UK government plans radical shake-up of foreign aid for climate change disasters

The UK government is to spend millions of pounds helping countries prepare for future humanitarian disasters in a radical shake-up of its development policy, the BBC has learned.

A new £150m fund will help poorer countries get access to money faster in emergencies and reduce the impact of future climate crises.

The change is expected to be part of a new White Paper designed to make Britain’s foreign aid spending go further while also finding new sources of international finance.

Ministers hope the 140-page policy document – published on Monday – can help restore Britain’s reputation as a development superpower after years of aid cuts.

It is understood the paper has been endorsed by world leaders, global philanthropists and international finance chiefs.

Ministers are also hoping to win cross-party support in Parliament so the seven-year plans survive beyond the next election regardless of the outcome.

The central idea of the White Paper is that conflict, climate and Covid have changed and blighted the world so much that countries must think differently about development.

It will argue that instead of wealthier states just handing out money, they should form new partnerships with developing countries – based on mutual respect – within an international system that finances new ways of tackling extreme poverty.

The government’s plans will not involve spending more taxpayers’ money – the UK will continue to allocate 0.5% of its national income on foreign aid each year, which in 2022 was about £12bn.

But the document will set out how to make the cash go further. The government currently plans to spend about £1bn on humanitarian aid in 2024. The new “resilience and adaption fund” will automatically take 15% of that money, which will be used to help countries prepare for future humanitarian and climate disasters.

So a drought-stricken country would not just get emergency food and water in the short term, but also investment in wells and reservoirs to help reduce the impact and cost of future emergencies.

There are also plans for special insurance schemes and pre-agreed contingency funds to ensure countries can get access to humanitarian cash the moment disaster strikes, instead of having to wait for donor countries to raise the money which can take some time.

Developing countries may also automatically be able to stop paying back international debts in times of crisis.

The White Paper is expected to set out plans to unlock more private finance to help the world meet the United Nations sustainable development goals, known as SDGs.

These plans – to cut poverty, hunger and inequality and boost education, health and climate action – were agreed in 2015. But the targets are considered widely off track and unlikely to be met by their 2030 end date.

The idea is to use the balance sheets of international financial institutions, such as the World Bank and the IMF, to guarantee greater investment in development from private capital such as pension funds.

The government also plans to reduce the costs incurred by workers in richer countries when they send money to families back home in developing countries.

The global value of so-called “remittances” is huge, about £520bn each year, which is three times as much as all overseas development assistance given by governments.

But up to 35% of the value of “remittances” can be lost in currency and transaction fees, which could be reduced through sharing more technology and regulatory expertise.

The government’s development and Africa minister, Andrew Mitchell, said Monday’s White Paper should be seen as a restatement of the value of aid and a glimmer of hope in dark times.

“Our world is troubled and fragmented,” he said. “Do we give up on it? Or do we act?

“The White Paper is our plan to make the world a better and safer place with solutions that are in the UK’s gift to deliver. We have the will and the way to make a difference.”