Further note submitted by the British
Council
NOTE ON
SR2004 OUTCOME FROM
THE BRITISH
COUNCIL FOR
THE FOREIGN
AFFAIRS COMMITTEE
1. This note responds to the request of
the Foreign Affairs Committee for an assessment of the outcome
for the British Council of the Spending Review 2004.
The settlement
2. The key features of the outcome were
as follows:
2.1 Confirmation of the 2005-06 baseline
of £184.1 million, an uplift of £10 million on the current
Financial Year.
2.2 An uplift of £5.5 million in 2006-07
and £11 million in 2007-08, calculated from the 2005-06 baseline.
2.3 The granting in full of the reserve
claim for additional security measures of £4 million in 2004-05
and £6 million in 2005-06.
2.4 Confirmation for the third successive
Spending Review of ring fencing in which the total allocated in
the Spending Review White Paper is passed on without any subsequent
deductions to the British Council.
2.5 Confirmation that the British Council
will be able to retain its efficiency savings of £5 million/£8.6
million/£13.1 million over the triennium, particularly for
re-investment in security.
The consequences of the settlement
3. The outcome consolidates the British
Council's uplifts from the 2000 and 2002 spending reviews, which
had reversed the cuts made in the mid-1990s. These two previous
settlements ensured not only that the organisation could be placed
on a sustainable basis, but that it could also carry out specific
high priority objectives, such as expansion in Russia and China,
part-fund the Prime Minister's Initiative to recruit international
students to the UK, and undertake increased activity in the Arab
and Muslim world.
4. As the uplift for 2006-07 and 2007-08
covers little more than risen costs caused by inflation, the scope
for undertaking new areas outlined in the Spending Review submission
will in practice be limited to re-prioritisation of existing funding
(and the move of efficiency savings into activity, once security
requirements have been budgeted for). We are looking at scope
for more resources to be committed to engaging with reform in
the Middle East, India, Sport and supporting a new strategy for
UK Education in the global marketplace.
5. The settlement will provide the financial
security to undertake implementation of our Strategy 2010. This
will improve efficiency through adopting regional structures and
developing global products and services, enabling us to reach
millions of more users, reduce back office costs, and work more
closely to outcomes which reflect the Council's objectives of
improving mutual understanding between the UK and other countries
and of achieving recognition of the UK's creative ideas and achievements.
6. The granting in full of the reserve claim
will enable us to improve security in 29 of our locations, deemed
as falling in the most vulnerable category, over 2004-05 and 2005-06.
Given the evolving nature of the terrorist threat, retention of
efficiency savings during the triennium is an essential pre-requisite
for the Council to be able to carry out its duty of care to staff
and users of its centres. We are grateful to members of the committee
for their concern regarding the safety of our staff, premises
and the additional resources required for this purpose. Our ability
to retain all the funding realised through efficiency savings
is essential to ensuring we meet our security obligations to staff
and clients.
7. The confirmation of ring-fencing for
the third successive Spending Review should place the principle
of the level of funding stated in the White Paper being directly
passed on to the British Council and the BBC World Service beyond
peradventure. We are grateful to members of the committee for
raising the issue.
8. We are grateful for the statement of
the Foreign and Commonwealth Office during questioning by the
committee that the idea of top-slicing the Council's funding to
create a common fund for public diplomacy was not being pursued.
We hope that this idea will not resurface.
9. We warmly welcome the statement in the
2004 Spending Review White Paper which refers to extra resources
for the BBC World Service and the British Council to enable them
to "continue to deliver unbiased news, cultural and education
services to an ever-growing audience".
10. We welcome the proposal of the Treasury
to institute a review of the workings of public diplomacy co-ordination,
as established following the Wilton report of 2002.
11. The committee asked about the predicted
impact of the Chancellor's statement on civil service job losses.
Our Strategy 2010, and the efficiency review proposals, identified
a number of job losses in "back office" areas as the
Council moves towards a global IT-based Finance and Business System.
12. There are no targets set for the Council
in contributing to the Chancellor's target of £30 billion
in asset sales. However, we will be developing a fresh strategy
for reducing the Council's footprint in estates by 15 per cent
by 2007-08.
British Council
22 July 2004
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