Recommendation 5

The British Council’s turnaround plan projects no operating surplus until 2029–30 and is entirely reliant on the unlikely scenario that all elements of the plan will run perfectly, leaving the organisation vulnerable to any external disruption. In 2024–25 the British Council had negative free reserves of £111 million. The British Council’s new turnaround plan is expected to deliver £306 million in benefits by 2029–30. Even if the British Council fully delivers the planned benefits, it will not be generating an operating surplus until 2029–30 and expects its free reserves to have fallen to negative £184 million by that time. The British Council has cited low levels of reserves as a factor that made the organisation vulnerable to the shock of COVID-19, when much of its teaching and exams business closed temporarily. With falling free reserves and no surplus expected until the end of the plan, the British Council remains financially very vulnerable and highly dependent on there being no further economic disruption to its organisation. While the FCDO and the British Council hope this risk is manageable, it is concerning that the plan leaves the organisation little flexibility to meet any future crisis. recommendation The FCDO and the British Council should set out: a. what measures will be used to track the British Council’s progress in its turnaround plan, as well as the expected timetable and milestones; and b. what action the British Council and FCDO will take to correct course should the turnaround plan prove unrealistic before its end date of 2029–30, The FCDO and British Council should write to us with updates about its progress every six months.