UK aid spending is facing its most drastic reduction since 2007 unless immediate changes are implemented in the autumn budget, a coalition of over 100 NGOs warned on Wednesday.

According to these organizations, the aid budget for overseas assistance is expected to drop to just 0.36% of gross national income (GNI) in 2024, with significant portions being rerouted to fund asylum-seeker programs in the UK.

The coalition’s statement reads: “If these plans are not urgently revised, the prime minister and his government will be withdrawing vital services and humanitarian support from millions of marginalized people globally and turning up empty-handed to global forums over the coming months.”

This is the first major challenge to Labour on aid spending since the election. The group fears that the Treasury will fail to supplement the aid budget to account for the significant resources being absorbed by housing refugees in the UK, leaving fewer funds for overseas humanitarian work.

Humanitarian Aid Diverted to Asylum Costs

The UK’s official development assistance (ODA) budget allocated to supporting refugees in the UK has ballooned from £500m in 2019 to £4.3bn in 2023, largely due to the growing backlog of asylum cases. The £4.3bn — almost entirely overseen by the Home Office — represented 29% of the total ODA budget last year.

This massive rise in refugee costs has reduced the amount of aid available for overseas projects, with housing expenses alone expected to consume approximately £3.8bn in the current 2024-25 fiscal year.

Without a new cash injection, the ODA budget not spent on UK refugee support will fall to just 3.6% of GNI — its lowest proportion in 17 years.

In response to previous crises, the Conservative government provided an extra £2.5bn over two years (2022-23 and 2023-24) to help absorb the Home Office’s escalating refugee expenses. However, this funding ceased in April, raising fears that the Treasury’s upcoming “tough choices budget” will not include similar relief.

In a private letter addressed to Prime Minister Keir Starmer, NGO leaders warned that the UK risks showing up empty-handed to major global summits, including Cop29 and the upcoming UN General Assembly.

To maintain the UK’s international credibility, the letter argues that the government must, at minimum, maintain aid spending at its current 0.58% of GNI. This, according to the letter, would require an additional £2.2bn. The NGOs also stressed the importance of outlining a path to restoring aid levels to the target of 0.7% of GNI.

The letter has been endorsed by several of the UK’s largest NGOs, including ActionAid UK, Oxfam GB, Care International UK, International Rescue Committee UK, and Save the Children UK.

Widespread Political Support for Aid Increase

The NGOs’ plea has gained significant political backing. Sarah Champion, chair of the select committee for international development, expressed concern over the current management of the UK’s aid budget.

“It is right that we support refugees and asylum seekers, but the reckless spending of the UK aid budget to pay for extortionate hotel bills for this vulnerable group in the UK not only mismanages taxpayer money but also deprives millions of marginalized people around the world of the vital humanitarian support they need to stay safe in their own countries.”
Sarah Champion

Champion added that the UK aid budget, traditionally aimed at alleviating global poverty, should not be used to prop up what she called a “broken asylum system” at home. She called for a government top-up to prevent further program cuts.