Bill Gates 'disappointed' by UK failure to boost foreign aid budget

American businessman and philanthropist feels for 'world’s most vulnerable people' as chancellor admits funding is unlikely to return to previous levels

The UK abolished a target of spending 0.7 per cent of national income on aid in 2021, a level which Labour says is unlikely to be attained again in the next five years. Getty Images

Bill Gates has voiced his disappointment at the UK's autumn budget after Chancellor Rachel Reeves failed to increase foreign aid funding to cover the cost of housing refugees.

Ms Reeves conceded that there was little prospect of foreign aid spending returning to 0.7 per cent of the UK's national income during the next five years, a target abolished in 2021. The department she leads acknowledged that much of its aid budget was being diverted to accommodate asylum seekers in the UK.

Campaigners were left disheartened after Ms Reeves announced no new funding to cover continuing asylum costs. The previous government topped up the aid budget by £2.5 billion ($3.25 billion) in 2022 because of the number of refugees arriving from Afghanistan and Ukraine.

Mr Gates, the American businessman and philanthropist, called the autumn budget a “disappointing outcome for the world’s most vulnerable people”, according to the BBC. Gideon Rabinowitz, a director of civil society network Bond, said it amounted to a “short-sighted decision”.

Mr Rabinowitz said: “By refusing to renew the top-ups made by the previous government to offset the rising costs of housing asylum seekers in the UK, aid will plummet this year. We must support asylum seekers, but funding should come from a dedicated budget.”

Britain's Chancellor Rachel Reeves allocated no new funding for asylum accommodation, eating into the UK's foreign aid budget. PA

Treasury documents said spending the foreign aid budget on housing refugees in the UK was in line with international guidance, but has had “significant implications” for overseas development spending.

The Labour government has promised to tackle the hot-button issue of asylum seekers crossing the English Channel on small boats. The Home Office has been promised more than £800 million ($1.04 billion), saved by scrapping a Conservative plan to deport failed asylum seekers to Rwanda. The Labour government is setting up a new border security command to tackle people smuggling.

“The government is committed to ensuring that asylum costs fall, has taken measures to reduce the asylum backlog and is ending the use of expensive hotel accommodation,” the Treasury said. “These plans should create more space in the [foreign aid] budget to spend on our international development priorities overseas.”

Labour says it wants to restore foreign aid spending to 0.7 per cent of national income “as soon as the fiscal circumstances allow” but Ms Reeves's autumn budget papers say fiscal tests introduced by the Conservatives are not due to be met within the current five-year parliament. The figure was 0.58 per cent last year.

Defending her budget to broadcasters on Wednesday, Ms Reeves conceded that her tax increases might limit pay rises but said she had no alternative because of a "black hole in the public finances". She called it a "budget to the slate clean after the mismanagement and the cover-up of the previous government".

Sarah Champion, a Labour member of parliament who chairs the House of Commons development committee, said the aid announcements were only a “nod in the right direction”. She said the government had adopted “unachievable fiscal rules regarding foreign aid spend” from the Conservatives.

“While I’m relieved the government has recognised the foreign aid budget must be protected from paying the Home Office costs of housing asylum seekers, it should have been more ambitious in addressing this,” she said. “For too long, the Home Office has been given a blank cheque to a budget already victim to significant cuts.”