Cap foreign aid at GBP 1bn

Aid baseline

Reform's live page says foreign aid should be capped at GBP 1bn, saving more than GBP 30bn over a Parliament. UK ODA was provisionally GBP 13.0bn in 2025.

• 2025 ODA was about GBP 13.0bn.
• Reform cap is GBP 1bn annually.
• Future baseline is already falling.

Core trade-offs

The Exchequer saves money if aid projects are cancelled. The cost falls on overseas recipients, UK aid contractors, diplomatic influence and global-health programmes.

• Treasury gains large spending savings.
• Aid recipients and suppliers lose funding.
• Diplomatic and security risks rise.

Illustrative fiscal impact

-GBP 10.0bn to -GBP 3.0bn. Central estimate: -GBP 6.5bn.

• Positive numbers mean public-finance pressure; negative numbers mean Exchequer savings.
• GBP 1bn cap is the main scale marker.
• Gross costs and receipt offsets are separated in methodology.
• Behaviour and pass-through widen the range.
• This is not an official costing.

Economic impact by 2027-28

• Jobs: UK aid-sector and contractor jobs fall; domestic macro employment effect is limited.
• Wages: No broad wage effect; affected charities and contractors face payroll cuts.
• Prices: Little direct CPI effect in the UK.
• GDP / productivity: UK GDP effect likely small but negative for aid-sector output and diplomacy.

Assessment

This is one of the clearer cash-saving pledges if implemented literally. But the fiscal saving is not an economic free lunch: overseas recipients, global-health programmes, UK contractors and diplomatic influence bear the cost. The current baseline is already moving downward, so annual saving is uncertain.

Confidence: Medium. ODA totals are official, but treatment of refugee costs, Ukraine and multilateral obligations is unclear.

Main risks

• Security spillovers: Cuts to fragile-state and health programmes can create longer-run diplomatic or security costs.
• Contract disruption: Abrupt cancellations may create exit costs and supplier failures.
• Baseline ambiguity: Savings depend on whether current ODA plans already fall toward 0.3% of GNI.

Safeguards

• Publish exemptions and protected programmes.
• Phase cancellations to avoid contract penalties.
• Separate refugee-hosting costs from overseas aid projects.

Academic evidence

UK government evidence

Sources

• PolicyLens illustrative scenario methodology: Cap foreign aid at GBP 1bn Internal - PolicyLens, 2026
• A brief guide to the public finances Fiscal forecast - Office for Budget Responsibility, 2026
• Our Contract with You Party policy document - Reform UK, 2024
• Provisional UK aid spend 2025 Official statistics - FCDO, 2026
• Aid and Growth: What Does the Cross-Country Evidence Really Show? Academic article - Rajan and Subramanian, Review of Economics and Statistics, 2008
• Counting Chickens when they Hatch: Timing and the Effects of Aid on Growth Academic article - Clemens, Radelet, Bhavnani and Bazzi, Economic Journal, 2012
• Our Policies Party policy source - Reform UK, 2026

Other Reform UK policies

• Raise income-tax thresholds
• Cut household energy taxes
• Cut fuel duty by 20p
• Cut stamp duty below GBP 750,000
• Raise inheritance-tax threshold to GBP 2m
• Cut corporation tax to 15%
• Raise VAT threshold to GBP 150,000
• Abolish IR35 rules