UK Aid Budget Drops by £987 Million, Poorest Countries Hit Hardest

The United Kingdom's Official Development Assistance (ODA) budget is set to decrease to 0.44% of gross national income in 2025, down from 0.5% in 2024. This reduction represents a total cut of £987 million, with funding specifically for least-developed and low-income countries declining by 6.7%, or £118 million.

While the poorest nations face reduced funding, allocations to lower-middle-income countries are set to rise by 13%, and those to upper-middle-income countries by 2%. Domestic spending on asylum seeker support remains the largest single category of aid expenditure, accounting for 18.4% of the total budget, according to figures from the Foreign, Commonwealth and Development Office.

Aid Shifts and Humanitarian Impact

These adjustments align with a broader government policy

These strategic shifts in aid priorities indicate further reductions for high-need regions. Projected cuts include a 28% decrease for Yemen and a 39% decrease for Afghanistan by the 2028/29 fiscal year. These adjustments align with a broader government policy to redirect financial resources towards domestic defense spending, as previously outlined by Prime Minister Keir Starmer.

The contraction of the aid budget has already led to a significant reduction in the reach of humanitarian programs. Data from a report by the Active Learning Network for Accountability and Performance (Alnap) revealed that 64 million fewer individuals received assistance globally last year due to these cuts.

This reduction creates risks for regional stability, particularly in climate-vulnerable and conflict-affected areas, where local systems may lack the capacity to absorb the loss of external support.

Outlook for International Development

Aid experts caution that these cuts, alongside similar reductions from other donor nations like the United States and Europe, are forcing aid workers to prioritize only immediate life-saving support. This situation risks millions of avoidable deaths and could contribute to the largest funding gap on record across the humanitarian system.

The longer-term consequences will depend on future decisions by donor governments and how crisis-affected governments and local support systems adapt to reduced external assistance. The charity network Bond has urged the new Prime Minister, Andy Burnham, to reconsider the cuts, emphasizing that remaining aid should target the reduction of poverty and inequality in fragile and conflict-affected countries.