The Comptroller and Auditor General (C&AG), Amyas Morse, has today qualified his opinion on the 2014-15 Accounts of the British Council on the grounds of regularity. This is due to the British Council awarding remuneration packages to the new Chief Executive and Chief Financial Officer in excess of the level that requires approval by the Chief Secretary to the Treasury.
The British Council must comply with the Cabinet Office’s Guidance for Approval of Senior Pay. This requires that, if remuneration of newly appointed Senior Civil Servants exceeds the Prime Minister’s salary of £142,500, then approval must be sought from the Chief Secretary to the Treasury. The British Council agreed to award a salary of £142,000 to the Chief Financial Officer, along with an additional one-off payment of £11,837 and a salary of £185,000 to the Chief Executive.
However, certain specific approvals were not sought by the Council at the appropriate times and the Chief Secretary to the Treasury has not retrospectively provided these approvals. In refusing to provide approval retrospectively for the Chief Executive’s remuneration, the Chief Secretary to the Treasury also imposed a reduction of £200,000 in the budget of the Foreign and Commonwealth Office (FCO), as sponsor department of the Council. The Chief Secretary is also likely to reduce the funding of the FCO in respect of the Chief Financial Officer’s remuneration, and the amount of the reduction is currently under discussion. The FCO, in turn, reduced the funding provided to the Council in 2014-15 by £200,000 and may make further reductions in 2015-16 funding in respect of the Chief Financial Officer.
The C&AG has concluded that the remuneration packages agreed in excess of the levels requiring approval are not in conformity with the authorities which govern them and are, therefore, materially irregular.
In response to these issues, the British Council has reviewed its process to ensure it complies with all the requirements for key appointments. It will engage fully with the Foreign and Commonwealth Office to ensure all have a shared understanding of the impact of the actions it is proposing in order to reduce the risk of such an event re-occurring.