The Government took the difficult decision to reduce temporarily the official development assistance (ODA) budget from 0.7% of gross national income (GNI) to 0.5% from 2021, because of the impact of the covid-19 pandemic on the economy and public finances. The Government will return to 0.7% when the fiscal situation allows.
The International Development (Official Development Assistance Target) Act 2015 envisages situations in which a departure from meeting the target of spending 0.7% of GNI on ODA may be necessary—for example, in response to “fiscal circumstances and, in particular, the likely impact of meeting the target on taxation, public spending and public borrowing”.
The FCDO’s annual report and accounts for 2022-23, published today, reports that the 0.7% target was not met in 2022, on a provisional basis. As required by section 2 of the 2015 Act, an Un-numbered Act Paper has been laid before Parliament, in the same terms as this statement.
In a written ministerial statement on 12 July 2021, my right hon. Friend the former Chancellor of the Exchequer confirmed that the decision to reduce the ODA budget is temporary and set out the conditions for returning to spending 0.7% of GNI on ODA. The principles for a return will be met when, on a sustainable basis, the Government are not borrowing for day-to-day spending and underlying debt is falling. The House of Commons voted to approve this approach to returning to 0.7% on 13 July 2021. My right hon. Friend the Foreign Secretary reaffirmed this in his 22 November 2022 written ministerial statement.
Each year the Government will review, in accordance with the 2015 Act, whether a return to spending 0.7% of GNI on ODA is possible against the latest fiscal forecast provided by the Office for Budget Responsibility. The most recent assessment, set out in HM Treasury’s autumn statement 2022, showed that the principles for a return to 0.7% had not been met.
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