The International Development Committee has chastised the chancellor for failing to explain how the Treasury arrived at its target figure for aid spending.
In a letter to Rachel Reeves on 5 November, committee chair Sarah Champion asked how the government had arrived at its decision to set official development assistance spending at 0.5% of gross national income. She asked whether affordability criteria had been used in the decision, and whether this had changed since the Labour government had come to power.
Reeves’s reply the same month contained no information on the calculation underpinning the 0.5% figure.
The chancellor also reiterated that the government is “committed to restoring ODA spending to 0.7% of GNI as soon as fiscal circumstances allow” and that it would use the same fiscal tests as the previous Conservative administration to decide when to do so.
The fiscal tests have not yet been met and returning to the 0.7% target “isn’t currently affordable”, she said.
Reeves’s decision to set aid spending at 0.5% of GNI in her October Budget attracted much criticism, with former development minister – and then-shadow foreign secretary – Andrew Mitchell calling it “shameful, immoral and wrong”.
For the two years leading up to the Budget, ODA had stood at 0.58% of GNI. The Budget reduced aid spending from £15.37bn in 2023-24 to £13.3bn this year and £13.7bn in 2025-26.
The target is now the same as it was under Boris Johnson, who broke a Conservative manifesto commitment in 2021 to keep foreign aid spending at 0.7% of GNI.
In a statement last week, Champion said Reeves’s letter “raises more questions than it answers”.
She asked: “If spending 0.7% of GNI is out of reach, why settle on 0.5%? Is this an arbitrary number, or one that is critical to the government’s strategy for overseas aid?
“I look forward to finding out more concrete information on this issue when we hear from government ministers in the new year.”
Champion also noted that she had not received a straight answer to a written parliamentary question on the same theme in November.
Responding to her question, chief Treasury secretary Darren Jones said the government was committed to returning to the 0.7% target “as soon as fiscal circumstances allow”.
“These plans strike an appropriate balance between fiscal responsibility at home and our responsibility to support the most vulnerable, using ODA resources to save lives whilst tackling key global challenges such as climate change, conflict, and epidemics. The UK will remain one of the most generous development assistance donors amongst the G7,” he said – phrasing that was replicated in Reeves’s letter to the committee.
Aid cuts in recent years have led to projects supported by the Foreign, Commonwealth and Development Office related to climate commitments, tackling health inequalities and driving economic reform in developing countries being scrapped or pared back.
Last year, FCDO perm sec Sir Philip Barton said the cuts had damaged the FCDO’s reputation as a reliable donor and harmed the UK's relationship with foreign governments.
The International Development Committee has been vocal in its criticism of successive governments' handling of ODA spending. In 2023, it slammed the Treasury for rejecting its recommendation to ringfence the aid budget on the grounds that it was "not affordable in the current highly challenging economic and fiscal context”.
The recommendation was made in response to concerns about the proportion of aid being spent within the UK. The Home Office spent £3.7bn of ODA in 2022 – more than a quarter of the £12.8bn budget for the year – mainly on hotel accommodation for refugees.
“This pathetic, mealy-mouthed response does not address our core recommendation that the UK’s aid budget should be used to alleviate the conditions faced by people living in the world’s poorest countries,” Champion said at the time.