The British Council could “disappear” within a decade, harming the UK’s global status and leaving an international vacuum to be filled by Russia and China, unless the government acts to save it, according to the council’s leader.
Scott McDonald, the British Council’s chief executive, said he was looking at £250m in budget cuts, losing hundreds of staff and axing the council’s presence in up to 40 countries.
McDonald said that without financial guarantees from the government: “I think we’d be in real danger of disappearing, probably over a period of a decade. And I don’t think I’m saying this just for headlines, I think it’s really true.”
The financial crisis would imperil hundreds of millions of pounds in economic activity generated by the council’s activities, jeopardising Britain’s soft power and cultural influence, with knock-on effects on diplomacy, tourism and international student recruitment.
The council – which independently generates 85% of its nearly £1bn annual revenue from commercial activities such as language classes – has an active presence in 100 countries but is being forced to consider closing down operations in 30 to 40.
“That leaves a vacuum in those 30 or 40 countries. There’s no British Council there, promoting the UK and our culture, our education, and so that vacuum gets filled – maybe by allies of ours but maybe also by some non-allies. It opens up for Putin’s Russia to move into these places to teach language and promote culture and capture the minds of young people. So on a broader scale, that’s enormously detrimental,” McDonald said.
He noted that China was attracting students from across the world through scholarships and other aid, with UK higher education facing increased competition for talented students and billions of pounds in international tuition fees.
Prof May Tan-Mullins, provost of the University of Reading Malaysia, said the British Council’s guidance was invaluable in establishing the campus.
“UK education is an international export success story but it’s not a given. Places such as Singapore and Malaysia have historic ties to Britain but UK universities have to work hard to convince students, who are able to travel almost anywhere in the world, to go to a British institution, and the British Council plays a big role in that,” Tan-Mullins said.
Prof Neville Wylie, chair of the Connected Scotland international higher education group, said: “The global reputation we enjoy today is simply inconceivable without the contribution made by British Council teams, in the UK and across the world.”
The council’s financial instability arises from a £200m Covid-era loan from the government. The government charges commercial interest rates with a rolling one-year term, requiring annual reauthorisation that McDonald said was “a very painful experience for us, because each year we’re going to be insolvent unless the loan is renewed”.
McDonald added: “We really need help on that loan. The government’s got to turn it into something viable for us, and at reasonable terms. And they’ve got to start funding us so that we can do more around the world.
“I would like the loan to be written off but I think in this economic environment, it’s very difficult to justify. So I would just like reasonable loan terms of something like 25 years and a lower interest rate, and then we’d commit to paying it back fully.”
A spokesperson for the Foreign Office said: “We remain committed to ensuring the financial stability of the British Council, and our continued funding underlines our support for their important work in promoting the English language, UK arts and culture and education.
“Due to its commercial activities, the British Council is legally subject to subsidy controls, ensuring fair and free market competition in the market, and we remain committed to recovering the loan once their finances allow. We continue to work closely with the British Council and the Treasury on this issue.”
McDonald said he offered the council’s collection of art valued at £200m, including works by Barbara Hepworth, Steve McQueen, David Hockney and Rachel Whiteread, to the government in exchange for writing off the loan but to no avail.
The council wants to avoid selling any of its art collection, much of it given by artists to support the British Council’s work. But its financial crisis may leave no alternative.
“If we get better terms on this loan, and we get some extra funding, I think we should be able to prevent significant art sales. If we get none of that, we have a £200m loan hanging over our heads that’s going to be due in another 12 months,” McDonald said.
The British Council has championed artists since its foundation in the 1930s. Sonia Boyce, whose commission for the council won the Golden Lion at the 2022 Venice Biennale, said: “I am not exaggerating when I say that working with the British Council has been a career highlight. So much has changed for me consequently.”
Other governments fund their outreach more generously: Germany’s agencies including the Goethe-Institut receive around £900m a year while France spends £600m supporting the Alliance Française and others, far above the UK government’s £160m.
“Even a smaller nation like Portugal, its equivalent gets £250m. We’ve gotten away with supporting the UK’s culture and education for very little,” said McDonald, a member of the UK government’s newly-created “soft power council”.
