Protecting bilateral spending from excessive cuts is going to be the first and most important step to ensuring the FCDO can still exert influence in an era of 0.3%, say Guy Lodge and Will Paxton. They discuss the new world of a lower UK aid budget and the pitfalls and opportunities it presents. (Update: this piece sparked a lively debate: read the blog below, then this blog disagreeing with them here).
Last week Jenny Chapman, the recently appointed Development Minister, appeared before MPs on the International Development Select Committee. She was talking about ODA in a radically changed context – the new world of 0.3%.
Her remarks come as the government’s Spending Review, due to conclude in early June, will weigh big decisions that may shape Britain’s place in the world.
The Prime Minister’s decision to slash UK official development assistance (ODA) to fund an increase in defence spending is not just a major bump in the road; we are living through what Duncan Green has described as a tsunami not a tide that demands serious rethinking of aid and development.
‘Disproportionately hitting bilateral aid makes no sense when the goal is to foster partnerships between the UK and the Global South.’
With humanitarian crises ongoing in Ukraine, Gaza and Sudan, and once high-priority sectors such as women and girls, climate, and health all competing for funds – it was always clear that FCDO would be left facing difficult choices. Chapman’s comments, however, suggest that ministers and officials have, understandably, not yet determined the way forward.
One thing the minister did set out, however, was a clear shift in approach, as the UK seeks to reposition itself as an ‘investor’ and ‘partner’, rather than a ‘charity’ donor.
So how can the UK avoid some pitfalls and use this moment as an overdue opportunity to reform its approach to aid?
The pitfall: disproportionate cuts to bilateral budgets
Our organization, Kivu International, argues that while the cuts are severe, lower spending does not necessarily have to mean lower impact or a diminished UK voice. But how ministers settle the competing demands for funding – in particular, how they balance demands to meet multilateral commitments with the desire to protect UK bilateral aid budgets – could significantly undermine the Foreign Secretary’s goals.
In 2021 when ODA was reduced from 0.7% to 0.5% of GNI – the prioritisation of funding for multilateral funding bodies meant that a 30% cut in ODA resulted in a c.50% cut in UK bilateral spending, undermining the UK’s credibility as a partner.
Multilateral bodies are important for upholding the international system and some deliver excellent results, but not all multilateral organisations provide consistent value for money, as the FCDO’s own research demonstrates.
Moreover, disproportionately hitting bilateral aid makes no sense when the goal is to foster partnerships between the UK and the Global South. It is bilateral spend which offers the UK great opportunities to deliver impact on the ground, and project UK soft power in the face of China and other hostile states.
The opportunity: building respect-based partnerships for growth
Protecting bilateral spend from excessive cuts is the first and most important step to ensuring FCDO can still exert influence in an era of 0.3%. The next is to significantly reform the focus and approach of what FCDO bilateral aid is spent on.
Western donors have long been criticised for imposing top-down aid programmes. This undermines relationships and often delivers patchy impact. Developing country partners often complain this approach compares poorly with other less patronising models.
For a fraction of the price of traditional large-scale sector-focused programmes, the new world will require approaches that help forge meaningful partnerships between the UK and developing partners.
Here’s how:
A locally-led aid system that listens and responds.
For the UK to establish mutually respectful partnerships, UK development policy must reflect the priorities in local partner countries. Our first question should always be: where are the areas of genuine mutual interest?
FCDO needs to deliver valued support on these mutual priorities. This demands significant changes to how FCDO operates. A core requirement is to develop a new generation of smaller scale, locally-led development programmes that deliver high impact and value for money. This demands an approach that is:
- Firmly aligned to local political demands.
- Responsive and agile, scaling up or down in response to opportunities.
- Skilled at navigating the political realities of how change happens (drawing on the insights from the “Thinking and Working Politically” stable that has been discussed extensively on this blog and Duncan Green’s new LSE blog).
- Linked to areas of respected UK excellence, from finance to science.
Responding to local demand is the critical ingredient for maximising impact. When partners genuinely want the support being offered, it has far more chance of leading to meaningful change. In Zambia, for example, an FCDO investment of under £500,000 which went with the grain of local interests led to an overhaul of costly agricultural subsidies, and the establishment of new private sector markets which created thousands of jobs and saved the Zambian exchequer millions of dollars.
Prioritising non-humanitarian ODA on economic growth
Tough decisions will be required about where to focus UK efforts. Arguably trying to cover so many thematic areas was hubristic even in the world of 0.7%: in the world of 0.3% it would be a big strategic mistake.
Economic growth is the main area of mutual UK and Global South interest and should form the basis of this new set of genuine partnerships. This is consistently what local elites and populations in the Global South value and want. It is also firmly in the UK’s own national self-interest. A more prosperous and stable Global South will open up new markets and strategic investment opportunities for the UK.
Prioritising our bilateral spend on programmes that are aligned to supporting developing countries meet their ambitions for growth is key.
Worryingly, on some measures we have reduced the proportion of aid targeted on economic growth (economic infrastructure and services spending fell from 13% of UK bilateral spend in 2021 to 4% in 2024).
Lower ODA spending, therefore, does not have to mean lower impact or a diminished voice for the UK. Instead, there is an opportunity for FCDO to rethink its global offer, in a way that is affordable in the new world of 0.3%. Focusing on areas of mutual interest with the developing world and adopting more flexible higher impact approaches can be the basis for the UK forging genuinely respect based partnerships.
But beware of the pitfall: if the current Spending Review process disproportionately hits bilateral spending, the Foreign Secretary will be shooting himself in the foot: UK soft power must not be diminished at the time when it is needed more than ever.
Guy Lodge and Will Paxton are directors and founders of Kivu International, an international development organisation that specialises in designing and implementing high-impact locally-led programmes. Kivu has over ten years’ experience working across the global south, supporting both civil society and government policymakers to increase their impact. Prior to establishing Kivu, Guy worked in UK policy and politics.
This article is reposted from LSE’s new Activism, Influence and Change blog, run by our FP2P Blogger Emeritus, Professor Duncan Green.
“With humanitarian crises on going in Ukraine, Gaza and Sudan” – I’m saddened to see that Myanmar continues to be forgotten from the humanitarian crisis list, with the escalating poverty rates since 2021, and despite the enormous additional devastation and hardship the March 28 7.7 magnitude earthquake added to the ongoing tragic situation.
Please also don’t forget that spending on improving accountability, public participation and accountability in social services spending and public financial management offers some of the most effective mechanisms for improving public services via social accountability. Thanks for including the Zambia effectiveness improvement example.
My extensive development experience [30 years] directs me to this singular consideration—local people can make a difference. Clear salient is freedom in open choice constitutes a necessary pre-condition for action of peoples to promote their interests.
Focus on institutions is crucial however should not be based on universal or Western templates, but hybrid forms, adapted to local conditions and cultures. Obstacles intense exist for development in unclear overlapping ambiguous institutional mandates, incoherent policies and wrong or even perverse incentives—problems which can be addressed through local flexible programs involving peoples at the grass roots level encouraging an open democratic form of development trenching supported sustained by these local peoples.
Political freedom is not—you do whatever you wish—Inherent in freedom is that your freedom is limited by the need to maintain and enhance other people’s freedom.
Inherent in freedom is social civic civil responsibility.
The normative choice for freedom is inherently social as freedom implies we make political and policy choices and formulate laws that may limit our own freedom in order to protect or enhance the freedom of other individuals in our society.
Freedom implies that our political institutions facilitate collective action and create the right incentives to further social goals. Attempts to violate human freedom in the name of some higher goal, whether socialism, nationalism or developmentalism, have usually migrated into policies of discrimination, ethnic cleansing and violation of individual rights.
Crucial is the importance of freedom, broadly conceived inherent in any kind of democratic development program.
Interesting blog but disappointing that there is no mention here on inequality – and therefore, on the flip slide, any focus on gender, equalities, inclusion and rights in relation to how we focus ODA and development partnerships. Missed opportunity to talk about how this can be foundational in ‘going with the grain’ (who’s grain? Can we move away from an elite-only focus?) and working on INCLUSIVE growth. Part 2 maybe?
A second practicable step to exert influence and achieve sustainable impact in an era of 0.3% would be through partnership, process, and pragmatism. Together, they facilitate collective action that would create the right incentives to deliver goals (value for money).
Partnership at all levels is crucial for 3 reasons. First, it assumes that the local actors are best equipped to understand and address problems at the level that affects them. Second, action taken at one level generates sustainable results with support from other levels. Third, promotes efficient divisions of labour as each actor contributes the resources (intellectual, financial, operational human, political, etc.) they are best equipped to provide.
The process is considered as important as the specific goals to be attained. The process creates the opportunity for the partners to co-creatively set their own objectives and determine the tools to apply in pursuit of the goal in a manner that is sustainable.
Pragmatism builds and sustains relationships as lines of communication are opened thereby creating opportunities for partners to collaborate and effect pragmatic changes that align with the context or existing conditions.