Aid: International development hit with £1bn cut

Charities expressed dismay last night after planned overseas aid spending was cut by more than £1bn due to the weakness of the economy.

The Government has promised to raise international development budgets to 0.7 per cent of national income by 2013 despite the austerity measures facing Britain. George Osborne repeated the pledge yesterday, but announced that the projected aid budget was being scaled back because spending would otherwise exceed 0.7 per cent.

"That I don't think can be justified and so we are adjusting those plans, so we don't overshoot the target," he told MPs. The effect of the move will be that the Department for International Development will spend £8.2bn in 2012-13 instead of £8.6bn, £10.8bn in 2013-14 instead of £11bn and £10.6bn in 2014-15 instead of £11.1bn. The resulting saving will be £1.1bn over three years.

Mr Osborne's move has been made possible because gloomy forecasts for gross national income means he needs to commit less money to aid to meet the 0.7 per cent target.

Andrew Mitchell, the International Development Secretary, pointed out that Britain would still become the first country in the G20 group of industrialised nations to achieve the target. But one Whitehall source conceded: "The department won't now be able to do everything that it hoped."

Last night charities challenged the Chancellor to promise that aid spending would increase when Britain's economic health improved. Adrian Lovett, Europe Director of anti-poverty campaign ONE, said: "We are obviously disappointed at the reduction in the scale of the aid increase, which is a painful side effect of Britain's economic performance. This Government made a pledge not to balance the books on the backs of the poor."

Claire Godfrey, Oxfam's senior policy adviser, said: "We are disappointed that lower-than-expected UK growth means the world's poorest people will get less help, especially as they are already suffering in an economic crisis they did nothing to cause."

Before the general election, all three major parties committed themselves to the 0.7 per cent target and the pledge was included in last year's coalition agreement, as well as a promise to enshrine it in law. Since then it has faced criticism from some Conservatives, notably the former Defence Secretary, Liam Fox, who protested in a leaked letter the moves would remove ministers' flexibility to spend more money on "activities and programmes rather than aid".

David Cameron has repeatedly defended the commitment, telling last month's Tory conference: "I really believe, despite all our difficulties, that this is the right thing to do." He said it was a "mark of our country, and our people, that we never turn our backs on the world's poorest".

Case study: 'The issue is not a lack of skills'

Sayyida Mehrali, 21, from Birmingham, graduated in neuroscience from UCL in June but is now unemployed.

"I have been looking for work since graduating six months ago. The problem I have found is my degree is so specific.

"I want to go into science communications, but a lot of employers want journalistic experience, which I don't have and is hard to come by.

"I think George Osborne has made a lot of promises and he's going to have a hard time living up to them. He said it's not a lack of jobs, it's a lack of skills, which I totally disagree with. I know a lot of people in my position who have the skills and not the jobs."