Readers will be aware that the Foreign & Commonwealth Office and the Department for International Development were merged into a new Foreign, Commonwealth & Development Office in September. This was generally viewed with concern in the aid sector, as it was felt, broadly, that aid decisions might become more politicised.
Further decisions in the area of international aid are now causing concern for INGOs. By way of context, the UK has a long history of foreign aid; Stone King understands it has the biggest overseas aid budget of any of the G7 as a percentage of its income (0.7% of national income). However, at the end of November, in light of the current economic emergency following the pandemic, the Chancellor said that the commitment is going to be cut to 0.5%, going against its manifesto commitment. There was public condemnation from some Members of Parliament and senior minister Baroness Liz Sugg (the Parliamentary Under-Secretary of State for the Overseas Territories and Sustainable Development) also then quit in protest. She will need to be replaced without delay, but at the time of writing it is not clear who the appointment will be.
The area of international spending has been fraught for many years, with arguments for either side of the argument often stoked by the press. One would expect that the FCDO will retain all of its current spending commitments but it will need to make longer term strategic decisions to meet the reduction. We advise our clients who are funded by FCDO to familiarise themselves with their grant funding terms; it may be that they will need to refer to them in coming months. INGOs, like all charities, should also have contingency plans in case of reductions in grant funding, managed as part of the organisation’s risk register.