A LEVEL PLAYING FIELD?YOU MUST BE JOKING!
How the British Council steals an advantage abroad over other UK education suppliers
The British Council has long used taxpayers money, our money that is, to subsidise its education operations abroad and to undercut other non-subsidised competitors from both the profit and not for profit sectors in order to win contracts . There is new evidence that it uses its diplomatic ‘ top cover’ to gain an unfair competitive advantage in the market with our own Governments collusion, to help it see off other UK competitors.
Malaysia’s Ministry of Education tendered recently for the supply of 360 native English language trainers. The contract was awarded to three providers, the British Council being one of them. The Malaysia MoE required each provider to supply a M$4m (about £800k) performance bond. Two providers put the money on the table. The British Council didn’t . It argued that its constitution didn’t permit it to put up bonds. So what happened? The British High Commissioner requested that the Malaysian government waive the requirement for a bond from the British Council . This request allegedly went to the Malaysian Cabinet and they agreed to waive the requirement on the basis that this was a government to government agreement. Confirming in other words the British Council operates with a Government guarantee behind it, to help it to win contracts even when competing against UK companies abroad.
This particular arrangement, of course, worked to the advantage of the British Council and to the disadvantage of other UK education companies, as often happens.
So, what is the status of the British Council that allows it to bend the rules when it suits its perceived interests?
Is it the cultural arm of the FCO? Or is it a straightforward commercial operation? Is it charity, fulfilling a public benefit ie justifying its charitable status (it cant be both a charity and commercial operator can it ?) Or is it a quango, at arms length from the Government? Then again, maybe its an aid agency supporting our development goals and the DfID (its tapping in to the DFIDs aid budget after all).The answer is- it tries to be all of these things . Like a chameleon it changes its status to suit any given circumstance. And it has been allowed up until now to get away with it . But one has to ask, for how much longer?
Why does all this matter anyway? Well a publicly funded quango that doesn’t know what it is and has an on-going identity crisis is a quango ripe for culling under the Governments efficiency drive . It cannot for starters prove that it is indispensable. In other words private sector and not for profit providers could deliver most of the services it delivers, if there is a demand for them that is , at lower cost (and for the most part at no cost to the taxpayer) while delivering better quality. Few in the market doubt this.
The shenanigans in Malaysia tell us a number of other truths. Firstly it confirms something that UK education service providers have known for a while , that in the eyes of our diplomats and those who purport to ‘represent’ our trade and investment interests abroad, the British Council is special and has a privileged status, and is given a helping hand in the markets (with the implicit guarantee behind it). Secondly, it confirms that the British Council is effectively an arm of the FCO (subsidised now also by the DFID budget) and not an independent bona fide commercial operator, as it would have it. Thirdly, it confirms that if the British Council pitches for a contract then there is no level playing field, and, importantly, the very presence of the BC raises the costs and risks for other competitors while deterring new market entrants.
The protected status of the BC is from another era. It was never easy to justify its chameleon status, its even less so now. It cannot secure value for money for us taxpayers. The way it conducts its business abroad and in the markets lacks transparency ,accountability and is demonstrably unfair on other non-subsidised competitors . It is doubly unfair because the British Council competes head on for the same contracts with the very companies it is supposed to be supporting in the markets (with taxpayers money).It is aided in all this by our public servants. This is not acceptable. At a time when our Government seeks better value for money and more engagement from the private and not for profit sectors, in public service delivery and for small and medium sized enterprises to be awarded a greater share of public service contracts, here and abroad , its activities clearly serve to undermine a key Government policy and work against the longer term interests of UK plc. It is time for the Government to act to protect the interests of us taxpayers and the education market.
The Government, according to the Cabinet Office ‘ will be establishing new procedures for reviewing public bodies to challenge whether there is still a requirement for them to continue and if there is ,that they are fit for purpose ‘. If that is case and its not window-dressing then the British Council should be worried. Over to Francis Maude and his reform team in the Cabinet office on this one.