Spending will soon fall to a 20-year low, according to analysis of Foreign Office budget

Britain will be hampered in its ability to retain influence after Brexit as core spending on diplomatic services falls to a 20-year low, ministers will be warned.

An analysis of the Foreign Office’s budget since the 1970s, published this week, finds that successive governments have presided over cuts, which have affected Britain’s ability to advance its foreign policy aims.

Since the UK joined the EU, core diplomatic spending has fallen from 0.5% of public sector current expenditure to 0.1%, according to a report by the British Foreign Policy Group. It finds that if the government continues with its projected cuts, core diplomatic funding will fall to its lowest level in 20 years.

The report has alarmed senior MPs and will be launched by Tom Tugendhat, the Tory chair of the foreign affairs select committee, and Hilary Benn, the Labour chair of the Brexit select committee. It warns that further cuts will cause irreversible damage to the UK’s diplomatic capacity at a time when the country can least afford it.

Theo Clarke, chief executive of the not-for-profit Coalition for Global Prosperity, which is also supporting the findings, said: “An effective development budget, alongside an active diplomatic and defence strategy, keeps Britain at the forefront of bringing freedom, security and prosperity to those who need it most.

“As we leave the EU, we must reaffirm our commitment to engaging with the international community and building prosperity across the globe.”

It comes after the foreign affairs select committee concluded last year that the Foreign Office was facing an “unsustainable” lack of funding and that British diplomats needed a pay rise. Its report found that the Foreign Office has the lowest median pay of any government department for policy officers and middle management officers.

Last year, the foreign office sold its embassy in Bangkok to fund modernisation projects across its global estate. The sale represented the largest land deal in Thai history and the Foreign Office’s biggest ever sale. The department said the proceeds, equivalent to a third of its core annual budget of £1.2bn, would pay for 30-40 modernisation projects around the world.