Select Committee on Foreign Affairs Appendices to the Minutes of Evidence


Memorandum submitted by The British Council

  Further to the Council's appearance before the Committee to give evidence on the Council's new strategy I enclose further information that was requested by the Committee.

  You will see that the grant-in-aid allocation by region is marked "in confidence". This is because discussions on the changes in Country Directorates with both staff and local authorities are still in progress. The Council would be grateful if the Committee did not publish these figures.


  The British Council plans to close its office in Portland Place when the existing lease expires in July 2003 and to consolidate its London headquarters in its Spring Gardens premises by investment in that building and in IT services to support flexible working.

  The rent for Portland Place is currently £47,500 a year. However, the building would need to be completely refurbished before the lease is renewed or the building is let to another tenant. Assuming the landlord carries out the refurbishment, we would expect the rent to increase to approximately £800,000 a year from mid-2003. Leaving Portland Place saves us not just rent, but buildings-related running costs of a further £450,000 a year at current prices. Estimated total savings are thus £1.25 million a year.

  This figure needs to be adjusted in two ways:

    —  We have allowed £300,000 a year to support flexible working and to accommodate some peripheral functions outside central London;

    —  We currently estimate a cost of £3.3 million to refurbish Spring Gardens so as to cope with the influx from Portland Place, to improve the environment, and to support flexible working.

  Using a 6 per cent discounted cash flow factor, the break-even point for the payback on this investment of £3.3 million when balanced against the savings from leaving Portland Place falls in 2007. Thereafter we expect a saving—compared to continuing in Portland Place—of nearly £1 million a year. The Spring Gardens lease runs to 2016.


  A total of £18.6 million has been budgeted for the HR transition costs of implementing the Council's strategy over the next five years. This is made up of £9.2 million for early retirement costs in the UK and £9.4 million for staff restructuring overseas.

  The overseas costs are broken down as follows:

    —  early retirement/redundancy payments  £7.6 million

    —  re-training  £1.4 million

    —  recruitment  £0.4 million

  In addition to the UK early retirement costs, £0.4 million a year will be spent on managing the re-structuring programme globally, including support for managers, and counselling and outplacement services.

  These figures are estimates only at this stage and will be refined as detailed re-structuring plans are agreed for overseas directorates and HQ departments.

11 April 2001

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