THE BRITISH COUNCIL
FCO raiding the aid budget to prop up BC
Andrew Mitchell, the Development Secretary, is redefining what is meant by ring-fencing.
What seems to be happening is that because the DFID budget is ring fenced, meaning that it is one of only two Departments not subject to the 20% cuts across public services, it is helping out other departments that are subject to cuts.
The Foreign and Commonwealth Office is finding it hard to fund the British Council, one of the quangos whose future is under review, so funds from the DFID are being diverted to support the Council.
So in short, the DFID is now formally shoring up the British Council, with a £40m grant to support BC projects, though its not clear which ones. It looks like a cosy backroom deal between the Foreign Secretary and the Development Secretary, though it raises a question mark given that the BCs future is supposed, as we have said, to be under review. Hague is known to be a supporter of the BC , and his wife Ffion is former Trustee, so the BC has important friends. Other Parliamentarians have benefited from the Councils hospitality and are minded to support it.
One wonders though just how much of a review it will turn out to be, and what the reviewers will take into account. If its based on value for money or competition issues then the BC will be under threat, but I doubt it ,on past form.
Aid agencies and charities are not best pleased with the funding deal, as the Financial Times has noted . If funds are going to the BC from the aid budget then there are less funds for them. They feel that they could spend it more effectively, and they have a point.
They are legitimately asking why the BC is treated as a special case, accessing scarce aid funds and getting preferential treatment forgetting, momentarily, that the BC is always treated as a special case, even if this requires a bit of timely shifting of the goal posts .
A substantial part of the British Council’s budget has already been shifted to DfID from the Foreign Office,” Phil Bloomer, Oxfam campaigns and policy director told the FT. “We are worried that this represents the thin end of the wedge. “We do not want to see DfID picking up the tab for programmes that were quite rightly until now the responsibility of other departments.” Quite. UK education exporters will also be alarmed. Though the subsidised BC is supposed to help them sell their services abroad, a key reason it receives subsidies, in practice its commercial arm competes directly with them in the international market, increasing their costs and risks. The BC has now admitted that there is no Chinese wall between its cultural and commercial operations, though previously claiming that it couldn’t cross subsidise between its cultural and commercial arms because ….of the existence of this very wall. It also manages to get advanced notice of new business opportunities and manages to secure some lucrative contracts, thanks to local diplomats efforts , that are not always put out to tender. These companies were rather hoping that the BC would be cut down to size, if not culled altogether, as part of the coalition governments robust stance on inefficient quangos but they may still, it seems , be forced to compete with a heavily subsidised BC for at least a little while longer.
Meanwhile Mitchell, it would appear, is losing friends and goodwill, in equal measure within both the aid and business communities. Talking of shifting goal posts, according to David Blackie, who runs a blog that almost exclusively reports on the Councils unusual activities, the BC has won a contract ( not put out to open tender of course) to teach English at Libyan universities using taxpayers money to pay for Libyan officials to attend its own course. Straitened times, indeed.
The BC is either an arms length Charity, an independent aid agency , an arm of the DFID, or an arm of FCO, promoting culture . It cant be all of these things or some of them . It doesn’t seem to know what it is-which perhaps goes some way to explaining why it was sponsoring a fashion show in Uzbekistan the other day while concurrently advising an African government on governance issues, and teaching Libyan officials English. You couldn’t make it up if you tried.