The UK’s foreign aid response to international disasters has become “very limited” due to the amount of the government’s budget being spent at home, a report has claimed.

The Independent Commission for Aid Impact (ICAI) said a third of the Foreign Office’s aid pot was being spent by the Home Office on supporting refugees and asylum seekers in the UK.

The allocation of the budget is within the rules, which say the first year of costs for such people can qualify as official development assistance.

But as a result of the “problematic” regulation – which the Commission says has been exacerbated in recent years due to schemes for Ukraine and Afghanistan, as well as small boat crossings – around £3.5bn was now being spent in the UK, rather than on help abroad.

And the shift away from foreign emergency responses to supporting refugees in the UK represented a “significant loss” in the efficiency of aid spending, it said, with no incentive for the Home Office to control its spending as it comes from another department’s budget.

The ICAI also said due to the ongoing limit to the foreign aid budget, which Boris Johnson’s government reduced from 0.7% of GDP to 0.5%, the UK’s response to international humanitarian emergencies had been “sharply curtailed”, with the Foreign Office forced to pause “non-essential” spending.

“This was seen in the limited UK response both to devastating floods in Pakistan in August 2022, and to the worsening drought in the Horn of Africa, which is expected to lead to widespread famine in 2023,” the report said.

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The conclusions echoed a report by the International Development Committee of MPs, who earlier this month said the world’s poorest countries were being “short-changed” by the government as the “political choice” was being made to spend the money at home.

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Responding to the ICAI findings, the committee’s chair, Sarah Champion, called on the Foreign Office to defend the aid budget from “profligate” Home Office spending.

“This review confirms that our valuable aid budget is being squandered as a result of Home Office failure to get on top of asylum application backlogs and keep control of the costs of asylum accommodation and support contracts,” she said.

“It is time for the UK government to get a grip on Home Office spending of the aid budget so that we can return to the real spirit of aid spending – spending that should promote and target the economic development and welfare of developing countries.”

Sky News has contacted the Foreign Office for a response.