Development is a different story. Not cuts, but an increase in the aid budget, with the total amount of money going from the UK as aid rising from £8.4 billion this year to £12.6 billion in 2015. Most of this is going through the Department for International Development (DFID), whose budget is going to hit £11.5 billion by 2015. The increases are going to start slow and speed up: aid as a percentage of the UK’s gross national income (GNI) will remain at 0.56% for the first few years, and then jump to 0.7% in 2013, staying at this level until 2015. We knew this was going to happen, but it’s impressive nonetheless – the coalition deserves praise for sticking to its promises on aid.
What will this money be spent on?
- Some of it will be prioritised by issues: so, £500 million a year on tackling malaria, and more on child and maternal health, all under the headline goal of achieving the Millennium Development Goals. There’s also an intention to spend more on ‘boosting economic growth’ – though what this means is not yet clear. Some of it will go to meet the government’s commitments on international climate finance. A total of £2.9 billion will be spent on climate finance over the five-year lifetime of the spending review, but what proportion will come from DFID remains to be seen.
- Some of it will be prioritised by types of country. One third of Britain’s Official Development Assistance (ODA) will be spent in fragile and conflict affected states by 2015.
- Some of it will be spent to make sure the rest is spent well – the Chancellor repeated the announcement of an ‘independent commission on aid impact’ to make sure that all aid spent is effective and good value for money.
What will it not be spent on?
- Administration – the Chancellor said in his statement that he’s agreed with Andrew Mitchell, the Secretary of State for international development, to reduce DFID’s administration costs to half the average of all donors. It’s not clear how this will happen but it’s likely that DFID will see more staff cuts.
- China and Russia – the Chancellor announced the widely trailed end of DFID’s programmes in China and Russia, an election commitment by the Conservatives.
Which Department will spend it?
A concern in the run up to the review was that some of this money might be spent by other departments such as the Ministry of Defence or the Foreign Office. This hasn’t happened – in fact, according to some insiders, the amount of the aid budget controlled by DFID will actually go up. The strict definition of aid imposed by the OECD helped DFID here – the government can’t move money around to other things like security and climate finance and call it aid, since the OECD will not allow it.
As ever, the real story will happen long after the cameras have packed up and left College Green. The UK’s very effective development lobby will no doubt be watching carefully over the next five years. The exact details of how the money will be spent – what will be cut to allow aid to increase in fragile states, how priorities in countries like Afghanistan will be decided in the on-the-ground negotiations between DFID staff and security staff, and how DFID will cope with spending more money with less people – are all things that need to be monitored carefully in the next few years.
It’s also worth keeping an eye on what happens to the UK’s growth rates ), to see if it’s the commitment to spending a certain amount of money on aid or certain proportion of the national income on aid which is met. If the government’s projections about growth don’t materialise, but it sticks to the amounts promised, it could end up spending more than 0.7% of GNI on aid. And, conversely, a decision would have to be made about what to do if growth were faster than expected, which would mean that the amounts given in aid would have to be higher to meet the 0.7% target.
In addition, both DFID and the development lobby have the difficult task of explaining to the UK public why aid should be protected when so much spending is being cut. The spending review has two pointers to how the government is going to make that case. The independent commission on aid and the reduction in administrative costs will, it is hoped, allay any public suspicions about waste in the aid budget. In addition, the Comprehensive Spending Review explicitly states that aid is not only right, but also in the UK’s national interest, pointing to another line of defence against public criticism."