Recent ODA cuts by major donors, including the UK, represent the steepest contraction of global aid in decades, but occur amid broader shifts in global governance, many driven by the US.
Since early 2025, the Trump administration has suspended or withdrawn funding for key multilateral institutions and initiatives, including the Paris Agreement on climate change, the World Health Organization (WHO) and some UN agencies, and ordered a review of US membership in all international organizations. The administration’s budget proposal to Congress for 2026 also includes cuts to the IMF budget and makes no provision for US financial contributions to the UN core budget, most UN agencies or the OECD. While the proposal is more of a political signal than a final financial settlement, it shows the Trump administration’s intent towards these institutions. Indeed, in March 2025, during a UN General Assembly meeting, a US representative to the UN denounced the concept and language of the SDGs, the existing organizing framework for global development, as ‘globalist’ and ‘adverse to the rights and interests of Americans’.
Thus, the US is stepping back from its role in the institutions it helped create in the aftermath of the Second World War, marking a significant shift away from the global aid paradigm of previous years. And although previous US administrations have expressed scepticism about development and multilateralism, this was not coupled with such dramatic cuts to US aid funding, nor with the US’s imposition of high tariffs on many low-income countries – two recent shifts that have hit many states in the Global South at once.
These dynamics compound long-standing challenges to global coordination on reducing poverty, preventing or resolving conflict, and providing global public goods (the latter has included work on problems such as the COVID-19 pandemic and developing-country debt). The current approach to these issues stands in contrast to earlier periods when collective mobilization was more intensive and effective, for example during the G20’s response to the 2008–09 global financial crisis and in the debt-relief initiatives of the early 2000s.
For the UK, both this wider shift in global aid and the country’s own latest cuts come in the wake of major changes to the government’s approach to aid and development. A rushed merger of the independent Department for International Development (DFID) with the Foreign and Commonwealth Office (FCO) in 2020 was followed by steep ODA cuts the following year. While the merger was initially described as an attempt to integrate the UK’s development and diplomatic toolkits, making for a more politically informed and agile approach to development, in practice the department lost expertise, and UK development policy lost focus.
But the UK has also undergone a wider shift in its foreign policy and global approach: where once development spending was seen as a cornerstone of the UK’s soft power and strategic global engagement, the government is now focused on the Russia–Ukraine war and on immediate questions of the UK’s own security.
This creates difficult policy and funding trade-offs. The presence of a war in Europe demands investment in the UK’s defence. At the same time, the UK faces more significant fiscal challenges than it did when the country spent more on aid, while public opinion – though often supportive of development spending in the abstract – remains unconvinced about prioritizing aid now. The global aid system that prevailed in the era when the UK spent 0.7 per cent of GNI on aid – the target set by the UN General Assembly in 1970 and enshrined in British law in 2015 – had significant flaws, including: problems with accountability and transparency; incentives often constructed to meet the goals of distant donors rather than the needs of affected publics; and, arguably, limited political analysis informing how development money was spent.
But, despite these failings, that same system has also been highly effective in some sectors, particularly via investments in health. Evidence reviews suggest that aid spending also brought global stability and security returns for donors like the UK. But the US’s shift away from its role as the leading donor and underwriter of the multilateral system, alongside wider cuts across other major donors, means systems for addressing collective security and transnational problems are under pressure. This will affect the UK and its geopolitical relationships.
Faced with these trade-offs, the UK government has made decisions on near-term priorities for its aid budget. On the upside, these decisions include increasing or largely preserving FCDO funding (ODA and non-ODA) for multilateral institutions and key thematic areas, such as humanitarian action (down a modest 3.1 per cent in fiscal year 2025/26), climate action (up 59 per cent over the same period) and international finance (up 52 per cent). At the bilateral level, the UK is increasing or preserving spending on strategically significant partners. Examples include Indonesia (up 231.6 per cent in fiscal year 2025/26), Turkey (up 39.5 per cent), Nigeria (up 15.1 per cent), Pakistan (up 1.9 per cent), Ukraine (up 1.8 per cent) and the Democratic Republic of the Congo (DRC) (up 1.3 per cent). Given fiscal constraints, these choices reflect an effort to support the multilateral system and to improve and focus on the work of international financial institutions, while maintaining engagement in contexts central to UK foreign and security interests.
At the same time, these decisions necessarily carry implications for other areas. At the thematic level, total direct FCDO spending (ODA and non-ODA) on health has decreased by 46 per cent in fiscal year 2025/26 (though some multilateral contributions, categorized separately, will also contribute to global health), while funding earmarked for multilateral human rights initiatives has declined by 65 per cent. Bilateral budget reductions have been made for recipients that include Lebanon (down 40.3 per cent), Syria (down 35.7 per cent), Somalia (down 27.3 per cent), Ethiopia (down 24.8 per cent), Nepal (down 22.6 per cent), Kenya (down 20.8 per cent), Palestine (down 20.7 per cent), Afghanistan (down 18.4 per cent) and Sudan (down 17.7 per cent). Moreover, these are budget allocations only for 2025/26; the ODA budget is set to decline further in the next financial year (2026/27).
Despite these cuts, the government has sought to regain the initiative in diplomatic engagement with countries across the Global South. Former UK foreign secretary David Lammy set out an ambition to pursue a strategic reset with these countries and jettison aspects of older aid relationships that were patronizing or ineffective. As many developing countries have become wealthier (39 countries have graduated from low-income status in roughly the last 25 years), direct aid provision has become less important to some than other areas of mutual cooperation. And UK strategy more broadly has long recognized the importance, at least rhetorically, of a Global South rising in power and influence – not least because of the critical role many of these countries might play in mitigating the effects of growing US–China rivalry and in addressing global challenges. But while the government’s argument recognizes the need to move beyond traditional donor–recipient relations, the shift in approach will nevertheless need to account for the impact of ODA cuts on developing countries and the UK’s relationships with them.
The remainder of this research paper will outline the emerging security and geopolitical consequences of recent aid cuts, and the wider risks for the UK from the shift away from the previous aid paradigm. The paper will also suggest how the UK can respond. The government faces difficult choices, and it is unlikely that new spending will be forthcoming. But even within these constraints, the UK can better align its approach to development, security and foreign policy.
Method and approach
This paper is based on a review of academic and grey literature examining the relationship between aid, security and geopolitics, and on emerging analyses of the effects of the 2025 global ODA cuts. It also draws on insights from three private roundtables on the future of development assistance, held under the Chatham House Rule in 2025; and insights from semi-structured interviews conducted between August and October 2025 with academics, senior representatives of humanitarian and development organizations, security practitioners, and former diplomats and officials. Interviewees participated on the condition of anonymity, but have experience in relevant institutions such as the World Bank, the UN Development Programme (UNDP) and the FCDO, and in contexts such as Kenya, Myanmar, Sudan and Syria. Secondary quantitative data, including on ODA spending, were drawn from official sources such as the FCDO and OECD.
On terminology, the paper uses ‘developing countries’ to refer to low-income and lower-middle-income countries as classified by the World Bank. We also use the term ‘Global South’, primarily to reflect the way this term is used by leaders and states themselves, especially in relation to the geopolitics of development – for example, when China positions itself as a ‘voice’ of the Global South. We acknowledge the conceptual limitations of these labels, as well as the diversity of the countries they describe, but retain them given their prominence in current policy debates. Where we refer to fragility and conflict, we are referring to countries classified as affected by ongoing ‘fragile and conflict-affected situations’ as defined by the World Bank.
The remaining analysis is structured into three parts. Chapter 3 examines a variety of security risks arising from global ODA cuts, with a focus on neglected conflicts and global health security. Chapter 4 explores the geopolitical consequences, including the responses of emerging powers such as China and the impacts of global aid cuts on the multilateral system. The final chapter sets out recommendations for how the UK can respond strategically to the changing aid landscape.
