FCDO Annual Report 2025 paints a bleak picture for the communities who need the most help

On Tuesday, 22 July the Foreign, Commonwealth and Development Office (FCDO) published its Annual Report and Accounts for 2024 to 2025.

The document presents forward-looking budgets for the current financial year (2025-26) and reported figures for UK aid spending for 2024-25, alongside an equality impact assessment for cuts undertaken for this financial year.

Following the government’s decision to cut the aid budget from (the already reduced) 0.5% of Gross National Income (GNI) to 0.3% by 2027, this years’ cuts are the first in their phased introduction building up to much more substantial and damaging cuts from next year onwards.  

While we await the government’s decisions on the much larger cuts to come – with an accompanying impact assessment– later this year, the Annual Report gives us a first look at where the cuts will hit hardest and paints a bleak picture.

The poorest countries will be hit hardest

Overall, we have now seen the plans for the first reduction in the FCDO’s programme ODA budget from £9.3bn in 2024/25 to £8.7bn in 2025/26, and we know from the Comprehensive Spending Review that it will fall further to £6.8bn in 2026/27 and £6.19bn in 2027/28 when the full budget cuts hit – a decrease of over £3bn.

Despite assurances by FCDO Ministers and senior officials that poverty reduction remains at the heart of UK ODA, bilateral aid to Africa is being cut by 12% (£184mn) this financial year, despite the fact that poverty levels are highest in the region. Middle East and North Africa is also seeing cuts (21% reduction), a concerning decision given the humanitarian needs in these regions, while budgets for others seem to be increased or protected.  

The UK is also cutting funding to some of the countries hit hardest by humanitarian crises, including Ethiopia (25% reduction), South Sudan (23%) and Somalia (27%). Surprisingly, UK aid to Sudan and the Occupied Palestinian Territories (OPT) – both outlined by the government as priorities – are seeing cuts this year, with Sudan seeing a reduction from £146mn in 2024/25 to £120mn in 2025/26 (18%) and OPT seeing a reduction from £127mn to £101mn (21%).

The FCDO have pointed to a £85mn crisis reserves, which they can draw on should the needs in Sudan or OPT go beyond the allocated budgets, as they did in 2024/25. However, given the mounting humanitarian crises in both countries it is difficult to understand why last year’s overall spending levels are not being maintained.

Those who need it most will bear the brunt of the cuts

The Annual Report also states that the approach to the cuts is balanced against “the UK’s proud tradition of supporting the world’s most vulnerable”, yet the numbers and equality impact assessment seem to tell a different story. While FCDO programme allocations for Education, Gender & Equality increased in 2024/25, this area will see a reduction of 42% (£206mn) this financial year. The Girls’ Education Department will be particularly hard hit with a cut of 51%.

The equality impact assessment confirms that in-year reductions to education will likely take place in Ethiopia, Sierra Leone, Nigeria and Zimbabwe and a girls education programme will close in DRC, which will “have negative impacts on 170,000 children in post-conflict rural Kasai”. The Equality Impact Assessment acknowledges that these cuts will likely have “adverse impacts on children […] including the most vulnerable and children with disabilities.

Funding for health will also be cut by 46% (£447.5mn) despite being among the government’s priorities. The equality impact assessment sets out some more detail on these cuts: “in Africa, spending is reduced in women’s health, health systems strengthening and health emergency response e.g. in DRC, Mozambique, Zimbabwe, Ethiopia. Spending on some programmes targeting women and children, WASH and nutrition have also been reduced.”

Overall, the government assessed that 11 of the 13 existing and pipelined programmes and projects that were put forward for closure due to the cuts were equalities focused -programmes that meet OECD criteria for gender equality or disability inclusion. While the government has promised to mainstream gender equality across their development work, it is clear that women and girls and those most marginalised are bearing the brunt of the cuts.

Gender equality advocates have been clear that mainstreaming gender equality is important, but only works alongside, not as an alternative to, standalone programming. This comes after the equality impact assessment of the previous aid cuts in 2021 highlighted that these cuts disproportionately affected women and girls, people with disability and other marginalised groups. The current cuts are all the more concerning given that they are happening at a time when women’s rights are under attack around the world.

Prioritisation of multilateral spending will give some relief

On a more positive note, the UK government has announced that it will honour its pledge of £1.98bn over three years 2028 to the World Bank’s International Development Association (IDA) after having agreed on payment schedule that reduces costs for the UK while providing the same value to the World Bank. This follows the welcome announcement of the UK’s £1.2 billion pledge to the vaccine alliance (Gavi) in June. In their Press Release accompanying the Annual Report, the government calls for a “modernised approach to international development”, focusing on multilateral spending to organisations with “a proven track record of impact.”

However, this shift to multilateral spending is coming at a significant cost for bilateral programmes.

Key questions remain for the upcoming cuts

The government is now in the process of deciding on the much larger cuts from 2026/27 onwards, and we continue to urge the government to ensure any decisions are based on an impact assessment of potential consequences for vulnerable groups, which needs to be published alongside spending allocations. It is also imperative that the government focuses the remaining budget on poverty reduction and reaching the most marginalised people.

But key questions remain, and will be all the more important while the government makes its decision:

1. Will priority countries be identified on the basis of humanitarian and development needs?
2. To what extent will country-level spending decisions be made on the basis of development objectives and strategic responses to development needs?
3. How will an emphasis on promoting UK expertise work with efforts to promote locally-led development?
4. How the growing emphasis on better responding to the priorities of partner governments shape FCDO’s engagement with and support to civil society partners?

In the context of the cuts, it is also very important that the UK shows solidarity and supports proposals from low- and middle-income countries to make the international financial architecture and their decision-making structures fairer, such as those tabled under the recent Fourth Financing for Development (FfD4) conference particularly around debt, tax and illicit financial flows.