British Council

Thursday 11th June 2020 Written Statements

[The Minister for Asia (Nigel Adams)]

The Foreign and Commonwealth Office has sought an advance of £60 million from the Contingencies Fund in order to provide a loan of up to £60 million to the British Council, which is a key driver of UK soft power overseas. The British Council’s commercial income has been heavily hit by covid-19, leading to significant losses and the risk of insolvency. The British Council has taken measures to reduce its deficit and cut costs, and the FCO has supported the British Council in accessing the coronavirus job retention scheme in line with the scheme’s eligibility criteria for public sector employers, as well as similar schemes in other countries. This has helped it support many of its workforce, and those employed through its partners, funded through the commercial side of its business. The FCO is also working closely with the British Council on its future strategy, operations and long-term sustainable funding models.

However, without additional support from Government the British Council will shortly become insolvent. The FCO is therefore seeking a Contingencies Fund advance to provide an initial loan of up to £60 million to the British Council, drawn down in tranches depending upon need and contingent on the approval of FCO and HM Treasury, to stabilise its financial situation until mid-August 2020. The terms of the loan will be agreed with HM Treasury.

Parliamentary approval for additional capital of £60,000,000 will be sought in a supplementary estimate for the Foreign and Commonwealth Office. Pending that approval, urgent expenditure estimated at £60,000,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS285]