British Council to cut more jobs and close 11 country operations to repay £197m Covid loan

The British Council is planning to cut an additional 1,180 jobs and close its operations in 11 countries as part of a turnaround plan to repay a £197m Covid-era government loan, according to a report by the National Audit Office (NAO). The UK’s soft-power agency, which promotes English-language teaching and British culture internationally, has been loss-making since the pandemic and is not expected to turn a profit until 2029-30.

The 2020 loan from the Foreign, Commonwealth and Development Office (FCDO) was originally £60m plus market-value interest but has now ballooned to £197m. The agency has not repaid any capital since 2024, though it has paid £42m in interest and expects to pay a further £53m by 2029-30. It has incurred net losses of £184m since the pandemic, and the loan is due for repayment in September 2027.

Negotiations between the FCDO and the British Council are in their final stages, with discussions focusing on extending the repayment period to 15 years, the NAO report says. The council has previously offered to swap its art collection—which includes works by LS Lowry, Francis Bacon, Tracey Emin and David Hockney—to settle the debt, but this was rejected. It also called for the loan to be written off, a move declined by the FCDO and the Treasury on grounds of the UK Subsidy Control Act 2022.

The turnaround plan would reduce the global workforce by about 15%, from 7,880 to approximately 6,700 by 2029-30, through redundancies, non-renewal of contracts and natural wastage. This is in addition to 2,110 jobs already lost since 2021. Operations will close in 11 countries and be scaled back in 15 others, though the British Council has not confirmed specific details. The NAO says the plan requires ministerial approval.

The job cuts and sale of assets abroad have sparked protests by staff across Europe, particularly in Spain and Italy, along with letters of no confidence in the British Council’s management. The NAO head, Gareth Davies, stressed that any agreement must provide clarity to parliament on the agency’s financial future and the eventual loan settlement. Geoffrey Clifton-Brown, chair of the public accounts committee, described the agency’s financial position as “deeply concerning and untenable,” urging the FCDO and the council to agree on a lasting solution.

A British Council spokesperson said the agency welcomes the NAO report and is “taking all necessary steps to significantly cut costs and grow our revenue,” adding that it looks forward to agreeing a loan solution “enabling us to continue with our mission to support peace and prosperity.” A UK government spokesperson stated that government support was necessary to stabilise the council after the pandemic shock, and the focus is on “reaching a long-term sustainable agreement that supports the British Council’s recovery while protecting public finances.”