Inflation drives £400m gap in UK aid target

The Center for Global Development (CGD) reports that the United Kingdom is on track to miss its 2027 international aid spending target by an estimated £400 million. The researchers calculated that current Treasury forecasts imply aid spending in 2027 will be £410 million lower than originally planned. This level of spending represents only 0.29% of national income, falling short of the 0.3% benchmark set by the government.

The CGD identified two primary drivers for the projected deficit. First, inflation has risen higher than anticipated, resulting in a larger national income than predicted during the 2025 spending review. Second, a policy change in 2025 affecting the budget of the Foreign, Commonwealth and Development Office (FCDO) contributed to the reduction. The organization describes a shortfall of £580 million, or 0.28% of national income, as a very plausible outcome. Even the most conservative forecast included in the analysis points to a gap of £250 million.

Ian Mitchell, a senior fellow at the CGD and co-director of its Europe programme, described the findings as material shortfalls in the spending power of UK aid. He noted that closing a gap of £400 million would be sufficient to halve the planned cuts to Africa. Mitchell argued that these cuts are likely to cost thousands of lives and constitute a de facto UK exit from the south and east of the continent.

The 0.3% target for 2027 is substantially lower than the 0.7% commitment made in Labour’s election manifesto. Prime Minister Keir Starmer lowered the target to free up funds for defence spending. The CGD urged ministers to add funds for international aid in this week’s budget to avoid the criticism associated with missing a publicly stated goal.

Fleur Anderson, a former minister and member of the foreign affairs select committee, stated she wants to see higher aid spending in the upcoming budget. She said, "I'd like to see this government going further and reversing these cuts altogether in time, but at the very least we should be hitting the reduced target that was set." Anderson added that falling short is not an abstract accounting issue, pointing to communities without clean water, girls leaving school, undelivered vaccines, and cuts to peace programmes in war zones.

Charities have repeatedly warned that deep aid cuts will damage children's education and raise the risk of disease and death in some African countries. Figures released by the FCDO in September showed that the cuts under Starmer's government hit the world's poorest nations hardest. Funding to the least-developed and low-income countries fell by 6.7%, or £118 million. The UK's overall official development assistance budget dropped to 0.44% of gross national income in 2025, down from 0.5% in 2024, a decrease of £987 million.

The government has prioritized funding through multilateral bodies such as the International Development Association, the World Bank's development arm, and Gavi. It has also maintained humanitarian support. The Conservatives and Reform UK have pledged to cut aid from approximately £9 billion a year to £1 billion, a level that would leave the UK unable to cover its existing contributions to the UN and World Bank.

An FCDO spokesperson stated that the multi-year aid allocations published in March 2026 set out spending plans and priorities for the next three financial years. The spokesperson explained that the plans are based on gross national income at the time of the 2025 spending review. "Moving to a fixed budget reduces volatility and provides the necessary stability to deliver high-impact aid programmes," the spokesperson said.