British Council ‘deserves support, not mistrust’, MPs say

The government must begin engaging with the British Council as the UK’s “soft power flagship” rather than pursuing it “as a debtor”, MPs have said.

Cross-party politicians on the Commons Public Accounts Committee have come together to demand an end to the perceived lack of trust between the Foreign, Commonwealth and Development Office (FCDO) and the embattled international promoter of cultural relations and education, which has been struggling financially since the pandemic.

According to the Financial Sustainability of the British Council report, the relationship has become one of suspicion between the Foreign Office and the arm’s-length public body, largely because the council owes £197 million to the FCDO and has indicated that may be unable to repay all of it.

The council’s vulnerability has potential knock-on effects for universities, as a result of its work promoting the UK as a top study destination, enabling institutions to offer their courses and qualifications abroad, and supporting international scholarships.

Politicians including Conservative MP Geoffrey Clifton-Brown, Labour MP and economist Clive Betts, and Liberal Democrat and former English lecturer Rachel Gilmour have urged the Foreign Office to consider offsetting the loan against the British Council’s soft power value and converting “as much of the loan as possible into a grant or similar”.

Since July 2020, when the British Council experienced pandemic-related disruption to its commercial enterprises – namely its English teaching and exams provision – it has suffered recorded net losses of £184 million.

The Foreign Office initially stepped in to help it weather Covid-19. It provided a £60 million loan, and the amount has since swollen. The two parties agreed that the British Council must repay its debt across a 15-year period.

However, this loan renegotiation was achieved only in 2024, with the MPs’ report describing it as a frustrating process for both parties. It was secured after the failure of an initial business plan, which was developed in 2020 and aimed to grow the British Council’s operating surplus by some £450 million.

Recalibrating has so far involved cutting more than a third of British Council staff, with plans to shed more, and closing council offices in nearly 10 countries.

But even if the British Council sticks to its plan to tighten the purse strings, it expects that it will be unable to generate any kind of operating surplus until 2029-30 – leaving the organisation “overly reliant on the unlikely scenario” that the economic conditions do not worsen, the report says.

Meanwhile, the bodies do not see eye to eye on issues such as how the British Council balances commercial activity with grant-based work.

“The FCDO says that the British Council must adapt to survive, but the British Council cannot do that without the FCDO’s full and practical support in its turnaround plans,” the committee finds.

“Both parties must work together to ensure the British Council can return to financial sustainability and continue to promote British soft power where it is most needed.”

The report recommends that the two agree on a plan for what happens if the British Council’s turnaround scheme fails to secure its financial security by 2029-30.

And as the British Council attempts to right itself, it must consult staff fully on any reduction in headcount and “resolve the tension” between shrinking and trying to achieve revenue growth, the report says.

Clifton-Brown, chair of the Public Accounts Committee, said that while the British Council had to return to sustainability “for the sake of the taxpayer”, it nevertheless had “inestimable value” and needed the government’s “full-throated support”.

“With the council seeking a leaner operation at a time of continuing precarity and obvious vulnerability for its finances, it needs the government’s help to continue its vital work, not to be simply pursued as a debtor.”

georgia.luckhurst@timeshighereducation.com