• Modernised approach to development to help provide best value for money for UK taxpayers and deliver mutual benefits at home and overseas.

• Aid budgets across Spending Review period to be based on Spring Statement 2025 Gross National Income forecasts with gradual reduction to 0.3% by 2027 – and will no longer automatically fluctuate in line with economic conditions, providing predictability.   
• Foreign Commonwealth and Development Office budgets will no longer be automatically adjusted for unforeseen changes to the ODA budget, such as if asylum forecasts change, improving stability.  

Extra detail on the UK’s international development budget up to March 2030 has been set out in yesterday’s Spring Statement, alongside new plans to ensure it is focussed on UK objectives and provides the best value for money.  

This follows the Prime Minister’s announcement last month that the UK government will increase spending on defence to 2.5% of Gross Domestic Product (GDP) from April 2027, funded from reductions in the Official Development Assistance (ODA) budget. 

Figures set out in the Spring Statement show how the UK will go from spending around 0.5% of the UK’s Gross National Income (GNI) on international development this financial year (2024/25) to 0.3% of GNI by April 2027, with the budget gradually reduced over three years to help smooth the transition.  

The government is to accelerate plans to modernise the UK’s approach to development, putting partnerships first, and mobilising private capital for international development and climate projects by strengthening links with the financial sector and international partners.

The Statement also confirmed the UK will now set annual aid budgets from 2027 onwards in cash terms and based on GNI forecasts at the Spending Review, and these budgets will not be adjusted for GNI fluctuations in future years. 

Minister for Development Baroness Chapman confirmed as a result of this change, the Foreign Commonwealth and Development Office (FCDO) will no longer hold the ODA ‘spender and saver of last resort’ role. This will bring more stability and certainty.  

It will also increase the predictability of international development budgets, which will no longer be automatically exposed to the volatility of GNI fluctuations or spending by other government departments, including demand-driven refugee and asylum costs in the UK. 

Minister for International Development, Baroness Chapman, said:

Our work on development is critical for the UK’s interests, making the world safer, more secure and better off. We have to work harder than ever to make sure it delivers for the British public and our Plan for Change.

We are committed to modernising our approach with less money: working with our partners in new ways to maximise our impact. These latest changes to the ODA budget will give greater certainty and stability, helping us provide the best value for money for taxpayers.

She has set out the changes in a letter to the International Development Committee (IDC).  For 2025/26, the letter confirms FCDO’s plans to allow for critical development work to continue, to honour live contractual agreements with partners, and to deliver on the Prime Minister’s commitment for the UK to continue to play a key humanitarian role. 

Our development investment is part of our hard power, building a stable international environment that strengthens UK safety, security and prosperity, necessary for the delivery of all the UK government’s Missions. 

In her letter to the IDC, Baroness Chapman also confirmed a new review of cross-government development programming to ensure it delivers on UK objectives and provides best value for money.   

Notes to editors 

• Link to Spring Statement 2025

• We plan to publish final 2025/26 ODA programme allocations in the Annual Report & Accounts this summer. 

• To allow for critical new development work to continue, an exemptions process is being run, in which some programming may continue if they meet the following criteria: planned humanitarian spend; protects value for money; mitigates significant reputational risks; mitigates risk of harm while responsibly exiting a programme; and enables delivery against Ministerial priorities.