Richard Watts

Senior Advisor on Development Finance @savechildrenuk. Views are my own

[Richard Watts @Richard__Watts]

Next weeks #WBGMeetings are a ❌ road moment for @WorldBank. Does it:

a) Do "more with less", or
b) "More with more", through innovation & inclusivity

Read why my hope is b), to shape a more positive outlook for the world.

https://t.co/nUpn1jZ8I6

[Richard Watts @Richard__Watts]

@SarahChampionMP Certainly not in the short term (see chart). Even longer term they are way higher than historic levels. Putting major pressure on FCDO ODA spending

[Richard Watts @Richard__Watts]

Tomorrow, the UK government has a clear choice to make:
- Continue treating #UKaid as the ugly duckling vs overall fiscal policy, and widen the disconnect between them
or
- Treat them as the equals as they should be & demonstrate global leadership at this critical time

6/6 end

[Richard Watts @Richard__Watts]

Ahead of tomorrows #AutumnBudget all the talk is of changes to #UKgov fiscal rules, yet zero mention of altering the specific rules on #UKaid

A blog on how their alignment can help solve the current crisis in #UKaid spending and 🧵with 🔑 points 1/6

https://t.co/E7ieOGnpZs

[Richard Watts @Richard__Watts]

2) New #UKgov fiscal rules will mean the current fiscal tests to return #Ukaid spending to 0.7% gross national income will be out of step.

This would likely end hopes of a return, even if the UK is on a pathway to fiscal sustainability. A re-alignment on these is crucial. 5/6

[Richard Watts @Richard__Watts]

UK PACT, the UK govs "flagship technical assistance programme" on climate finance has been further cut.

Budget is £42 million less this year & £32 million less overall (see chart). The original budget sought was £340mn.

The £11.6bn ICF commitment is looking harder by the day...

[Richard Watts @Richard__Watts]

@FCDOGovUK's budget cuts have begun...

The £707 million payment due to be made to @WBG_IDA this year has been deferred into next (see table).

The result? - A further (and large) squeeze on next years aid budget.

Expect more deferred payments, then project level cuts if needed.

[Richard Watts @Richard__Watts]

The new UK gov must review the ODA budget. Business as usual will only repeat past failings, impacting millions of the worlds poorest

Short term: Assess 0.5% GNI ceiling/rationalise accounting practices (eg refugee & admin spend)

Long term: credible path back to 0.7% GNI

8/8

[Richard Watts @Richard__Watts]

Unlike the last two years, when @hmtreasury allocated an additional £2.5 billion in ODA spending above 0.5% GNI, this year it hasn't (yet)done so.

This means at best @FCDOGovUK likely having to defer payments into next year, or at worse cutting projects. 6/8

[Richard Watts @Richard__Watts]

Whilst more ODA funding this year is imperative to avoid yet more cuts, this issue will keep happening without systemic change.

@FCDOGovUK budgets in the future continue to be fully allocated under a 0.5% GNI ceiling, again based on reduced home office spending (see chart). 7/8

[Richard Watts @Richard__Watts]

There is now no @FCDOGovUK budget uplift, it's similar to last year, but with a real risk more funding could be surrendered to the @ukhomeoffice.

This is because the Home Office has said it still doesn't have sufficient budget & will need to ask for more (see picture). 5/8

[Richard Watts @Richard__Watts]

However, @ukhomeoffice spending isn't reducing as planned. Migrant arrivals by boat are still historically high, tracking inline with levels in 2022 & 2023.

This has led @FCDOGovUK to surrender almost £1 billion in planned ODA spending to the home office (see picture). 4/8

[Richard Watts @Richard__Watts]

The @FCDOGovUK plan has been carried forward to actual budgeted activities. Currently £9 billion has already been allocated (see chart).

Even if @ukhomeoffice ODA spending was significantly reduced, this would have left FCDO with limited scope for any new in year spending. 3/8

[Richard Watts @Richard__Watts]

Last year, @FCDOGovUK set out a plan to significantly uplift its ODA spending (see chart), banking on @ukhomeoffice reducing it's aid spending in relation to hosting refugees.

FCDO annual report and accounts 2022 to 2023 - https://t.co/FisFu6qQLj (https://t.co/QeOaY6JSho). 2/8

[Richard Watts @Richard__Watts]

Another year & yet another budget squeeze for @FCDOGovUK ...

Despite promises of an uplift in aid spending, the opposite is looking more and more likely.

Lets dive into the reasons why and what options the new UK government has. A 🧵 1/8

[Richard Watts @Richard__Watts]

@thrh Great read, thanks Tom.

Whilst agree on the risk of suddenly going back to 0.7%, it could be done if properly planned, centered on reprofiling multilateral commitments. The cut to 0.5% was made more damaging as it simply wasn't appropriately planned.

[Richard Watts @Richard__Watts]

The UK government is set to cut it's international climate finance contributions by £1.6 billion.

An announcement I am guessing Rishi Sunak won't be making at #COP28...

No need for a 🧵, all the gory details/analysis in the blog 👇

https://t.co/d1ZsUdDV5g