The UK said it will cut its overseas aid budget in a new blow to vulnerable nations. The move will make it more difficult for the government to deliver on a promise to increase climate finance to developing countries, analysts have warned.
On Tuesday, Prime Minister Keir Starmer announced plans to slash the UK aid budget from 0.5% to 0.3% of national income in order to increase defence spending to 2.5% of GDP by 2027.
The UK’s climate finance commitment comes from its aid budget, which was already reduced from 0.7% to 0.5% of national income a year before the country hosted the COP26 climate talks in 2021.
Starmer is due to travel to Washington on Thursday to meet with US President Donald Trump, who has been piling pressure on Europe’s cash-strapped governments to take more responsibility for their own defence.
The decision came as a shock to the international development community, which is still reeling from Trump’s decision to freeze USAID spending and from a string of cuts to overseas development aid by European governments. Germany, Sweden, France, Belgium and the Netherlands have all announced significant cuts to their aid budgets recently.
“Catastrophic blow”
International charities and aid organisations have responded in dismay, slamming the move as “a betrayal”, “short-sighted” and “a truly catastrophic blow” that will cause more people to die and lose their livelihoods in the world’s most vulnerable nations.
Worsening climate impacts, soaring humanitarian needs and growing instability across the world requires stronger global solidarity rather than retreat, experts warned.
“When we’ve just had the hottest January on record and humanitarian crises are at an all-time high, the UK government’s decision to slash its [overseas development assistance] budget is deeply shameful,” said Teresa Anderson, of ActionAid International.
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Tom Mitchell, executive director of the London-based International Institute for Environment and Development (IIED), told Climate Home News that Starmer should consider cutting harmful fossil fuel subsidies “before raiding an already depleted support system that is relied on by some of the world’s most vulnerable people”.
Climate finance watchers told Climate Home the move also threatens the UK’s ability to deliver the increased climate finance promised to developing countries at last year’s COP29 climate talks.
Climate funds on the chopping board?
The UK has pledged to spend £11.6 billion ($14.7 billion) on climate finance for developing countries between 2021 and 2026, and Starmer’s Labour government recently said it remains committed to meeting this pledge.
However, analysis carried out by the UK’s Independent Commission for Aid Impact last year found that the goal would be challenging to meet as more than half of the money is expected to be spent in the last two years of the pledge amid growing pressures on the aid budget. This is despite the UK making accounting changes, which increased what it counted as climate finance without recipient countries receiving more money.
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Laetitia Pettinotti, of the ODI Global think-tank, said the UK’s announcement lacks clarity on how the cuts, which are due to take effect from 2027, will impact climate finance.
“It seems likely that climate finance could be on the chopping board,” she said. “Sweeping cuts with no transparency is what we’ve come to expect from Trump and Musk; Starmer can’t follow suit, he needs to provide clarity.”
Rich nations like the UK will be expected to dig deeper into their pockets to help scale the finance that flows to countries most vulnerable to climate impacts and who contributed the least to causing them.
Worse timing
At the COP29 climate summit in Azerbaijan, developed countries agreed to triple finance to help poorer nations cut emissions and cope with climate impacts to $300 billion annually by 2035.
“Let’s be clear this can be life and death for struggling communities and this reduction could make meeting the UK’s climate finance commitments even more challenging,” said Gareth Redmond-King, of the UK’s Energy and Climate Intelligence Unit (ECIU).
As wealthy nations are expected to bolster their existing climate finance commitments, “the UK government has just reduced the budget that climate finance comes out of,” he told Climate Home.
“The UK has been a leader on climate finance but to pull its weight in delivering the new $300bn per year by 2035 goal agreed by governments at COP29 last year, they will need to find ways to continue to scale up climate finance,” said Joe Thwaites, who tracks international climate finance at the Natural Resources Defense Council (NRDC).
“If traditional budgetary sources are stretched, the government should look at more innovative mechanisms for raising funding” such as taxing private jets, he said.
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Ahead of critical climate talks in Brazil in November, when countries are due to assess whether collective climate pledges can halt warming in line with global goals, “we were expecting to hear new climate finance commitments by the rich countries to build confidence in the poorest and emerging economies that they can afford to be ambitious in their climate targets,” said long-term climate finance watcher Clare Shakya, of The Nature Conservancy.
“If we do not peak emissions as close to 1.5C as feasible and halt biodiversity’s decline, we will be facing many more security challenges in the coming years. The timing of this news from the UK could not be worse,” Shakya told Climate Home.
Prime Minister Starmer told UK members of parliament the decision had required some “extremely difficult and painful choices” and that this was not one “that I wanted to take or that I am happy to take”.
“We will do everything we can to return to a world where that is not the case and to rebuild a capability on development,” he said, insisting the UK will “continue to play a key humanitarian role” in Sudan, Ukraine and Gaza, as well as tackling climate change.
The UK government was contacted for comment but didn’t respond at the time of publication.
The story was updated on 26/02/2025 to add reactions.
