK residents are paying more tax than they were in 2013.

On November 20, 2023, UK Foreign Secretary David Cameron announced an additional GBP30 million (US$36 million) in funding for humanitarian assistance in Gaza.

During his visit to Israel and the Occupied Palestinian Territories, Cameron noted that the funding will deliver lifesaving assistance to people in Gaza through UN agencies.

The UK has pledged a total of GBP60 million (US$72 million) in additional funding to humanitarian assistance for Palestinian citizens since October 2023.

On November 20, 2023, the UK partnered with the government of UAE, who are the forthcoming hosts of COP28, and the government of Somalia to host a Global Food Security Summit in London.

UK Prime Minister Rishi Sunak, President of Somalia Hassan Sheikh Mohamud and UAE Minister for Climate Change and Environment Mariam Almheiri opened the summit. They were officially supported by the Bill & Melinda Gates Foundation and CIFF.

The summit gathered representatives from more than 20 countries. It had the stated goal of focusing international attention on the increasing global good security crisis and boosting action against hunger and malnutrition, including through innovations in science and technology. Almost 1 billion people were severely food insecure in 2022, and more than one in three people in the world were not able to afford a healthy diet in 2023.

The UK government launched its new White Paper on International Development at the summit, and also announced:

• Up to GBP100 million (US$120 million) to respond to food security crises and their impacts in the world’s hunger and malnutrition hotspots, including Ethiopia, Sudan, South Sudan, the Sahel, Afghanistan, and Malawi;
• Up to GBP100 million (US$120 million) to build resilience to climate shocks and provide food security for the most vulnerable families in Somalia to avert future humanitarian crises; and
• An extra GBP16 million (US$19.2 million) for the Child Nutrition Fund, inaugurated at the Summit, which is a new UNICEF initiative aimed at coordinating national governments and CSOs against child malnutrition.

The summit also saw the launch of the new CGIAR UK science center to develop new climate-resilient crops and identify risks to global food systems. The new virtual hub will help to link UK scientists with global research initiatives to develop climate- and disease-resistant crops.

The end of the summit produced a joint Ministerial Statement by the UK, UAE, and Somalia that urged the international community to address underlying causes of food insecurity, act earlier to prevent crises, and work towards delivering more resilient agriculture and food systems in the face of climate change. The declaration called on governments to sign the Emirates Declaration on Sustainable Agriculture, Resilient Food Systems, and Climate Action ahead of COP28 in UAE on November 30, 2023, in order to support policy tools and resources needed to enable a transition to sustainable food systems.

On November 20, 2023, UK Prime Minister Rishi Sunak launched a new White Paper on International Development, the first since 2009, which set out a progressive, whole-of-government approach to accelerate the delivery of the SDGs over the next seven years.

The White Paper provided a return to focusing UK development on the goal of eradicating poverty, which experts noted was largely neglected by previous strategies. It presented two further key goals: tackling climate change and biodiversity loss. The paper called for a new approach to partnerships based on country ownership, accountability, and transparency.

Though experts noted that the paper seemed to signal that the UK has recommitted to international development, it did not make new major financial commitments. The focus of the paper was on mobilizing resources beyond ODA for development, including the City of London’s private finance and expertise, stretching multilateral finance, and tackling trade, tax and illicit flows, as well as outlining policy priorities.

A return to delivering 0.7% ODA/GNI when fiscally feasible was mentioned briefly in the paper. Neither the Foreign Secretary nor the Minister for Development mentioned 0.7% ODA/GNI as a goal in their respective prefaces.

Six key themes from the paper included:

• Mobilizing international finance (public and private) for climate and development with a focus that includes the City of London, pension funds, and investors;
• Reforming the international system, with a strong focus on debt relief, trade, tax, and illicit flows, areas where the UK has in the past had strong expertise;
• Tackling climate change and biodiversity loss and enabling sustainable economic growth;
• Ensuring opportunities for all, including gender and broader equality and rights, global health, education, water, and social protection;
• Tackling conflict, disasters, and food insecurity through preparedness and resilience. The only new financial commitment in the document reserved GBP1 billion (US$1.2 billion) in the budget for humanitarian spending each year, in line with current spending, and established a GBP150 million (US$179 million) disaster fund; and
• Harnessing innovation and technology. R&D remains core to the UK offer on development, with a resurgence in interest in digital transformation and a strong interest in harnessing AI for development.

One of the most significant commitments was the aim to spend 50% of UK bilateral ODA in LDCs, prioritizing ODA resources to LICs. In 2021, the UK only provided 19.1% of resources to LDCs and has never exceeded 33% since 2013. A commitment to 50% is seen by experts as a monumental change in bilateral allocations. The White Paper also committed the BII to invest half of its resources in so-called poor and fragile states by 2030.

The 2024 UK election sets a narrow timeframe for the current Conservative government to implement the goals laid out by the paper. The progressive and broad framing, however, indicated to experts that the paper may not necessarily be jettisoned by a potential Labor government.

Development NGOs in the UK have been broadly welcoming of the document, but have criticized the government for ODA cuts and called for a return to 0.7% ODA/GNI.

On November 13, 2023, UK Prime Minister Rishi Sunak undertook an extensive reshuffle of his cabinet team in preparation for the 2024 election, which included reinstating former Prime Minister Lord David Cameron to the post of Secretary of State for the FCDO.

The former Secretary of State for the FCDO, James Cleverly, was appointed Secretary of State for Home Affairs. He replaced Suella Braverman, who was removed from the post following controversial comments on the homeless as well as on pro-Palestine protesters.

The appointment of Cameron is likely to be welcomed by the development community, given Cameron’s strong support for international development during his time as Prime Minister between 2010-2016. In 2013, he led the UK to spend the DAC target of 0.7% ODA/GNI for the first time. He also co-chaired a UN High-Level Panel with world leaders to agree on the UN SDGs. Cameron focused especially on governance issues in global development, including stable government, lack of corruption, human rights, the rule of law, transparent information, describing them as the golden thread for enabling long-term development.

Following his departure from politics in 2016, Cameron co-chaired an LSE-Oxford Commission on State Fragility, Growth, and Development, and was also elected as a board member of the ONE Campaign.

FCDO Minister for Development and Africa Andrew Mitchell, who retained his position during the reshuffle, is familiar with Cameron. Mitchell was appointed by Cameron as Secretary of State for International Development between 2010-2012.

Other important changes to Sunak’s cabinet included the appointment of Victoria Atkins as Secretary of State for Health and Social Care, and the appointment of former Secretary of State for Health Steve Barclay as Secretary of State for Environment, Food and Rural Affairs. Jeremy Hunt remains Chancellor of the Exchequer.

On November 3, 2023, UK Minister for Health and Secondary Care Will Quince launched four new research hubs to support vaccine production and delivery in partner countries during at a meeting on science, technology, and health cooperation between the UK and ASEAN.

The hubs will each receive GBP33 million (US$40 million) of UK ODA funding via the DHSC and a further GBP1.5 million (US$1.8 million) from EPSRC.

The hubs will be led by Imperial College London, University College London, University of Oxford and The University of Sheffield, and will engage with experts from across Africa, Asia, and Latin America.

The hubs were described as follows:

• Future manufacturing vaccine hub: Building flexible, low-cost and scalable manufacturing and deployment of vaccines. It will focus initially on projects in Vietnam, Bangladesh, and South Africa;
• Chanjo: Catalyzing the African vaccine manufacturing ecosystem. This hub will be an African-led, academic-industry consortium focusing on establishing local vaccine manufacturing in Africa for endemic diseases within the continent, primarily in Kenya and Ghana;
• Vax-Hub-Global: Developing multi-product platforms and simplified engineering solutions that will enable development of low cost, effective and globally deployable vaccines to low- and middle-income countries; and
• UK-Southeast Asia vaccine manufacturing research hub: Bringing together expertise and infrastructure in Sheffield and Southeast Asian partners, focusing primarily on dengue and hand, foot, and mouth disease.