In February 2025, Sir Keir Starmer, former Prime Minister of the United Kingdom (U.K), announced reductions to Britain’s foreign aid budget, which will decrease from 0.5% of gross national income (GNI) to 0.3%. These cuts to U.K. foreign aid will fund defense spending, with the aim of increasing the government’s budget from 2.5% of gross domestic product (GDP) to 3% by the next parliament. This development represents a further drop from the U.K.’s self-imposed commitment to spend 0.7% of GNI on foreign aid. Previous reductions have already affected the U.K.’s aid response to international crises; the Independent Commission for Aid Impact found that British relief for the 2022 floods in Pakistan and the rising drought in the Horn of Africa was smaller and came later than for similar crises in previous years.

In real terms, these cuts to U.K. foreign aid mean that the budget, projected to be approximately £15.4 billion in 2027, will instead reduce to £9.2 billion. Anneliese Dodds, the international development minister, resigned following the announcement, saying a reduction in aid spending would mean less support for vulnerable groups in Africa and the Caribbean and would affect the U.K.’s international reputation.

In March 2026, a year after Starmer’s announcement, the Foreign, Commonwealth and Development Office (FCDO) published its spending plan for the Official Development Assistance (ODA) budget, clarifying the potential impact of the cuts on poverty reduction programs.

Multilateral Programs

One immediate impact of the cuts will be a decrease in funds allocated for multilateral programs, such as the World Bank and Education Cannot Wait, which implement support and relief on a global scale. While the government has pledged to maintain contributions to those specific organizations, other grants are set to fall or cease altogether. On average, multilateral programs will see reductions of around 22%, and affected institutions will include global health organizations, humanitarian groups and United Nations development agencies.

Groups working to treat deadly diseases and provide lifesaving health care to impoverished communities will be affected by these cuts. Previous support to Gavi, the Vaccine Alliance, contributed to the immunization of more than 1.2 billion children worldwide, preventing an estimated 20.6 million deaths. British foreign aid also helped the Global Fund achieve a 63% reduction in the death rate of AIDS, tuberculosis and malaria. The U.K. has confirmed that future contributions to both organizations will be cut. Meanwhile, assistance to the Global Polio Eradication Initiative, whose work has helped bring about a 99.9% decrease in polio occurrence worldwide, will cease altogether, with the U.K. saying it would continue to support the cause through other programs.

Bilateral Programs

Direct U.K. aid efforts will also be affected by cuts to bilateral programs, which will see an overall 37% reduction in allocation. The reduction will be especially pronounced in Africa, with British funding set to fall from £818 million to £688 million. What this will mean for specific nations is less clear, as the government has not yet announced its country-by-country allocations, but preliminary assessments indicate that Sierra Leone and Malawi will cease to receive health care support and that social programs in Ethiopia, Mozambique, Rwanda, Tanzania and Zambia will shrink. These seven countries alone are home to more than 15% of the global population living in extreme poverty.

When the question arose in the House of Commons, Baroness Jennifer Chapman, the minister of state for international development and Africa, said support for conflict-affected areas such as Ukraine and Sudan would remain level, while funding for fragile states would be reallocated from 54% to 71%. It remains unclear how these figures will manifest in real terms or what the implications will be for bilateral programs in developing nations not considered fragile or conflict-affected states. Access to health care, education and welfare for vulnerable people in these countries could be affected, though the scale of that impact is not yet known.

Private Finance

To offset the impact of the cuts, Foreign Secretary Yvette Cooper said she intends to work with the private sector to secure needed investment. She proposed restructuring the ODA budget to prioritize initiatives that support “financial leverage and private capital mobilization.”

However, research from groups such as the International Development Committee has identified drawbacks to relying on private finance for poverty reduction. While such initiatives can potentially facilitate employment creation and economic growth, they can also be poorly targeted, concentrating in regions and sectors prioritized by investors rather than the poorest places or most marginalized groups that need the greatest assistance.

Looking Ahead

The government has stated that the foreign aid budget will be restored to 0.7% when fiscal circumstances allow, though a strategy to achieve this target has yet to be announced. At the Global Partnerships Conference held in London in May, there was little discussion of how the U.K. foreign aid cuts might be reversed beyond relying on private finance. Estimates by the National Institute of Economic and Social Research indicate that the U.K. could lose more financially from reduced exports than it would gain in savings from lower aid spending.

The full impact of the cuts on poverty reduction will become clearer once the government announces its country-specific allocations

– Aled Warren

Aled is based in London, UK and focuses on Good News and Politics for The Borgen Project.

Photo: Flickr