Global trends in aid funding are becoming increasingly unreliable and media driven. It is therefore essential we secure more sustainable ways to fund our support to conflict-affected countries when they inevitably fall from the headlines.
The economic pressures arising from the Covid-19 pandemic, the war in Ukraine, and a cost-of-living crisis have created significant challenges in UK. Focus is undoubtedly turning towards tackling the problems at home, and the implications on overseas aid spending remain uncertain.
Recent geopolitical events such as the Afghanistan and Ukrainian refuges crises have caused additional pressures on the UK aid budget, which has now supported 141,500 people from Ukraine and 21,500 from Afghanistan, having spent an estimated £3 billion – 25 per cent of the ODA budget – on hosting UK-based refugees in 2022.
The FCDO, whose ODA spending is capped at 0.5 per ccent of GNI, paused non-essential aid spending from July to November 2022. The UK is now facing significant problems in managing a budget which is capped and now overloaded to 0.55 per cent.
The UK government has the opportunity to explore alternative funding mechanisms which can both improve the efficiency of their capped spend, and explore new sources of funding in order to bridge gaps. These include impact/outcome finance, public-private partnerships, asset recovery, and front-loading finance.
In the case of Ukraine, this will not only address the multi-million-pounds cost of reconstructing the country’s infrastructure, but also alleviate pressures on other programmes funded by the ODA budget.
The UK’s support helps to tackle some of the foremost crises such as food insecurity, climate change, displacement of populations, and cyclical conflict.
An agile, efficient and well-managed aid budget, supported by private investment and finance is key to unlocking the inherent challenges facing conventional aid spending, and to ensure we can continue to help fund Ukraine to rebuild sustainably into the future.
Calum and HALO will be holding a discussion on this topic at the Radix Big Tent London Summit on 29 November.