Recommendation 4

The British Council’s 2020 business plan failed to return the organisation to profitability, and both the Council and FCDO were slow to recognise and respond to this. The British Council began a five-year business plan in 2020, which aimed to cut costs and increase revenue. It achieved the first of these goals but failed to increase significantly revenue with the organisation continuing to make a loss throughout the period (with an exception in 2021– 22, when the sale of its Indian subsidiary led to a one-off profit for the year). The plan was unrealistic, and it took until 2024 for both the British Council and FCDO to realise that the plan was off track and would not deliver what it set out to do. FCDO expect that new financial governance arrangements will give it better visibility and assurance that the British Council’s current turnaround plan is meeting its key metrics, and provide opportunities to reset should it begin to slip against its targets. recommendation The FCDO and the British Council should set out what lessons they have learned from the failure of the 2020 business plan and how it is mitigating against those risks in the current turnaround plan. 5