UK Humanitarian Aid: How Cuts in Funding to Foreign Aid Affect Businesses

In 2020, the UK government spent 14.4 billion pounds ($20 billion) on overseas aid.

However, a recent decision to cut this amount by four billion pounds has sent shockwaves around the world. International organisations have condemned the decision, saying it will lead to many deaths, disability, and hunger.

The decision was especially devastating coming so soon after the COVID-19 pandemic, which left poor countries struggling even more.

The announcement will also have an impact in the UK. Many businesses involved in humanitarian aid contracts may be worried they will find themselves without work or need to adjust to different types of projects.

Keep reading to learn more about humanitarian aid spending in the UK and what is likely to change.

The history of UK humanitarian aid

There have always been wars, natural disasters, hunger, and poverty. However, there has not always been the level of foreign assistance we see today.

Societies have organised themselves in a certain way to provide assistance based on concepts like Christian charity or a desire not to see your fellow man suffering. However, the modern idea of humanitarian aid only really emerged after World War II and the creation of the United Nations.

Thousands of NGOs sprung up to channel money from more developed countries to those seen as third-world countries needing development and assistance.

One of the central organising principles of foreign aid emerged in the 1960s and 70s. The United Nations adopted a target which would see countries donate 0.7 per cent of their gross national income for humanitarian aid.

The United Kingdom reached this target in 2013. However, many countries never did, and the United States refused to stick to a specific target.

The UK has typically spent more than half of its foreign aid in Africa, where it has numerous former colonies.

In 2020, the top recipients of humanitarian aid from the UK were:

  • Ethiopia
  • Nigeria
  • Somalia

Pakistan, Afghanistan, Yemen, and Syria have also been major recipients of UK government assistance.

Also, in 2020, the UK spent 1.66 billion pounds on overseas assistance with the COVID-19 pandemic.

How does the UK spend humanitarian aid?

Much of the UK’s foreign aid is spent on emergencies, alleviating suffering, and health. The latter includes medical research, controlling infectious diseases, and family planning.

The government also spends money on education, supporting the free press, peacebuilding operations, and preventing conflict.

Some of the cuts to organisations are drastic and will have a dire impact on a developing world already facing hunger due to the war in Ukraine and the financial blow from the COVID-19 pandemic.

For example, Yemen has seen its aid drop by 63 per cent, and Somalia has seen a 41 per cent cut in aid.

Both countries are already far from the top of the global priority list after years of drawn-out conflict and instability that has led to deep suffering and donor fatigue.

Both are also hit by food shortages and are at risk of famine because of the Ukraine war, which has cut global wheat supplies.

While the UK is decreasing its humanitarian spending, it is boosting the money it spends on its defence budget.

How does the UK compare to other donors?

The UK was among only seven countries to hit the 0.7 per cent target for humanitarian aid. It was typically one of the top three most generous countries in the world for humanitarian aid.

The decision by such a major donor to cut aid is a major blow to the developing world. Here are the top five donors:

  1. United States ($32 billion)
  2. Germany (27.3 billion euros)
  3. UK (14.4 billion pounds)
  4. France ($19.2 billion)
  5. Japan ($17.6 billion)

The latest cut will put the UK much lower on this global list of leading donors.

What is the new UK government strategy?

After announcing the budget cuts that are expected to last until 2024, the UK government spent only 11 billion pounds on foreign aid in 2021. The final figures for 2022 are not available yet.

new strategy released in June outlines the aid priorities from now on.

This includes reliable investments in businesses, trade, and jobs in partner countries.

There will also be a focus on empowering girls and women. Government spending on this sector will be restored this year and in 2023 to 745 million pounds. This money will go towards ensuring that girls and women get a quality education and support for their sexual health. It will also tackle violence against women.

Humanitarian assistance will focus on the greatest crises, such as Ukraine, Syria, Afghanistan, and Yemen.

The UK has also committed to spending 11.6 billion to mitigate the impact of climate change and on health aid.

Instead of sending foreign aid to organisations like the United Nations, the UK will focus on individual projects and countries it considers a humanitarian priority.

How will businesses be affected?

Any change in UK government strategy is stressful for businesses that work on humanitarian aid tenders. While changes are taking place, the new strategy will lead to new business opportunities in the sector.

There will likely be an increase in available tenders in the education and emergency aid sectors. The UK government will continue to need language and interpretation services, consultancy, and other support services.

Adjusting to the new humanitarian aid strategy

While shifts are taking place in the UK foreign aid sector, the government is still spending more than 10 billion pounds a year. This means that there will continue to be opportunities for humanitarian aid tenders.

Our expert team will guide you through the process of bidding for a UK government tender and stay on top of market trends.

Book a demo with DCI to see how we can help you find humanitarian aid contracts.


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