Britain spent over 50% of bilateral aid budget on domestic hosting costs - preliminary 2023 data

By Sam Ursu

Britain spent over 50% of bilateral aid budget on domestic hosting costs - preliminary 2023 data

The British government has just released the provisional figures for its development aid spend for 2023. According to the published statistics, 54% of Britain’s bilateral aid budget in 2023 was spent not on helping people overseas but on hosting asylum seekers and refugees. Following in 2022’s footsteps, when 48% of the development budget was spent on in-house hosting costs, Britain spent a whopping £4.3 billion on domestic hosting costs.

According to the government watchdog agency, the Independent Commission for Aid Impact (ICAI), spending so much of its “overseas” aid budget to pay for domestic hosting costs is “wreaking havoc” with the government’s international development partnerships.

“We find that the costs of hosting refugees, far from being reduced [from 2022 levels], have actually increased. Value for money risks have also not been reduced, given that just as many people were being hosted in hotels at government expense at the end of 2023 as there were in 2022, all at an extremely high price to the UK taxpayer,” said ICAI in its report.

“Furthermore, this money is not being spent in line with UK international development strategies. As a result, such an approach completely undermines the integrity of the ODA (Official Development Assistance) concept, which is supposed to be about reducing poverty in developing countries,” the ICAI report concluded.

Currently, the FCDO spent £8,2 million per day on hostel costs for asylum seekers and refugees, all of which came from the “overseas” aid budget. In addition to this, the Treasury also provided an extra £2.5 billion to help subsidize the rise in refugee hosting costs for 2022 and 2023.

According to the ICAI, Britain is now following a “maximalist approach” in which anything that can conceivably be reported as ODA is being done so, an approach that no other major donor country is following. Officially, Britain spent £15.4 billion on ODA in 2023, which represents approximately 0.58% of the Gross National Income (GNI), a slight rise over 2022 (0.51% of GNI) but still far below Britain’s pre-pandemic benchmark of 0.7%.

“It beggars belief that the government is using its overseas aid budget to bail out their failing asylum system,” said Labour’s shadow international development minister, Lisa Nandy. “This is no way to run either the development budget or the Home Office.”

“We do not believe that UK ODA is being spent in the spirit of the OECD rules,” said International Development Committee chairwoman Sarah Champion, adding that such vast amounts being spent on hosting refugees domestically was “deeply worrying.”

UK 2023 ODA spend by the numbers

According to the preliminary statistics released by the government, 61.6% of the government’s ODA spend in 2023 was managed through the FCDO while 36.3% were spent via other government departments, with “other” channels accounting for the remaining 2.1%. This is a slight increase over 2022 when the FCDO accounted for 59.7% of the government’s ODA spend.

Source: Statistics on International Development: provisional UK aid spend 2023

Britain’s ODA is divided between bilateral aid spend and multilateral aid spend, with 64.1% of 2023’s ODA budget being spent on bilateral aid and 35.9% delivered via multilateral channels. This is sharply divergent from 2022 when 75.4% was spent on bilateral contributions and 24.6% delivered via multilateral channels.

Source: Statistics on International Development: provisional UK aid spend 2023

In terms of regions, Africa received 52.4% of Britain’s bilateral ODA spending in 2023 (a decrease of 0.8% from 2022, followed by Asia at 30.8%, Europe at 12.3%, and the Americas at 4.4%.

Source: Statistics on International Development: provisional UK aid spend 2023

Other key statistics concerning Britain’s 2023 ODA spend:

  • The amount spent on in-donor refugee hosting costs increased by £607 from 2022.
  • Britain spent £888 million on humanitarian assistance, a 20% decrease from 2022.
  • Britain contributed £5.5 billion via multilateral channels.
  • Nearly every world region saw a reduction in bilateral aid delivered by Britain in 2023. Total ODA spend continues to be below the 0.7% GNI benchmark because the British government’s debt levels are still too high.

The finalized official figures will be published in September 2024 and may change from the above-reported provisional numbers.