The British Council, the UK's international cultural relations organisation, is facing significant financial challenges as it struggles to repay a £197m government loan taken out during the Covid-19 pandemic. According to a report from the National Audit Office, the organisation is not expected to make a profit until 2029-30, six years after the pandemic.
The loan, originally £60m plus market-value interest, now stands at £197m and is due for repayment in September 2027. However, the British Council has only paid back £42m in interest since 2024 and expects to pay another £53m by 2029-30. This has led to a net loss of £184m since the pandemic.
The organisation is now proposing a turnaround plan, which includes cutting its workforce by around 15% and closing operations in 11 countries. This is in addition to the 2,110 jobs already lost since 2021. The plan would also involve selling assets abroad to help reduce costs.
The British Council's financial struggles have led to protests from staff across Europe, with staff members in Spain and Italy expressing their concerns. The UK government has stated that it will work with the British Council to find a long-term sustainable agreement to repay the loan.
Gareth Davies, head of the National Audit Office, has called for clarity on the financial future of the British Council and the eventual settlement of the loan. Geoffrey Clifton-Brown, chair of the public accounts committee, has described the organisation's financial position as 'deeply concerning and untenable'.