Committee publication · Correspondence · 30 June 2026
Correspondence with the Parliamentary Under-Secretary of State for Multilateral, Human Rights, Latin America and the Caribbean, relating to the British Council, dated 30 and 16 June 2026
Summary
Correspondence between the Foreign Affairs Committee and the Parliamentary Under-Secretary of State for Multilateral, Human Rights, Latin America and the Caribbean regarding the British Council's financial restructuring. The Under-Secretary confirms final-stage negotiations on a long-term loan restructuring, outlines £173m annual Grant-in-Aid funding through 2028/29, and identifies nine countries where the British Council will close offices due to cost pressures.
Key findings
- FCDO, British Council, and HM Treasury have agreed in principle on long-term loan restructuring; negotiations expected to conclude within weeks, with compliance against Subsidy Control Act required.
- Grant-in-Aid funding increased to £173m annually until 2028/29 (baseline £162.5m in 2024/25), plus £10m cash injection in 2026/27 and £15m exceptional payment in 2025/26 to support turnaround plan.
- British Council permitted to retain approximately £60m from asset sales in Madrid and Lisbon for financial restructuring instead of loan repayment.
- Nine countries identified for closure of Grant-in-Aid-funded offices: Botswana, Chile, Croatia, Mozambique, Peru, Tanzania, Trinidad & Tobago, plus two further countries withheld for commercial sensitivity reasons.
- Committee raised concerns about British Council's 'going concern' status affecting project delivery, staff job security, and parliamentary scrutiny; pressed for negotiations conclusion before summer recess and July Public Accounts Committee session.
Tone
ProceduralTopics
Key actors
Chris Elmore MP, Dame Emily Thornberry MP, British Council, FCDO (Foreign, Commonwealth and Development Office), HM Treasury, Helena Vega-Lozano, National Audit Office, Public Accounts Committee
Notable line
“… the British Council will be responsible for successful implementation of its turnaround plan.”
Key Quotes
“… the FCDO is agreed in principle with the British Council and HM Treasury on a long- term restructuring of the British Council's loan , and negotiations are currently in their final stages.”
“… the Government increased Grant-in-Aid funding for the British Council, allocating £173m Grant-in-Aid per year until 2028/29, a significant increase from the 2024/25 baseline of £162.5m”
“There are nine affected countries, two of which will be communicated privately due to commercial sensitivities. The other affected countries are Botswana, Chile, Croatia, Mozambique, Peru, Tanzania, and Trinidad & Tobago.”
“… the British Council's long-term future r.emains uncertain. The going concern affects the ability of the British Council to deliver. projects and generate new business, not to mention job security for its workforce, causing stress and anxiety.”
“… as we approach the end of the second quarter of the calendar year of 2026 (not to mention the summer recess), the Committee expects these negotiatibns to conclude soon.”
Source · parliament.uk record ↗