Five things we learnt from the new Development Minister’s first appearance at the IDC

Baroness Chapman- recently appointed as Minister of State (International Development, Latin America and Caribbean) in the Foreign, Commonwealth & Development Office (FCDO)- last week appeared for the first time in front of the International Development Committee.

A few weeks on from the Prime Minister and Chancellor’s short-sighted decision to cut UK ODA from 0.5% of GNI to 0.3% and the subsequent resignation of former minister Anneliese Dodds, the session provided Baroness Chapman with an opportunity to lay out some of her priorities as the new minister for development and shed some light on the governments approach to implementing the cuts.

So, what have we learned?

The UK plans to significantly evolve its development offering to countries

Baroness Chapman confirmed that the government plans to evolve its development offering to partner countries in order to emphasise an investment approach, while sharing UK expertise, alongside continuing to act as a donor.

In making this announcement, Minister Chapman used concerning language in stating that the UK’s days as a “global charity” are over. At Bond, we’ve been adamant that UK aid isn’t about charity. It’s about global solidarity and a responsibility to our international commitments, and it’s an investment in a safer, healthier and more sustainable world that benefits us here in the UK.

It was on this basis, and with cross-party support, that the 2002 International Development Act legally mandated the UK to provide 0.7% of GNI as ODA. Many of the members of the IDC expressed similar concern about this language and the vital global importance of aid.

Baroness Chapman stated that she is fed up with hearing about the need to reform the international architecture and instead wants to hear answers on how to do that. We encourage her to listen to proposals tabled by lower-middle income countries, for example at July’s Financing for Development Conference.

The UK looks to prioritise humanitarian, health and climate change, while likely deprioritising gender equality and education programs

Although a review of programs and ODA allocations across government is still ongoing, Baroness Chapman confirmed that humanitarian assistance, health and climate would be prioritised within a reduced budget, while there would be less money for gender and education programmes.

In responding to this announcement, Sarah Champion, Chair of the IDC, highlighted that equality impact assessment of the aid cuts in 2021 found they disproportionately affected women and girls, people with disability and other vulnerable groups. In response, Minister Baroness Chapman highlighted that efforts would be made to mainstream gender across development work and a desire to champion gender equality in international forums.

However, there was no detail provided on how this would happen and how the UK might uphold its Leave No One Behind commitments in the implementation of these cuts. At a time when women’s rights are under attack around the world, it would be deeply wrong if the UK were to target gender equality in the ODA cuts. MPs also expressed concern about the UK stepping back from its vital work on gender.

Impact assessments are not being used to guide “broad-brush decisions”

Minister Baroness Chapman confirmed that she had not yet looked at the equality impact assessments of the 2021 cuts, and that such assessments for this new round of cuts will only take place as part of the budget allocations, and will not guide the current “broad-brush decisions” made as part of the Comprehensive Spending Review. The IDC rightly questioned the risks of not having information about the potential impacts whilst making broader spending decisions and the decision to deprioritise gender and education before any impact assessment has happened.

Nick Dyer, Second Permanent Under-Secretary of the FCDO, confirmed that they will conduct an impact assessment as part of the budget allocation process, which they hope to publish around the time of the FCDO 2025/26 allocations and Annual Reports during the Summer.

In donor refugee costs may increase in 2025 and will soon be a third of ODA

While we await the departmental ODA allocation decisions currently being discussed as a part of the Comprehensive Spending Review, Nick Dyer indicated that in-donor refugee costs (IDRCs) may increase in 2025 and remain high, thereby limiting ODA resources available for overseas programs further.

In 2023, the UK spent over a quarter of its aid budget on supporting refugees in the UK, and while these costs came down by a third to £2.8 billion (20% of total ODA) in 2024, Nick Dyer confirmed they will reach 20%-21% of ODA in 2025, which, under current GNI predictions, would be equivalent to £3 billion. Minister Chapman said that following full cuts the IDRC percentage share of ODA will increase to “give or take a third” as the ODA budget is being cut by over 40% while IDRC are not projected to go down by the same level.

Over 100 NGOs and refugee charities called on the UK government to bring these costs down, particularly by ending the use of costly hotels for housing asylum seekers, and stop using the aid budget for these costs, warning that otherwise the already diminished aid budget would be stretched even further.

The government is likely to pause core funding to BII as a result of the cuts

Nick Dyer stated that in the context of a significantly reduced ODA budget, it will be difficult to continue providing core contributions to British International Investment (BII). Bond and our members have been calling on the government to pause capital contributions to BII as part of the comprehensive spending review as one of the few mitigating steps the government can take to maximise the use of grant ODA available for essential FCDO development and humanitarian programmes, so this disclosure was welcome.