Examination of Witnesses (Quesitons 1-42)|
Witnesses: Vernon Ellis,
Chair, British Council and Martin Davidson CMG, Chief Executive,
British Council, gave evidence.
3 November 2010
Q1 Chair: I welcome Mr Vernon
Ellis, the Chairman of the British Council, and Martin Davidson,
the Chief Executivea very warm welcome to you both. Mr
Ellis, I think you would like to make a short opening statement
before we get into questions.
Vernon Ellis: I will keep it very
brief if I may, Chairman. I thought it might be worth setting
in context, first of all, who I am. I have been Chair since 25
March this year. My background was 41 years at Accenture, where
I led its operations in Europe, the Middle East, Africa and India,
and then I became international chairman. Over the past decade,
I have also had an increasing involvement in the arts. Since the
end of 2005, I have been chair of English National Opera.
When I was approached in January to see if I
was interested in being appointed, there was, of course, a competitive
process and I dug around to find out a bit about the British Council.
I had three impressions. One was that I was very impressed by
the wide range of activities, the impact they seem to have and
their importance to the UK. Secondly, perhaps because of that
wide range and because it had developed into quite a complicated
organisation, it was hard to get to the essence of what the British
Council was about. Thirdly, I thought that my experience was relevant
to the skills listed as requirements in the brief, and that I
would bring something to it.
Since joining, I have spent a lot of time on
itthe six days a month was an expected underestimateand
I have travelled a great deal. I was with the Prime Minister's
trip to India and I am going to China and other countries. The
impressions I have got over those six months have confirmed all
those three impressions; but, even more so, have confirmed that
it is an important organisation, which can and does make a big
impact. But it is also a little fuzzy and a little complex. I
recognised from my experience at Accenture that it was on a journey
of getting its arms around a very disparate set of countries around
the world. Two things seemed to be important. One was to clarify
the purpose; the other was to simplify the organisation.
Its purpose is not very different from what
we have said. It is about creating international opportunities
for and trust between the people of the UK and other countries.
We do it by using our great assets: the English language, higher
education and the arts. In terms of organisation, perhaps that
is the key, because if we focused very precisely on geography
and three sectorsEnglish and exams, education and society,
and the arts and cultureit would perhaps be a simpler organisation
than the one we have at the moment.
I will close by saying that I have been absolutely
delighted by the rapport I have had with the executive. At the
end of the day, they have to managenot methe degree
to which they experience things that have been useful. Lastly,
on the rapport and engagement of the trustees, it is really important
that we have trustees who are involved and committed. We have
made a lot of progress, but I am hugely optimistic about the future.
Q2 Chair: Thank you very much.
Some of us were in Afghanistan last week, we visited the British
Council there and we were quite impressed by what they were doingit
was a good visit.
Vernon Ellis: Good.
Q3 Chair: Can I take you back
to the events of the last couple of months and the fairly significant
spending review that was announced a couple of weeks ago? How
did the dialogue go with the Foreign Office and the Treasury and
was there any point when your future as an NGO was threatened?
Vernon Ellis: Not explicitly,
at all. There was no dialogue with the Foreign Office about an
agenda to cut us. Right from the beginning the Foreign Secretary
has indicatedpublicly in speechesthat he regards
the British Council as an important arm. It is a subtle thing,
because the benefits are oblique, rather than direct, but it brings
benefit and it is an important part of our integrated approach
overseas. Of course, one only has to read to know that there must
have been questions from some quarters, but it has never been
part of the agenda with us. Martin, you have been more deeply
involved in the actual dialogue than I have, although I have interacted
with the Foreign Secretary on one or two occasions and it did
not come up then.
Martin Davidson: Obviously the
question was asked, along with other NDPBs, but I do not think
that we felt at any particular time that there was an agenda for
the British Council to be abolished.
Q4 Chair: How did the conversations
with the Treasury go? Did you have the conversations with the
Treasury, or was it directly with the Foreign Office?
Martin Davidson: Obviously, as
an NDPB under the Foreign Office, we have to direct much of the
conversation through the Foreign Office, but we also have a separate
conversation with the Treasury. The conversation was very much
as one would expect. What is the value to the UK of the work of
the British Council? How do you demonstrate value for money for
the expenditure that the British Council undertakes? Are there
ways in which the British Council can do the work that we do at
the moment in a cheaper and more efficient way? That was the nature
of the conversation that we were having.
Q5 Ann Clwyd: Can you tell me
what activities the British Council will need to stop or curtail
to meet the 25% cut in spending? Can you give us an overview?
Vernon Ellis: There are perhaps
three areas that I would pick on. First, as I have said, the journey
we have been on is to try to get more integration and more synergy.
That has meant building some programmes and functions at the centre
in order to do that. I think that we have reached a point where
a lot of that could be done more naturally with a simpler organisation.
There is a cost to be saved at the UK end in the headquarters.
Quite a lot has been done already, by the way. A lot of the cost
was taken out last year by moving some functions to India, offshoring
them, and by rationalising some other functions, but I think that
we all agree that more can be done in London.
Secondly, in terms of activities, the area that
is perhaps hardest to get your arms around is what we call "society".
We are seeing education as a society. There is a seamless run
from education, higher education, schools, schools linkage, inter-cultural
dialogues and so on. At one end of that you might say, "Are
we really making a sustainable impact, or is it just making a
nice dialogue and making an individual impact on individuals?"
I think that there are some programmes that we can cut out.
Thirdly, we will have to look at our geographic
coverage. We very much do not want to pull back. We see our local
coverage as being essential to our role, but maybe there are some
cleverer things that we can do on cutting costs, on doing things
in new ways, on perhaps having hub and spoke, but in some way
rationalising some of the operations, particularly in smaller
Q6 Ann Clwyd: In addition to the
Grant in Aid from the FCO, you receive over £10.5 million
in education grants from other Departmentsfrom the Department
for Education, from the Department for Business, Innovation and
Skills and from the three devolved Governments. Following the
spending review, will you continue to receive that funding and
will you continue the activities that funding supported?
Vernon Ellis: I will turn to the
chief executive for a more detailed answer, but the general answer
on that and other things that are funded under grantsusually
for full cost recovery work or other grant workis that
it would depend on their detailed review following the spending
round. We won't yet know the answer to all that. Martin, you might
want to expand on that.
Martin Davidson: For example,
the grant from the Department for Education, about £7 million
last year, was very much about links between schools in England
and other countries, and support to teachers to gain international
experience. From the Department for Business, Innovation and Skills,
it was to support the promotion of higher education and the recruitment
of students into the UK through the Prime Minister's initiative
and specific work on developing a stronger education link with
India. We are having discussions with those Departments at the
moment on what they feel they will be able to continue, but on
our side we believe that the opportunities to build stronger links
between schools and to give young people who are here in this
country an opportunity to gain international experiencealbeit
largely through internet or IT-based exchangesare all very
important initiatives. The money from the three devolved Administrations
was very much in support of those same programmes. In addition
to that, Scotland, for example, supported staging the Black Watch
play by the National Theatre of Scotland in Washington and New
York, where it had the most extraordinary reaction from the audience.
The play is about the reaction of ordinary British troops to serving
Sir Menzies Campbell: I saw it in Brooklyn.
Martin Davidson: The reaction
from the audience was truly extraordinary. Those grants from the
other Administrations and the other Departments are important
for us, but we have to recognise that in the present circumstances
it is likely that they will be reduced.
Q7 Ann Clwyd: You also raised,
I understand, about 70% of your money through commercial activities.
Can you explain what those are?
Vernon Ellis: The bulk of those
are English and exams. As I have been around, I have seen the
value of that, not just in the commercial raising of income, but
the linkage to our other activities. There is a huge demand for
English around the world and it is growing hugely in countries
like China, but there is still very strong demand in places like
Spain and Italy where we have very active teaching centres. I
was in Rome last week for the opening of a new Rome office, which
is very profitable. English also extends into other parts of our
work. What we are doing in India is funded partly by state Governments
there. That is not through language teaching centres; it is training
master trainers, who train teachers who then reach out to 14 million
children. So we see English as being very synergistic with our
Similarly, exams are quite profitable. A lot
of them relate to Englishthey are English exams, IELTS
with the Cambridge exam. What we are selling is decent premises
and decent supervision, but above all trust. That is why I think
it has something to do with our mission. Our brand is associated
with trust because they know they are not going to have a corrupt
overseer. They know that they will be decently housed, that they
will be able to take their exam in private and that their results
won't be tampered with.
Q8 Mr Baron: May I press you on
that just a little? There seems to be an assumption about the
ongoing negotiations, as regards the settlement as I understand
it, that you will have to become more entrepreneurial. Now, you
did well last year. There was a 9% increase in your income. Can
you tell us a little more about how you are going to become more
entrepreneurial, if that is the case? Perhaps that is one reason
why you were approached, Mr Ellis. Can you also enlighten us or
assure us that, if you are going to become more entrepreneurial,
it will not affect or diminish the brand of the British Council?
Vernon Ellis: If I may say so,
that is a very good question. I had the same sorts of questions
when I first started talking to the Council, because it seemed
to me that you had to be aware that there could be a dichotomy
or a strainthat the more you become commercial, the more
you put in the type of commercialism that would maximise that,
the more you concentrate on, for example, places in Europe, where
it is nice and easy and profitable, the more you might diminish
your capability overall. I think that I have reconciled my mind
in the following way. I am not saying it is easy, because you
do touch on a thing, but I think we can manage the growing commercial
aspects while, at the same time, having an English language programme
that embraces not only those commercial activities, but the wider
aspects of the use of the English language. There is no doubt
that our brand, and the reason we are a premium supplier in most
countries, derives from the fact that it is the British Council.
They actually like the cultural associations. They like the high-quality
teaching that they get. But I firmly believe that, if you were,
for example, to say, "Well, why don't you just sell them
off to somewhere else?" it wouldn't be worth as much as it
is now, because it would lose something of that distinct brand.
If that is so, we have to be very careful to maintain that. You're
absolutely right. I think it is something that we have discussed
a lot. It is of such importance that I don't know whether you
want to add to that, Martin.
Martin Davidson: The area that
I would also like to add is that an important aspect of our income
is support from commercial organisations through their CSR works.
In the report period, something like £50 million was raised
through partnership with commercial organisations. I think that
part of the future for us will be to develop stronger links with
other organisations that are prepared to support and work with
One example is that I will be talking later
this afternoon to the head of the Microsoft learning network,
which is particularly interested in working with us on school-linking
in sub-Saharan Africa and will, we hope, be wanting to partner
with us, including financially, to develop those school links.
If we aren't able to maintain the level of school links that we
have at the moment, we are looking for other partners that are
able to work with us to do that, and they want to work with us,
because of the brand and the sense of an organisation that is,
yes, delivering something of value to the UK, but also delivering
something of value to the places where we are working.
Q9 Mr Baron: That is very good
to hear, but do we have your assurance, or a certain assertion,
that the brand will be protected? One can think of other examples
where commercialism has represented a sacrifice and is not to
the long-term well-being of the organisation in question.
Vernon Ellis: I have thought about
this a lot, and I think it is really important. We can be more
entrepreneurial without destroying it. If I thought that it was
an impossible dichotomy, and you really can't do it, there would
be a case for selling-off, but I think there is weak case for
selling-off as it stands now.
Martin Davidson: The one thing
we do say to all our staff when we start thinking about this is
that we have a double-bottom line. We need both the commercial
gain, but we also need the impact, the sense of a partnership
and the building of trust through the commercial activities. Both
of those things have got to be part of the agenda for the future.
Q10 Mike Gapes: May I switch the
focus a bit? Last week, the Foreign Secretary wrote to our Chairman,
and included with his letter was an interesting paragraph about
what he expects the British Council to do to help reduce the deficit.
The phrase that I would like to quote to you is to do with overseas
development assistance, because I am not clear what it means and
perhaps you will be able to explain it to me: "I am also
asking the Council to meet an ambitious ODA target, and I expect
to start a strategic dialogue with the Council quickly to agree
how best to maintain the Council's significant global impact,
and target it to greatest effect in these new circumstances."
Can I take it from that, that somehow or other, you are going
to be used to pay towards some of our overseas development spend,
rather than it coming out of either the FCO's budget or the DFID
Vernon Ellis: Already, I think
£40 million of
our grant is classified as ODA. There is a very precise definition
of ODA, which is laid down by the OECD.
Mike Gapes: Yes, I am aware of that.
Vernon Ellis: A lot of what we
do naturally falls into that. Indeed, when you look hard at it,
you can increase that still further. If you increased it more
and more every year, it would inevitably mean that you would,
indeed, take away some of our work. There would also be some interesting
discussions, which will no doubt follow, about what ODA is and
what work we do and how that aligns with Britain's objectives
in that area. For example, I believe that there is a very valid
argument for arts for development. Establishing artistic institutions
that give freedom of expression, that enable difficult topics
to be discussed and provide outlets for local art on an international
scale, is part of development. They can link on to cultural activities.
Certainly, as DFID wasI am not saying
as it is nowthat probably wouldn't have been high on its
agenda, because it had a higher priority of immediate poverty
relief. With the way it is looking nowmuch broaderand
the way that the Foreign Secretary, I think, sees development
as a broader institution, I can see that falling more naturally.
It is those kinds of discussions in detail that will come in due
course, no doubt, but I don't see a big threat to us, implicitly,
in what the Foreign Secretary has written there. In fact, I think
we'd welcome it.
Martin Davidson: Yes, we would
see our work in EnglishEnglish for development, the development
of higher education and education more generally, and the work
of arts within developmentas falling within the OECD definition
of ODA. That is where we see ourselves focusing.
Q11 Mike Gapes: Can I be clear?
Are you saying that, at present, the British Council is spending
in particular in areas related to art and culture, which could
be included within the ODA definition, but are not? The implicit
consequence of that, therefore, is that by counting what you are
spending as part of the ODA, the Government could reduce their
spend on poverty reduction in the DFID budget but still stay within
the 0.7% target, because they don't count what you do as being
part of that 0.7%.
Vernon Ellis: I do not think that
we can speculate on what the Government might do.
Q12 Mike Gapes: No, but am I correct
in saying that you do things at present that are not counted within
the ODA definition of the UK Government, but are counted within
the ODA definition of the OECD?
Martin Davidson: At the moment,
we calculate that something like £40 million of our grant
has traditionally always fallen within the ODA definition, because
that part of the grant was given to us from DFID about 10 years
ago. Looking at the work that we do at the moment, we estimate
that double that figure could possibly be submitted.
Mike Gapes: So if I am right, the definition
could be changed to the OECD definition, and, by implication,
a reduction could take place elsewhere and we would still meet
Q13 Mr Ainsworth: We are not distorting
the work that you do. We are effectively re-badging it so that
it is ODA accountable.
Martin Davidson: That is probably
Q14 Mike Gapes: You referred to
art and culture, and when we were in Pakistan last week we had
a very interesting discussion with some British young people,
who were taking part in an exchange programme, which I think you
had something to do with. That was very interesting and very good.
We also had discussions in Afghanistan about
the Chevening scholarships. If I have remembered correctly, and
I may be wrong, I was told that there were some 800 applicants,
but only eight people from Afghanistan go through the Chevening
programme, which is obviously a very small number of people. Do
you have any say in the prioritisation of countries? I know that
you administer the Chevening programme for the FCO, but do you
actually have any say in which countries and how many people there
will be from each country?
Martin Davidson: On the whole,
no we don't. We act very much as an agent for the Foreign Office
in administering the scholarships, but the decisions on the prioritisation
of countries is made by the Foreign Office.
Q15 Mike Gapes: So they give you
Martin Davidson: They essentially
give us a number for individual countries, and we administer that
within the countries.
Q16 Mike Gapes: Then you have
to be sure that the people who make the application and qualify
for the scholarships are those who are really able to come through
the system, and have not been put in by some corrupt Minister
somewhere because they are his nephew.
Martin Davidson: That is absolutely
correct. It varies from country to country, but in essence our
job is to ensure that the right people are selected, that they
have the qualifications and that they will benefit.
Vernon Ellis: You probably know,
but the number has been reduced. The grant has been halved.
Q17 Mike Gapes: Because of the
Vernon Ellis: The decision to
halve the grant for that area was actually made in May this year.
Q18 Mike Gapes: What does that
mean for you in the long term? Does that mean that there will
be half the number of places available, or, given the admin costs,
is the impact bigger than that?
Vernon Ellis: The precise number
according to our estimates is that we were administering 1,000
awards and we are now at 580.
Q19 Mike Gapes: Do you have any
view on what the CSR will mean in the long term?
Martin Davidson: I do not think
that we are aware yet of what the outcome will be. The one thing
that I would say is that, from our perspective, the Chevening
scholarships are an extremely valuable contribution. Some outstanding
people from across the world have taken them and are now in positions
of real importance. We would very much want to see the scholarships
remain as an element of the UK's wider projection.
Q20 Mr Watts: On the subject of
value for money and efficiency, you have been very successful
in reaching the targets set by the previous spending review. What
are the implications for the organisation in doing the same through
this spending review? Are there any risks or problems associated
with your decision to locate the financial processing centre in
Delhi? Could you just outline how you view that decision?
Martin Davidson: We have been
effective in meeting the efficiency savings, and it has been with
real pain within the organisation. With the fall in the value
of the pound two years ago and the loss of the overseas price
mechanism, which compensated for that, we made a decision that
we had to radically change the way in which we worked if we were
not going to become an organisation that spent purely on being
there and not doing anything. We made a decision to establish
two principal changes. First, we decided to establish a support
services hub in Delhi to bring together all our global finance,
IT and increasingly HR work into that one location. Secondly,
we radically changed the way in which we do our support for the
operations here in the UK.
The Delhi hub opened in May. It has gone relatively
smoothly; there have been some problems along the way, but they
have not been significant. We have been very conscious of the
potential dangers of having all our eggs in one basket, and as
part of the development of the hub we also have a secondary facility
based in India where we could transfer activity if that hub became
unusable for technical reasons. We are also maintaining a skeleton
staff in Warsaw and here in London. If India as a whole became
unusable, we would be able to pick up and manage our activity
from those two locations. So we have multiple layers of contingency
planning to ensure resilience of the system.
Q21 Mr Watts: The general thing
about this spending review is that you have already made substantial
savings in efficiency. You would think either it was a very inefficient
organisation to start off with, or you were now getting to a stage
where they are not really efficiency savings but cuts.
Martin Davidson: Indeed. It is
an area of real concern to us. We reduced our staffing over the
past three years from something like 1,250 in the UK down to 800.
I anticipate that we will want to reduce our headquarters yet
further. The truth of the matter is, like many other organisations,
we have been largely bureaucratic. We are wanting to move ourselves
to being much less bureaucratic. That will probably mean reducing
our headquarters staff quite significantly over the coming period.
That does not necessarily mean having a lot fewer people in the
UK, because we also have the UK operation as well as the headquarters,
but I would see us becoming a much smaller headquartered organisation
in the UK.
In order to manage a 25 or 26% reduction, we
will have to do business in a different way. In particular, as
the Chairman said a little earlier, that means stopping doing
some of the work that we do at the moment and thinking about our
physical presence overseas in very different ways. A physical
presence is extremely expensivethe buildings and the necessary
wraparound for thatand I think there will be a number of
places where we will probably have a virtual wraparound for that.
I think there will probably be a number of places where we will
have a virtual rather than a physical presence in the future.
Q22 Mr Watts: Do you have any
feel for how that 25% cut will be split between what you stop
doing, and greater efficiency through less bureaucracy?
Martin Davidson: The model that
we are looking at, at the momentobviously we are still
working a lot of this throughwould be for something like
35% of the total cut to be met through reducing our overhead.
The balance will have to be found by changing the way we do our
Q23 Mr Frank Roy: On this point
in relation to a business transformation programme, I am interested
to hear you speak about a 25 or 26% reduction when the numbers
are telling us that you are going to cut the number of staff by
a third. Isn't that a top heavy slicing of your staff?
Martin Davidson: The reduction
of a third is what we have already done through managing the reduction
in value of the pound. We haven't yet worked out what a further
reduction in staff might be, but there will be some reduction;
I think it's inevitable.
Q24 Mr Roy: The ballpark figure
that you are talking about, that you have already identified,
is 500 jobs?
Martin Davidson: That is correct.
Q25 Mr Roy: Your report last year
highlighted that you have got to 300?
Martin Davidson: That is correct.
Q26 Mr Roy: So I presume that
you therefore still have the balance of nearly 200?
Martin Davidson: In the UK, yes.
Q27 Mr Roy: And that you are going
to have more on top of that?
Martin Davidson: The balance of
that 500 are already largely gone, but the balance will be gone
by the end of the financial year. We would still expect to see
a further reduction in headquarter staff and headquarter functions
here in the UK.
Q28 Mr Roy: Presumably all those
staff were doing really important jobs before you made them redundant.
That suggests to me that if you are making such enormous cuts
to your staff there will be massive cuts to the services that
they provide. Surely you will not be able to deliver the same
level of service as you did previously with 500 more people?
Martin Davidson: We will have
to change the way we do our work. There is a lot of bureaucracy
and administrative overhead in the organisation which we will
need to strip out. But also there will be a reduction in services,
absolutely. Part of that we will look to replace through our income-generating
activity, but it certainly won't be possible to replace all of
Vernon Ellis: May I just add a
word about the bureaucracy? I do not want to label this organisation,
or for you to label the organisation, as being inherently bureaucratic,
but in any complex people-organisations there are things that
could be called bureaucratic.
I mentioned this journey. The journey was 110
countries around the world, five or six years ago, each to an
extent doing their own thing, often very good things, but there
was a lot of reinventing the wheel, not much commonality and not
much synergy in terms of bringing people across. What Martin and
his team did, as I understand it, was to put in on top of our
normal sectors of English some vigorous centrally led programmes
that devised things of global impact in certain areas, such as
inter-cultural understanding, the use of the creative industries
and so on. They were driven out of London, and that did change
the nature of the organisation. But it had a cost, because you
then had some sectoral people, you had some programme people and
you had some geographic people. And then you have a lot of other
people trying to tie things together and monitor how this interfaced
with that, and how we could plan for it and then monitor it more
I think it has reached the stage of maturity
when we can pull some of that back. We can be simpler. We can
focus on where it matters on the ground in these three areas,
these three sectors.
Q29 Mr Roy: How can you pull that
back if you are now proposing even more job cuts?
Vernon Ellis: We haven't done
that yet. At the moment we have an organisation designed to support
that rather complicated way of doing things. It isn't going to
be all our savings, but it will certainly be some of it. And I
don't think that that will reduce service at all, I really don't.
Q30 Mr Roy: But you actually think
that you can lose many of these jobs? Surely you cannot lose all
those jobs and not reduce the service?
Vernon Ellis: We are talking about
Mr Roy: Yes.
Vernon Ellis: What I would be
worried about in the UKand this we will have to look at
from a service point of viewis that part of the UK which
is the UK end of bilateral and multilateral partnerships with
universities, schools, whatever. I think we have to be careful
Part of it also, as we journey, is that we've
perhaps merged together two different things in the UK. There
is a head office function, a headquarters, which supervises and
does innovation and programmes; and then there is a UK service
element. One of the things that we want to do is to make a more
distinct difference between the two, and I would want to preserve
the UK because it is a very important part of our service, but
reduce some of the overhead.
Q31 Mr Roy: May I ask a further
question? How many staff do you have now, and how many staff do
you expect to have in two years' time?
Martin Davidson: Here in the UK
we have 825 full-time equivalent staff on the books. I don't know
at the moment exactly how many we will have in two or three years'
time, but it will be a smaller number than that; it is almost
Q32 Mr Roy: What is a smaller
number? Surely you have a projection of where you want your funding
to be in two years' time, and therefore your staffing costs and
keeping people in a job, which is obviously very important for
Martin Davidson: Of course. This
is exactly the conversation we are having with our staff at the
moment. The spending review was only a couple of weeks ago. We
will be working with staff, the trade union side and indeed with
our managers, to see how we can actually
Q33 Mr Roy: When do you estimate
that you will know when you come to that?
Martin Davidson: I would expect
us to come to a view by the end of this financial year. Given
that the reduction in income for the organisation is a fairly
straight line in terms of trajectory, I wouldn't expect a huge
change in a very short period of time. I would expect the change
to take place over the next two years, but we will have the plans
in place by the end of the financial year.
Q34 Mr Roy: Still on those 825
employees, do you have a reasonable breakdown, in relation to
the United Kingdom, of where they all come from?
Martin Davidson: I do not have
it off the top of my head. I can write and let you have it. We
expect to maintain our offices in Belfast, Edinburgh and Cardiff,
as well as Manchester and London. We think it is very important
for our organisation to have a genuine distributed headquarters
across the UK.
Q35 Mr Roy: On that point, in
relation to London and Manchester, the lease of the Manchester
premises is up pretty soon as I understand it2012. For
Spring Gardens that is 2020.
Martin Davidson: That is correct.
Mr Roy: What are the Council's plans
for renewing those leases?
Martin Davidson: At the moment,
we need to work out the exact numbers that we will have in place.
I would expect, if there is a reduction in numbers in the UK,
that that will largely come from London, and perhaps secondly
from Manchester, rather than from the other centres. We have a
very good lease, particularly for our Spring Gardens premises
here. It is about two thirds of market value, or market price,
through to 2020. It will be too large for us within the next year
or so, but we will look to sub-let part of the premises to keep
the lease. We haven't yet made up our minds exactly what our premises
requirements will be from 2020 onwards.
Q36 Mr Roy: What about 2012 for
Martin Davidson: The premises
are significantly too large for us now in Manchester. We are negotiating
with our existing landlords, but also looking elsewhere in Manchester
to see whether we should move.
Q37 Chair: May I turn to the scale
and scope of what you are doing? I gather that you measure the
scale of your work in terms of engagement, the people you see
face to face, and in reachthe people with whom you interact
online. I understand that you will be doing some tracking of how
many people you are getting through to. What is your thinking
Martin Davidson: As you say, we
measure through those two lenses. We believe that the engagement
figure, which is those individuals who come into a positive transaction
with the organisation, is the most important measure. It is also
important to ask the question, "What is the impact that that
engagement has on them?".
Q38 Chair: And does it justify
Martin Davidson: And does it justify
the resources? We have a certain amount of measure at the moment
through our evaluation of long-term outcomes survey. We have also
undertaken some work over the past year in five particular countries,
including Saudi Arabia, China, Poland and India, to ask the question,
"Does this engagement actually change the level of trust
that individuals have in the UK and in the British Government?".
Like all these things, it is always difficult to be able to draw
a direct link between the work that we have done and the particular
outcomes. But we believe that it is important constantly to ask
the question, "Has this work actually resulted in a change
in people's attitude?". That particular piece of work, done
for us by YouGov, indicated a very significant shift in people's
attitudes, particularly in those countries where the trust was
perhaps least well developed. For example, the greatest shift
has been in Saudi Arabia and China. People coming into contact
either with the English language or with British education has
changed radically their people's trust in the UK.
Q39 Sir John Stanley: The British
Council has had a pretty rough time in Russia in recent years.
As you know from our reports in the previous Parliament, there
is a lot of concern about that in this Committee. Where do you
regard the British Council as standing vis-à-vis the Russian
authorities? Are we still in, basically, a stalemate or do you
see any chink of light that will enable you to do what you want
to do in Russia?
Martin Davidson: As the Committee
knows, we took court action against the Russian tax authorities
and their demands for tax from the British Council. Those cases
have been concluded in our favour, fortunately, and we believe,
rightly. The tax bill was reduced for St Petersburg by 99% and
for Moscow by 95%. That has been very important. The indication
from the Russian authorities is that they desire a stronger cultural
relationship between Russia and the UK. The Turner exhibition,
which took place in the Moscow Academy a couple of years ago,
was extremely successful. It was awarded "exhibition of the
year" by Russian critics. We expect a very major exhibition
to take place in Moscow in 2012 and are in discussion with the
Russian authorities to recognise the 50th anniversary of the first
manned space flight next year, with an exhibition of Russian space
exploration and, we hope, a statue of Yuri Gagarin, which the
Russians wish to bring to London.
The mood music is very different. It hasn't
yet translated into the opportunity for us to sign our Cultural
Centres Agreement, on which we are still very keen, or to return
to St Petersburg, which we believe to be critical. We don't believe
that we, as a cultural relations organisation, can be effectively
present in Russia unless we're present in both Moscow and St Petersburg.
Work remains to be done, but there is no question but that the
Russians continue to link the position of the British Council
and a warming of our work with the broader political relationship
between Russia and the UK.
Vernon Ellis: I was at a meeting
the other day with the Britten-Pears Foundation, and there is
a lot of talk about having a considerable presence on the 100th
anniversary of Benjamin Britten's birth in 2013. They have an
intense interest in him and I think that a lot of activity will
happen, of which we will be part.
Q40 Sir John Stanley: Do you feel
that FCO Ministers can give you any additional support and help
with the Russian authorities?
Martin Davidson: Certainly the
position of the British Council remains an item on the agenda
with the Russian authorities. We had the conversation several
years ago in this Committee in the previous Parliament about that
linkage between the political relationship and the cultural relationship,
which we deeply regretted. One of the aspects of the problem with
Russia was that the Russians, pretty uniquely, had linked the
education and cultural relationship with the wider political relationship.
Most other countries seek to keep that separate. We believe that
the role of the British Council in building that wider trust relationship
using culture and education is best done at one remove from the
direct political relationship.
Q41 Sir John Stanley: Equally
difficult, if not more difficult is Iran, where the British Council
has been given a wonderful opportunity to let people know something
of the world that is, to some extent, removed from them. Do you
see any way of breaking out of the stalemate that you have with
the Iranian Government?
Martin Davidson: In the immediate
term, I don't see any likelihood of the British Council returning
with a physical presence in Iran, but we are looking to see how
we can develop work with other organisations to support a wider
involvement with Iran. For example, we now have a programme with
the BBC World Persian Service on English teaching. That will be
broadcast in the new year. Given the nature of the language, we
will also, with the service, transmit that into Afghanistan and
Tajikistan. We are working with a number of British universities
to support university-to-university links and we are also supporting
British arts organisations to try to become involved in Iran.
But at the moment, given the Iranian attitudes towards us as an
organisation, I don't see a short-term likelihood of our being
able to return to Tehran.
Q42 Sir John Stanley: Is the British
Council in Iran being treated in the same way as the French and
German equivalents, or have they somehow found a way of maintaining
a presence that we haven't been able to do?
Martin Davidson: I am not absolutely
clear at the moment on exactly what the position is. Certainly
I have had conversations with my French and German counterparts,
who have had significant difficulties in that place. It is, however,
true, I think, that the Iranian authorities treat British institutions
like the BBC and ourselves with considerably more suspicion than
perhaps they do those from other countries.
Chair: Time is up. This has been a really
valuable contribution and it will be very helpful to us in preparing
our report on the finances and performance of the Foreign Office,
of which you are a component part indirectly. Thank you both very