ABSTRACT
In last year’s Reality of Aid we reported that the UK aid programme was undergoing a major strategic change to the detriment of its impact on poverty. Developments this year provide clear evidence of the magnitude of this strategic change. The downsizing of the British aid effort was outlined in the 1995 Fundamental Expenditure Review (FER), a series of policy recommendations to Ministers by the Overseas Development Administration (ODA). The FER is the first forward-looking policy document on aid in 20 years, and it indicates that:
the level of UK aid as a percentage of GNP is forecast to fall to its lowest ever level next year, at 0.26%. Despite Ministerial assurances, cuts in bilateral aid could, under one doomsday scenario outlined in the FER, threaten both the viability of the UK aid effort and the potential to make UK aid more poverty focused;
reductions in aid mean that the bulk of bilateral assistance will be concentrated on just 20 countries. Yet bilateral aid is being cut to such an extent that these countries could receive less after concentration than at present; and
despite rapidly rising multilateral contributions, Britain risks reducing its influence over EC aid because of inconsistencies in its policies. There is also a threat of withdrawing aid to some key UN agencies.
