Select Committee on Foreign Affairs Minutes of Evidence

Memorandum submitted by British Council


  1.  This paper outlines the British Council's new five-year strategy and summarises the implications for the Council of the 2000 Spending Review.


  2.  The new strategy is aimed at making the Council a cultural relations organisation fit for the 21st century and ensuring that it continues to promote the UK effectively throughout the world.

  3.  The Council has long been a success story. It is about winning recognition for the UK's values, ideas, achievements and expertise. It is also about developing mutually beneficial and lasting relationships between people of the UK and other countries.

  4.  But the world is changing faster than ever. Globalisation and the spread of democracy are challenging the existing order everywhere. Countries are having to adapt to major political, social and economic change. Information and communication technology is making possible the exchange of ideas and values on a global scale. Competition for influence and attention is intensifying. The UK too is changing fast. Devolution and diversity require new messages and a different tone of voice to convey a true picture of contemporary Britain. The Council is determined to meet these challenges and opportunities. The new strategy will enable the Council to respond to the rapid pace of political, social, cultural and technological change around the world.


  5.  The strategy has three main objectives:

    —  to maximise the impact and effectiveness of the Council's operations;

    —  to create a sustainable overseas network; and

    —  to exploit new media and strategic partnerships to reach wider audiences and deliver new services.

  6.  The strategy retains and builds on the Council's recognised strengths, particularly its emphasis on people-to-people contact and long-term engagement. But it has been developed out of a root-and-branch look at where the Council operates, what it does and how it operates. Its key features include:

    —  a shift of resources to transitional countries to fund increased activities in areas where the Council is able to achieve significant impact for the UK;

    —  greater emphasis on targeting young people, especially future decision-makers and opinion-formers and reaching a wider, younger audience;

    —  investment in the development of IT-based services and the use of digital technology to complement existing programmes;

    —  using revenue-funded services, such as English language teaching, to enhance the Council's impact and achieve increased influence for the UK;

    —  building strategic partnerships with other organisations which have similar objectives and whose activities complement those of the Council; and

    —  increasing expenditure on operational activities by reducing the size of the Council's overseas estate and putting resources into premises only where these are necessary to support operational objectives.

  7.  The implementation of the strategy will involve major re-deployments within the Council's existing budget—between countries, sectors and programmes. However, these re-deployments will be supplemented by the additional funding which the Council will receive as a result of the 2000 Spending Review. The Council's grant-in-aid (which currently accounts for a third of its total turnover) will be increased from £136 million in 2000-01 to £159 million in 2003-04 (see Annex A for further details). Although the additional funding is less than the Council had asked for, the settlement nevertheless represents a real terms increase in the Council's grant-in-aid of 9 per cent over three years—recognition by the government of the increasing importance of public diplomacy and the key role of the Council in enhancing the UK's reputation abroad. The additional funding will be used inter alia to develop a network of technology-based knowledge and learning centres, to support the Prime Minister's initiative to attract more international students to the UK and to strengthen the Council's operations in Russia and China.

  8.  The new strategy has three main elements:

    —  Geography—re-shaping the Council's overseas network.

    —  Programmes and services—developing new activities and ways of working.

    —  Sustainability—creating a sustainable platform for the Council's operations.


  9.  The Council's geographical priorities have been revised to take into account not only the importance of each country to the UK in political, economic and historical terms, but also the Council's ability to achieve long-term influence and impact for the UK. The latter includes the need to change perceptions of the UK; the demand for Council services and receptivity to Council programmes; the accessibility of the Council's target audiences and the availability of other mechanisms for influencing perceptions of the UK. The revised geographical priorities have been used to inform decisions about the level of grant-in-aid funding to be provided in each country. These decisions also took into account the Council's ability to achieve impact through its revenue-funded services in many countries, recognising that income from teaching English, administering British examinations and managing development and training contracts is critical to the implementation of the strategy.

  10.  Globally, the changes in grant-in-aid budgets will result in a shift of resources from developed to transitional countries. In many transitional countries, there is a huge appetite for engagement with the UK and for the experience and know-how which the UK can offer. The Council, particularly through its work in education and governance, is ideally equipped to achieve impact for the UK in such countries by providing access to British knowledge and expertise, and by helping to develop long-term sustainable partnerships with UK organisations. Over the next five years, increased funding will be provided for programmes in transitional countries, especially in Eastern Europe and Central Asia—in line with the recommendations of the Foreign Affairs Committee. There will be a corresponding reduction in grant-in-aid funding for a number of developed countries, mainly in Western Europe, where ties with the UK are already well established.

  11.  As part of the re-shaping of its overseas network, the Council will be closing four overseas directorates—Belarus, Ecuador, Lesotho and Swaziland. The office in Minsk was closed in December 2000, while the other three offices will be closed during 2001-02. The Council is in the process of re-establishing operations in Libya and Iran, and is committed to developing its activities in these countries over next few years. A new directorate will also be opened in Armenia, probably in 2002. In addition to the closure of overseas directorates, a number of offices in secondary cities will be closed over the next five years. The closure of regional offices in Germany and Nigeria has already been announced. Other closures are under consideration and will be made public once staff have been informed and the relevant overseas authorities notified.

  12.  A key feature of the strategy is a reduction in the overall size of the Council's overseas estate in order to free up funds for operational activities. In some countries, particularly in Western Europe, the amount spent on buildings and other fixed costs accounts for a disproportionately large share of the Council's budget. In others, for example in sub-Saharan Africa, the reduction in DFID-funded development and training contract management activity has resulted in the Council occupying buildings which are now too large for its needs. In all countries, therefore, the Council will be reviewing its overseas estate to ensure that it is fit for purpose. Where public access services are no longer required or programmes are managed largely off-site, offices will move to smaller, less costly premises. In some cases, for example in southern Africa, directorates will be organised on a "hub and spoke" model, with activities in one or more smaller directorates being resourced from a directorate in a neighbouring country. These measures will enable funding for operational activities to be increased.


  13.  The second key element of the strategy is the development of new programmes and services. Under the strategy, the Council will give increased emphasis to targeting the successor generation, especially those who are expected to be in positions of influence in future, such as young professionals and postgraduate students. The authority generation will not be neglected. However, many of the new programmes and services will be aimed at reaching a larger number of young people.

  14.  The next five years will see significant changes both to the nature of the Council's activities and to the way in which it operates. The changes will include:

    —  an increase in work in governance and human rights, and in education (especially education promotion, distance learning and vocational education);

    —  the re-direction of science work to focus on the promotion of UK science through exhibitions and other high profile activities; and

    —  the re-shaping of information services in response to the changing requirements of target audiences, with increased emphasis on the electronic delivery of information services—particularly in developed countries.

  15.  The Council's work in the arts and English language teaching will remain a core element of its programmes. Increasingly, however, programmes in all areas will exploit opportunities for cross-sectoral collaboration (for example, between science and the arts). In some cases, programmes will be managed as regional initiatives focused on specific themes (eg women's rights) or will form part of country-wide perception-changing campaigns organised in collaboration with other UK partners, such as the Britain Abroad Task Force. More emphasis will also be given to using grant-funded and revenue-funded services to complement each other (for example, in governance work).

  16.  Strategic partnerships will be developed with organisations which have similar objectives to the Council and where collaboration will result in mutual advantage. The Council's Memorandums of Understanding with the BBC World Service and the World Bank will be used to develop joint programmes, particularly in English language learning and in support of the global knowledge agenda.

  17.  The Council's revenue-funded services are crucial to the implementation of the strategy and challenging targets have been set both for increases in income from English teaching and examinations work over the next five years, and for maintaining the level of development and training contract activity currently managed by the Council. The growth of revenue-funded services, however, will remain focused on achieving the overall purpose and strategic objectives of the Council. The pursuit of income for its own sake is not part of the strategy.

  18.  In a number of countries (for example, the Gulf States), operations will be built around revenue-funded education services. In these directorates, priority will be given to developing a customer-focused, one-stop shop approach to the delivery of education services, bringing together English teaching, examinations, education information and other services to provide a high quality, integrated service for all customers.

  19.  The single most important area of investment in programmes and services over the next five years will be the development of new IT services. These will be used not to replace, but to complement and enhance the Council's core people-to-people activities. The internet will be a particularly important vehicle for the Council's work in Western Europe and other developed countries, where there is a high level of connectivity and web-based services will enable the Council to reach a much larger audience than conventional programmes. The initiatives in this area fall into four categories:

    —  creating portals to enable target audiences to access UK information resources—for example, the newly-developed human rights portal;

    —  providing support for networked communities and enabling professional groups to build links with UK partners—for example, MONTAGE, which enables teachers to exchange materials and information on curriculum development;

    —  introducing IT-based educational services—for example, the LearnEnglish web-site and the on-line registration of examination candidates; and

    —  developing corporate and regional intranets to enable staff to access UK specialist resources and frequently updated information about the UK.

  20.  The enhancement of the Council's corporate web-site, improving the quality both of its content and its presentation, will be crucial to these developments. Facilities will be provided to enable web users to access personalised information quickly and easily, and to enable the Council to establish and nurture lifelong relationships with its target audiences.

  21.  Over the next three years, the Council plans to establish a network of IT-based knowledge and learning centres, using additional funding secured in the 2000 Spending Review. These centres will provide a range of facilities including Internet access, support for distance learning courses, video-conferencing, multi-media and book collections. They will be targeted at young professionals, giving them access to resource materials from the UK and supporting the development of professional networks both with UK contacts and with similar groups in other countries.

  22.  Another significant development under the strategy will be the establishment of centres for English language learning support (CELLS) in key countries. These centres, which will be set up in collaboration with the BBC World Service, will develop English language courses and materials for dissemination through local broadcasting organisations and teacher networks. A pilot centre will be established in China in 2001-02.


  23.  The third key element of the strategy focuses on developing a sustainable platform for the Council's operations. Investment in staff, premises and IT is critical to the success of the strategy. Previous evidence to the Foreign Affairs Committee has highlighted the way in which, during the past decade, it has become increasingly difficult for the Council to maintain its overseas network. Pressure to establish directorates in more countries and to develop new programmes in response to changing government priorities has led to under-investment in the Council's infrastructure, threatening the quality of its work and the image it projects of the UK, especially through its buildings. The Council has also lacked the resources necessary to recruit and retain key staff (for example, in marketing and IT), and to invest in the development and re-skilling of its workforce, both in the UK and overseas.

  24.  The strategy aims to address these issues through a carefully targeted programme of investment in staff, premises and IT. The main elements of this programme will include:

    —  the implementation of a global human resources strategy, with a strategic staff plan, global standards for employment terms and conditions, contract types and recruitment, a commitment to mainstreaming diversity and to increased funding for leadership and professional development;

    —  the completion and upgrading of the Council's global IT infrastructure to provide a common platform, industry standard software and improved connectivity for all offices;

    —  the development of improved financial management systems;

    —  the rationalisation of the Council's headquarters' accommodation in London and the introduction of new ways of working; and

    —  the implementation of a rolling programme to upgrade the Council's overseas estate, including a reduction in the total size of the estate, improvements to ensure compliance with health and safety standards, and funding for the periodic fit-out and refreshment of buildings.

  25.  These investments will be funded from re-deployments within the Council's existing grant-in-aid budget, from the sale of properties no longer appropriate to the Council's needs and from increased income from revenue-funded services.


  26.  The implementation of the strategy will involve a substantial amount of change for all Council offices over the next five years—changes to programmes, to the delivery of services and to the way in which the Council operates. Inevitably, these changes will have significant implications for Council staff. There will be a need for extensive retraining of staff in some countries and for the recruitment of people with skills in areas such as marketing, public relations and customer care. The re-structuring of overseas operations, particularly in Western Europe, Africa and south Asia, will result in job losses in a number of countries. However, in others, new posts will be created as activities expand or new programmes are developed.

  27.  Managing the HR implications of change will be a key priority for all Council directors during the next few years. Staff re-structuring programmes will be managed to consistent global standards, including voluntary schemes for exit, and support and re-training for displaced staff. Managers responsible for the implementation of staffing changes will also receive training and support to ensure that the process is managed in a way that is consistent with the Council's values that all staff are treated with fairness and consideration.

  28.  The management of the Council's reputation during the implementation of the strategy will also be a crucial task. Given the scale of change, some adverse reaction is inevitable, especially from those who are users of services or who have participated in programmes which are being discontinued. Care will need to be taken, therefore, to communicate the rationale for the changes with key stakeholders, both overseas and in the UK, and to ensure that the Council's standing and reputation is maintained.


  29.  The British Council of the Future strategy represents an ambitious programme of change and modernisation. Building on the Council's recognised strengths, it aims to ensure that the Council is equipped to meet the opportunities and challenges of the 21st century. Over the next five years, the Council's operations around the world will be re-shaped to create a stronger, more effective organisation capable of achieving significantly greater impact for the UK.

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