MPs urge ministers to write off £197m British Council loan
The Commons public accounts committee says the Covid-era debt should be converted into a grant, warning the British Council's finances remain precarious.
At a glance
- The Commons public accounts committee says ministers should convert as much as possible of the British Council's £197m loan into a grant.
- The £60m Covid-era loan, agreed under Boris Johnson's government, has grown to £197m and was restructured over 15 years.
- The council plans a further 25% staff cut, more asset sales and closures in nine countries, and expects no operating surplus until 2029–30.
The Commons public accounts committee has urged ministers to explore writing off a £197m loan to the British Council by converting as much of the debt as possible into “a grant or similar”.
In its report, the cross-party committee said the government lacked a “positive vision” for the council, whose soft power value to the UK is put at £1bn a year, and called on the Foreign, Commonwealth and Development Office (FCDO) to set out what more it could do to support the organisation and its work.
How the loan grew
The £60m loan was agreed by Boris Johnson’s Conservative government when the pandemic shut down the council’s English teaching and exams business overseas. Taken on commercial terms, it has since grown to £197m. Repayment had been due this year, but the loan was restructured to be cleared over the next 15 years.
The committee said that despite the council cutting a third of its headcount and selling off historical assets, its future remains precarious. A turnaround plan would reduce staffing by a further 25%, dispose of more assets and close operations in nine countries, yet the council forecasts it will not generate an operating surplus until 2029–30.
The report asked the FCDO to say what steps could be taken to offset the loan against the soft power value the council provides, and to convert as much of it as possible into a grant or similar. It said the committee recognised the council’s “inestimable value” and called on the FCDO and the council to set out a positive vision for its future and monitor the situation as partners, pointing to “a lack of trust” and urging a “more collaborative tone”.
Staff cuts and strikes
British Council staff across Europe have staged widespread strikes and protests against the cuts. The planned further job losses would mean staff numbers have almost halved since 2020, with more than 2,000 full-time equivalent posts lost since 2021.
Geoffrey Clifton-Brown, who chairs the committee, said that 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”. He said the FCDO’s position that the council must adapt to survive “may be true – but it will fail to do so without the government’s full-throated support”.
What the council does
The British Council is an arm’s-length body of the FCDO as well as an established charity and a commercial organisation. It operates in just under 100 countries and claims a reach of more than 700 million people a year. Most of its income comes from its teaching and exams business, while FCDO grant-in-aid accounts for about 15% of annual revenue and supports its three charitable objectives: cultural relationships, the English language and education.
Source: The Guardian.
Questions and answers
- Why does the British Council owe £197m?
- The debt began as a £60m loan from the Foreign, Commonwealth and Development Office, agreed on commercial terms by Boris Johnson's government when the pandemic shut the council's English teaching and exams business overseas. It has since grown to £197m.
- What does the public accounts committee want the government to do?
- It wants the FCDO to explore offsetting the loan against the council's soft power value and to convert as much of it as possible into a grant or similar, and to set out a positive vision for the council's future.
- How many jobs has the British Council cut?
- The council has cut a third of its headcount and plans a further 25% reduction. More than 2,000 full-time equivalent posts have been lost since 2021, with staff numbers almost halved since 2020.
