British Council
Debate between Baroness Thornton and Lord Lemos
Baroness Thornton
To ask His Majesty’s Government what progress they have made in supporting and funding the work of the British Council.
Lord in Waiting/Government Whip (Lord Lemos) (Lab)
My Lords, I declare my interest: I was a board member of the British Council for 12 years—an unbroken record, I am told—many of them as a trustee, deputy chair and as acting chair.
The Government have increased funding for the British Council, and we are allocating it £173 million grant in aid per year until 2028-29. In addition, we have provided a one-off cash injection of £10 million this year to support the British Council to restructure its grant-funded operations, in line with its financial turnaround plan. We have also agreed to the British Council retaining the proceeds of asset sales of £60 million. These are significant increases, from the 2024-25 baseline of £162.5 million, when this Government took office. This is a very positive settlement for the British Council in what all noble Lords know are challenging fiscal circumstances.
Baroness Thornton (Lab)
I thank my noble friend for that Answer. I have great affection and support for the British Council, having been a parliamentary ambassador for it for many years, and having met many incoming delegations over the years. What I did not hear in my noble friend’s Answer was a resolution of the punitive £200 million Covid-era solvency and restructuring loan handed to the British Council by the then Conservative Government. The costs are eye-watering: £15 million in interest every year before even making repayments. Can my noble friend tell me whether this is going to be resolved?
Lord Lemos (Lab)
As my noble friend knows, the loan was made on commercial terms to ensure compliance with the UK Subsidy Control Act, which means that interest rates are set at market rates. For the last five years, the British Council has made losses of around £50 million per year, greatly in excess of the loan repayments. The priority, therefore, is for the British Council to address these ongoing commercial losses, return to surplus and implement its financial turnaround plan, to get itself back on to a long-term financially sustainable footing. In the meantime, the British Council continues to do excellent and important work, funded by grant in aid.