UK Aid Target Slips as Inflation Lifts National Income

The Center for Global Development said on Monday that the UK will miss its own 2027 target for aid spending as a share of national income, with the central forecast in the Treasury's comparison of independent experts putting the gap at £410m. Under that scenario, aid would reach 0.29% of national income rather than the 0.3% goal.

A shortfall of £580m, or 0.28% of national income, remains a plausible outcome, the researchers said. They put the narrowest projected gap at £250m. Ian Mitchell, a senior fellow at the Center for Global Development and co-director of its Europe programme, called these "material shortfalls in the spending power of UK aid". He said that closing even a £400m gap would halve planned cuts to Africa.

The center attributed the divergence to two factors. Inflation ran higher than expected, which enlarges national income relative to the figures used at the spending review. A 2025 policy change affecting the budget of the Foreign, Commonwealth and Development Office also contributed. Researchers urged ministers to add money for aid in this week's budget.

The 0.3% target for 2027 falls short of the 0.7% commitment in Labour's election manifesto. Keir Starmer lowered the figure to redirect money toward defence. Fleur Anderson, a former minister on the foreign affairs select committee, said she wants to see higher aid spending in the budget. "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," she said.

Anderson said the gap "isn't an abstract accounting issue", citing communities without clean water, girls leaving school, undelivered vaccines and cuts to peace programmes in war zones. Figures the FCDO released in September showed funding to least-developed and low-income countries fell 6.7%, or £118m. Britain's overall official development assistance budget declined to 0.44% of gross national income in 2025 from 0.5% in 2024, a drop of £987m.

An FCDO spokesperson said the multi-year allocations published in March 2026 set out spending plans and priorities for the next three financial years, 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.

The Conservatives and Reform UK have pledged to cut aid from about £9bn a year to £1bn. That level would leave the UK unable to cover existing contributions to the UN and World Bank.