Billions spent on ‘refugees and migrants’ in UK to be counted as foreign aid

Senior Tories could rebel against the move, according to reports

Funding for Ukraine reugees is to be counted as foreign aid under the move (PA)

Billions of pounds of government spending in Britain is to be counted as foreign aid.

Under Treasury rules, as much as £3.5 billion for refugees and migrants in the UK will be considered part of Britain’s contribution to international development, The Times reported.

It means the government is in line to spend almost half of the foreign aid budget in Britain, leaving 0.3 per cent of gross national income to go on projects overseas – below the government target of 0.5 per cent.

Conservative MPs warned that ministers would face a backlash from the move. Tobias Ellwood, chairman of the defence select committee, said that the decision would “astonish many colleagues”.

It comes after Save the Children speaking to The Independent warned that billions could be slashed from overseas aid projects unless ministers abandoned the rule diverting a portion of funds to Ukrainian refugees in the UK.

The UK’s international aid budget is £11.4 billion but under Treasury spending rules the costs of looking after asylum seekers and other refugees in Britain count towards it.

Amid the war in Ukraine and the Channel boats crisis, these costs have risen significantly, meaning that an estimated £3.5 billion will be spent to cover it. About another £1 billion of domestic spending is also classified as “aid” including research grants and scholarships.

According to The Times, Andrew Mitchell, the new international development minister, is lobbying Jeremy Hunt, the chancellor, to protect existing aid spending.

Senior Tories have raised the prospect of rebellion over the inclusion of spending on Ukrainian refugees in the foreign aid budget. Mr Ellwood said: “There will certainly be noise now that it’s eroded from 0.7 to 0.3. [per cent].”

While chancellor, Rishi Sunak, vowed that the 0.7 per cent aid target would return when the UK wasn’t borrowing for day-to-day spending and its ratio of underlying debt to GDP was fallen, however, with pressures to make spending cuts amid recession warnings, it’s likely the restoration will be pushed back further.

Including those costs within the 0.5 per cent aid budget, which is already fully allocated, will result in further deep cuts in funding for those in the toughest circumstances across the world,” said Richard Watts, senior adviser for development finance.

“This isn’t right. The UK government should ensure its help for refugees here does not come at the expense of support for children across the world at this critical time. It can and must step up, and not back.”

Ministers have already ordered a stop to “non-essential” aid spending – partly because of the ballooning Ukraine costs – with agencies still in the dark over existing projects, with just four months left in the calendar year.

Sarah Champion, chair of the House of Commons international development committee, said: “It’s absolutely right that we step up to help the people of Ukraine, but we mustn’t abandon our commitment to the world’s poorest in doing so.

“We must show flexibility in increasing the 0.5 per cent target before the costs of providing much-needed help to Ukrainian refugees lead to cuts that will cause real suffering elsewhere.”