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British Council 'may be anticompetitive', claims FCO review

The British Council must be overhauled to prevent it competing unfairly with UK education businesses abroad, a government review has argued.
The 'Triennial Review of the British Council', published by the Foreign and Commonwealth Office (FCO) yesterday, claims the council makes a significant contribution to the UK’s international reputation through its promotion of UK education, the arts and English language worldwide.
But it also found conflicts of interest in the way it “acts as an advocate and advisor for other UK providers in fields that are also important sources of its own self generated income”. 
The council, a public body with a Royal Charter and charitable status, now earns nearly 80% of its income independently, by selling English language training and other educational services. This is sometimes in direct competition with British businesses. 
As such, states the review: "There are some grounds for concern that the organisation could be limiting potential opportunities for other UK providers in a growing market where the UK has significant natural advantages."
In response, it says the council must more overhaul is operating model by more clearly separating "income-generating activities and those for purely public benefit”. This could involve
(i) internal administrative separation, including financial reporting, that increases transparency of commercial activity and its relationship with other areas of British Council work and income streams;
(ii) establishment of a government owned company for income-generating activity, reporting to the FCO or another government entity;
(iii) establishment of a commercial, legal entity for income generating activity (such as for example a community interest company), with its own board of directors, reporting to the main British Council board.
Patrick Watson of Montrose Public Affairs welcomed the review. “There have always been concerns expressed by education providers directly to ministers that the British Council operates with a unfair advantage in the market. 
“Providers have been unsure of the rules of engagement – when is the council working with them in partnership to promote British education interests, and when is it competing with them to secure commercial deals for itself.”   
David Blackie, managing director of International Education Connect, which runs the course listings site English in Britain, said the review was "not radical enough to satisfy those who the council competes with", but a “step in the right direction”. 
“If the recommendations are carried out and acted upon with zeal there will be a new culture within the organisation,” he said.
Sir Vernon Ellis, chair of the British Council said: “We agree that our significant growth and the increased importance and complexity of our relations with government and other stakeholders has given rise to a number of important issues that need to be addressed.”
A cross-government steering group will begin assessing the review's recommendations this month.

Posted on: 23/07/2014

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