Spending foreign aid budget on refugees in UK is ‘wreaking havoc’, says watchdog

The UK Government’s Use of Overseas Aid Budget for Supporting Refugees in Britain

The UK government’s decision to use the overseas aid budget to pay for supporting refugees in Britain is “wreaking havoc” with the Foreign, Commonwealth and Development Office’s development partnerships, according to an official government watchdog. The Independent Commission for Aid Impact (ICAI) stated that £4.3bn was diverted to support refugees in 2023, which accounted for 27.9% of the total UK aid budget.

Increased Spending on Refugee Support

Official statistics reveal that there was a £600m increase in spending on supporting the first-year housing and food costs of refugees in Britain. The ICAI criticized the system of allocating housing costs of UK asylum seekers to the budget designated for poverty alleviation abroad, stating that it creates “perverse incentives” and places the financial burden on the FCDO due to the Home Office’s overspending.

The report by ICAI states, “We find that donor refugee costs, far from reducing, have actually increased. Value for money risks have not been reduced, given that the same number of asylum seekers are accommodated in hotels as of 31 December 2023 (45,768 people) as there were on 31 December 2022 (45,775), at extremely high costs to the UK taxpayer, much of which is covered by the official development assistance (ODA) budget.”

Maximalist Approach and Impact on ODA Concept

The government’s “maximalist approach” to refugee support was criticized by ICAI for deviating from the practices of other major donors. This approach was deemed to undermine the integrity of the ODA concept, which aims to support development and reduce poverty in developing countries.

Rising Costs and Allocation of Aid Budget

The report highlighted that the Home Office’s spending on hotel costs for asylum seekers reached £8.2m per day, all drawn from the aid budget, despite a 25% decrease in the number of hotels used. The FCDO was the largest spender of UK ODA, allocating £9.47bn, while the Home Office spent £2.96bn of ODA.

In 2022, the Treasury provided an additional £2.5bn over two years to help subsidize the rise in refugee costs impacting the aid budget. However, this funding does not cover the full cost of housing and feeding domestic refugees.

Increasing Domestic Spending and Impact on Aid Allocation

Aid analysts noted that the spending on refugees is part of a broader trend where UK aid is increasingly being spent within the country rather than on locally led projects in recipient countries. Ian Mitchell from the Centre for Global Development in Europe stated that the government is now spending over 50% of the £9.9bn bilateral aid budget within the UK, with domestic spending steadily increasing over the past decade.

ICAI also highlighted the uncertain status of 55,000 asylum seekers who arrived after 20 July 2023 through irregular routes and after the passage of the Illegal Migration Act. Once the act is implemented, the first-year housing costs for these asylum seekers will not be eligible for ODA funding as they are not considered refugees or asylum seekers under British law.

Conclusion

The UK government defended its actions, stating that it spent over £15bn on development in 2023, including humanitarian aid in various crisis-stricken regions. However, concerns remain regarding the allocation of the aid budget and the impact on achieving sustainable development goals.

SDGs, Targets, and Indicators Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 1: No Poverty
• SDG 10: Reduced Inequalities
• SDG 16: Peace, Justice, and Strong Institutions
• SDG 17: Partnerships for the Goals

The article discusses the diversion of the UK overseas aid budget to support refugees in Britain, which is connected to the goals of reducing poverty (SDG 1) and reducing inequalities (SDG 10). It also mentions the impact on development partnerships and the need for strong institutions (SDG 16) and partnerships (SDG 17) to address the issue effectively.

2. What specific targets under those SDGs can be identified based on the article’s content?

• Target 1.2: By 2030, reduce at least by half the proportion of men, women, and children of all ages living in poverty in all its dimensions according to national definitions.
• Target 10.7: Facilitate orderly, safe, regular, and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies.
• Target 16.6: Develop effective, accountable, and transparent institutions at all levels.
• Target 17.3: Mobilize additional financial resources for developing countries from multiple sources.

The article highlights the need to address poverty (Target 1.2) and ensure safe migration and mobility (Target 10.7). It also emphasizes the importance of effective institutions (Target 16.6) and the mobilization of financial resources (Target 17.3) to support development efforts.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator 1.2.1: Proportion of population living below the national poverty line, by sex and age group.
• Indicator 10.7.1: Recruitment cost borne by employee as a proportion of yearly income earned in country of destination.
• Indicator 16.6.2: Proportion of population satisfied with their last experience of public services.
• Indicator 17.3.1: Foreign direct investment (FDI), official development assistance (ODA), and other financial flows.

The article does not explicitly mention indicators, but based on the identified targets, these indicators can be used to measure progress towards reducing poverty, ensuring safe migration, improving public services, and mobilizing financial resources.

SDGs, Targets, and Indicators Table

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Source: theguardian.com

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