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.



  1. Please keep up the good work letting us know about BC. It is a waste of taxpayers’ money. I worked for them here in Dublin and it was worse than being a member of the Catholic Church or the Communist Party – a self-righteous, self-aggrandising little clique of wannabes and cuddabeens.

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