LONDON — The British Council and the Foreign, Commonwealth and Development Office are negotiating a 15-year repayment plan for a £197 million government loan. Repayment of the loan, which originated as a £60 million loan issued by the FCDO in 2020, is currently scheduled for September 2027.

The loan balance increased to £197 million due to accrued interest. It paid £42 million in interest on the loan but has not repaid any principal since 2024. The organization projects paying an additional £53 million in interest by the 2029-2030 fiscal year.

The Council has operated at a net loss since 2021, recording net losses totaling £184 million since 2020. The organization reduced its workforce by 2,110 positions starting in 2021. The organization now proposes reducing its global workforce of 7,880 employees by approximately 15 percent by the 2029-2030 fiscal year.

The National Audit Office reported that the Council proposed closing operations in 11 countries and reducing operations in 15 additional countries. It declined to confirm specific details of the proposed operational changes. Ministerial approval is required for the Council turnaround plan.

The Council previously proposed repaying the loan by transferring assets from its art collection, which includes works by LS Lowry, Francis Bacon, Tracey Emin, and David Hockney. The FCDO and the Treasury rejected this art collection swap proposal. It also requested that the loan be written off, but this request was rejected due to compliance requirements with the U.K. Subsidy Control Act 2022. Geoffrey Clifton-Brown, Public Accounts Committee chair, said, "It is not sustainable for the FCDO and the British Council to continuously extend the loan year after year, rather than agree on a lasting solution; they must do so as soon as possible to ensure that the British Council is viable for the long term."

A Council spokesperson said, "We are taking all necessary steps to significantly cut costs and grow our revenue, ensuring that the British Council is modern, efficient and able to adapt to changing economic conditions. We continue to work with the FCDO to resolve the key issue of our £197m government loan, which was awarded on commercial terms, with interest at market rates. We look forward to agreeing a solution to the loan, enabling us to continue with our mission to support peace and prosperity for the people of the U.K. and millions of people across the globe."