Revised UK aid strategy ‘dilutes focus on poverty’

9 May 17

The UK’s emphasis on serving its own interests through its aid spending takes away from its effectiveness in reducing global poverty, according to a British economics think-tank.


Since 2015, the country has pursued a novel priority in its aid spending: to cater to the UK’s interests. This could mean, for instance, using aid to create international business opportunities in developing countries, including for British firms, and reducing poverty by building markets and economies and boosting trade.

This change of direction for UK aid, which has led to much more of the country’s £13.6bn ($17.6bn) aid budget being spent by UK government departments other than the one focused on international development, sparked concern both at home and abroad.

Now the country’s Institute for Fiscal Studies has become the latest organisation to warn of a tension between the UK’s bid to serve its own interests and its goal to reduce poverty overseas.

Sonya Krutikova, author of the report and director of the IFS’s Centre for the Evaluation of Development Policies, said there was “clearly a trade-off” between this and ensuring aid money is used most effectively for poverty reduction.

The UK is one of only a handful of countries worldwide to meet a decades-old commitment to spend 0.7% of its national income on overseas aid. This commitment will see the country’s aid budget hit £13.6bn this year and increase by another £1bn ($1.3bn) by 2021.

Meanwhile, other areas of UK government spending are being drastically cut, with those outside of the NHS, education and defence seeing a 28% (£34.6bn; $44.7bn) decline on average, compared to a rise of 44% in aid spending since 2010.

The country’s commitment to aid spending and world-renowned expertise have led its Department for International Development to become a global leader in the sector. But since the country’s new aid strategy was announced in 2015, more of that budget is being spent by departments other than Dfid.

A key mechanism for achieving the promotion of the UK’s national interest was to direct the focus of the aid budget away from Dfid, which has a primary purpose of poverty alleviation.

Between 2010 and 2015, the proportion of official aid money received by Dfid fluctuated only slightly from year to year, declining overall by just 1 percentage point over the whole five years.

Between 2014 and 2016, however, there was a 12 percentage point drop. By 2016, more than a quarter of the aid budget was being spent outside Dfid, up from 14% two years earlier.

Money was instead channelled through the Home Office, Department for Business, Energy and Industrial Strategy, the Treasury and cross-government funds dedicated to building prosperity and tackling conflict, instability and insecurity.

UK NGOs and official aid watchdogs have raised concerns about the transparency, accountability and effectiveness of aid spending by other departments and funds.

Like the IFS, both the OECD’s aid committee and the UK’s parliamentary aid oversight, the International Development Select Committee, have flagged the risk that Britain’s focus on alleviating poverty could be diluted, given the challenges of aligning this goal with the national interest.

With the country’s 8 June general election looming, the IFS noted that, while all parties are likely to maintain the 0.7% spending target, they have given “little indication of how this money will be spent and what balance they will aim to strike between national interest and global poverty alleviation goals in UK aid spending going forward”. 

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