fcdo is in the final stages of talks with the British Council over a £197m loan that must be repaid in September 2027, as the agency prepares further job cuts and closures in 11 countries. The plan would also pare back operations in 15 others and cut around 15% of staff across the British Council’s 7,880-strong global workforce.
British Council loan talks
The turnaround plan would remove about 1,180 jobs by 2029-30, on top of 2,110 posts already lost since 2021. Those cuts would come through redundancies, non-renewal of contracts and natural wastage, leaving the British Council still loss-making six years after the pandemic and not expected to make a profit until 2029-30.
The loan began in 2020 at £60m plus market-value interest. It now stands at £197m, and the British Council has not paid back any capital since 2024. It has already paid £42m in interest and expects to pay another £53m by 2029-30.
Gareth Davies on parliamentary clarity
Gareth Davies, head of the National Audit Office, said any agreement needed to provide clarity to parliament on the financial future of the agency and the eventual settlement of the loan. The National Audit Office said the current plan would need ministerial approval, placing the decision directly with the government rather than the British Council alone.
Geoffrey Clifton-Brown, chair of the public accounts committee, described the agency’s financial position as “deeply concerning and untenable” and said, “It is not sustainable for the FCDO and the British Council to continuously extend the loan year after year, rather than agree on a lasting solution; they must do so as soon as possible to ensure that the British Council is viable for the long term.”
Spain and Italy protests
Staff cuts and asset sales have already triggered protests by agency staff across Europe, including in Spain and Italy. The British Council had offered to pay off the loan through swaps for its art collection, which includes works by LS Lowry, Francis Bacon, Tracey Emin and David Hockney, but that proposal was rejected. The British Council has also called for the debt to be written off, and the FCDO and Treasury rejected that idea on the basis of the UK Subsidy Control Act 2022.
The British Council said it welcomed the National Audit Office report, saying it was taking all necessary steps to significantly cut costs and grow its revenue, and that it continued to work with the FCDO to resolve the key issue of its £197m government loan. The next decision now sits with the negotiations over a repayment structure aimed at settling the debt within 15 years.
