Background
The British Council is an executive non-departmental public body sponsored by the Foreign Commonwealth & Development Office (FCDO). It is a cultural and educational organisation and it represents the UK abroad. Its work includes teaching English, encouraging international students to study in the UK and supporting British students to study overseas.
The Covid-19 pandemic severely impacted the British Council’s finances due to the suspension of many of its income-generating activities, such as English language teaching and exam administration. To support the Council, FCDO provided an emergency loan with interest attached, allowing the Council to continue its operations post-pandemic. Currently, £197m of the loan remains outstanding, and the Council does not believe it will be able to pay back the loan under current arrangements.
In a recent Foreign Affairs Committee hearing, the British Council reported that it had been in discussion with FCDO for 16 months to renegotiate the terms of the loan and that no progress has been made. The current loan term comes to an end in September 2026.
Scope
We will investigate and report on the financial position of the British Council, and the progress of the renegotiation of the outstanding loan from FCDO. We will be considering:
- the initial terms and conditions on which FCDO gave the British Council the post-Covid loan
- how the British Council’s finances have changed since the loan award
- the loan negotiations between FCDO and the British Council going forward
NAO team
Director: Lee Summerfield
Senior Audit Manager: Tom Tyson