US aid, the UK, and funding for multilateral aid bodies in 2025

On taking office in January 2025, President Donald Trump announced a pause in most US foreign aid spending, pending reviews of its alignment with US foreign policy goals. He also announced that the US would withdraw from the World Health Organization (WHO) and Paris Agreement on Climate Change and that it would review its contributions to all multilateral organisations and banks (international organisations which organise programmes and deliver aid and funding with money donated by multiple states and donors).

This research briefing covers the foreign assistance intended to promote the economic development and welfare of developing countries, known as official development assistance (ODA). It focuses on multilateral institutions, the global funding landscape, and the UK Government response and commitments on aid from 2025.

How important a donor is the United States?

The US is the world’s largest aid donor, providing around 20% of all aid by the 32 members of the Organisation for Economic Co-operation and Development’s development assistance committee each year from 2018 to 2023. In 2023, it was the largest single donor in areas including population, reproductive health and family planning (providing 76% of all direct bilateral aid in those areas) and humanitarian aid (42%). Its contributions made up 16% of all countries’ contributions to UN agencies (the UK provided 9%).

What has the US administration announced?

In January 2025, the Trump administration announced a 90-day pause and review on all overseas aid spending, with some waivers for humanitarian assistance. The administration has also announced its intentions for most of the functions of the USAID agency (PDF), the primary government agency used to deliver overseas aid, to be assumed by the US State Department.

In March 2025, Secretary of State, Marco Rubio, said that 82% of all USAID programmes would be ended (around 5,200 of the 6,200 programmes). His department has previously said that USAID programmes to the value of US$54 billion would be ended and $4.4 billion of programmes from the US State Department. UN agencies have raised concerns for the continuity of their work, including on global health, as a result of the decisions.

The administration’s budget for fiscal year 2026, which remains subject to congressional approval, proposes reductions in US humanitarian and health assistance and an increase in funding to the US Development Finance Corporation (among other elements). US State and international programmes will be US$31 billion (PDF), down from the $60 billion enacted for 2025.

In February, a review of US membership and funding for multilateral organisations was launched, to last 180 days. The organisations subject to the review include UN agencies and multilateral development banks (MDBs). The US has said it is “eager” to continue to work with the International Monetary Fund and the World Bank, if they make sufficient reforms.

The administration has announced that the US will withdraw from the World Health Organization and Paris Agreement on Climate Change. These will take effect in January 2026. The US will not commit funds in 2025. The US will also not fund the UN Relief and Works Agency for Palestine Refugees (UNRWA). President Trump says he may rejoin the WHO but “they would have to clean it up”. The WHO says it is willing to discuss reforms, including on who funds it.

How has the UK responded?

The UK Government says decisions on US aid policy are a matter for the United States and it is assessing the potential impact of the pause on UK programmes and objectives. It says that countries must work collectively to meet the sustainable development goals, such as reducing poverty.

For 2024/25, the government has announced a cash rise in overseas aid spending, particularly for UK aid to Africa and the Middle East. In 2024, the UK announced aid for the WHO and World Bank for their future work.

In February 2025, the government said it would reduce aid spending to 0.3% of gross national income from 2027, with savings used to fund defence. Aid will fall to an estimated £9.2 billion (down from £14.1 billion in 2024). The government cites climate change and global health as priority areas. Further decisions on funding will be made as the UK spending review progresses.

In her resignation letter following the announcement, International Development Minister Anneliese Dodds said that reduced aid would “likely” lead to UK withdrawal from some regional banks, reduced commitments to the World Bank, and less UK influence at climate negotiations and international forums.

The Commons Library briefing, UK aid: Reducing spending to 0.3% of GNI by 2027/28, April 2025, has more on decisions made by the UK from 2025.

What is the outlook for international aid?

The Center for Global Development has described a “traffic jam” in funding replenishments for multilateral agencies in 2024 and 2025, in which they are competing for a finite level of donor funding. Several major donors are expected to their reduce aid budgets in 2025, including the UK.

Data from the Organisation for Economic Cooperation and Development (OECD) shows that aid spending by major aid donors fell 7% in 2024 from the previous year, the first fall in six years. This included falls in humanitarian aid and aid to Ukraine.

Analysts note US and UK decisions, decreased donor funding, and potential withdrawal of support for multilateral institutions may increase demand for:

• new or more donor countries or private providers to commit aid
• reforms to the international financial architecture (such as the World Bank or debt relief) to assist low-income countries fund development
• a refocus of aid onto poverty reduction

In the UK, both Conservative and Labour governments have in the past said more needs to be done to help low-income countries raise their own funds for development and address climate change.

The G20 has also committed to reform multilateral development banks to increase their lending to low-income states. In 2024, the Climate Conference, COP 29, also called on a wider range of countries to provide climate finance to support lower-income countries respond to climate change. The WHO has an ongoing reform programme, as does the World Bank, International Monetary Fund, and UNRWA. The UK Government last published an evaluation of all multilateral agencies it provided funding to in 2016.