As you will be aware, the UK is facing severe financial pressures as a result of COVID-19 and its impact on the economy. As a result, the UK government has decided to reduce the funds available for Official Development Assistance (ODA). This will have a significant impact on the work we fund under ODA programmes.
The BEIS ODA allocation to UKRI has reduced significantly in planned ODA expenditure for FY21/22, leading to a £125m budget and a £120m gap between allocations and commitments.
These reduced ODA allocations will affect every UKRI Council, including Innovate UK, and will have whole-system impacts in the UK and overseas.
Our aim now is to work closely with you try to maximise the benefits from the limited funding we have available, and ensure that we are making the best use of the £125m funding we have available next year. This may involve reprofiling and reducing grants, with a view to supporting current longer-term awards to remain active during this challenging year and to continue to operate into future years. It is also unavoidable that some grants will need to be terminated. The reduction in ODA spend also means that we are unable to initiate any new awards where proposals have been submitted but have not reached the grant award stage.
We are still working through what this means for the ODA projects funded by UKRI and we will shortly provide a briefing detailing the impact on the various grant types.
We are informing you by this letter that whilst we will seek to agree mitigation measures including reprofiling with you, if an alternative approach cannot be agreed we will have to issue a formal notice of termination, and that it is our current assessment that we would be unable to provide funding for the majority of awards beyond the amount currently agreed up to 31 July 2021.
UKRI will continue to support all ODA grants and contracts, including those issued by Innovate UK, according to their usual arrangements for Quarter 1 2021/22, but will not be liable for the cost of new activities entered into after receipt of this letter. The terms and conditions of individual grants and contracts provide more detail of the arrangements that apply should a termination notice be issued.
The research and innovation community has worked superbly to establish high quality collaborations across the developing world and to build a powerful portfolio of projects aimed at addressing the UN Sustainable Development Goals. Given the situation in which we find ourselves, we want to work with you to try to reduce as far as possible the impact the sudden reduction to our ODA budget will have on your work and on the researchers, partners and communities around the world with whom we have been working so closely over many years.
Our ODA funding continues to help some of the world’s poorest and improve millions of people’s lives, and is awarded on the basis that it supports developing country impact in the pursuit of the SDGs, respects the importance of equitable partnerships and has due regard to EDI. These principles must guide the task ahead as we work together to implement the cuts as transparently and fairly as possible.
The UK remains a world leading aid funder with over £10 billion next year to fight poverty, tackle climate change and improve global health. While the 2021-22 allocations will involve some very difficult choices, the Foreign Secretary has reiterated the government’s commitment to international development and intention to return to the 0.7% GNI target when the fiscal situation allows.
We will be following up directly with you in the coming weeks and providing further guidance on matters that require special consideration. If you have questions or comments, please contact us at: firstname.lastname@example.org
Professor Christopher Smith, FSAS, FRHistS, FSA, FRSA, MAE
UKRI International Champion
Executive Chair Arts and Humanities Research Council, part of UK Research and Innovation
Last updated: 21 February 2022