British Council’s £197m debt should mostly be written off, MPs say

The British Council offices in Dar es Salaam, Tanzania. A costly loan has forced the agency to lay off a third of its worldwide staff. Photograph: UCG/ View image in fullscreen The British Council offices in Dar es Salaam, Tanzania. A costly loan has forced the agency to lay off a third of its worldwide staff. Photograph: UCG/ British Council’s £197m debt should mostly be written off, MPs say Commons report calls on Foreign Office to bail out soft-power flagship reeling from job cuts and asset sales Ministers should explore writing off a crippling £197m loan to the British Council “a grant or similar”, MPs have said. The Commons public accounts committee said the government lacked a “positive vision” for the council, whose soft power value to the UK is put at £1bn a year. The MPs called on the Foreign, Commonwealth and Development Office (FCDO) to set out what more it could do to support the council and its work. Despite slashing a third of its headcount and selling off historical assets, the council’s future remains precarious because a £60m Covid-era FCDO loan on commercial terms has grown to £197m. The loan was agreed ’s Conservative government when the pandemic shuttered the council’s English teaching and exams business overseas. The loan was due to have been repaid this year but was restructured to be cleared over the next 15 years. Even with a turnaround plan to reduce staffing by a further 25% as well as dispose of more assets and close operations in nine countries, the council forecasts it will not generate an operating surplus until 2029–30, according to the committee. The report said: “The FCDO should write to us on what steps could be taken to offset the loan against the soft power value provided a grant or similar.” British Council staff across Europe have staged widespread strikes and protests against the cuts. The planned further job losses will mean numbers will have almost halved since 2020, with more than 2,000 full-time equivalent posts lost since 2021. The report called on the FCDO and the council “to work together to set out a positive vision for the future of the British Council that will build on its soft power value to the UK”. “It seems to the public accounts committee that the future of the British Council is still precarious and both it and the FCDO need to carefully monitor the situation as partners so that the British Council can confidently demonstrate to the world that the UK values its work in providing soft power,” it said.