The British Council rests four square, and comfortably, on a base constructed out of privilege. At one corner it has the privilege of diplomatic status, with privileges, including tax privileges, for employees overseas, and for “business” activities. At a second corner it has, despite its clear dependency on government, charitable status, which means that it has privileges at home, including tax privileges. At a third corner its officers enjoy retirement at 60 (or five years paid holiday) and civil service pension arrangements, meaning that the taxpayer underwrites the government’s commitment to index-link their pensions sine die. And at the fourth corner, the British taxpayer pays them a subsidy of over half a million pounds a day. 365.
Armed with all that privilege, this organisation is then able to “compete” with private enterprise at home and abroad. As noted in our “Economy with the Truth” article they know that it’s stitch-up, and now they know too that we know that they know. In October 2005, in evidence to the Foreign Affairs Committee, Lord Kinnock, British Council chair, answering a question about whether the Council might perhaps be able to manage with less of a subsidy, said “The second reason why a reduction would not be justified is the very one that we started the question with: the fact that we leverage the resource that is utterly dependable from grant-in-aid resources so that we are an organisation that can generate that additional value and those additional resources.” Elsewhere in his evidence, Lord Kinnock refers to the British Council as “as an organisation that generates £1.76 for every £1 we get in public support”.
About nine months later, the Director-General was asked a similar question by the same parliamentary body, and he answered thus: “First, can I nail one thing and that is that all of the work we do in terms of teaching English through our language schools and the examinations that we promote on behalf of examination boards is not in any way subsidised by the grant-in-aid. It is a completely separate operation and there is no subsidy of those operations by the grant. I would put it the other way, that the value that the UK gets and the UK Government gets is that for every pound that the British Council receives in grant-in-aid, we turned that into ₤2.74p last year. That was because we were able to bring in students to study English, we were able to promote examinations, we won contracts through the European Commission and DfID, and we did work for the DfES, et cetera. I think if the grant were removed or reduced, it would also remove that ability to leverage those funds, which are so beneficial.”
Setting aside the 2p discrepancy, the Chair and the executive sing from the same hymn sheet which says give us your money so that we can use it to make more. But whereas the seasoned politician Kinnock does not say here how it is “leveraged”, the Director General - somewhat rashly we might think - refers to selling examinations, getting fees for student recruitment, and winning DFID contracts. Put that another way, and they appear to be saying that unless they can count on that fourth leg of privilege of a daily half million pounds they might not be able to win those contracts to sell examinations, recruit students or get millions from DFID. Why should that be? Because of course the organisation would then have only the three legs of privilege – charitable status, diplomatic status and taxpayer funded pensions on early retirement – and that’s not enough (for them) with which to compete with genuine, real-world, tax-paying, risk-based, enterprise businesses. Which are therefore less able to grow their businesses, or fund their pensions, or pay tax.
Even after apparent rehearsal the Chair and the Director-General did well to get within 2p of each other, because whether they say they turn £1 into £2.74 or £2.76 the figure, like the logic which has it that “leveraged” activity is not subsidised, is nonsense. Their figure takes no account of the huge cost of those other privileges, neither does it recognise the benefit to the economy that there would be if such revenues went to real enterprise, without the heavy drag on the public purse that the organisation creates today, and - even if it were closed down tomorrow – with which it will continue to burden us for many years to come.