UK aid and the Overseas Territories

As the administrating power for ten inhabited Overseas Territories (UK OTs), the UK has a responsibility under the UN Charter to support their political, economic, and social development and self-government. This requirement is in place for all the OTs, regardless of their income level or eligibility for aid.

In its 2012 White Paper on the Territories, the UK committed that for those Territories where financial self-sufficiency is not possible, they would be the “first call” on the country’s aid budget. This is the case for Montserrat, Pitcairn, St Helena, and Tristan da Cunha.

Note this briefing paper expands on the discussion of UK and EU aid to Territories set out in the Commons Library briefing on Brexit and the Overseas Territories.

What programmes can the Territories access?

OTs are ineligible for funding from international bodies like the International Monetary Fund and World Bank. Much of their external funding therefore comes from the UK aid budget and legacy funds from the European Union.

Eligibility for funding streams Programme/funding Value to the Territories Eligibility of the 14 OTs

Darwin Plus (UK)

£3.8 million per annum (average, 2012-22)

14/14

Conflict, Stability and Security Fund (UK)

£62 million in 2020/21 (across all OTs)

14/14

Regular aid budget (UK)

£80 million in 2022/23 (for eligible OTs)

3/14: Monserrat, Pitcairn, St Helena and Tristan da Cunha (not Ascension)

European Development Fund (EU, to 2024)

£6.9 million per annum (average, 2014-24)

6/14: Anguilla, Montserrat, Pitcairn, St Helena, Ascension and Tristan da Cunha, Falklands, Turks and Caicos Islands

Biodiversity and Ecosystem services in Territories (EU, historic)

£1 million per year (between all UK OTs)

11/14: All but Pitcairn, Gibraltar, Ascension, and Sovereign Base Areas Cyprus

Source: Sections 3 and 4 of this Commons Library briefing paper

Which Territories are eligible for support from the aid budget?

In line with international aid rules set by the Development Assistance Committee of the Organisation for Economic Cooperation and Development (OECD), UK aid can only be spent in countries and Territories that are beneath a certain income threshold. In 2022 and 2023, this stands at a per capita (per person) income of up to US$12,695.

This means that only three Territories: Pitcairn, Montserrat and St Helena and Tristan da Cunha (but not Ascension, which has no permanent population) are eligible for funding from the UK aid budget.

The UK provides aid with the aim of working towards financial self-sufficiency in the case of Montserrat and St Helena, where the UK currently meets around 60% of their annual budget needs. It is up to 95% in the case of Pitcairn. The UK Government consults with local ministers and leaders on budget needs, and audits spending through the Foreign, Commonwealth and Development Office, UK-appointed Governors, and under Memoranda of Understanding.

Following hurricanes Irma and Maria in 2017, the UK also secured changes in OECD rules to allow it to provide assistance from its aid budget to non-aided Territories substantially affected by natural disasters and external shocks.

How does UK support compare?

St Helena and Tristan da Cunha and Montserrat receive levels of aid that are relatively high, but not unusually so, given their level of “national income." UK aid allocations to the eligible OTs are therefore fairly typical in terms of the total amounts received by other countries or territories with similar populations or levels of income.

Due to the low populations of the OTs, the level of aid they receive per person far outstrips any other UK aid recipient. In 2021, St Helena and Montserrat received about £6,000-£8,000 in aid per inhabitant (the equivalent figure for Pitcairn, with a population of 40, is probably above £100,000 per person).

Of allocations to European OTs in the most recent funding round for the European Development Fund, which runs until 2024, St Helena, Ascension and Tristan da Cunha received the third highest of all the allocations (€22 million), coming below French Polynesia (€30 million) and Saint-Pierre et Miquelon (€26million). The UK Government has not announced a replacement to EU funding though has committed to take account of financial shortfalls.