British Council could 'disappear' within 10 years due to budget cuts: Report

The British Council, the UK’s flagship international organisation delivering educational services globally, is at risk of shutting down within a decade, its chief executive has said.

Scott McDonald, the British Council’s chief executive, said that the organisation could “disappear” within a decade owing to massive budget cuts which could leave hundreds of employees without a job and close the shutter for its institutions in around 40 countries.

McDonald told The Guardian, “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.”

What is the British Council?

The British Council is the United Kingdom’s organisation for international cultural relations and educational opportunities. Established in 1934, it operates in over 100 countries, promoting a wider knowledge of the UK and the English language, and encouraging cultural, scientific, technological, and educational cooperation.

The organization offers English language teaching, administers examinations, and supports arts and cultural programs worldwide. It also facilitates international educational exchanges and partnerships, contributing to global peace and prosperity by building connections, understanding, and trust between people in the UK and other countries.

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Why is it in peril?

British Council’s trouble began after it took a £200m loan from the government during the COVID era.

The government imposes commercial interest rates on a rolling one-year term, requiring annual reauthorization. McDonald described this as “a very painful experience for us,” noting that the organization faces insolvency every year unless the loan is renewed.

“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," the chief said.  

McDonald added that the council tried offering the government its collection of art worth £200 million in exchange for writing off its loan but that did not work.

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“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,” he said.

How would it impact Britain?

The council generates about 85 per cent of its  £1bn annual revenue from commercial activities like language classes. However, in recent times, its institutions in at least 30-40 countries may close their doors and McDonald thinks that a vacuum in those regions might pave the way for countries like Russia and China to flourish their educational organisations.

He pointed out that China is drawing students from around the globe by offering scholarships and other forms of aid, creating growing competition for UK higher education institutions in attracting talented students and securing billions of pounds in international tuition fees.