Will the UK reach 0.7%? The 2013 Autumn Statement

by Ian Townsend

Joint Post with Guto Ifans, Work Placement Student, DI Analyst team

Will the UK reach 0.7%?

George Osborne will deliver his Autumn Statement tomorrow, on the 5 December 2013. This has implications for UK Official Development Assistance spending. In the Budget back in March, the UK government reaffirmed its pledge to fulfil its long standing commitment of giving 0.7% of Gross National Income in ODA.

The UK is the only G8 donor that is planning to fulfil its commitment this year, as explored in depth in our recent report, ‘Investments to End Poverty’. The Office of Budget Responsibility’s GNI estimates from March would suggest that UK aid would have to reach £11.2 billion to meet this target, an increase of £2.55 billion, from the £8.6 billion spent in 2012. With GNI estimates for 2013 set to be revised upwards this month, it remains to be seen if the UK will increase aid accordingly.

Fig.1: The share of aid as a percentage of GNI has been increasing

Fig 1 ODA as percent of GNI

Where will the extra money be spent?

As UK aid increases in 2013, observers will keep an eye on the share of aid delivered through UK government departments other than DFID. While DFID still spends the lion’s share, with £7.59 billion going through DFID in 2012, other departments are seeing an increase in the aid they spend too. According to the last figures available from the Office of National Statistics, the share of non-DFID aid increased in 2012 to 13.4%, with the Foreign & Commonwealth Office (£282 million) and the Department of Energy and Climate Change (£246 million) being the largest distributors.

As we examined in our  report, ODA differs substantially between donors, and is made up of different things (see also a recent blog by Rob Tew: “Unpacking the Aid Bundle: A DI Analyst Viewpoint.”). When looking at UK aid, we see there are differences in the composition of aid from different departments; a greater share of aid from the Foreign & Commonwealth Office is not transferred directly to developing countries, while the CDC Group (previously the Commonwealth Development Corporation, a UK government owned development finance institution or DFI) gives nearly all its ODA in the form of loans.

Fig 2: In 2012, the share of UK aid not spent through DFID was the highest in recent years

Fig 2 nonDFID aid

Our forthcoming brief on UK aid will look at how different agencies deliver aid. It will examine different types of aid and mechanisms by which aid is delivered, as well as exploring the implications for transparency and accountability of giving ODA given by other government departments. To keep updated on this, sign up to our newsletter or follow our Twitter feed @devinitorg.