Labour’s decision to reduce aid spending to 0.5% has been slammed as "shameful, immoral and wrong".
The government has also been criticised for failing to reform the rules for how official development assistance is spent.
Rishi Sunak’s Conservative government had topped the official development assistance budget up to 0.58% of gross national income for the last two years, after Boris Johnson’s government took it down from 0.7%.
Wednesday’s Budget reduced aid spending from £15.37bn in 2023-24 to £13.3bn in 2024-25 and £13.7bn in 2025-26, amounting to 0.5% of gross national income.
Former development minister Andrew Mitchell, who is now the shadow foreign secretary, said: “At a time of unprecedented humanitarian crises around the world, I’m shocked by the government’s decision effectively to cut our international development budget by £2bn. It is shameful, immoral and wrong.”
And billionaire Bill Gates, who is the co-chair of the Bill & Melinda Gates Foundation, said the decision was “a disappointing outcome for the world’s most vulnerable people”.
As well as returning to 0.5% of GNI, Rachel Reeves’ Budget implies the government will not reach the 0.7% target by the end of the decade.
Labour committed in its election manifesto to returning to 0.7% “as soon as fiscal circumstances allow” and it has reiterated this pledge in the budget.
However, the Office for Budget Responsibility’s latest forecast shows that the ODA fiscal tests are not due to be met within this parliament, meaning aid is not expected to be reach 0.7% by 2029-30.
The Budget Red Book states: “The government will continue to monitor future forecasts closely, and each year will review and confirm, in accordance with the International Development Act 2015, whether a return to spending 0.7% of GNI on ODA is possible against the latest fiscal forecast”.
International Development Committee chair Sarah Champion said: “It is disappointing the government has decided to be bound by Sunak’s unachievable fiscal rules regarding foreign aid spend.”
Gideon Rabinowitz, director of policy and advocacy at Bond, the UK network for NGOs, said the decision to stick to the previous government’s fiscal rules was “short-sighted”.
“By sticking to the previous government’s restrictive fiscal rules for returning to 0.7%, the government not only jeopardises support for those facing poverty, humanitarian crises and climate change, but it also reneges on its promise to return to 0.7% and re-position itself as a reliable development partner ahead of upcoming summits like the G20 and COP29,” he said.
The government, which has appointed former Department for International Development permanent secretary Minouche Shafik to undertake a review of its approach to development, has also come in for criticism for failing to commit to ringfence ODA for overseas development. Last year, Home Office spending on supporting refugees in the UK took up more than a quarter of the ODA budget.
The Red Book states that, under the previous government, the increasing use of the ODA budget for the costs of refugees and asylum seekers here in the UK is “in line with international guidance” but “has had significant implications for ODA spending overseas”.
Rather than reforming the rules to ringfence ODA, the Budget documents state that the government is taking measures to reduce asylum costs, including by “ending the use of expensive hotel accommodation”, and that this will “create more space in the ODA budget to spend on our international development priorities overseas”.
Champion said she was “relieved the government has recognised the foreign aid budget must be protected from paying the Home Office costs of housing asylum seekers” but said ministers “should have been more ambitious in addressing this”.
She added: “I am glad the chancellor agrees the Home Office needs a long-term funding solution instead of pilfering funds designed to support the poorest in the world."
The decision to increase funding for the BBC World Service has, meanwhile, come in for praise. The Red Book does not specify how large the increase will be but the FT reports that it will be a 25% boost for the international broadcaster.
Former Foreign and Commonwealth Office permanent secretary Sir Simon Fraser said the boost was a "small amount to pay for huge potential influence in promoting truth and combatting false news around the world".
Champion said it would "hopefully prevent the need for immediate cuts" at the World Service.