Scaling what works: The UK can help deliver for the world’s children

This essay is the final piece in The next frontier: Reimagining financing for development and growth — a series convening diverse global voices to redefine collaboration and unlock capital for future growth.

Over the past decade of work with our partners, I have been confronted by a pervasive problem: Global financial flows, and the architecture that governs them, are failing the world’s children. Money seems to flow away from the children in greatest need rather than toward them. When this happens, children miss vaccinations, schools close, clean water is scarce, and the opportunity to escape poverty vanishes for this generation and the next, leaving the world’s greatest unrealized human potential unfulfilled.

Cascading crises — exacerbated by the impacts of the changing climate — have arrived faster than they can be absorbed. Financial buffers built up over the course of many years have been drawn down in months.

Moreover, both domestic fiscal space and concessional support for countries made available by international institutions are being exhausted by crisis-response measures, which perpetuate insecurity by depleting the resources available to invest in future prosperity.

This shortfall is unfolding at a time when budgets are already stretched thin: Over 3 billion people live in countries that are already spending more on debt servicing than health and education combined.

For countries such as the United Kingdom, the moral ambition to support children around the world can still unify government and wider society. But a plan to achieve this, with tight domestic finances themselves, and fragile support for international spending, has not been fully articulated.

Upgrading this outdated financial architecture is one place to start; fixing it must be understood as an immediate, existential necessity. Becoming a more proactive participant in the system is something the new United Kingdom foreign secretary seems to embrace, as signaled through his decision to take the U.K.’s seat on the board of the World Bank.

Specific innovations are not hypothetical. They exist and are already working, although not yet at scale. The demand signal from emerging markets and developing economies is unambiguous: Countries know what they need, what they can contribute, and what they can deliver.

The new U.K. government has an opportunity to pick up this agenda, strengthening the relationships built during the Global Partnerships Conference in May, and establish a coalition that can deliver for the world's children.

Women gather for a community meeting at a Health and Welfare Centre in rural Rajasthan, India. Photo by: CIFF

The system was built for a different era

The challenge of development finance is often perceived as purely a volume issue, but it is deeply tied to the incentives that limit policy choices. For example, when governments subsidize fossil energy and fertilizer in an understandable pursuit of more immediate stability, they lock in wasteful production and consumption while missing opportunities to build resilience against the next shock. Indeed, two-thirds of fossil energy is lost before being productively used, and over half of synthetic fertilizers are similarly lost before reaching crops. In comparison, investment in renewables and integrated soil health builds more independent local and national energy and food systems, mitigating the impact of future supply disruptions and reducing the need for external help.

This misalignment extends to the wider global architecture, which undoubtedly was designed for a simpler era. This refrain is well-worn, and the list of dysfunctions is long. Credit rating frameworks do not adequately reward long-term investment in resilience. The capital adequacy rules for multilateral development banks, or MDBs, have prevented institutions from lending at the scale that external needs (and their own mandates) require. Sovereign debt resolution mechanisms are slow, contested, and frequently inadequate.

The collapse of official development assistance, or ODA, has compounded the sense of permacrisis for low- and lower-middle-income countries: The scale of cuts has been precipitous, and the human consequences have been immediate. Concurrently, the sector has lost traction with the public in many OECD nations, due to the cost-of-living crisis, fiscal stress, and undeniably concerted disinformation. This has played out in the U.K. and Europe, but the trends are mirrored internationally.

Those committed to addressing global inequity and working with the new U.K. government should not accept declining ODA levels as an irreversible trend. At the same time, a simple return to the previous era would be inadequate to meet today’s challenges. The gap between available concessional finance and required investment demands reforming the system itself. Low- and middle-income countries are clear about their expectations regarding fairness and sovereignty as part of any reset, while nontraditional donors are projecting geo-economic power and offering new and alternative forms of partnership. With net ODA projected to fall again this year, we must target scarce ODA grants to the poorest countries and — critically — make existing resources work harder.

People exercise jogging, walking, cycling along Sudirman Road during a car-free day on Sunday morning in Jakarta, Indonesia. Photo by: Syahrir Maulana / iStock

A solar farm in Japan. Photo by: topthailand/ istock

Technical tools exist. Now, political courage must follow

Transformative solutions to optimize capital are not a distant prospect. Delivering systemic shifts requires a focus on increasing and diversifying capital solutions while also ensuring that capital is affordable. There’s an opportunity for governments to champion and scale proven models:

MDB capital adequacy framework reforms, often known as CAF, can create meaningful balance sheet headroom; in other words, MDBs have the flexibility to unlock new lending using existing assets, without requiring immediate capital injections from shareholders. Those efforts should not be over. A second phase of CAF would address additional headroom opportunities, focus on making the multilaterals, bilateral, and national development banks work better together, and focus on the deployment of that headroom.

 MDB guarantees can support debt reprofiling, refinancing, and debt swaps that give fiscally constrained governments breathing room while lowering the medium-term cost of capital. The new Global Hub for Debt Swaps for Development at the World Bank, championed by Spain as part of the United Nations Fourth International Conference on Financing for Development, offers an opportunity to standardize this underutilized instrument and free up fiscal space by scaling debt-for-development swaps, as well as swaps delivering climate and nature outcomes.

 Catalytic equity can mobilize private capital at much higher multiples than concessional debt, crowding in institutional investors at scale. The World Bank Private Investment Lab is making the case for catalytic equity in partnership with private financiers, who are keen to collaborate under the right conditions. While development finance institutions, or DFIs, have deployed this capital for years through tools such as the World Bank’s IDA Private Sector Window, new momentum is being driven by players such as Allied Climate Partners, a philanthropically backed platform that crowds commercial capital into emerging markets.

 Currency swap facilities, local currency lending mechanisms, and debt conversion instruments can tackle currency risk by addressing the mismatch between dollar-denominated obligations and local-currency revenues. The Group of Seven leading economies has recently discussed a pooled fund with the Multilateral Investment Guarantee Agency — the World Bank's guarantee engine — to support public development banks in local currency lending. This needs to move from discussion to capitalized reality, with first-loss insurance, genuine interoperability between institutions, and a governance structure that reflects country priorities.

 Credit rating reform and debt sustainability analyses need to ensure that countries investing in resilience are rewarded with lower borrowing costs. Uganda and the Coalition of Finance Ministers for Climate Action are doing the detailed methodological work to make the case for credit rating reform. By demonstrating the macroeconomic benefits of resilient agriculture in a climate-vulnerable economy, this work provides a template for other countries.

 Regional financial institutions, when properly capitalized, can provide a buffer against political volatility and overreliance on concentrated sources of financing. Operating closer to their markets, they often understand political economies better than global counterparts and can originate faster. The African Development Bank's intention to scale its trade finance guarantee program through its New African Financial Architecture for Development framework is a significant example of bold, continent-led initiatives. These efforts merit a meaningful response.

All these solutions have the potential to move from the margins to the mainstream as levers of standard practice.

Over 71,000 young girls received vocational skills training as part of the Rajasthan government-led Project Manzil in India between 2019 and 2025. Photos by: CIFF

Valuing both outcomes and ownership will rebuild trust

For too long, the development ecosystem has measured success by the volume of money moving out the door rather than the tangible results achieved with and by communities. Indeed, much of the debate in the U.K. has polarized and ossified around an input measure, the 0.7% target, that was agreed at the U.N. and then adopted in U.K. law. Setting aside legitimate moral, legal, and fiscal arguments for a moment, the evidence is telling us that publics do not trust such measures.

Outcomes-based financing, championed by governments such as India, Peru, South Africa, and Sierra Leone, both builds stronger alignment between stakeholders working toward development goals and ties finance to results that taxpayers can see. The Skill Impact Bond in India shows how this works in practice: Its financial structure is designed around women's job retention, compensating training providers based on that outcome rather than only the input — in this case, training.

MDBs are also shifting toward this model: new World Bank ‘missions’, for example, focus on measuring impact instead of money allocated. In April, several MDBs launched the Water Forward platform, committing to improving water security for more than 1 billion people. The consequent country-led water compacts, developed with the World Bank and partner MDBs, show that investment can scale when institutions align behind country priorities. The next step in successful delivery will be building state capacity to prepare, execute, and manage performance so that Water Forward leads to the desired outcome of sustainable water services — and the intended impact on health, prosperity and nature — not just the completion of infrastructure projects. Input measures are useful intermediate guides and should not be abandoned, but they neither guarantee nor communicate results.

Young child in Wolaita Zone, Ethiopia, enjoying fresh running water as part of the Geshiyaro Project on water, sanitation and hygiene. Photo by: CIFF/Speak Up Africa

A UK road map for collective action

Many countries have signaled intent to drive reforms, but the U.K. carries a particular weight of expectation from its legacy of global financial stewardship, having spearheaded the global response that stabilized the international financial system during the 2008 crisis. Its recent hosting of the Global Partnerships Conference, or GPC, in London, has reignited that expectation.

We may have a new prime minister and a new foreign secretary in place, but if the U.K. is to continue its efforts to regain trust and agency on the world stage, it must build on recent efforts. Having assembled over 50 countries and diverse partners at GPC, the U.K. cannot afford to lose this momentum. The conference was a starting point; the definitive test of British leadership will be its presidency of the Group of 20 major economies in 2027. This summit offers a monumental opportunity to help coalesce demands for structural change and solidify a new global compact for development finance. Where the G20 itself struggles in discord, a critical mass can still be generated by coalitions that unite a subset of ambitious G20 governments with smaller but more numerous partner countries and institutions — if the U.K. is strategic and deliberate enough.

With a new prime minister currently developing a comprehensive policy platform, now is also the time to define a meaningful agenda for the G20 presidency, structured around five core pillars:

Debt relief and fiscal insulation
The U.K. must immediately provide funds and the support needed to enable the rapid deployment of debt swaps, reprofiling mechanisms, and conversion instruments. These tools give the most fiscally constrained governments the space to invest rather than merely servicing obligations. Blueprints already exist, spanning proposals by the South African G20 Presidency to the Expert Review on Debt, Nature and Climate. Over the medium term, this must evolve into the widespread adoption of more resilient instruments and a structural rethink of access to affordable capital.
MDB optimization
Shareholders must demand that MDBs deploy their existing balance sheet headroom using highly responsive instruments. This means, for example, scaling guarantee programs that lower the cost of capital by holding institutional boards accountable for utilizing the balance sheet capacity they have been given. Capital should be deployed better as a system, leveraging the local expertise of regional development banks. And of course, the International Development Association must be replenished and reformed to meet future needs.
Private capital mobilization
Building on the approach of the U.K. emerging markets task force, a coherent program should include support for domestic public-private investor task forces that can accelerate local project pipeline development, reduce the transaction costs that make individual deals prohibitively expensive, and offer capacity support for efforts to attract investment.
Country platforms and government effectiveness
Country platforms that are genuinely country-led — with financing and investment aligned behind government priorities rather than donor preferences — can end the fragmentation that makes development cooperation so costly to manage. But platforms only work if governments have the capacity to use them. International support must prioritize strengthening public financial management systems, data infrastructure, and civil service capability to absorb investment and deliver results. Investing in state capacity is the most important precondition for success — and the only sustainable path to rebuild public trust.
Narrative and social license
Public skepticism about the development system is real and growing, creating a vulnerability that is easily exploited by political forces that would dismantle international cooperation altogether. While recent events have shown a growing receptiveness to the tangible benefits of international cooperation, the only definitive antidote to cynicism is demonstrable, measurable results. Citizens must see and feel government efficacy in their daily lives through better health services, cleaner water, and greater resilience to climate change and other shocks.

Children grow up fast, and missed opportunities scar for a lifetime

A child who misses vaccinations today, whose school closes this year, who grows up without clean water, can’t just pause her life until funding returns. She will continue to grow and, in the meantime, these funding gaps will permanently scar her health, educational attainment, and lifetime productivity, as well as the social capital and trust that functional states require to operate. With the strongest El Niño in living memory on the horizon threatening stability even further, there is no time to waste.

While I’ve provided an outline for the U.K.’s G20 presidency based on financial architecture, the ultimate test will be outcomes for citizens. Food, water, and energy are all universal human needs that demand massive public and private investment. The U.K. could pick any one of these — or indeed the nexus of two — and build a compelling agenda around tackling the cost of living and improving community resilience, while showing the benefits of international cooperation and bold political action for the public good.

If the U.K. were to be bold and extend the hand of partnership, many would rally and help collectively deliver meaningful change for children.

About the author

Kate became CEO in March 2016, having run CIFF’s climate team since 2009. Her current board roles include the Global Climate Finance Centre, the WeProtect Global Alliance, and the European Climate Foundation. Previously, she has served on the advisory committees for the presidents of COP26, COP28, and the inaugural Africa Climate Summit. She has received multiple awards for her work, including a First-Class Order of Zayed in the United Arab Emirates, a Friendship Award in China in 2024, and an Order of the British Empire in 2023.

Prior to CIFF, Kate’s career spanned roles in government, finance, consulting, think tanks and NGOs, including at Climate Change Capital, where she was head of policy. She has advised policymakers in several roles, including as senior policy adviser for the United Kingdom’s Group of Eight and European Union presidencies in 2005, and as a sherpa to the EU High Level Group on Competitiveness, Energy and the Environment in 2008. She holds a bachelor’s degree from the London School of Economics and a master’s in Public Policy from the Harvard Kennedy School, where she was a Fulbright scholar. In 2008, Kate was named a World Economic Forum Young Global Leader.

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