MPs urge ministers to explore writing off most of the British Council's £197m loan

A Commons committee has said ministers should explore writing off most of the £197m loan to the British Council, the UK's international cultural organisation, by converting as much of it as possible into "a grant or similar", according to the Guardian. The recommendation comes from the Public Accounts Committee, the cross-party group of MPs that examines how public money is spent. The committee published its inquiry into the British Council's financial sustainability on 30 October 2026.

The debt has its roots in the Covid-19 pandemic. The Foreign, Commonwealth and Development Office (FCDO), the government department that handles foreign affairs and overseas aid, lent the British Council £60m on commercial terms. That loan has since grown to £197m. It was due to be repaid in 2026, but was restructured so that it would be cleared over the next 15 years.

The committee, chaired by Geoffrey Clifton-Brown, said the government lacked a "positive vision" for the British Council. It called on the FCDO to set out what more it could do to support the organisation and its work. The Guardian reported that the British Council's soft power value to the UK, meaning its influence through culture and reputation rather than force, is put at £1bn a year.

The organisation's finances remain under strain. The committee said the British Council forecasts that it will not generate an operating surplus, meaning income left over after running costs, until 2029-30. In June, the Guardian reported that the British Council faced further job cuts and possible closure of operations in 11 countries as it struggled to repay the Covid loan.

The committee's inquiry examines the British Council's financial position, the effect of the FCDO loan and the sustainability of ongoing support. It lists 30 December 2026 as the due date for the inquiry.