Overseas aid after the Autumn Statement

Published: 3rd Dec 2015

In brief

Claim

The UK is spending more on foreign aid than the Home Office.

Conclusion

This is likely to be the case within a few years, although exact comparisons are tricky. Last year the Home Office spent more than was devoted to overseas aid, but aid spending is due to increase a lot.

"The £16 billion aid budget that dwarfs our Home Office spending"

Daily Mail, 25 November 2015

"Now UK sends £16 BILLION overseas—more than ENTIRE Home Office budget"

Daily Express, 26 November 2015

It's certainly likely that aid spending will be higher than the Home Office budget in the years to come. The Autumn Statement, setting out the government's spending plans for the next few years, said that overseas development assistance (foreign aid) will be "£16.3 billion per year by 2020".

The same source says that the Home Office budget will be £11 billion in 2019/20. But these figures aren't the full story on spending, and it's hard to be certain about what the exact sums for either aid or the Home Office are going to be.

Comparing these different types of spending is surprisingly hard

This comparison of different Autumn Statement figures isn't exact. For one thing, the £16.3 billion for total aid spending by 2020 is more of a prediction than a plan.

Aid spending is based on a target: the government has committed to make the aid budget every year an amount equivalent to 0.7% of gross national income, a measure of the nation's wealth similar to the more familiar gross domestic product.

The Department for International Development (DfID) told us that the £16.3 billion figure would be based on a projection for what gross national income will be in 2020.

The economy is expected to grow, and spending on aid will likely grow with it.

That said, forecasts aren't always completely accurate. If the economy tanks, we might spend less on aid, while if it does well we could spend more.

There'll be more to Home Office spending than what's in the Autumn Statement

Making a direct comparison between aid spending and departmental spending is tricky for other reasons. The Home Office's £11 billion Departmental Expenditure Limit, or DEL, for 2019/20 is fair to describe as the 'budget', but it's not everything the Home Office will end up spending.

It will also have Annually Managed Expenditure, less predictable spending caused by demand for public services. Last year that was around £2 billion for the Home Office, on top of its Departmental Expenditure Limit.

The total spent by the Home Office was probably higher than aid spending last year. It's hard to be 100% sure: you could compare the £13.5 billion the Home Office spent last year with the figure for aid spending in 2014, provisionally estimated at £11.8 billion, but aid spending is calculated based on the calendar year (January to December) rather than the financial year (April to March) for departments.

All in all, aid spending might well be higher than Home Office spending at some point in the next few years, but it's difficult to put an exact figure on the gap.

The Home Office might spend more than the Department for International Development

Some of the newspaper coverage compares the DfID budget directly with that of the Home Office. The former department told us that its budget doesn't contain everything that'll actually be spent on aid, though.

DfID's Departmental Expenditure Limit is due to be £11.1 billion in 2019/20—stripping out aid money in its budget spent by other departments—compared to £11 billion for the Home Office.

Again, this ignores Annually Managed Expenditure, which will tend to bump up the Home Office's total far more than DfID's. So the Home Office could end up spending more.

Big projects can make a big difference to spending comparisons

The Mail has separately said of the increase in DfID's budget compared to other departments that "while international development will see its foreign aid budget balloon by 21 per cent, transport will lose 37 per cent".

But this is also a comparison that tells only part of the story. Transport's day-to-day spending limit may be falling more than any other department, but its capital budget (for one-off investment) is increasing more than any other department.

Put the two together, and the Department for Transport's budget increases by a lot more than DfID's: by 52%, compared to 12%.


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