ODA allocations for 2026 onwards show the grim reality of aid cuts

More than a year since the Prime Minister announced drastic cuts to the UK aid budget from 0.5% to just 0.3% of GNI by 2027/28 – the steepest among G7 countries – last week the Foreign Secretary Yvette Cooper MP made a long-awaited statement to set out the FCDO’s ODA allocation for 2026/27 to 2028/29.  

The sector has been waiting a long time for these allocations in the hopes of gleaning greater clarity on where devastating aid cuts will fall, and who will be hit hardest. While last week’s allocations and statement gave us some steer, much of the uncertainty around exactly where cuts will fall on a country and programmatic level remain, and there was precious little details on how the government will practically deliver what it attempted to package as ‘new innovative development reforms’.  

Clarity on where cuts will fall…sort of? 

Before we can go into any analysis, we have to address the elephant in the room- the lack of comparability and transparency in the decisions set out. Last week’s announcement included regional and directorate allocations but did not set out country by country allocations.  

The lack of country-level allocations makes it difficult to unpack the full extent of the cuts and assess the trade-offs in the FCDOs prioritisation of issues at present, including which countries will see the sharpest decline, if not an end to UK aid altogether. The Foreign Secretary was clear that some programmatic decisions are still under consideration or being communicated to country posts, but with the new financial year just around the corner, this will ultimately create uncertainty for UK partners and implementers.   

While previous announcements of FCDO ODA allocations, such as those for 2024/25, used to follow the same structures as the FCDO Annual Report and Accounts, last week’s announcement ditched this precedent. Regional groupings have been changed,  and while in some cases we were able to combine new groupings to allow for comparability, in other cases this was not possible and so comparisons remain flawed.  

While we used to get detailed breakdowns of ‘Policy Priorities, International Organisations and Humanitarian’, these allocations only give a breakdown of ‘Thematic Directorates’, with many of them changed to once again make comparison impossible. These changes to reporting make a full analysis and proper scrutiny of decision making around the cuts very challenging and raises real concerns about transparency and accountability. 

Which regions are hit hardest?  

The multiyear allocations set out by the FCDO last week will once again see Africa and the MENA region the hardest hit. In 2026/27 alone, Africa will receive 40% less bilateral aid than in the previous year, and overall comparing the 2028/29 allocations to pre-cut levels in 2024/25 it will see a 56% (or £874millionn) reduction. MENA will see a 45% reduction from £680mn in 2025/26 to £375millionn in 2026/27, and a staggering 56% reduction when comparing allocations in 2028/29 to pre-cut levels in 2024/25.  

This would likely be looking slightly better if Afghanistan was still included in the MENA allocations, but given that Africa and MENA are the regions with the highest levels of poverty, conflict and fragility, this is alarming. Other regions such as Eastern Europe and Central Asia (including Ukraine), or South Asia and Afghanistan together with Asia Pacific are relatively protected against cuts.  

Though the Foreign Secretary’s announcement of a focus of bilateral ODA on fragile and conflict affected states (FACS) is welcome, given that under current trends 60% of the world’s poorest may live in FACS in 2030, without country allocations we are unable to see where this leaves other least developed countries not classified as FACS. Given the scale of the UK’s cuts to ODA over the next three years, it’s likely that FACS funding too will see an overall reduction.  

What thematic areas are being cut? 

Again, it is difficult to give a full picture here, given the change in reporting of allocations. One important change has been the creation of the new ‘Human Development’ Directorate, “combining work on global health, women and girls, equalities, civil society, safeguarding, governance and education.” Under previous FCDO allocation publications, we had specific allocations to Development and Open Societies; Health; and Education, Gender & Equality.  

If we combine those to compare to the new Human Development Directorate, we see a large drop (52%) in 2026/27, before steep increase in the following two years. Even so, by 2028/29, this area will have seen a 19% decrease when compared to pre-cut levels in 2024/25. And importantly, bringing all these important sectors under one directorate means that we are, at this point, unable to know how much each of these have been allocated. 

The Equality Impact Assessment, published alongside the allocations, gives a similarly worrying picture. Overall, the message is clear: “Bilateral ODA has been cut more heavily than multilateral ODA and reductions will have negative impact.” Among those reductions, safeguarding will be disproportionately reduced, equalities targeted programmes may close in DRC and Tanzania, and fewer women, girls and boys will access life-saving health services in Somalia and fewer girls and children with disabilities will receive education cash transfers to support their school attendance.  

These cuts will cost lives and have detrimental impacts on the lives and opportunities of women and girls, children, people with disabilities and other equalities characteristics. And yet, given that many decisions of programme level cuts are still outstanding, this EIA is only an assessment based on “risks and impacts” and the true dimension of the impact of cuts are still to be determined.  

Other areas that will see declines in their ODA allocations are Humanitarian, which will see a drop of 21% between 2024/25 to 2028/29. The UK has announced that its new international climate finance commitment is just £6bn over three years starting April 2026 – a reduction in both amount and longevity of commitment from the previous commitment of £11.6bn over 5 years, ending this month. This backward step at a time when climate change impacts are escalating has been highly criticised given the global agreement reached in 2024 at COP29 to triple international climate finance and the UK’s responsibilities. 

On a more positive note, we welcome that ICAI, the Independent Commission for Aid Impact, appears to be retained, although severe cuts to its budget will ultimately undermine its role when it is needed the most.  

The predominance of private finance 

In her statement the Foreign Secretary put a lot of emphasis on private finance. This was expected, given the governments wider shift from “grants to expertise” and “donor to investor”. She describes a restructure of FCDO’s ODA programming managed from headquarters as a focus on “programmes that support financial leverage and private capital mobilisation.” The press release published ahead of the ODA allocations has also put a great emphasis on unlocking private investment and working with the private sector.  

The government’s efforts to present today’s cuts as innovative development reforms betray the world’s most marginalised communities that UK aid has to date supported. We’ve been clear that the UK’s efforts to drive innovation and mobilise private capital can only ever be supplementary to grant-based support for the countries and communities who need it most.  

Evidence, such as from the International Development Committee, has already shown that private investments such as from British International Investment (BII) are poorly targeted at reaching the poorest countries and people. While the private sector has a role to play in sustainable development, it’s disingenuous to slash UK aid while implying that innovative reforms in the shape of private finance can replace the grant-based funding contexts of extreme poverty and conflict or urgent humanitarian need.  

Although a reduction in ODA going to British International Investment (BII) from £481mn in 2025/26 to £143mn for each following year is welcome. We have been calling on the government to pause all capital contributions amidst the aid cuts, especially given that BII has received over £6bn in capital contributions over the last decade. 

Can the government still turn the corner? 

While we still don’t have the full picture of the aid cuts, this already paints a bleak picture for those affected by poverty and inequality. And once again, the government has decided to cut aid particularly to regions that are already disproportionately affected by conflict, fragility, climate crisis and poverty, leaving those furthest behind without life-saving support.  

We urge the government to publish country allocations as soon as possible and to further assess the impact of the cuts once programme allocation decisions have been made.  

In the meantime, it’s essential that the FCDO makes headway in setting out the detail of its development vision. Despite having been in post for nearly two years, this Labour government has still yet to set out a comprehensive strategy for its development role in the world and we know no more on how the four shifts championed by Minister Chapman will actually look in practice.  

The Labour government has betrayed their manifesto promise by slashing the aid budget and irreparably damaged their reputation on the global stage. Rebuilding trust will require the UK putting action to their words and swiftly enacting their promises to champion reform to the global financial system. The urgency for reforms to the global system that has trapped the lowest income countries in unjust cycles of debt and allowed the leakage of critical resources back to rich countries through weak international tax policy and illicit financial flows slows has never been clearer.  

The path forward has already been charted and is completely cost neutral for the exchequer. The only thing lacking is political will.  Upcoming moments such as the Global Partnerships Conference in May and the UK’s G20 presidency in 2027 present an opportunity for the UK to move on these agendas and demonstrate genuine partnership with global majority allies.