TUESDAY 23 FEBRUARY 1999

BARONESS KENNEDY OF THE SHAWS, QC, MR TOM BUCHANAN, CBE and MR EDMUND MARSDEN

  120.  Can I come back to your lists for a moment. What is the list of the countries which you should be operating in that you are not in your view?
  (Baroness Kennedy of the Shaws)  There are all sorts of arguments about where we might be. We would like to strengthen our activity in the accession countries. It seems to me and to my colleagues that one of the important things we should be looking at is that if there are going to be more countries coming into Europe that they should access Europe through Britain and our providing them with the English language, and if in their reform packages they were to look to Britain, then it actually strengthens our position in Europe too and our relationships with them as the countries coming in. We would like to be doing very much more there than we are able to do currently because of resourcing. It is enormously effective. Anyone who has been involved in our governance programmes and in the work we are doing in capacity building in those countries and those emerging democracies will know that it is really successful.

  121.  But we are operating in all of the pre-accession countries.
  (Baroness Kennedy of the Shaws)  In the most minimalist way in some of them. We really feel that we need to put much more energy and activity into them. We already have a track record of great success in doing that and we need to have more capacity for that. We also are very concerned about bringing students into Britain. It is something that we are the conduit for, we do it better than anybody and it is a great resource for Britain. It certainly has enormous results in creating relationships that are sustained and continue for long time thereafter and it was one of the things that the Prime Minister saw first hand in China when I was there at the same time as he was. He was very impressed with the fact that all the people working with news agencies, all the young lawyers who were there as commercial lawyers but open to the ideas of human rights, all that was done by bringing students to Britain. We cannot do that in a number of countries because we are not present or we are not present in a way that helps us to tap into the networks that you need to identify the students to bring them through. So there is an enormous amount that we could be doing that we re not actually able to do with the success that we could. It is almost as if we are operating `pilots' in places, which are successful in the most incredible way, but if we had better resourcing we could widen it. I have just been to South Africa and it was really impressive to see the sort of work that is going on in the new universities, the technicons. There are terrible problems about the fact that the students going in are often ill-equipped because they are bright enough and get their matric to get in, but they have not learnt study skills and all the sorts of ways which help them to accept a university education. We can help show them how to deliver things such as access courses because Britain is very good at this and we have acquired the expertise in it. They are very keen for us to help them with it and we are not able to do it because again the resourcing is not available at the levels they need to be.

  122.  I agree with that and sympathise with what you say. Can I put the converse to you that perhaps that suggests that British Council activity is less required in existing EU partner countries and that really it is a nonsense to be talking about cultural diplomacy in countries which share the same supermarkets and the same television stations and everything else.
  (Baroness Kennedy of the Shaws)  You say that but what you have to remember is what the British Council does in places like Germany and France is very very different from what it does in the developing world or in the emerging democracies or in China. The European Series, for example, is about bringing tomorrow's leaders in touch with people here and about addressing issues. Pontignamo is one of the very successful exchanges that we operate, where we look at things like the serious problem of organised crime where you have softer borders; how you address those things together. Indeed the British Council is a very successful convenor of opportunities to bring together people such as senior police officers and other people who are addressing those problems in different ways. That is the strength of public diplomacy. It is about people to people stuff rather than government to government stuff.

  123.  I accept that but when it is a matter of priorities one has to ask is the British Council in The Hague or wherever as useful in terms of the overall scheme of what the British Council can do as somewhere in Eastern Europe or somewhere in a developing democracy in Africa or elsewhere where it can be absolutely crucial to British interests?
  (Baroness Kennedy of the Shaws)  I will ask Edmund Marsden to come in but you would have to look at the way in which our funding currently operates and I think you will find that, in fact, the greater intensity of our operations is now in places like China, in Russia, in South Africa, around the Commonwealth, but to think of closing down our effort in Europe would be a great mistake given that Europe is about to change its form too and our whole influence in it might be greatly affected by the relationships we are creating with accession countries.
  (Mr Marsden)  Mr Heath has put his finger on our dilemma. We have very close discussions with the Foreign Office at an early stage putting our three year plan together and one of the things that we do with them is talk through our geographical priorities and they write a two-page paper to us setting out the strategic parameters that they think we should work together on and in there is a set of very simple geographic priorities. Europe and the accession states are very much at the head of that list. Over the last ten years we have been hollowing out a lot of our operations in Western Europe in order to pay for new activities in, for example, South East Asia, East Asia and in Latin America and in Eastern and Central Europe. So what we find ourselves faced with now is the problem that Europe is very much at the top of the agenda and that the Council is expected to produce a great deal of activity in Europe with our funding extremely depleted in most of the European Community countries which feature very high in the geographical priorities. On the matter of new operations which you raised at the very beginning, we have obviously in the circumstances been very reluctant to add a lot of new countries to the lists of those in which we would like to open our operations, for obvious reasons—that we are so overstretched in the 109 that we are already in. The ones on the list are Cuba which we have just started an operation in and in doing so we have redesigned our Caribbean operation quite fundamentally. The ones waiting in the wings are Iran, if conditions are right, the Ivory Coast where there is great potential for English language teaching and commercial opportunities, and Angola, a very difficult country to operate in where similarly there are greater opportunities for us in collaboration with BP to develop language teaching.

  124.  Do the countries of the Caucasus figure in that?
  (Mr Marsden)  We have made some progress there but, as you will be aware, we are not completely covered. We have made quite an effort over the last three to four years to get our operations opened in the Caucasus.

  125.  I wanted to ask one more boring accountant-like question.
  (Baroness Kennedy of the Shaws)  I will pass it to somebody else!

  126.  It is a broad brush one. One of the major costs and one of the opportunities you identify is having decent buildings to operate out of. To what extent do you actually look at the cost in use of buildings you presently occupy and the opportunities for disposal?
  (Mr Buchanan)  We do audit our estate, we value it, we analyse it and see what it is costing to run on a regular basis.

  127.  Regular being?
  (Mr Buchanan)  I think the last review was 1997. And we are looking very critically at the sorts of buildings we want both now and for our future operations. We are looking at ways of sharing space with the Foreign Office and, in fact, we signed a memorandum of understanding with the BTA recently and we are sharing space with them. So we are looking creatively at the use of space around the world in order to make the best use of the resources available.

  128.  Might I turn to a topic we have not mentioned and that is the cultural activities of the British Council. I am concerned particularly in some areas where France and Germany are taking a dominant interest particularly in trade about how much more they appear to be spending on cultural activities, particularly the French, to a much greater extent than ourselves. Could you say a word or two about that?
  (Baroness Kennedy of the Shaws)  It is one of our great concerns. One of the great jewels in our crown, as we see it, is that the British Council has a great track record in bringing artistic events abroad and it has had to cut back on that considerably. It is something that I have to regularly deal with because people inside the organisation come to me as the Chair saying, "We really would want to be much more ambitious in what we are doing", and in seeking to spread the money out, in looking to what is needed in some parts of the world as distinct from other parts, I am afraid the arts are suffering. It is one of the arguments we would make for prioritising the British Council's effort because we have not been able to put as much money into the arts as we would have wanted. I must say that even so, they have still managed to do the most wonderful things. We have got the ballet out in China at the moment. We have got a Hockney exhibition on in Paris that is enormously successful which the Ambassador has just opened. I saw out in South Africa a wonderful arts project with children in the townships which has been replicated by children working on a theatre project here in Lewisham coming together to create an event at the London International Festival of Theatre. I also saw wonderful work in China with a small theatre group. So we are still doing wonderful work but it is of great regret to all of us that the money that is going into the arts is not as great as it should be.
  (Mr Marsden)  Can I add two things quickly. First of all, we have looked very hard at the French and the Germans and their expenditure on cultural relations and it is quite difficult to disentangle exactly the types of expenditure that relate to the British Council. The Germans, for example, spend a great deal of money on their schools around the world. However, we can draw two conclusions. One is that both the French and the Germans spend significantly more than we do, perhaps two or three times as much as we do. The second thing is that we achieve very much more leverage through our grant than the Germans or French do by a major effort to get sponsorship from the private sector for our arts work and also "in kind" contributions both from the UK and overseas to make that money go further. So in terms of getting more bangs for our buck we do much better.

  129.  We have an easier product to sell in the English language.
  (Mr Buchanan)  That is possible but this applies also to our exhibitions, to our theatre and so on

  130.  You have highlighted the divergence of £600 million from France and Germany and about £250 million from ourselves. Has any thought been given to working in joint sponsorship with the Heritage Secretary who has responsibility for the arts where you might be able to attract some funding in a joint way whereby we could begin increasing that amount which would not come out of the Foreign Office budget?
  (Baroness Kennedy of the Shaws)  I met with the Secretary of State for Culture and the Arts and he certainly is a great supporter of the British Council. Obviously he has a vociferous lobby which is on his tails just now about expenditure on the arts here in Britain at this moment. I do not think he is feeling that his budget has much to offer in terms of taking things abroad, but he has indicated that perhaps some of the Millennium money for assisting artists could be managed by the British Council so we are seeing some alleviation of some of our problems through that Department. But I am not sure that he would see part of his function as contributing to touring exhibitions.

  131.  I am most worried about your reply because foreign tours for ballet, opera and symphonies are often a major factor in expansion and growth particularly with younger orchestras and things like that which is of great benefit at home. Therefore, he ought to be interested and you must not allow him to get away with saying because it is overseas there is nothing he can do about it. I am trying to give you a stronger argument.
  (Baroness Kennedy of the Shaws)  Sir Peter, you can rely on me not to let anybody get away with anything!

Mr Rowlands:  I think I am going to pursue in a minute Sir Peter's questions because I think they relate to this horrible phrase of joined-up government. It is not only at the top level of opera. I know of a group of young British artists who were helped by you to show in Hamburg, the richest city in the world, and giving the chance to young people to show their wares in a rich country is a very important part of promotion, as I see it. In answer to an earlier question of what the previous Committee did, in 1985 I recall that the British Council was in near melt-down. It was facing a 16 per cent cut in one year which would have led to a cut in a swathe of posts all over the world and in fact we were part of the lobby——

Chairman:  By "we" you mean the Committee?

  132.  Yes, the previous Committee. We became almost ex-officio members of the British Council in some ways, and as a result we got it down to a mere nine per cent cut. That led to a huge reduction in UK staff, something like 285 staff or 25 per cent of the British staff.
  (Baroness Kennedy of the Shaws)  It was terrible.

  133.  Either those staff were not doing much or they were doing something we are no longer doing. We have concentrated a lot on the overseas operation. Just very briefly because we do not spend much time looking at the domestic side, what where they doing and what are we not doing now at home as a result of the reduction of 285 staff?
  (Mr Buchanan)  There are various things we had to stop doing at the time. The UK regional network where we operated a series of offices around the United Kingdom in support of exchange of students and people coming here have closed down and we have now got implants in universities and other institutions with whom we work on a much reduced level. We have had to scale down many of our areas such as facilities management where we support buildings in the UK. We have seen a massive reduction in our staff from somewhere in the upper ends of the 70s or 80s down to 20 or 30. The result of that has been considerable strain on those staff and in maintaining our buildings and the quality that we are able to provide there, and it is of great concern to us. So it is those kinds of reductions in personnel, in central overheads, support services, in finance, facilities management, in those groups who look after incoming students. All of that has been reduced.

  134.  Does that mean it was a rather inefficient system before in delivering the service as opposed to you have actually cut the services themselves?
  (Mr Buchanan)  I think we have actually cut the services themselves. There is always the possibility of making efficiency cuts, I would not want to pretend that there was not some slack we could take out, but it has affected quality and we had to work very hard to find an alternative way of dealing with some of the issues that otherwise those people would have handled.

  135.  These are the welfare problems?
  (Mr Buchanan)  Yes, we have streamlined and in fact we have just finished a very major programme called Welcome to the UK where we pulled together lots of agencies and ourselves to try and improve the standards to which we look after students. It has been a very difficult exercise. We just have not got the margins we had in the past so we are very tightly stretched now.

  136.  If there was some extra marginal funding available would you invest it domestically as opposed to overseas at the present time?
  (Mr Buchanan)  Edmund mentioned hollowing out the centre and that has gone on and I would certainly want to reinforce some of the areas centrally. I think it is a mistake in the argument of everything from tail to teeth to look at everything having to go overseas operationally. We cannot support the quality of those services from the UK and I think it has got very dangerous in that regard. We have to look very hard at what we provide in the UK in support of our overseas operations.

  137.  "Dangerous" is quite a strong word.
  (Mr Buchanan)  I think it is dangerous. We operate on quality and quality is our byword and it is our brand name and I am very concerned that we maintain that.

  138.  So if a significant number of overseas students are not serviced as well as they used to be by the British Council they could end up disgruntled or unhappy or having a bad feel or bad view of the United Kingdom? Is that right? Is that one of the direct consequences?
  (Baroness Kennedy of the Shaws)  I think the thing about public diplomacy is that when it is done well——

  139.  —— Nobody notices it.
  (Baroness Kennedy of the Shaws)  The consequences are phenomenal and nobody notices, but when it is done badly it really can be very damaging. I think that is the extraordinary counterpoint here. There is an invisibility about what the British Council does particularly here in Britain but, by God, would we know if we started making a real hash of it and people complained about the fact that they did not feel supported. It is hard for students coming in.