UK Foreign Aid Budget Cuts: The Impact on the Nation and the World

In 2021, the UK Government confirmed a substantial cut to foreign aid spending, reducing its annual budget from 0,7% of gross national income to 0,5%, which represents a decrease in spending worth between £4bn and £5bn per year.

Though originally described as temporary, this highly disputed move is predicted to last until 2024-25. Having been met with opposition from aid charities and MPs, the repercussions of this decision will be widespread, and, just a few months down the line, they are already plain to see.

In line with the warnings launched from many large-scale aid organisations such as UNICEF about the detrimental impact these cuts would have on vulnerable communities, major humanitarian relief, aid and developmental projects have already been disrupted as a result.

Here, Shameet Thakkar, managing director of Unimed Procurement Services (Unimed), discusses the consequences of the UK foreign aid budget cuts for aid charities, countries worldwide and the UK itself.

Who will be affected the most?

In 2020, most of the UK’s foreign aid budget was allotted to Asia and Africa, with around 55% going to Africa and 39% being spent on Asian countries.

Most of this aid is bilateral, meaning the UK gives funding to organisations for specific projects only, instead of providing it to international aid charities to spend in different ways as and when needed – what is referred to as multilateral aid.

As a result, humanitarian relief projects of major importance were significantly affected, with some unable to continue altogether.

Initiatives funded by the UK foreign aid budget have always had a strong focus on healthcare and humanitarian aid.

As a result of the cuts, experts have estimated that, between 2021 and 2022, around 5.3 million women and girls would stop receiving support with modern family planning methods and a staggering 11.6 million individuals would no longer be reached with nutrition-related aid.

Albeit the full extent of the repercussions the funding cuts are going to have is not yet clear, critical projects such as The Global Polio Eradication Initiative and UNAIDS’ HIV prevention and treatment programme have received reductions in funding of 95% and 80% respectively, causing evident setbacks in these aid organisations’ missions.

The UK Government has stated that the economic pressures of Covid-19 are to blame for the funding cuts. This begs the question: is the UK’s budget being distributed in the best possible way?

While devoting resources to assisting countries where the Covid crisis reached alarming levels was instrumental, it has also taken the limelight away from other life-threatening illnesses such as malaria, which are still the cause of countless deaths.

It is countries who are most affected by these illnesses that will bear the brunt of the spending cuts, yet there are long-term implications that will undoubtedly have an impact on the UK as a nation.

The impact on the UK

Consistently ranking among the largest donors in the past few years, the UK is regarded as a development force within the international community.

This means the spending cuts will make the country susceptible to a significant loss of soft power, damaging its reputation and transforming its image in the eyes of the world.

According to public opinion, the UK was in recent years in a considerable position of influence within the world, considered first for general attractiveness and second for trust within the G20.

And with the UK being awarded second place for soft power in 2022, still surprisingly ranking first among European countries – most likely thanks to its response to Covid-19, it is clear that we still haven’t seen the full impact Brexit is going to have on the global perception of the nation.

The increase in negative sentiment Brexit kickstarted can only be exacerbated by the UK’s funding cuts: the 0,7% promise was one that symbolised trust, having been upheld by the UK since 2013, and not renewing this commitment is likely to cause Britain’s position of power to drop in the next few years.

In contrast, countries such as China, Japan and the USA are likely to continue to gain soft power and develop within the international market.

However, if the is UK no longer doing enough to give back to the world, it stands to lose more than its position of power internationally.

Investing money in the right ways ultimately has a cyclical benefit, benefiting the UK economy in a variety of ways; for instance, it has been shown that bilateral aid can generate a significant increase in UK exports, also increasing trade revenue and generating extra UK jobs.

This gives us but a glimpse of why investing in foreign aid is a better use of taxpayers’ money, ultimately contributing to the growth of the nation.

Building resilient healthcare services

Given the setbacks and threats introduced by the UK foreign aid cuts, how can we look into bettering the system and doing more long-term?

Looking at the big picture involves using budgets effectively and focusing on what’s truly important. And while reviewing structures at a higher level is fundamental, change can start on a much smaller scale, too.

Also important is being able to rely on organisations whose work can complement a well-structured foreign aid model and who are able to efficiently work with foreign countries, negotiating effectively while also providing transparency about expenditure.

Awarding healthcare solutions contracts to these organisations equips them with the tools they need to foster growth for the UK, benefiting its economy and promoting its development.

Ultimately, the focus should be on building resilient healthcare services, infrastructures and consultancy, in order to be prepared to react in the event of humanitarian crises and emergencies, and being armed with the right support systems and allies who can do their part may just hold the key.