Overseas aid cuts threaten UK aid watchdog

LONDON — Ministers are poised to axe the watchdog that measures the U.K.’s overseas aid spending as part of deep cuts to the development budget, set to be confirmed this week. 

Prime Minister Keir Starmer announced last year he would reduce the aid budget from 0.5 percent to 0.3 percent of economic output in order to pay for a boost to defense spending, but has not yet spelled out where those cuts will fall. Foreign Secretary Yvette Cooper is expected to unveil details before the Easter recess, including tough funding settlements for the BBC World Service and the British Council. 

The Independent Commission for Aid Impact (ICAI), which scrutinizes official development assistance (ODA), may be downsized or scrapped altogether under the plans, according to three people with knowledge of discussions with the Foreign, Commonwealth and Development Office (FCDO).

The move comes as Starmer’s government shifts away from a focus on international development — a cornerstone of Labour Party foreign policy since the 1990s — and plows those resources into defense.

An ICAI spokesperson said: “The Independent Commission for Aid Impact costs less than 0.03 percent of the total U.K. aid budget. … As the government reduces the aid budget and changes the way it does development, independent scrutiny and learning become even more important, not less.”

The ICAI’s latest report lambasted the government for a lack of “an overarching strategy or set of priorities,” pointing out that aid cash is being spent on supporting refugees in the U.K. rather than on the global poor.

The potential closure of the ICAI has drawn concern from within Starmer’s own ranks, with Labour MPs pointing out that the party made an explicit commitment to “work closely” with the watchdog in their 2024 election manifesto.

Foreign Secretary Yvette Cooper is expected to unveil details before the Easter recess. | WPA pool photo by Jaimy Joy/Getty Images

Sarah Champion, chair of the international development committee, said the ICAI’s latest report “underlines why the government should row back from its plans to scrap the U.K.’s aid watchdog.”

She added: “At a time of brutal budget cuts, it is more important than ever that the government spends its aid wisely and transparently.”

Fleur Anderson, a member of the foreign affairs committee, told POLITICO: “When something works as well as ICAI, why are we even considering dismantling it?” Beccy Cooper, a 2024 intake MP, said: “More than ever, we need to ensure effectiveness and maximum impact of our aid funding.”

Asked about the body’s future in January, International Development Minister Jenny Chapman said: “I have to ask myself whether that is the right use of that money or whether we could get what we need more efficiently.”

The government is expected to prioritize multilateral aid while slashing funding for bilateral donations and in-country projects including public health initiatives and education for women and girls.

A Labour MP briefed on the plans, granted anonymity to speak candidly, raised fears that some cuts would go against ministers’ own stated aims for the remaining aid budgets.

The MP flagged proposals to reduce funds for the British International Investment development bank, despite a stated aim to boost private investment in development projects, and to reduce the headcount of Whitehall staff working on ODA, despite professing a wish to focus on expertise.

Fleur Anderson, a member of the foreign affairs committee, told POLITICO: “When something works as well as ICAI, why are we even considering dismantling it?” | Brian Lawless/PA Images via Getty Images

Chapman held briefings on the plans last week and will hold more sessions next week as the government tries to keep MPs onside as the details emerge of where savings will be made.

An FCDO spokesperson said: “National security is the first duty of this government. That’s why, to fund a necessary increase in defense spending, the government has taken the decision to reduce the U.K. ODA budget to 0.3 percent of [economic output] by 2027.  

“We remain absolutely committed to tackling the global challenges of hunger, disease, insecurity and conflict, but we have been clear we must modernize our approach to development to reflect the changing global context.”