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Tuesday, 29 March 2016

UK aid braced for $1 billion shortfall

The United Kingdom’s economy is not growing as quickly as previously thought, U.K. Chancellor of the Exchequer George Osborne revealed Wednesday. Original estimates by the Office for Budget Responsibility in November projected an average of 0.6 percent growth in gross domestic product over the next four years, now halved to 0.3 percent. As a result, the country’s aid budget, estimated in November at $23.4 billion for 2019-2020, will be about 650 million pounds ($932 million) less than expected. Unveiling his latest budget, Osborne told members of Parliament: “I am proud to be part of the government that was the first to honor Britain’s commitment to spend 0.7 percent of national income on development. We won’t spend more than that, so the budget will be readjusted saving 650 million pounds in 2019-2020.” The U.K. is the only country in the Group of Seven to commit to the United Nations 40-year target of committing 0.7 percent of gross national income to international development. “This is just a pitfall of having an aid budget tied to GNI,” said Amy Dodd, head of the U.K. Aid Network. “It’s subject to the estimates by the OBR and changes with the economy.” A U.K. Department for International Development spokesperson told Devex it is not yet known which part of the aid budget will be cut, or indeed whether the cuts will come from DfID or one of the other government departments that now allocate aid, following the U.K.’s new cross-government aid strategy in November 2015.

Source: Devex