« Après nous, le déluge » ‘After us, the flood.’
The phrase is most famously associated with Madame de Pompadour, the mistress of Louis XV.
This was in the context of looming financial and political crisis in pre-Revolutionary France — a sense that catastrophe was inevitable, but with nothing to be done, it’s not really Mdme de P’s concern.
For the UKAID ecosystem, for the BINGOs, for the wider quality bilateral aid sector, and for the multilateral market it’s clear that le déluge, much trailed and long feared, is now imminent. The sector caught in a pincer movement by haters on both the populist right and the self-flagellant activist wing of the progressive left now faces its Alamo as the Treasuries of the West run dry.
But catastrophe is not inevitable for those that are prepared to make hard choices now.
Building rosters of Farsi and Spanish speakers won’t be enough to survive this cycle. There will be no return to Noughties style state building. The hard choices that stand in front of the sector include downsizing and redundancy and the urgent need to look to the future: to adapt and adopt new ways of working and to identify and embrace new and emerging trends for ways of working, and for programming and delivery. Trends such as:
- Automation, digital delivery and the use of AI
- Localisation and long-term pooled funding models
- Impact investing, blended finance & outcome-based models
- Building new capacity in digital development and digital public infrastructure at the expense of ‘old aid’ cadres and practice areas
- Marshall Plan style ‘start with clearing the rubble’ style reconstruction and the funding from the Gulf that will support it
- Migrant return and support programmes
These, in this authors’ view, are the coming areas of focus that will drive and define this the latest big swing of the aid sector’s pendulum.
These are the life rafts on which to ride out the flood. In this paper I make the case for clambering onto four of them.
- The automation of project management and non-client facing tasks
- Building new advisory and technical capability in digital development and digital public infrastructure
- Positioning and tooling up to win and deliver pooled funding vehicles
- Embracing localization as an opportunity and not a threat.
This is not an exhaustive list of options or ways forward. Other bold paths are open and indeed some suppliers, anticipating change and sensing opportunity, have already pivoted into other areas as Palladium have demonstrated with their move into the blended finance space. Others such as Mott MacDonald have already exited the sector altogether. I recognise that no supplier can afford, or attempt from a standing start, to do all four, but I believe that the four that I highlight deserve serious consideration as firms seek to chart a course to safety.
But I start by trying to make sense of what’s happening now by looking back at the sector’s history and the dynamics at play. If you’ve had your fill of scares about the sector and its history and prospects, I suggest skipping to the four options in the latter half of the paper.
The numbers don’t lie
The numbers don’t lie. The FT worked hard to dispel any festive cheer with a blunt assessment of the sector’s prospects on Boxing Day.
‘UK overseas aid spending is set to fall to the lowest level this century as long-feared cuts start to hit non-governmental organisations and charities hard from 2026.
Sir Keir Starmer’s government announced in February that it would reduce overseas aid spending from 0.5 per cent of gross national income (GNI) to 0.3 per cent by 2027 in order to fund a rise in defence spending to counter Russia.
But of £6.5bn in total planned cuts, only £500mn has been earmarked for 2025-26, before accelerating rapidly with £4.8bn to be cut in 2026-27, suggesting the real crunch will begin in the second half of 2026.’
It gets worse.
‘By 2027-28 the percentage of GNI spent on the aid budget will be down to 0.3%, the lowest level since 1999. The amount that makes it overseas is likely to be even lower due to funds being diverted to the Home Office to fund asylum seeker hotels.’
Back to the future
There was an ecosystem of suppliers in the 1990s when the UK aid programme was last this size, and a vibrant set of smaller Technical Assistance, engineering and agricultural extension programmes. But veterans, like me, will recall that suppliers then were almost exclusively homegrown and that aid programming then was very different in focus and scale and centred on expertise rather than grants and budgetary transfers.
This was the era before the UK’s professional service firms had entered the sector in a big way, before the arrival of the Australian engineering and agricultural conglomerates and the American beltway bandits with their odd sounding names. The era before the aid pendulum took its biggest and most consequential swing towards state building, powered by liberal intervention, financed by the trillions spent in far away places and sustained by a clutch of messianic Western leaders, who in an era of relative plenty, believed they could make poverty history on the backs of their own taxpayers.
In that distant era you had the likes of HTSPE, Maxwell Stamp, the Adam Smith Institute (International Division) and Enterplan scrapping for work in support of structural adjustment programmes. WS Atkins and Mott MacDonald built things, Crown Agents procured and delivered humanitarian and emergency supplies and response. WYG operated in the Private Sector Development space and Agricultural extension services were provided by outfits like NR International, Gibb Africa and the Wye Group.
A return to 1990s volumes of aid will necessitate a major shakeout of the sector. There just won’t be the space and volume to support all the existing players. Not even close.
My point in dredging up this ancient history is to note that in 20 years many of the names of the current crop of providers will be as obscure and half-forgotten as some of those rode high in the 1990s. The era of state building and liberal intervention will be remembered as if a fever dream. And like the 1990s the suppliers and the programmes they support will be smaller and will, in the Baroness Chapman’s words to the International Development Committee in October 2025, be focussed on ‘Expertise rather than Grants’.
Howls of Pain Across the Pond
For those of us who, for want of a better alternative, must wade through the AI dross on LinkedIn to communicate, source, market and sell, the rocky path in 2026 for the U.K. development sector has been clear for some time.
Clear from the howls of pain telegraphed on LinkedIn in real time through 2025 by thousands of former USAID staffers and contractors.
This year those howls will again be long and loud. But many of them will be much closer to home.
The reality confronting many in the UK sector through 2026/7 will be job losses, with well-established firms large and small collapsing suddenly, without warning despite efforts by the FCDO to spread contract awards across the supplier base as the last big slew of pre-crisis programmes come to market in the first half of this year. This will be the year of cash flow crises, of invoices unpaid and it will end with experts in PFM, in governance, in green growth, in PSD/M4P seeking work outside the sector. All this before the bookmaker’s firm favourite seems likely to arrive in Downing Street a few years hence.
The current government is pro aid, and, emotionally at least, is committed to it. But it lacks the money and political will to defend it. The bookie’s favourite won’t have any money either. But it will hate aid and have the political will and motivation to attack it.
It’s a sobering backdrop. What then can be done before Le Deluge?
‘The aid sector is dead. Long live the aid sector.’
First accept that the current model is dead in the water. There’s no prospect of a return to 0.7%. It’s over.
As Raj Kumar, editor of Devex, on what he calls ‘Old Aid’, has it.
‘Even the fiercest defenders of international cooperation have long been frustrated with the project based, risk averse, bureaucratic approach endemic to development and humanitarian institutions’
He points to a new future for aid. A sector transformed. A future defined by the transfer of decision-making power to local intermediaries, by new long term pooled models and facilities and by technology. A new and changed sector will emerge.
What will this new future look like?
For the generalist suppliers there will be limited space for layers of project managers at HQ, for dedicated business development teams, or for relatively well-paid full-time in-house technical experts. The collapse of the project-based model means that the era of top-heavy prime contractors, developed and defined by mega projects, is drawing to a close.
In the short term, in what will feel like a reprieve to some, we can expect to see a return to 1990s style policy and influencing focussed TA projects – Baroness Chapman’s promised focus on expertise. These projects will be much smaller without funding for overhead, layers of project management or delivery. But this is a false dawn, and experienced practitioners will know that small projects are often, in management and administrative terms, as resource intensive as larger projects.
Short term survival, long term positioning
With tightened budgets and smaller projects the project management and administration challenge will be huge in the immediate and short term.
The last 20 years have seen a layering on of compliance, risk and reporting requirements for suppliers. Developed in an era of plenty to control profits in the face of hostile press campaigns, to manage suppliers and performance and to control/game the market, these expensive bureaucratic controls have stuck and are now applied, unthinkingly, to all projects large and small.
Helpful to risk-averse officials who like comparing apples with apples, rather than apples with pears, these controls have, arguably, been to the detriment of the sector as a whole. They have not advanced VfM, or the efficiency, economy or effectiveness of projects. Quite the reverse, taking the UK sector closer to the box ticking race to the bottom of EU and UNDP programming.
Controls that have crowded out innovative, individual and idiosyncratic approaches, that are in thrall to costs considerations at the expense of quality, and that are driven by over of complex theories of changes, Logframes, and by GESI overreach.
But these processes, these regulations are here to stay. It’s inconceivable that officials will row back on procedure and remove the controls that are now in place: however frustrating that might be to old development hands nostalgic for a looser and more pragmatic era when the focus was on getting stuff done rather than compliance.
But nostalgia doesn’t really help in 2026. Indeed, it’s understandable in an era of polarisation and instant news that the sector must have controls in place that seek to minimise the risks associated with poor safeguarding, incomplete due diligence processes and all the risks that come with spending taxpayer’s money in conflict settings or disaster zones.
So aid will continue with smaller projects and less overhead, in new areas and with new models and instruments for delivery. How can suppliers square the circle and meet the compliance burden without the overhead or headcount they have enjoyed in years gone by? How and to what should they pivot?
I suggest there are four moves that could be made.
#1 Automate or die
The technology now exists to automate most of the tasks that practice, portfolio and project managers have traditionally undertaken in the UK and wider aid and humanitarian sector.
There are established and sector specific platforms that can handlealmost all the repeat tasks undertaken by those in these traditional roles, from generating first cut proposals that respond to terms of reference drawing on your company’s intellectual capital and referencing your relevant corporate experience and capabilities. That run end to end due diligence processes, and check compliance, that can handle all aspects of financial management from consultant receipts, to invoice generation, to real time cash flow forecasting and burn rate management; that support ambitious MEL and learning tasks, and handle and help coordinate reporting requirements.
Platforms can’t decide whether to bid or not to bid in a resource constrained environment, or run the preparation for a competitive bid presentation. They can’t charm an important counterpart, write a carefully phrased note of thanks with pen and paper, or smooth the ruffled feathers of a tricky senior Team Leader. They are not a silver bullet, but in development and testing for well over a decade, these platforms are increasing capable and proven for complex programmes, for fund and facility set up and for portfolio management. As licensed products available for an annual fee they cost significantly less than the cost of a junior project manager in London, Nairobi, Islamabad, Kinshasa, or Port Moresby.
MetricsLed - the company I chair – has an integrated delivery platform, ML – PROJECT, that provides all this these capabilities and is currently used by many of the UK’s largest suppliers to run some of their most challenging and complex programmes. ML-PROJECT underpins a range of high profile FCDO led funds and faculties such as the COAST and GCBC programmes, the Aid for Syria Fund, and the Somalia Stability Fund.
High overheads will kill off some of the supplier base, those that embrace technology and automate repeat tasks – early adopters such as ASI, DAI, FHI360 & Palladium that use digital delivery platforms – give themselves a good chance of survival.
#2 Embrace Digital Development and Digital Public Infrastructure
The need for a fundamental rethink of the aid sector is clear and it’s clear that teams within FCDO and other western donors are hard at work trying to work out how to adjust.
How to do more with less is the question. As the era of huge budgets and unconditional transfers of cash and expertise rapidly recedes many of the challenges associated with extreme poverty, humanitarian crisis and environmental and man-made degradation stand unmet. How to do more with less is a difficult circle to square and it won’t be squared in the future by lots of white guys driving around in Land Cruisers.
But answers to this question are already emerging driven in large part by the march of technology.
A slew of press and announcements through the summer shows that other actors are already mobilising: A point well made in a much-circulated Financial Times July article ‘AI is the new foreign aid’ by Maha Hosain Aziz.
‘Consider what has already been rolled out. In the past year OpenAI has partnered with a primary care provider in Kenya to support local AI development in healthcare. In South Africa, billionaire Strive Masiyiwa worked with Nvidia to launch the continent’s first “AI factory” a Johannesburg-based hub designed to train local talent and build regionally relevant models. In Kenya and Ghana, Google is investing in AI research centres. These projects are not labelled as foreign aid, but they’re delivering infrastructure, skills, and tools in exactly the areas where traditional donors have pulled back.’
In a series of announcements choreographed with the White House Open AI for Countries has set out its stall with Altman stating that:
‘We’ve heard from many countries asking for help in building out similar AI infrastructure—that they want their own Stargates and similar projects. It’s clear to everyone now that this kind of infrastructure is going to be the backbone of future economic growth and national development. Technological innovation has always driven growth by helping people do more than they otherwise could—AI will scale human ingenuity itself and drive more prosperity by scaling our freedoms to learn, think, create and produce all at once.’
It’s taking time for traditional donors to catch up with this world view. FCDO’s own digital development strategy 2030 published in March 2024 showed huge promise and ambition before the cuts derailed it. But the shift towards digital development will come and those in the supplier base who recognise it early and recruit accordingly will benefit.
# 3 Pooled funding, facilities and funds
Projects are on the way out, even if there will be a large number of small projects in the short term as the FCDO and other donors struggle to retreat from working across a large and diffused spectrum. Time will show that the £2 – 3 million/3 – 5 year contracts in the current pipeline are not a good use of resources.
All the indications are that the quality bilateral donors are recognising that pooled funding and the aid instruments that deliver it are the way forward to achieve scale and lasting impact and to draw in and develop an ecosystem that supports localisation and the promised efficiencies and economies that policy promises.
Companies that are tooled up to run pooled funds and facilities will be well placed to ride out the crisis. Think ASI with the Public Finance Resource Centre (PFRC) and DAI Global with the Global Centre for on Biodiversity for Climate (GCBC) with the Climate and Ocean Adaptation and Sustainable Transition Fund (COAST). Those that don’t have any under their belts will need to fight hard to secure those that are coming through now. Those at the end of FY 2026/7 who have no pooled funds at all will likely face a bleak future.
# 4 Don’t fight localisation: it’s an opportunity for those that can see it – not just a threat
I’ve written, blogged and spoken lots about localisation over the last few years and I’m used to the narrowing of eyes and sideways glances from colleagues and friends from the traditional supplier base whenever I raise the L word.
I’ve become familiar with the challenges and difficulties of this much heralded policy – like defining it, what does it actually mean in practice – as well as the opportunities if presents. Familiar due to my involvement in the launch of the Contexium platform, built out of MetricsLed, the software company I chair.
Contexium’s raison d’être is to smooth the path of localisation by levelling up information and network asymmetries, by reducing compliance burdens on local agencies, by standardising due diligence processes for primes, by finding ways to identify and support quality and to mitigate the fiduciary risks facing donors.
I’m now convinced that the shift to locally led or delivered development is actually coming and will, imminently and formally, be reflected in tender documentation and the commercial scoring of bids.
Some in the UK supplier base – particularly companies who run large, pooled programmes like the Somali Stability Fund or the Aid for Syria – can see the benefits of walking the localisation walk rather than playing lip service to the idea.
The reality is that there will always be a need – as aid agencies shrink their own staff – for suppliers based in capital or regional donor hubs to manage and QC locally led programmes. For suppliers to take on and manage the fiduciary risks of operating in complex and fragile environments, to backstop and support local firms, to identify, source, verify and support quality.
It’s a big change to the existing model but it’s not that big a change. The UK supplier base has never really delivered the big programmes with their own staff. The technical work has always been farmed out to external experts, to associates, to freelancers. What will change is that increasingly the work will now be farmed out to local and regional experts. The challenges of managing and supporting these experts and supply chains will still require the sorts of skills found in the existing supplier base.
Those suppliers that recognise this and adjust their systems to get the best out of localisation will prosper as the shift to locally led development is actioned – I’m thinking here of Palladium in their work on local supply chains in delivering the UK’s humanitarian and emergency relief programme and ASI’s best practice setting stewardship of the Aid for Syria Fund. Suppliers who can identify, support and effectively deploy local expertise will survive. Those that resist, that continue to narrow their eyes at the L word, will face being swept away in the flood.
Conclusion
As I look across the sector, I see that a number of suppliers are hunkered down in a defensive crouch hoping to ride out the storm with existing programmes. But hoping for the best is not a strategy as the aristocrats of pre-revolutionary France found to their cost. Whatever emerges ‘on the other side’ will be very different.
My four life rafts are not the definitive list of options, but all warrant serious consideration. If your company is not looking at any of these four areas and positioning for the changes that each will bring you have reasons to be concerned.
As the aid pendulum swings towards an uncertain future the sector and its supplier base face an existential threat. It’s going to get Darwinian out there in the market, and only those who take bold action and seek to do things differently now will survive.
