MPs urge government to write off British Council's £197m debt
The public accounts committee argues the organization needs grant funding to survive, citing a lack of trust with the Foreign, Commonwealth and Development Office.
By Thomas Schneider ·
Members of the House of Commons public accounts committee have told ministers to explore converting most of the British Council's £197 million debt into a grant. The committee stated the government currently lacks a clear plan for the organization, whose soft power contribution to the United Kingdom is valued at £1 billion annually.
The debt originated as a £60 million loan from the Foreign, Commonwealth and Development Office during the pandemic. That sum has since grown to £197 million under commercial terms. The original repayment was scheduled for this year, but the terms were restructured to allow the debt to be cleared over the next 15 years.
Despite cutting one-third of its workforce and selling historical assets, the council faces continued financial instability. A new turnaround plan proposes reducing staff by another 25% and closing operations in nine countries. The committee noted the council does not expect to generate an operating surplus until 2029 or 2030.
Staff across Europe have staged widespread strikes to oppose the cuts. Since 2021, the organization has lost more than 2,000 full-time equivalent jobs. If the planned reductions proceed, total headcount will have nearly halved since 2020.
Geoffrey Clifton-Brown, who chairs the committee, said the council needs government support to continue its work rather than being treated solely as a debtor. He noted that while the council must adapt to survive, it will fail without full support from the government.
The report calls for the Foreign, Commonwealth and Development Office to write to the committee on how to offset the loan against the council's soft power value. It recommends converting as much of the debt as possible into a grant or similar financial instrument.
The committee acknowledged a lack of trust between the two bodies and urged a more collaborative relationship. The council operates in just under 100 countries and reaches over 700 million people a year. Most of its income comes from teaching and exams, while grant-in-aid from the Foreign, Commonwealth and Development Office accounts for about 15% of annual revenue.
Source: The Guardian
