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Overseas Development Assistance: Budget

Volume 811: debated on Tuesday 27 April 2021

Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 26 April.

“The pandemic has resulted in the biggest drop in UK economic output in 300 years, and it has had a major impact on public finances; the deficit this year is projected to be double its peak during the financial crisis. That is why we had to take the tough—but, I assure the House, temporary—decision at the end of last year to reduce the official development assistance target from 0.7% of GNI to 0.5%.

In spite of that, the UK will spend £10 billion on aid in 2021, making us the third largest donor in the G7 as a percentage of our gross national income. Not only that, but we will be the third largest bilateral humanitarian donor, spending at least £906 million this year, and we will invest at least £400 million bilaterally on girls’ education in over 25 countries. We will deliver £534 million of bilateral spend on climate and biodiversity, a doubling of the average spend between 2016 and 2020. We have committed £548 million to COVAX to provide vaccines for poorer countries, and we are multiplying our impact by integrating our aid spend with our diplomatic network, our science and technology expertise and our economic partnerships.

This Government’s commitment to the UK being a leader in development has not changed. The integrated review reaffirmed our pledge to fight against global poverty and to achieve the UN sustainable development goals by 2030, and we reiterate our commitment to return to 0.7% when the fiscal situation allows. This week’s new allocations show that we are following through with the vision that the Prime Minister set out in the integrated review. The way that the UK applies our world- leading investment and our expertise must be strategic, in line with the approach defined by the integrated review; it must represent best value for tax- payers’ money; and it must deliver results by tackling poverty and improving people’s lives around the world.

To achieve this, the Foreign, Commonwealth and Development Office has conducted a thorough review of aid spending to ensure that we target every penny at the highest-priority global challenges. The Foreign Secretary’s Written Statement to the House last week set out how this sharpened focus of the FCDO’s aid portfolio lies behind seven strategic priorities for poverty reduction. These are: climate and biodiversity, Covid-19 and global health security, girls’ education, humanitarian preparedness and response, science and technology, open societies and conflict resolution, and economic development and trade. We believe that this plan will deliver the greatest impact where it matters most.”

My Lords, last Thursday, I asked about country-by-country allocations and how much the cuts would affect bilateral nutrition portfolios. Yesterday, Sarah Champion, chair of the IDC, repeated the question to James Cleverly. As she put it, the Government were determined to avoid scrutiny of exactly where these cuts will land. I hope the Minister will do better than the Minister in the other place and answer the question of when FCDO country office budgets for 2021 will be made public. Can he also confirm that impact assessments for each country will be released?

My Lords, our country teams are discussing programme plans with host Governments and suppliers. We will publish the 2021-22 country allocations later in 2021 as part of our annual report and accounts. I point the noble Lord to the fact that the programme-by-programme information will be published on DevTracker throughout the year.

My Lords, I know that the Minister respects the breadth and depth of experience in this House on international affairs and development. Over 60 Peers have now joined the Peers for Development liaison group that the noble Baroness, Lady Sugg, and I have established. Will the Minister facilitate a meeting between the Peers for Development group and the Foreign Secretary and himself to discuss the implications of the cuts that have been announced and the issue of timeliness, as has been raised, in the need for transparency around country allocations?

I can certainly confirm that I would be happy to meet the group, and I will take the request back to my right honourable friend the Foreign Secretary. I stand by the noble Lord’s assessment; this House is full of wisdom, not just on ODA but across many areas.

My Lords, I regret that girls’ education has had less funding allocated this year because of the cuts; that shows that, with the scale of the cuts, even that priority is suffering. On cuts to sexual and reproductive health spending, I understand that the UK flagship programme WISH is being closed and that there will be significant reductions—in the region of 70% to 80%—to reproductive health supplies. Can my noble friend the Minister tell me how much funding will be allocated to sexual and reproductive health and rights spending this year?

My Lords, on the thematic issues, we are finalising our health spending across all areas, including sexual and reproductive health. I assure my noble friend at this juncture that this remains something I am very much focused on, not least in my role as the Prime Minister’s Special Representative on Preventing Sexual Violence in Conflict.

My Lords, I declare my interest on malaria and neglected tropical diseases as set out in the register. Does the Minister accept that in-year cuts are particularly damaging and wasteful of public money already spent? Yet NTD programmes look to be facing total and immediate devastation and deep cuts are in train for crucial ongoing malaria work, notably in Nigeria. Given the disproportionate burden of malaria on that country, what assessment have the Government made of the effects of such cuts on the CHOGM commitment made in London in 2018 to halve malaria in the Commonwealth by 2023?

My Lords, on the final point, the challenges of the last year have of course quite severely impacted the fight against not just malaria but other diseases. That is why the Government have stood firm in our support of multilateral organisations and initiatives such as Gavi and CEPI. We continue to invest in research and development on malaria specifically; as I am sure the noble Baroness will acknowledge, that was primarily responsible for the world’s first antimalarial drug, which has saved more than 1 million lives. However, I fully accept that the challenges to programmes are severe—I do not shy away from that. We will work with organisations and countries to see how we can manage the impact of the cuts being made.

The Minister will be aware that we are already in the financial year in which the reductions in budget are meant to take place. I note from an answer to an earlier question his commitment and desire to inform the House as soon as possible of the nature of the cuts in funding and how they will affect various development and aid projects. Does he agree that to implement a 25% reduction in the annual budget if one is, for example, three months into the financial year would amount to reducing by a third the funds remaining? This causes greater dislocation to whichever activity is supported than implementing planned funding before the financial year commences.

My Lords, the right reverend Prelate raises an important point about the impact of funding over the course of the whole year. I can assure him that we have not been working in a vacuum on this; we have been working directly and liaising with organisations and institutions which are impacted, and with countries directly. Over the last couple of days, I have had various conversations with key partners, including those within multilateral organisations.

My Lords, I note my register of interests. It is an absolute disgrace that, four weeks into the financial year, the Government are still hiding the figures for the organisations and projects that are normally supported through our official development assistance. That will impact on education in particular. I have heard the Prime Minister speak eloquently and passionately about his commitment to girls’ education, and he wrote it into the Conservative manifesto in December 2019. And yet its budget will be cut by 25%—embarrassing our allies in Kenya, with whom we are holding a joint education summit in July 2021. Will the Government commit at that summit to £600 million, as originally planned, for the Global Partnership for Education, to make sure that those girls and boys around the world who need an education after this pandemic can actually get one?

My Lords, as the noble Lord articulates, the importance of girls’ education is key for this Government and our Prime Minister. However, the challenging situation means that we have had to look at all elements of our ODA spend. I assure him that we will invest at least £400 million in girls’ education, which will have a really progressive impact in over 25 countries.

My Lords, the VSO was told last Friday that its volunteering for development grant would get a one-year extension, amounting to a 45% cut. How does this represent either protection for the VSO, which the Foreign Secretary promised, or help for 4 million of the world’s poorest and most marginalised, whose services from the VSO will now have to be scrapped? Will the Government reconsider the terms of the VSO grant?

My Lords, we are working very closely with the VSO. We are proud that the FCDO and the VSO were able to work together to pivot over 80% of programme funding to the pandemic response. On managing the current budgets, I assure the noble Baroness that we are working very closely with the VSO to ensure that any impacts of any reduction in funding are managed. I stress that this is a settlement for this year; we are looking at how we can best manage the impact on programmes for the medium and longer term directly with the VSO.

My Lords, given the OBR forecast that the economy will return to pre- pandemic levels in Q2 next year, why will the Government not commit to returning to 0.7% at that point?

My Lords, my noble friend speaks with great insight and expertise on this subject. I note very carefully what she has said. The underlying base on which we will return to 0.7%—again, the reduction to 0.5% is temporary—is, as my noble friend suggests, the prevailing economic conditions and fiscal conditions at that time. I note what she has said. We and our colleagues in the Treasury will keep a very firm eye on that.

My Lords, I know from my time at DfID the impact that UK aid has had. However, I, like many of the general public, have some sympathy with the position the Government have taken, on the condition that it is only temporary. Can my noble friend tell me why the cuts or reductions in spending seem to have fallen disproportionately on bilateral rather than multilateral aid?

My Lords, the reductions are being finalised. I assure my noble friend that in the work we do with our multilateral organisations, as I have seen directly as Minister for the Commonwealth and Minister for the United Nations, the positive impact of the sum of the whole—if I may put it that way—is often greater. Nevertheless, our funding to multilateral organisations and bilaterally is due to the overall impact assessment we make of a country’s requirements. That will continue to be the case. However, we are having to make reductions in our multilateral support, as well as in the support we extend on a bilateral basis.

Sitting suspended.