UK aid to China falls by up to 90% since 2019 but still lacks transparency

21 Mar 2024

UK aid to China has fallen by up to 90% since 2019, but the aid watchdog continues to raise concerns about the transparency of the remaining spend in a report today (Thursday 21 March).

The Independent Commission for Aid Impact (ICAI) finds that aid engagement with China across all of government dropped from £80 million to an estimated £8.2 million between 2019 and 2023-2024, with the Foreign, Commonwealth and Development Office (FCDO) – mostly through the British Council – and Department for Environment, Food and Rural Affairs (Defra) continuing to spend aid there.

In the report, the watchdog notes that while there have been efforts to improve transparency in some areas, it has worsened around the ‘administration costs’ of running aid programmes and other development activities, for which ICAI was unable to get an up-to-date figure.

With China expected to graduate from being eligible for official development assistance (ODA) in the near future, ICAI also pointed out a lack of clear planning on how the government’s priorities in the country will be funded after this happens.

ICAI Commissioner Sir Hugh Bayley, who led the report, said:

“There is still too little transparency over how UK taxpayers’ money is being spent in China, and we’re concerned it seems to be going backwards on the issue of ‘administration costs’ charged to the aid budget which can run to millions of pounds.

“As China will soon be ineligible to receive aid, it’s important that the government ensures there is a proper strategy in place for the transition if dialogue with the country on issues of global importance such as climate change is to continue.”

FCDO aid to China continues through its arm’s-length body, the British Council, which currently has the largest portfolio of UK ODA to China with an estimated spend of £5.8 million in 2023-24, and the separately managed Chevening Scholarship Programme which spent an estimated £1.24 million in 2023-24 on scholarships for students from China.

FCDO also spends aid in China through its global Forest Governance, Markets and Climate (FGMC) Programme, which aims to reduce the illegal use of forest resources, at just under £0.5 million in 2023-24. In addition, Defra’s Illegal Wildlife Trade Challenge Fund (IWTCF) spent around £0.2 million in China in 2023-24.

However in 2022, the latest year for which a figure was available, ICAI found that FCDO spent around twice as much on ‘ODA-eligible administration costs’ – around £4 million – as it did on aid programme delivery, which totalled less than £2 million for 2022-23 excluding the British Council and Chevening, which have their own administration budgets.

The government has also decided to stop publishing these aid administration costs – which FCDO calculates based on the overall “effort” that FCDO officials devote to ODA-eligible activities – on a country-by-country level, as it is no longer required to by the OECD Development Assistance Committee. ICAI asked for the China figure for 2023, but FCDO did not provide it.

FCDO says it expects that aid to China is likely to remain at similar levels to 2023-24 until the country becomes ineligible to receive ODA.

The British Council’s spend includes programmes on English language teaching, arts and culture, and education. Among them is a long-running partnership with the Premier League, which aims to provide opportunities for disadvantaged young people through football.

ICAI noted some attempts by the British Council to improve transparency since last year’s update – including the publication of a corporate plan and recent annual review – but pointed out that the organisation still does not publish data on implementation, results, budgets or expenditures for its country-level programmes.

This is despite the fact that FCDO accepted ICAI’s recommendation in its 2022 review of transparency in UK aid that ambitious standards for transparency should be applied to all aid spending, including by arms-length bodies.

In 2021, the then foreign secretary announced that aid programming in China from FCDO would be reduced by 95%, with the continuing programmes focused on promoting democracy and human rights. ICAI has published a series of information notes on the UK’s aid engagement with China to track whether spending has fallen as predicted.