Conclusion 11

The British Council’s preference has been for the FCDO to forgive the loan, or to accept some of the British Council’s art collection in lieu of cash repayment. The FCDO’s position is that this is not possible, as the British Council is a commercial entity and loan forgiveness in this case would not be compliant with the UK Subsidy Control Act 2022.29 Partly as a result of this difference of opinion, a final decision on the loan’s restructuring was yet to be reached at the time of our evidence session in July 2026, although some basic principles for the loan’s restructuring had been agreed. 23 Q 6 24 Q 5 25 Q 64 26 C&AG’s Report, Figure 10, para 2.11 27 C&AG’s Report, paras 3.4, 3.5 28 C&AG’s Report, para 3.14 29 C&AG’s Report, paras 3.6, 3.7 11 These principles included an interest-only grace period for the British Council, during which time the FCDO will accept ‘trapped’ cash as interest payments, and that there will be a 15-year repayment period for the loan.30