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Ukraine costs hit Whitehall aid budget

Former Aid Minister Andrew Mitchell to head the Development and Africa departments in London

The revelations that £4 billion (US$4.6bn) of Britain's £11bn development budget this year is likely to be spent within the country to house Ukrainian refugees, underscore the pressure that the war in eastern Europe has imposed on aid spending and wider cuts outlined by the Foreign, Commonwealth and Development Office (FCDO) in May.

In the FCDO's strategy paper, it included plans to cut £1.5bn of funding allocated to the World Bank but said Africa and the Indo-Pacific would be priorities for funding, with out detailing more specific allocations.

The rules on Official Development Assistance (ODA) drawn up by the Development Assistance Committee (DAC) at the Organisation for Economic Cooperation and Development (OECD), allow donor states to count the costs of housing refugees and asylum seekers as aid, and have been used by donor countries to cover many of the costs incurred by housing Ukrainian's fleeing the Russian invasion since February (AC Vol 59 No 8, Cooking the books).

Civil society groups have estimated that in-country refugee costs alone could exceed $48.7bn in 2022, equivalent to around 28% of total ODA spent in 2021. Few countries have followed Britain's path of deducting all the costs of Ukrainian refugees from its existing aid budget.

Britain's Prime Minister Rishi Sunak, who as Chancellor cut the development budget from 0.7% of gross national income (GNI) to 0.5%, plans a two-year freeze on aid spending as his government seeks multi-billion pound spending cuts across the board (Dispatches, 13/7/21, Multi-party rebellion against Johnson government's aid cuts). Sunak is unlikely to allow the 0.5% target of GNI to be raised until after 2024; cutting the target from 0.7% to 0.5% of GNI saves the government about £5bn a year.

In real terms, Britain's spending is now lower than it was in 1997, when Labour Prime Minister Tony Blair's government reinstated the Department for International Development (DFID), separate from the Foreign & Commonwealth Office. In 2020, under Prime Minister Boris Johnson, the two entities were merged again into the FCDO and many senior DFID officials left.

One of the leading Conservative MPs to rebel against the aid cut and campaign for the 0.7% target to be reinstated, former International Development Secretary Andrew Mitchell, has returned as the combined Development minister and Africa minister in Sunak's government. Mitchell, who was regarded by much of the development policy community as the most able Conservative minister to handle the portfolio, has been a strong advocate for higher spending.

Mitchell, who since March 2020 has been advising Southbridge, a pan-African Investment and Advisory company with offices in Abidjan, Kigali and Paris for an annual fee of £39,600 (according to his parliamentary filings), is a veteran cheerleader for the Paul Kagame-led Rwandan government which took over after the 1994 genocide

This year, Britain and Rwanda finalised an agreement worth over £100 million to President Kagame's government to host people whose asylum requests in Britain have been rejected (AC Vol 63 No 9, Refugee deal faces delays as legal and political challenges grow). That agreement is now subject to judicial review. The British government insists that none of the asylum seekers sent to Rwanda will be people fleeing from Moscow's war on Ukraine.

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