House of COMMONS






Foreign and Commonwealth Office Annual Report 2004-2005



Wednesday 12 October 2005



Evidence heard in Public Questions 1 - 65





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Oral Evidence

Taken before the Foreign Affairs Committee

on Wednesday 12 October 2005

Members present

Mike Gapes, in the Chair

Mr Fabian Hamilton

Mr John Horam

Mr Eric Illsley

Mr Paul Keetch

Mr Andrew Mackay

Andrew Mackinlay

Mr Greg Pope

Mr Ken Purchase

Sir John Stanley

Ms Gisela Stuart

Richard Younger-Ross


Memorandum submitted by the British Council


Examination of Witnesses


Witnesses: Rt Hon Lord Kinnock of Bedwellty, a Member of the House of Lords, Chairman, Sir David Green KCMG, Director-General, and Mr Martin Davidson, Deputy Director-General, British Council, examined.

Q1 Chairman: Gentlemen, thank you for coming today. I would like to welcome you to the first public evidence session of the new Foreign Affairs Select Committee, and my first as well. I am very pleased that we have got the British Council here today and we have got a large agenda to cover with lots of interesting areas to explore. Perhaps we could begin, Lord Kinnock, with an introduction to your colleagues and you could set out to us what you see as the priorities for yourself and the British Council, as its Chairman, and the main challenges that you are facing at this time.

Lord Kinnock of Bedwellty: Thank you, Chairman. Can I first say that we are grateful to you and to your Committee colleagues for the invitation to appear and, of course, I think it is fitting, as you indicated, to add that we celebrate with you your assumption of the Chair and your first public session of this Committee-the first, I trust, of many. I suppose you are living evidence of the fact that in politics it is possible to lose your maidenhood twice, and so I congratulate you on that too. With me are Sir David Green, the Director-General of the British Council, who several of you will know, and Mr Martin Davidson, who has recently been appointed as the Deputy Director-General of the British Council after several years and extensive experience working for the Council both at home and abroad. The Committee, Chairman, has seen our submission dealing with issues raised in the FCO's annual report and, obviously, we are very happy to take any questions from Committee Members on that. Perhaps I could begin, as you indicate, Chairman, by briefly outlining some of our current priority activities against the background, I must say, of a further year of substantial achievements. In Iraq we have been making a significant contribution to rebuild the country's capacity in education and in fostering free reporting media, where obviously we have collaborated closely with the BBC World Service. We have provided training for hundreds of senior university managers, education ministry staff, teachers, media technicians and journalists. We have delivered more than 50 tonnes of books to universities and set up educational resource centres in universities in Baghdad and Basra. We have worked with women's groups and excluded minorities in projects that are particularly geared to increasing electoral participation. Obviously, all of these activities continue to flourish. In China we have helped to make the United Kingdom become a major competitor to the United States of America as the destination of choice for international students, and there are currently 48,000 Chinese students studying in our country, most at under-graduate level. In Russia around 300,000 people use our centres every year, so we are a vital source of dependable information about the United Kingdom and educational opportunities. A further 200,000 Russian citizens take part in our various programmes. We are having a major impact on educational reform, with 50 per cent of Russian schoolchildren learning English from British Council textbooks and about 35,000 teachers have so far taken part in our education workshops. In sub-Saharan Africa our interaction leadership programmes are providing essential opportunities for young, potential leaders in 19 countries, to develop their skills. These are brief samples of our activities and, of course, they are undertaken at a time in several places where there are great challenges. For instance, challenges that come from the need for greater inter-cultural understanding, particularly with countries with large Muslim populations, including those in Asia. The challenges come from capacity in relationship-building in the EU candidate countries, as we did in the last of the accession states between 1989 and 2004. Challenges also come from the need to ensure that the United Kingdom continues to be a favoured destination for overseas students despite increasingly tough competition. We are fully committed in these and in many other areas where we provide the tangibles of educational enablement, of broadly manifested cultural access and opportunity and of governance training in a variety of forms in order to develop mutually productive understanding and to earn a sustained high regard for the United Kingdom. Finally, Chairman, if I can say, as the Committee might expect, we now experience some difficulties in undertaking our work in countries where security has become more problematic, but to their great credit our staff resolutely feel that we must keep faith with the people of those nations and we, therefore, continue with efforts to help people build their futures. In doing that, of course, we contribute directly to generating durable trust internationally for the United Kingdom with all of the advantages that flow from it. As you will see from our accounts, Chairman, over 60 per cent of our total resources are self-generated and the rest comes from grant-in-aid. That is around 3p per head of the population of our country per year. Our modernised systems of management ensure that the money is properly and accountably spent. We welcome your questions, Chairman.

Q2 Chairman: You have listed some of the areas where, clearly, you regard the Council's work as being very successful. Are there any areas where you have been less successful than expected? Have you any thoughts, apart from the security issue you have touched on, on the reasons why that might be?

Lord Kinnock of Bedwellty: I would like my colleagues to come in on this. One point I would make is the obvious point: as an organisation that generates 1.76 for every 1 we get in public support - absolutely vital and highly valued public support and grant-in-aid-it is clear that there are areas in which we could beneficially extend our activities if we were not as resource-constrained as we are. We understand the reasons for that and we do not protest about that-it would be unreasonable to do so-but if we identify areas in which we encounter some frustration most of it relates to the fact that we could and would like to do more to meet rising demand in many areas, educational, cultural and particularly in the area of governance training, much in demand across the world.

Sir David Green: If I could mention two areas where I think there is scope for increased engagement by the British Council and, indeed, other organisations, one is the experience that international students have when they come to this country. We are talking of some 300,000 students studying at higher education level in the United Kingdom. I have some concerns that their experience beyond their academic experience is not as positive as it might be, and I think there is more we could do to enhance their experience and make sure that they go away from the United Kingdom not just having had a very good academic experience but, also, feeling very positive about the United Kingdom. We know that there are some students from some countries that do not actually integrate all that much with British society, and I think that is something we should tackle, but it would require resources to do that. A second area where we are-and I think in common with many organisations-trying to work out better ways of engagement is between the United Kingdom and young people in countries with large Muslim populations, and we have had a successful programme called Connecting Futures which is engaged with young Muslims across the world and interacting them with young people in the United Kingdom. There has been a huge increase in mutual understanding as a result of that engagement, but I still think there is a lot more that we can do and we are beginning to develop ideas based on the learning that we have had from various experiences through bringing young people together in forums, through volunteer exchange programmes, through seminars and workshops and a whole range of different activities. However, there is more we can do and we have begun to develop ideas in that area. So I think those are two areas where I would like to see more emphasis given.

Q3 Chairman: Can I ask you about your programme for EU accession countries? You referred to that. Do you think that that is likely to be reduced as you change your emphasis? Are there some areas where there will be a reduction in your activity as a result of trying to deal with other areas?

Sir David Green: I think this is one for Martin, actually, seeing as he had responsibility for Europe until very recently.

Mr Davidson: We put a substantial amount of new resource into our work in the new accession countries about five years ago and I think over the next two years we would expect to see the level of resource in those countries remain broadly steady, but after that I think we would expect to begin to see money coming out of those parts of the operations and moving into other parts. I think likely shifts in resource over the next period are likely to be in the amount of money we put into Western Europe, and the amount of money we put into the new accession countries in Central Europe in preference for moving those resources into higher priority parts of the world, in particular the Middle East and parts of Africa. One part of Europe where I think we are likely to maintain our resourcing for the immediate future will be in South East Europe, particularly in the Balkans and Romania and Bulgaria, as those countries again move into accession status.

Sir David Green: Can I add on that, Chairman, that we have been running a United Kingdom South East Europe forum over the last couple of years, which has engaged with a number of young politicians, particularly, through our People and Politics programme; some 150 young politicians, including from the United Kingdom, have been exploring issues around people and politics, and there is another thread on youth action and a third thread on creative cities. I think that has had a strong impact.

Q4 Mr Mackay: Can I pick up two points? One Sir David has just made, which was about the British Council spending funds ensuring that some foreign students that he feels do not completely gain the British experience. Should that not really be done by the universities and colleges of further education rather than you? Is there not a duplication? Is there any need for you to be spending money in this area?

Sir David Green: I think it is a joint responsibility. Some universities are extremely good at it and take a lot of care over the social aspects of the university students' engagement, but I think it is fair to say that that is not as consistent as it might be. I think if we, as the United Kingdom's cultural relations organisation-and bearing in mind what we want is for those 300,000 students to go back to their countries as ambassadors for the United Kingdom and we want to maintain that contact over the years - want to make sure it is an extremely good experience, therefore, I think we do have some responsibility.

Q5 Mr Mackay: But you would consider duplication would be a bad use of public funds?

Sir David Green: I think there are ways in which we can help in terms of helping the sharing of good practice and encouraging organisations like Host, which is an NGO that we partially fund, which provides opportunities for students to stay and spend time with United Kingdom families whilst they are in the United Kingdom, so there are a number of ways in which we can support them. I take your point, but I think this is about public diplomacy and about building good relations for the long term. The universities' interest is obviously in giving them a good academic experience and enriching the experience of other students within their campus, and of course there is an issue of the income that they bring. As I say, the best experience that students have in the United Kingdom at many universities is a positive one, but it is not as consistent as it could be.

Lord Kinnock of Bedwellty: As David indicated, it is more a matter of universalisation of the best, and there are some excellent models, than any possibility of duplication.

Q6 Mr Mackay: May I now turn, Chairman, to Lord Kinnock's remarks at the beginning? If I may say so, I thought the most significant point was that-and correct me if I misheard-for every pound of public money put into the British Council the British Council returns in kind 1.76.

Lord Kinnock of Bedwellty: An additional 1.76.

Q7 Mr Mackay: Can you explain that?

Lord Kinnock of Bedwellty: Yes. It is simply the balance of our total budget. This year, for instance, we will receive 182 million from grant-in-aid provided by Her Majesty's Treasury on the FCO account, and we will generate roughly 60 per cent more than that by our own efforts in an assortment of activities: acting as contract agents both for British ministries and for the European Commission and other international organisations; the collection of fees for those activities for which we charge fees, including a substantial part of English language teaching; sponsorships and other forms of financial support that come from the private sector frequently because of our provision of vocational training and education for them at a level which is so satisfactory that they repeat the contracts, and some sponsorships (I think it was 11 million last year), which collectively accounts for the remainder of our total budget of just over 470 million.

Q8 Mr Mackay: Do you anticipate that could be improved further so that the British taxpayer and, perhaps more significantly, the Foreign Office, which is having to close down embassies around the world, no longer have to?

Lord Kinnock of Bedwellty: No, we strive for maximum efficiency and where there are feasible possibilities of securing revenue returns we exploit those opportunities. We think it is a business-like way to approach things. Actually, the British Council greatly values the fact that it is only partially dependent on grant-in-aid finance. We think it is a useful stimulus and discipline. The fact remains that even working at our maximum efficiency and even if we were able to engage in more revenue generating activities, there would be no case for diminishing the grant-in-aid, on two grounds: first of all, it directly relates to and is fire walled against any expenditure that does not fall into the allowable categories for expenditure from grant-in-aid. So every penny of that is spent on the basis of objectives agreed and patterns of provision agreed with the Foreign and Commonwealth Office, which is highly agreeable and very beneficial. 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. So we would argue that very good value for money is obtained from the public support that is provided. That value would probably be reduced if the public support was reduced.

Q9 Mr Purchase: On this question of efficiency, I am enormously impressed, Lord Kinnock, with the idea of a 60 per cent return on investment. I think that is quite extraordinary. Can I buy shares?

Lord Kinnock of Bedwellty: You have, you are a British taxpayer.

Q10 Mr Purchase: In the meantime, because efficiency is important and we do expect to get a proper return on money invested, what criteria does the Council use to determine whether or not its presence is continuing to be worthwhile? What indicators do you look at? I take the view that you cannot trade with people you are not friends with, so the work of the Council is enormously valuable to British exports, but I wonder what range of indicators you look at to determine continuing presence.

Sir David Green: That is a very important area and we have done a good deal of work looking at what the indicators should be in order to measure our impact, which is notoriously difficult in an area like ours because, by definition, what we are seeking is a long-term impact; we are about building long-term relationships and sometimes you do not see the benefits of the work that you are doing for several years. What we have done within the British Council is to develop what we call a balance scorecard, so we look at a range of different factors in terms of our impact. I should just go back a stage: we have to obviously base it all on what we are seeking to achieve, and what we have done is to set the purpose of the British Council to build mutually beneficial relationships over the long term between people in the United Kingdom and people in other countries, and an increasing appreciation of the United Kingdom's ideas created by those achievements. We have then split that down into a series of outcomes and then those outcomes are split further into a series of outputs. The first purpose is pretty immeasurable but as you get down to the outputs and you go to the level below that to the key performance indicators then you are getting more and more measurable. Some aspects are very easy to measure. If, for instance, we are charged with increasing the number of students coming into this country, which we were, through the Prime Minister's initiative, and increasing them by 50,000 at higher education and 25,000 at further education-you can easily measure whether or not that is done. So there are a number of quantitative measures that we are able to use. We also want to use qualitative data as well, so we encourage our programme staff and country directors to collect stories about what the impact has been. The fact that the President of Sierra Leone came on a scholarship to the United Kingdom some 20 years ago is something that we want to know and, obviously, is relevant in terms of measuring our impact. So that the balance scorecard looks at a whole range of indicators from management indicators and efficiency to factors related to our impacts and the extent to which we can change people's perceptions about the United Kingdom.

Q11 Ms Stuart: Sir David, you talk about beneficial relationships between the United Kingdom and other countries. By way of declaring an interest, I was a trustee of other organisations like the Westminster Foundation and the British Association for East and Central Europe with grant-in-aid from the Foreign Office. In those organisations the determinator as to what this relationship should be works in close relationship with the people who give us grant-in-aid. When we, as a Committee, go abroad the British Council always appears terribly proud of being not an arm of government. I would be really grateful if you could explain to me how you see your political accountability to the British taxpayer. The second thing is, if you could briefly touch on this, when we go abroad and deal with the British Council, how can I tell it is the British Council and not just the provider of English language teaching?

Sir David Green: Could you remind me of the first part of your question?

Q12 Ms Stuart: Given that you describe yourself as independent, what is your accountability in defining what these beneficial relationships are?

Sir David Green: Our status is as a non-departmental public body (NDPB). We are also a charity set up by Royal Charter. We have a board of trustees with a Chairman whose appointment is ratified by the Foreign Secretary, as is the Deputy Chairman. The board of trustees is the board that determines policy. We work to FCO strategic priorities because the Foreign and Commonwealth Office is our sponsoring department-the department that we, as an NDPB relate to. So our work is in line with FCO strategic priorities and we demonstrate how we work towards those. It has been generally acknowledged that our effectiveness is enhanced by what we call this arms-length relationship with government, which enables us to work in a number of countries in areas of work which it would be much more difficult for embassies and high commissioners to become engaged in. Therefore, in terms of the overall contribution to public diplomacy it is very helpful that we have this arms-length relationship with government and operate not independently but with that light relationship. There are lots of examples I could give which demonstrate why that has been very important, and in terms of building relationships between the United Kingdom and countries within the Middle East that has been particularly important over recent years. One of the strengths of the British Council is that it has built up trust over a period of 70 years, and the country benefits from that, and where there are difficulties in the short term, in terms of perhaps government relations, then the fact that the British Council has very good relationships with people in those countries is beneficial to the United Kingdom in the long term.

Q13 Chairman: I am conscious we have a number of other, rather important points, so I would like to bring in questions about the public diplomacy review which is ongoing.

Sir David Green: Chairman, I have not answered the second part. They are complex questions and it is quite difficult to be brief, but the second one is how would we know it was the British Council?

Q14 Ms Stuart: And not just an English language provider, which could be anybody. It is actually the British Council.

Sir David Green: Because the English language part is only one element of the work that we do. It is an important element but it is only a small part of it; it is about a quarter to a third of our total business activity. More and more when you go into a British Council premises you will see that there is a very wide range of activity on offer and a whole host of different ways in which we want to engage with the public in that country in order to make those relationships that I have talked about. English language is one, the arts, science, governance, British examinations-a whole range would also be on offer. More and more people coming to the British Council get a wider view than a sort of one-dimensional view which you might get in one or two countries where English language is more predominant than other activities.

Chairman: I suggest we come back to this point later on. We have got some other questions on our list that we want to ask, but I wanted to get in early on the Carter Review, and issues related to it.

Q15 Mr Keetch: On this public diplomacy point, you make the point that you are at arms length from the Government, and you represent Britain overseas; it is the job of the Foreign Office to represent the Government; you represent Britain, our culture and our history. Certainly I have seen you do that excellently in many countries that I have visited, and I am sure Lord Kinnock, as a former Leader of the Opposition in this place, would cherish that distinction between the government-of-the day and whatever political party and representing Britain. So can I ask about the Carter Review? You say in your memorandum that you have accepted the Wilton Review of 2002. We were expecting the Carter Review to be published by now; we are told that in fact the Government have asked for there to be a redraft. I wondered if you happen to know what the redraft was about, what you hope would actually come from the Carter Review and where it will place you in the whole aspect of British diplomacy abroad.

Lord Kinnock of Bedwellty: We are, Chairman, slightly constrained in the response that we can make for the very reason Mr Keetch says, that we also had anticipated that by this auspicious date Patrick Carter would have produced his review. Certainly if hard work on his part and that of his team could have guaranteed it, it would have been done. However, I have no news or knowledge of a Government-required redraft. What I am certain has been taking place is that the whole approach adopted by Lord Carter and his colleagues has been characterised by consultation, and that can be a time-consuming and painstaking activity not because there is an adversarial relationship but because simply to try to ensure that a review whose function it is, stated from the outset, to improve the co-ordination of public diplomacy efforts across the piece involving government and the associated bodies, like ourselves and the World Service - with that objective in mind - consultation is obviously reasonable. What we would like to see coming out of the review is, first, a recognition of the quality, and I am actually pretty confident that that will be forthcoming in relation to the, I would say, incomparable quality, in the spheres in which we operate, of the British Council. Certainly if we make a comparison between ourselves and our functions and the way we discharge them and comparable bodies from other Western countries, they will acknowledge the quality of our achievement. I would like to see that endorsed, not for reasons of flattery but for reasons of necessary public reassurance. As Ms Stuart says, we are accountable to the British taxpayer and part of our accountability is the result of an examination of the kind undertaken by Lord Carter. Secondly, I would like, on the basis of the examination that has now been conducted over about 14 months, there to be recognition that the degree of what I call independence with alliance that is a characteristic of the British Council is of direct value to the United Kingdom and the interests of the United Kingdom, and therefore any shift in direction or attempted micromanagement would not achieve objectives of efficiency or sustain the essential characteristic of the British Council. I would also like to see it made evident that improved co-ordination is not only an objective of the review but is something that we strongly favour, as is improved measurement of outputs of public diplomacy by the various bodies, including government departments, engaged in that in this country. The Carter Review had those characteristics, and I will say, because of the generous amount of time that Patrick Carter has given to all people in all organisations affected by it, that I think at least some of what I suggest will feature (not in the same words, patently, or maybe with the same inflection) in the Carter Review. I hope I am not misrepresenting at all. Those are the basic feelings that I have as a consequence of the contact that we have had and the very strong efforts that Lord Carter and his colleagues have put into effective consultation. I do not know if my colleagues want to add anything.

Q16 Mr Keetch: Just to be specific on that, Lord Kinnock, the delay is not because of any redraft, the delay is simply because the very excellent review is taking slightly longer than one anticipated, and you certainly, from your point of view or the British Council's point of view, have no concerns about the structure of how the review is being concluded and how the process is moving on?

Lord Kinnock of Bedwellty: I am certain that Lord Carter, who I think has appeared before this Committee and certainly has appeared before other Committees of the House, will be happy if invited to come and speak to the Committee to fill in the background. What would be a reasonable process in this review, obviously-because it is in no sense adversarial, as I said-is that Lord Carter and his colleagues compile the initial conclusions and then discuss the operational impact and receive the responses, digest them and then decide what they are going to recommend. As I say, this is a democratic process and democracy almost invariably takes longer than the alternative, but thank God for that!

Q17 Chairman: Do you have any indications as to when the final version is going to be made public?

Lord Kinnock of Bedwellty: Not really, no, because on the basis of assumptions, not because there was any deadline, we made assumptions that you and the general public would have possession of the report before we actually turned up here. That has not occurred. I doubt we will have to wait much longer. I am sure a call from a body like this to Pat Carter would produce a much more precise response than any one that I am capable of giving.

Q18 Chairman: Are you worried about any of the recommendations that might be in this?

Lord Kinnock of Bedwellty: None that we can anticipate, actually. There has been a discussion over a couple of months about the adequacy of what I will call the Wilton definition of public diplomacy, but it is not a discussion about how many saints dance on the eye of a needle. Nevertheless, it does have significance, and that is understood by Lord Carter; he is totally aware of that. To profess concerns or anxieties in that area would not be right because that is not what we feel as a Council, and certainly I do not feel it and neither do my colleagues on the board of trustees feel it.

Q19 Mr Horam: Lord Kinnock, you said you want to do more and I would want you to do more because I think the work you do is very important. I am surprised, therefore, that you deploy 1,000 of your employees, of 5,500[1] employees in total, in the United Kingdom.

Lord Kinnock of Bedwellty: It is actually more than 1,000; it is nearer to 1,5001, [2] in total.

Q20 Mr Horam: In the United Kingdom?

Lord Kinnock of Bedwellty: In the United Kingdom

Q21 Mr Horam: Why so many?

Lord Kinnock of Bedwellty: There are a couple of reasons. First of all, and my colleagues will go into the actual deployment, we have several offices necessarily in the United Kingdom, most particularly, for obvious reasons, in Edinburgh, in Belfast and in Cardiff. This is in addition to the substantial office that we have got in Manchester, with I think 600[3] people still there (my colleagues will go into their functions in a moment).The remainder, somewhat under 1,000[4], are in Spring Gardens where we have now concentrated all our London staff. In previous decades they have been a bit more scattered in the London area.

Q22 Mr Horam: Why do you need all those people?

Lord Kinnock of Bedwellty: My colleagues will go into the detail of their function.

Sir David Green: The primary reason we need people in the United Kingdom is to make sure that the connections between all the sectoral specialists in the United Kingdom and overseas are of the highest quality. So we need to have contact and we need to access scientists, artists, musicians and English language specialists, and people involved in governance work, etc. So we have to have a body of people within the United Kingdom in those specialisms who can then actually work with those sector specialisms in order to make sure that the people we serve overseas get the best possible advice.

Q23 Mr Horam: I raise this question because I am sure you have seen this anonymous article in The Daily Mail by an ex-employee who said: "One of my line managers regarded typing an e-mail in a day as an achievement", and abuse of the office time-off-in-lieu system was widespread.

Sir David Green: I can respond quite firmly to that because actually I think that the staff in the British Council work extraordinarily hard. There are bound to be, as in any organisation, one or two who, perhaps, do not do as well as they might ----

Lord Kinnock of Bedwellty: The reason for being the ex-employee.

Q24 Mr Horam: It could have been a whistle-blower.

Sir David Green: By and large, the commitment that we get from staff in the British Council is second to none. So you have all that sectoral experience that is required and engagement with different sectors. We also obviously have all the administration, all the finance, and we have to have a finance team covering finances worth nearly half a billion pounds.

Q25 Mr Horam: Do you think the balance is right between overseas staff and United Kingdom staff?

Sir David Green: Six thousand to one thousand?

Q26 Mr Horam: No, Lord Kinnock said 1,500.

Sir David Green: OK. I think it is, although it is something that we are looking at.

Q27 Mr Horam: Do you think it would be advisable to reduce the number of staff in the United Kingdom?

Sir David Green: We will be reducing the number of staff through efficiencies, through the Finance and Business Systems.

Q28 Mr Horam: Have you reduced it?

Sir David Green: Yes.

Q29 Mr Horam: Can you let us have some figures on that?

Sir David Green: Yes, I can send you a note of those. Certainly in the last year we have reduced the number of finance staff by around 40, and the Finance and Business System will over time enable us to reduce further. However, it is a very complex organisation to run in terms of the interaction with the United Kingdom. Also, within those numbers are staff who run contracts for other government departments, namely DFID and the Department for Education and Skills. So, for instance, we run the Global Schools Partnership Scheme on behalf of DFID, which requires staff in the United Kingdom to administer it. A number of the staff based in Manchester are responsible for the development of services contract which our Chairman referred to in terms of part of the income that we receive. We also have a network of staff in universities supporting students, particularly the Chevening students, to make sure that they have as good an experience as possible. In total, we have 23 different locations in the United Kingdom. So what I would like to do is write a letter to you, Chairman, which sets out the position of staff and what their functions are.

Q30 Mr Horam: Can you let us know what has happened, over the last few years, to the total number of staff and what your projections are?

Sir David Green: Yes. Just to add, we did in the spending review up to 2004 make a commitment to reducing our headcount within the United Kingdom by 5 per cent.

Q31 Mr Horam: A year?

Sir David Green: Over the period.

Q32 Mr Horam: Five years?

Sir David Green: Over the period of the Spending Review.

Q33 Mr Horam: Which is what?

Sir David Green: Three years.

Q34 Mr Horam: So 5 per cent over three years? That is pretty unambitious, is it not?

Lord Kinnock of Bedwellty: It depends where you start from.

Q35 Mr Horam: Not really. It is unambitious. Five per cent over three years is an unambitious target.

Sir David Green: Can we write you a note about that? It is not unambitious in the context of a growing organisation, and in the spending review up to 2004 we received an increase in our grant of 9 per cent. So if you take into account the growth within the organisation, it is not unambitious. If I can send a note to you, I will.

Chairman: That would be helpful. Then, if necessary, we can get back in touch with you for further information.

Q36 Mr Illsley: Lord Kinnock, gentlemen, I want to ask you questions about your existing staff and recruitment rather than your downsizing through efficiencies. I know that in your strategy for 2010 you are talking about moving from administrative overheads to new products. Bearing in mind what my colleague has just asked you, how are you recruiting staff to meet those new products - staff with professional experience in areas such as IT, project management, finance and human resources? Given your most recent answers, how is that made more complicated by the fact that you are looking to create these efficiencies?

Mr Davidson: I think there are a number of areas where we are seeking to move the skill base of our staff into new areas, particularly overseas moving into staffing which has much higher levels of professional skills, particularly in the key sectors in which we operate around education, the arts, etc, and moving ourselves away from routine administrative work and more into professional and partnership management, so that our whole staff profile becomes a more professional one. As our Director-General said, within the United Kingdom we are looking to move resources out of the routine administration of the organisation, particularly around the finance side and the IT side, and again move more of our resource into the professional side of the organisation, and the management of the inward flows. I think what is particularly important about the staff that we have in the United Kingdom is that we are bringing very large numbers of people into the United Kingdom each year, and the management of that process and ensuring that those people coming here have really effective experiences is a critical aspect of the work.

Q37 Mr Illsley: For 2006 you have set diversity targets in senior management, for ethnic minority staff and disabled staff. Are you likely to meet those targets? What action are you taking to try and ensure that you do that?

Mr Davidson: Within the diversity targets we have met and exceeded our gender targets. Within the area of ethnic minority representation, we are well on our way to meeting them. I think the one area where we still do have issues is over the disability targets, where perhaps we are further away from meeting those targets than we are in the other areas, and we will be having to take additional action to try and meet those.

Q38 Chairman: Perhaps you could send us a note on where exactly you are in relation to the targets. It would be helpful for us to have an idea.

Sir David Green: If I could just add, in terms of the earlier question about how we are going to get these skills, it will be a combination of bringing people from outside the organisation into the organisation through external recruitment, but also we have a very strong training and development programme of increasing the skills base within the organisation by growing people from within the organisation. That is something that we have got a strategy to do. We do have to increase our skills set in order to implement strategy 2010.

Lord Kinnock of Bedwellty: Chairman, in order to try and further serve Mr Horam with an answer and, indeed, related to the last question, if you take, for example, the fact that in a less than propitious year because of the value of the pound and because of the aftermath of the SARS epidemic, the war in Iraq and an assortment of other factors that are bound to affect our demand curve to some extent, we nevertheless expanded - just to take one example, in the education area - in the number of examinations that we handled and in English language teaching by 4 per cent. If we go over the three year period, it is not unreasonable to assume something like a 10-12 per cent growth rate in those areas, at the same time as we are implementing the policy for securing a 5 per cent reduction in overall staffing, which is what I meant when I said, "It depends where you start from". As Sir David said, we are talking about a continuing growth curve, maybe not as steep as it was two years ago but still pretty satisfactory, and it is in that context that we are raising productivity by further rationalising our staff, but not in a way that would inflict any harm on the quality of our programme. The only other thing I would say is if the person referred to in the anonymous article (and I am grateful to you for phrasing it in that way) was a whistle-blower then one would hope that the whistle would be blown so that the causes for that person's concern could be identified and the effective management action taken, because that is what the British Council does.

Q39 Mr Keetch: Just to compare, though, with similar organisations from other nations-France and Germany, for example-what is the equivalent size of those organisations compared to what you do, in terms both of their footprint overseas, their effectiveness, and indeed their footprint back in their host nation? I would suspect that you probably do rather better per person over there than perhaps they would do.

Lord Kinnock of Bedwellty: We can certainly send you a list of figures, but off the top of my head, US expenditure only on public diplomacy will this year be $740 million. The state department is willing to acknowledge, as it has indeed to Lord Carter, that they envy the British Council in the quality of its performance in public diplomacy and other areas. If you look at the Goethe Institute, their commitment from the Federal Government in Germany is substantially greater than the 180 million we will be getting this year. Obviously their terms of reference are different, though you will find people in the Goethe Institute who wish that they had the breadth of obligations and effective activity as that undertaken by the British Council. The same could be said for the Institut Francais. We will more than happily provide the figures. I think they may be a matter of public record in our public diplomacy document, the submission to Carter, but it will provide you with a full (I hesitate to use the term) league table.

Sir David Green: We did send copies of it to the previous Committee.

Chairman: We do have that, I think, in our office.

Q40 Mr Hamilton: Lord Kinnock, may I come back to the point about efficiency savings with regard to information technology? I understand you have this wonderful, global integrated, Finance and Business System, or FABS for short (some people call me Fabs for short). Ninety-six million pounds over ten years is what you are expected to spend. I wondered what sort of savings in back-office operations and staffing you were likely to make during that period.

Lord Kinnock of Bedwellty: For a blow-by-blow account with all the decimal points, Sir David.

Sir David Green: First of all, the reason why we have embarked on this massive programme is that we had some 20 different independent IT systems which in the modern age had to be brought together. So what we will have with the Finance and Business Systems is an integrated system. We went live in the United Kingdom in January, very successfully, and we have just gone live, a week ago, in India and our next wave is in China, followed by South Africa. It will result in savings of around 300 staff by the end of the ten-year period. It will also result in savings of around the figure of 96 million that you quoted. We have already made 3.4 million in savings this financial year, even though it has only been going a relatively short period of time, which if you extrapolate through to the end of the period is around 30 per cent of that 96 million. So, so far so good. I am not so optimistic or unrealistic as to not appreciate that there will be a number of problems along the way; it is a very complex system and even though it went well in the United Kingdom it has taken sometime to bed down and it did mean that we were later in presenting our annual accounts than I had hoped because of some technical difficulties. However, we have now resolved those and the National Audit Office gave us a clean bill of health and thought that, actually, the introduction of the Finance and Business System was one of the best introductions they had seen. The fact that it was to time and to budget was something which is not the norm within the public sector. So, so far so good.

Q41 Mr Hamilton: It is very rare, is it not, that it is to time and to budget? So, obviously, from what you say, you are pretty satisfied with the new system and it is delivering what you expected. Have there been any major glitches or problems, apart from making you late with your accounts?

Sir David Green: No, we did learn, though, from our initial experience of going live in the United Kingdom that investment in prior training is the key to it. I think it is fair to say that the introduction in India has gone more smoothly than it went at this comparative point with the United Kingdom introduction. That is because we learnt the lessons and we have a team of people who have been working on the FABS project who are now in centres in India supporting staff. I think we will get better as we go through. The other thing, of course, is that it is very dependent on high-quality connectivity, and we have signed a large contract with Global Crossing (?) to provide connectivity for us across the world, and it is entirely dependent on that.

Q42 Mr Hamilton: Finally, may I ask what proportion of your total savings is dependent on the IT systems, in terms of efficiencies?

Sir David Green: The efficiency savings that we are committed to are very much in line with Gershon targets, and that is 2.5 per cent per annum between 05/06 and 07/08, and what that commitment will mean is us finding 30 million and moving that from savings into frontline services. So the actual proportion that is reliant on FABS I am not entirely sure. Can you give us a figure, Martin? Can we come back to you on that?

Q43 Mr Hamilton: Do come back.

Sir David Green: I think we would need to come back to tell you what proportion it is, but it is significant.

Lord Kinnock of Bedwellty: There is a further, additional point that gives the Committee some figures that Martin has got.

Mr Davidson: We are committed this year to 5 million of efficiency savings. Of that we expect to find slightly over the full amount-about 102 per cent. We are committed to a further nearly 9 million next year and we have identified about 50 per cent of those figures already, and we are committed to a further 13 million in the year out from that, of which we have identified about 30 per cent to date.

Q44 Mr Hamilton: When you say "identified", are these identified within the new IT system?

Mr Davidson: The year-out figures will be largely identified through the IT system, yes.

Q45 Mr Hamilton: Finally, Lord Kinnock, or your colleagues, can I ask you about your estate abroad? Last year the British Council told this Committee that it was developing a fresh strategy for reducing the Council's footprint (terrible word) in estates by about 15 per cent by 2007/08. I wondered what proportion is likely to be as a result of sales of property owned by the British Council.

Mr Davidson: We do have a sales programme for the British Council. We are looking this year for sales of about half a million pounds within our budget, but we have already identified and have already made at least one sale and there are two more in the pipeline which will substantially exceed that. We would expect to see a continuing sales programme of around the 1 million mark for the next couple of years, which is against a total fixed asset estate of about 65 million.

Q46 Chairman: Can I ask you a few questions about security? Last year you claimed 10 million from the contingency fund to upgrade the security of your estate. Has all that money now been allocated and do you foresee you will require any further money for security from the contingency fund?

Sir David Green: It was awarded to us in two tranches: 4 million in the previous financial year and 6 million in this financial year that we are in. We spent the 4 million last year on upgrading our security in the high priority areas and we have committed to spending more than 6 million this year, so the rest we will find from within our own resources. There is no question that we will need all of that.

Q47 Chairman: The last spending review allowed you to retain all your efficiency savings that were anticipated for reinvestment in security. What is going to happen to your planned savings which you have referred to already? Is that all going to be reinvested in security or not?

Sir David Green: Some of it will have to be. What I have just explained covers some 75 locations around the world but, given the increasing security problems that we face as an organisation, I am quite certain that we will have to invest more in security. The commitment we made to Treasury was that we would not go back to ask them for more if we were allowed to keep the efficiency savings and could spend at least part of those on upgrading security and the balance of that would be put into reinvesting and investing in products and services for the future.

Q48 Chairman: You said there were 75 locations, presumably a large number of those will be locations where there is public access. Does the need to improve security actually reduce public access and does that have a knock-on consequence on your ability to generate income from the use of your facilities and your services?

Sir David Green: Yes. As both American embassies and UK embassies and High Commissions have become more fortified, we have become a possible displacement target and we have to take very carefully and very seriously the issue of security and safety of our staff and people who use our buildings. What we have done is a very careful and thorough review of all our premises across the world. In some places, sadly, we have had to close our centres to public access. If you take a country such as Pakistan, there is no public access in any of the five centres that we have across Pakistan. That is not to say that we are not able to operate in Pakistan, we have a very thriving operation and we administer 200,000 examinations each year, for instance. This does not require people to come to our offices, we have made an arrangement through Standard Chartered Bank and they can go to any branch of Standard Chartered Bank and register for examination, we tell them where to turn up and then notify them by post or by email. It is forcing us to think of new ways of working. That is an extreme case. There are other countries where we have more limited public access and in some countries, such as Cairo, where the Chairman and I were earlier this year, we have increased security and people coming into the building have to go through an x-ray machine which would not have been the case five years ago.

Lord Kinnock of Bedwelty: There is still a huge use of the Cairo building-huge.

Sir David Green: Yes. In terms of numbers that we are reaching both face-to-face and virtually, the numbers are growing very substantially each year.

Q49 Chairman: You mentioned Pakistan, is there any near term prospect of the reopening of your public offices there?

Sir David Green: Not near term, no.

Q50 Chairman: What about Saudi Arabia, which I also understand has been closed?

Mr Davidson: Over the last year we have moved two-thirds of our six offices into new premises in Saudi Arabia but all of them do have public access. In one centre in Dammam in eastern Saudi Arabia we have closed the teaching centre because it was becoming impossible to maintain an effective teaching operation in the environment. In Riyadh and in Jeddah, we have both men's and women's teaching centres which are open to the public and which are beginning to increase the throughput of people as well, I am glad to say.

Q51 Chairman: This Committee visited Algiers and found that there was disappointment in the fact that the British Council had closed its presence there over ten years ago and some other European countries do have facilities there. Is there any possibility of a return to Algeria in the near future?

Sir David Green: That is something we are looking at at the moment. I think there is a possibility. I do not want to be more positive than that but certainly it is something that we are exploring.

Lord Kinnock of Bedwelty: Just to emphasise, I am sure the Committee will understand that our approach to security is substantially based on the analysis provided to us by the Foreign and Commonwealth Office and also substantially determined by our determination to provide the maximum degree of security and protection to the people who use us as well as the people who work for us.

Chairman: Thank you. I think Fabian Hamilton has a question to do with the Middle East.

Q52 Mr Hamilton: I just wanted to ask you about Iraq and Pakistan. I know that you have been pretty successful in re-establishing the British Council in Iraq. For example, I understand that you have got five resource centres now in Basra and you are opening two more during the course of this year; I do not know if they are already opened. You have brought 200 university and ministry staff to the UK for training and networking. You have trained 50 managers and teachers from technical colleges. I understand you have trained 140 media workers and 120 media technicians as well in partnerships with the BBC World Service Trust. I wanted to ask you what the problems are, apart from the obvious ones, of operating in Baghdad, Basra and other parts of Iraq and whether your staff are facing undue security problems and are uncomfortable, or whether the situation is relatively normal apart from the dreadful suicide bombings that we know about from the news?

Lord Kinnock of Bedwelty: I will let my colleagues go into the detail in relation to the locations. I met a substantial part of our Iraqi staff during the course of one of their orientation visits to London. They are conscious and grateful for the fact that we are acutely aware of realistic concerns about their security. It has to be said, however, that they are absolutely determined to sustain and, if possible, advance the service that they are providing in a variety of forms. That will never make us careless about their safety but that is a factor to insert. These are people who have got experience of what existed before, in several cases are victims of what existed before.

Q53 Mr Hamilton: So there is quite a number of local engaged staff then in Iraq?

Lord Kinnock of Bedwelty: Absolutely.

Q54 Mr Hamilton: In Afghanistan as well?

Lord Kinnock of Bedwelty: We will go into detail on Afghanistan where the picture in the last 12 months substantially and happily has shown considerable improvement. The point I am making is our watchword is the security of the people who work for us and who use us. Several of the people who work for us in areas of pressure, like Iraq, are not unconscious of their own safety but, nevertheless, are so utterly committed they just want to get on with the job. They are very impressive people.

Sir David Green: We had a member of our staff from Iraq here earlier this week accompanying the Minister of Education for Iraq who is here on a visit with his senior staff to look at how the UK can support him in rebuilding his education system. One of the things that he is most interested in is English language teaching and how we can support the development of English language teaching through teacher training and through the provision of textbooks. I asked our UK-based member of staff how she was finding the security situation and it is very tough. It is a requirement that she has to travel in an armoured vehicle and is accompanied by a security officer. It is very difficult to get out or beyond Baghdad. The operating situation is not easy. Having said that, you gave a catalogue of some of the things that we have been involved in and I think we have managed to work very successfully in bringing Iraqis out, often to Jordan, sometimes to the UK, to work with them on teacher training and curriculum development. We brought a number of vice-chancellors here to the UK to look at what their needs were and to explore that with them through a management development programme organised with Birmingham and Nottingham Universities. We also distributed 50 tonnes of books to universities very soon after the war ended. There is a number of things we are able to do but it is constrained on the ground in terms of our UK staff in terms of their movement, so we have to be imaginative in terms of how we can provide a service. As the Chairman was saying, in Afghanistan the picture is brighter. We have now got English resource centres both in Kabul University and in Balkh University, Mazar e Sharif. We have also appointed an ELT consultant to develop the English language curriculum of Kabul University. I have to say that the thirst for English language in Afghanistan is extraordinary and these English language resource centres are just packed and it is impossible for people to move. Working with the BBC we have also produced self-study English language textbooks in Dari Pashto, which have now been distributed, and we have provided English language training for 70 members of the new parliament in English language using our British Council resource centres. It is easier to operate now in Afghanistan than it was, and certainly in Iraq, but it is not that easy.

Mr Purchase: On the question of Iraq and safety, is it reasonable for management to actually allow work to go on in these circumstances of extreme danger, notwithstanding the staff's willingness, courage and so on and so forth? Is it reasonable for management to continue to put staff in this position?

Q55 Andrew Mackinlay: You withdrew them from Minsk on safety grounds, I remember.

Sir David Green: No, that was not the case. We withdrew them from Minsk because we could not operate in that country; it just was not possible to operate there. Obviously we think about this very hard and if anything keeps me awake at night it is the security of our staff and the people who use our services. The other thing I did not mention about Iraq was we administer and manage two very large DFID funded programmes, one on political participation and one on civil society engagement and capacity building within civil society. In discussions with DFID and obviously with the Foreign and Commonwealth Office, taking advice, we think we are being responsible and if I ever felt that we were placing our staff in an impossible position then I would withdraw them.

Chairman: Sir John Stanley has been very patient; he has been waiting to ask about Russia. It is now your turn.

Q56 Sir John Stanley: Thank you, Chairman. Lord Kinnock, when the Members of this Committee in the last Parliament visited Moscow in June 2004 we had a very detailed briefing discussion with your senior management there about the imploding tax dispute between the British Council and the Russian tax authorities. It appears since our visit the situation, if anything, has got worse and we understand that a criminal investigation, as described by the Russian authorities, has now commenced against the British Council in the St Petersburg area. The Independent on 4 October reported: "St Petersburg's main investigation directorate told the Interfax news agency 'A criminal case regarding illegal entrepreneurship is being pursued in connection with the offering of commercial English language courses. Also over the past four years the British Council has not paid a single kopeck in tax from its commercial activities." Lord Kinnock, I will of course give you every opportunity to respond to the wider issues here but I would be grateful if we could have one or two facts on the table. Could I ask you, first of all, members of the British Council, both the expatriate members and locally engaged members, do they or do they not have immunity from criminal prosecution under diplomatic immunity in Russia?

Lord Kinnock of Bedwelty: I think it is best for the case of the oral record for the response to come from the Chief Executive.

Sir David Green: I am going to ask Martin. I want to give you absolutely the right answer and I think Martin knows.

Lord Kinnock of Bedwelty: That is perfectly correct.

Mr Davidson: All our UK based members of staff working in Russia are there with diplomatic immunity and, therefore, have immunity from prosecution; our local staff do not. Local staff are normal members of the Russian public who are employed under normal circumstances as are our local staff elsewhere in the world and are subject to the laws of the country, of course.

Q57 Sir John Stanley: Thank you. The next question I would like to ask you is did the British Council before engaging in the commercial provision of English language courses take tax advice not only from UK based tax advisers but also from the Russian tax authority?

Mr Davidson: I think the point I would like to make is that English language teaching has never been a hidden area of work, it has always been completely open and ----

Q58 Sir John Stanley: I would be grateful if you could answer my question. I asked a specific question. If you have not got the answer here we will completely understand if you give it to us in writing.

Mr Davidson: We have taken tax advice from an international accountancy firm. From time to time we have also sought to engage with the Russian tax authorities but because the status of the British Council was not settled under Russian law it was not possible for us to engage with them.

Q59 Sir John Stanley: It would be helpful if you could just fill that out a little bit and let us have a note of the attempts the British Council made to get clarification of its tax position in relation to its commercial English language courses and what response you had from the Russian tax authorities.

Mr Davidson: Certainly.

Lord Kinnock of Bedwelty: The note will show over long years, maybe as many as a dozen years, efforts by the British Council to conclusively resolve its status with regard to Russian law. For reasons that I think everyone will understand it can reasonably be said that in parts of the regulatory regime in Russia there is a continuing state of evolution.

Q60 Sir John Stanley: Thank you very much. I am just coming to the wider question of British Council status, if I may. When the Committee reported on this in our last annual report to the Foreign Office we received the following response from the Foreign Office when they replied to our recommendation. I quote from paragraph 47 of their response: "We have also made it clear that any discussions on the specific tax issues must go hand in hand with agreement at a political level between foreign ministries on the overall future status of the Council in a Cultural Centres Agreement (CCA)". Could you tell us what is the current situation on negotiating and concluding this Cultural Centres Agreement with the Russian Government?

Lord Kinnock of Bedwelty: Yes, readily. We are given to understand that we have had tax obligations in respect of our operations in Moscow, St Petersburg and the other centres in which we operate in Russia. The tax liabilities stipulated by the Russian authorities were paid in full in respect of Moscow in September. They were paid in full in respect of St Petersburg last week. We are led to believe that we can reasonably anticipate that by the end of this month the remaining tax issues will be cleared. They form a minute part of the overall tax picture and that is why we have got reason to believe that those who communicated to us in those terms are being accurate. So far as the status is concerned, we have heard of an explicit assurance that immediately after these tax obligations are resolved, and as I say this is at most now weeks away, so we are led to believe, there will be rapid movement towards the conclusion of the agreement. We have long sought that agreement for the very straightforward reason that in replacing the 1994 existing agreement, that will give stability to our status which will be beneficial both to the Russian authorities and to ourselves. The more rapidly we can arrive at that, the better it will be for the British Council, for the United Kingdom, for the Russian authorities and for those people in their hundreds of thousands who plainly have an appetite for using British Council services in Russia. I hope that long before we next come before this Committee, provided we are invited, we will be able to relate the resolution of this issue. Certainly if what we have been told about the conclusion of the outstanding tax matters is the key, the very, very rapid action key, to the conclusion of the agreement, we will be able to report that news.

Sir David Green: Can I just add that we have been working very closely, as you would expect, with the Foreign and Commonwealth Office in helping to resolve this matter both in London and in Russia.

Lord Kinnock of Bedwelty: I am aware of the time but for reasons that Sir John above all others will understand, this is a critical issue. In the introduction to your question you said that it appeared the situation now is worse than it was when you last gave attention to it. Given the fact that we are well on the way to the final resolution of the tax issue, it is necessary to give attention to what a Russian agency, as you correctly quoted, reported as an impending criminal prosecution. We have got no reason to believe that this will add additional complexities to what has been a complex situation, given that we and our embassy in Moscow and our consulate in St Petersburg diligently work with our counterparts in the Russian Ministry of Foreign Affairs for a stable and mutually agreeable outcome.

Q61 Sir John Stanley: I have just one final question to put to you, if you just add it to the factual information you are going to give us. Could you give us an indication of the size of the tax payments which the British Council are going to make so that we have got that in front of us?

Sir David Green: Certainly.

Q62 Sir John Stanley: There have been two lines of suggestion as to how the British Council got into this particular situation. It has been suggested that the British Council have been less than diligent in examining their tax status, and you are going to answer that in the note you are going to provide. The other motivation that has also been ascribed here is the suggestion that the British Council have become, unhappily for themselves and through no fault of their own, something of a political pawn in some outstanding issues between the Russian Government and the British Government, in particular in relation to the British Government's refusal to allow the extraction of Mr Akhmed Zakayev and also Mr Boris Berezovsky, and also the Russian Government's alleged displeasure that the British Government has decided to make a substantial financial contribution to educational projects in the North Caucasus region, including Chechnya. I would be grateful if you would just like to respond to the suggestion that the British Council may have been subjected to this tax action as a result of a degree of political motivation by the Russian Government.

Lord Kinnock of Bedwelty: I am sure you will understand, Chairman, if the British Council are not in an authoritative position to comment on what attitudes may exist in Russia towards the granting of asylum to Russian citizens, and it would not be appropriate for us to explore the matter further. Plainly, this Committee, with its powers of investigation, is in an appropriate position to secure any additional facts on the matter. Part of me regrets that I will have to leave it there but I think that is the wise thing to do, although I understand the propriety and the effectiveness of the question. So far as North Caucasus is concerned, it has to be emphasised very strongly that the British Council's engagement in the education initiative in that part of Russia is as a part of the United Kingdom's response to the Beslam tragedy, the anniversary of which has just been sadly marked. Consequently, therefore, we are not simply consistent with government policy on this, which we are very happy to be, we are effectively the executives of government policy. The discussion, if it continues, should continue in that context. We have no wish to evade, we accept every responsibility that is ours, but that is the situation in which we find ourselves and are ready agents of the execution of government policy in that sadly afflicted area.

Chairman: Let us not move away from Russia. In the four minutes that are left, if Andrew Mackinlay comes in very briefly and then Andrew Mackay and if we have any other outstanding issues we will have to write to you.

Andrew Mackinlay: The first is Kyrgyzstan and the related countries there. There is no United Kingdom political mission or embassy in Kyrgyzstan and that is a matter for another occasion, but if you could amplify on that. The other one is if you might touch upon the relationship with the Scottish Executive, and it would be true if Northern Ireland was up and running and also the cultural side of the Irish Republic's cultural ministry. If you have a moment, could you just touch upon how we are going to convey these nations within the UK, particularly whether they have got some money, energies and an agenda legitimately of their own.

Lord Kinnock of Bedwelty: If I could respond very briefly to the last part of the question and simply use Scotland as an instance. We now have a substantial office in Edinburgh and it works in very close harmony across the political spectrum with the Scottish Parliament and with the Executive. The Presiding Officer of the Parliament is actually a member of our advisory council in Edinburgh and the co-operation is universal, we believe to the benefit of Scotland and its Parliament, yes, and to the benefit of the British Council but, most of all, people in Scotland and elsewhere in the world who are deriving direct advantage as a consequence of this reinforced effort.

Sir David Green: On Kyrgyzstan, we do not have plans to open an office in the foreseeable future. We did a major review of our network some years back which, as you remember, resulted in the closure of our programmes in four countries: Belarus, Swaziland, Lesotho and Ecuador. We have since then opened in Libya and Iraq and Afghanistan. From that previous experience we knew that there was no point diluting our effort and it is very important that we keep the quality of our work here and, therefore, we cannot keep opening new operations. Sadly, whilst we would like to, there is no opportunity for us to do so in the foreseeable future.

Q63 Mr Mackay: You will recall that those of us on the previous Committee when we reported were very critical of your new logo and did ask you to reconsider the use of the Union Jack. Since then, I think we have all been dismayed about the Common Ground exhibition and the distortion of this country. It was hugely regrettable and it was clearly a mistake. Linking the two together does not give you many friends. I would like you to briefly comment on both points.

Lord Kinnock of Bedwelty: The photographic exhibition, Common Ground, shown in dozens of countries across the world, was universally hailed as highly effective, and that was by expats as well as by the recipient audiences. There was one image out of 130 photographs that provided the opportunity for one or maybe two British newspapers to produce sensationalist coverage little informed by the facts. Apart from that context, it is the reality that if the British Council were exclusively to focus on celebrating the undoubted virtues and values and greatness of our country, and sought to obscure the more difficult and challenging features of our society, we would lose the credibility which is fundamental to the development of understanding and trust internationally. I know that Mr Mackay is entirely responsible in his view but I would ask him to put that into context.

Q64 Mr Mackay: The Union Jack?

Lord Kinnock of Bedwelty: I think the logo is very effective. Again, it has had a great reception around the world representing, as it does, the four constituent parts of the United Kingdom and I am damned if I am going to spend any more money on that.

Chairman: I am afraid the Division bell has stopped us. Thank you for coming, gentlemen. Thank you for your answers.

[1] Note by witness: The actual total number of British Council employees is 7,377, of which 1,167 are UK-based.

[2] Note by witness: Lord Kinnock was including UK appointed staff whose place of work is overseas.

[3] Correction by witness: there are 390 staff based in Manchester.

[4] Note by witness: there are 659 staff based in the Spring Garden premises