Politics, policies and pounds: development in 2022

It was another big year for the UK development sector, once again dominated by political instability, economic decline and decisions around development based more on politics than policy with significant impacts on UK aid and development in practice.

Here I’ll take a look at the politics, policies and the pounds sterling (or lack of them) that have dominated the year, before looking at what we might expect in 2023.

The politics

The political instability in the Conservative government dominated most of 2022. Alongside multiple prime ministers this year, we now have the 5th foreign secretary (FS) in four years. This has meant continued instability within the Foreign, Commonwealth and Development Office (FCDO) with new leaders coming in and trying to stamp their authority on the department, and periods of instability leading to a lack of ability to make decisions.

We started the year with Liz Truss as FS, who then went on to be Prime Minister, albeit briefly, with James Cleverly, formerly a junior Minister in the FCDO, appointed as FS in September 2022. There was some relief among FCDO staff that Cleverly, who is diplomatic and appears well liked at the department, represents some continuity in a period of substantial uncertainty.

Bond has been consistently advocating since the merger that created the FCDO for a minister of state for international development role attending cabinet. This has now happened, and the appointment of Andrew Mitchell, a supporter of aid and the leader of the Tory rebellion on cuts to the aid budget, following Rishi Sunak’s appointment as prime minister, is an important step.

In terms of strategic direction, Cleverley’s December “keynote” speech, despite its billing, revealed little about priorities. It focused on the need for “patient diplomacy”, the need to counter China, and the need to build relationships with increasingly influential countries (largely middle-income countries). There was little on development or on support for lower income countries. Most noticeable were the things he did not say: no more “Global Britain”, the buzzword under Johnson, and no more “Network of Liberty”, which Truss introduced in her tenure as FS. In that sense the speech represented ‘more of the same’ with a continuation of previous shifts towards an increased focus on middle-income countries, at the expense of lower-income countries, a trend that can also be seen in how Official Development Assistance (ODA) is being spent.

In contrast, shadow foreign secretary David Lammy set out a set of six priorities for Labour and some detail on their approach at a Christian Aid hosted event in November. These included the UK as leading global convenors; leveraging its soft power; a ‘moral and strategic’ approach to ODA; a new development model; a feminist foreign policy; and bringing together of climate and development, with legislation to require ODA to prioritise climate change. He also welcomed input from the sector on what the ‘new model’ would look like in practice, and Bond is following up on this. There was welcome talk of justice not charity, dignity not dependence, equality and new approaches to development. However, on ODA quantity the answer was to parrot the government’s line on “returning to 0.7% when the fiscal situation allows”.

We finish this year with an increasingly confident Labour party with some clear directions of travel around development and foreign policy outlined, relative stability in the political leadership at the FCDO, and much improved engagement between civil society and civil servants at both senior and working levels. However, the few months of relative stability in leadership at the FCDO has been undermined by continued hollowing out of the aid budget…

The pounds sterling

In November, the foreign secretary published a written Ministerial Statement confirming and building on the chancellor’s Autumn Statement. We learnt that, for 2022, ODA is remaining “around” 0.5% and that the government is allocating an additional £1bn this year for costs of hosting refugees here in the UK.

Whilst this addition is welcome, it is insufficient, with estimates of the Home Office costs around £3 billion and rising. This leaves a stated £7.6bn for the Foreign, Commonwealth & Development Office’s ODA spend in 2022. What that means in practice is another round of aid cuts (round three). Andrew Mitchell has talked of “fierce and draconian” cuts of around 30%, and Bond members are now reporting being forced to close or scale back at short notice programmes funded by UK aid globally including in the Middle East and East Africa. With the previous aid cuts already having been made, there is no fat to trim and programmes closed means lives lost.

Whilst the UK does face economic challenges, these are political choices. There has been a deliberate approach of piling as much as possible of other government departments’ spending under the ODA budget: spare vaccines, climate cash, historic debt payments, UK hotel bills for refugees. Whilst this is allowable under the DAC rules, many other donors are not taking this out of the ODA pot. Of course the result of doing that is that more cuts have to be found from lifesaving programmes overseas. Indeed, Mitchell did not dispute the chair of the IDC’s assertion that the FCDO might be left with just 25% of the ODA budget due to spiralling Home Office costs. More detail on the slicing and dicing of the ODA budget and the DAC rules in this excellent blog.

The policies

Alongside the priority setting of each of the incoming foreign secretaries during the year, the main event in terms of UK policy on aid and development was the publication in May of the long-awaited International Development Strategy (IDS).

Less of a strategy than an outline of a long-term vision for a whole-of-government approach to development, the IDS contained little in terms of detail or financial commitments. With a thread reflecting the current geopolitical situation, and the need to “counter China” it focuses more on leveraging development assistance to strengthen bilateral partnerships and global alliances, and supporting states to become resilient against the “threat of malign influence and aggression”.

Whilst it contained a welcome commitment to spend the majority of ODA in low-income countries and continued support for the commitment to spend 0.2% of GNI on the “Least Developed Countries”, it is evident from the statistics that this is not happening. Indeed, poverty alleviation, which should be at the heart of a development strategy, is largely absent, getting just a couple of references compared with trade’s 27.

The IDS confirmed the government sees development assistance as a tool to achieve foreign policy objectives, with a greater focus on promoting British interests and a theoretical “trickle-down” approach to development. The slimmed-down set of strategic priorities were: British investment partnerships, humanitarian response, women and girls, health and climate. It’s notable that it took a lot of work privately and publicly by Bond and allies to ensure several of those priorities made it into the final version.

Some of its more positive elements included commitments to local ownership, self-determination and working with civil society, a welcome recommitment to the Sustainable Development Goals (SDGs), as well as the recognition that development is a long-term endeavour.

You can read our full analysis of the IDS here.

What will 2023 hold?

With relative stability at the top of the FCDO, and no signs of any major changes from the priorities set out in the IDS, the real challenge next year, once again, will be around how much money is actually available as ODA (quantity) and how it is spent (quality).

ODA quantity

The Home Office has swallowed up a huge chunk of the ODA budget this year, and that looks set to continue in 2023, though under the current rules this is only allowable for the first year of a refugee’s stay in the UK.

With the overall ODA envelope shrinking, Home Office costs mounting, and a political direction of travel to focus more on middle-income countries, it does raise questions about how much of the development budget will actually go towards its stated goal under the International Development Act of reducing poverty in countries outside the UK. In 2021, the amount of bilateral ODA going to “least developed countries” was cut by 40%, down to a total of £1.4bn. That is just 12% of the total ODA budget of £11.4bn. For me, that raises serious moral questions about how the government’s overall approach to development.

ODA quality

Given the cuts in ODA, the quality of spending for what’s left of the budget is even more critical. Humanitarian needs are rising globally, and according to the IRC, just 20 countries have 90% of the humanitarian need. Of all these countries in dire need, only Ukraine got a mention in the FS’s recent speech. It will be critical for the sector, and for parliament, to keep up the scrutiny of the government’s approach, and of its spending, to ensure it has an impact on poverty alleviation, that it’s good quality and brings value for money for the UK taxpayer.

ODA transparency

One potential area of positive change is in the transparency of ODA. The FCDO scored noticeably worse than its predecessor in assessments in this area, and transparency was notably absent from the IDS. However, new minister Andrew Mitchell does appear to be serious on improving transparency of ODA spend and has made it one of his priorities, which is welcome.

New models of “development”

We hope to see some serious discussions about approaches to aid and development fit for the 2020s next year. Bond’s Future Dialogues process will be synthesizing some of the great ideas out there on new ways forward, and discussing these with a range of stakeholders over the course of the year.

There is welcome momentum around the “Bridgetown Agenda” and the reform of the multilateral institutions. We hope to see the UK play a progressive role in that. Bond is looking to drive change on decolonising approaches to aid and development in the sector and with policy makers. Bond will also be engaging with UK political parties as they start to develop their approaches to aid and development for their manifestos ahead of the general election in 2024.