Guidance

Tailored Review of the British Council: terms of reference

Published 19 July 2018

1. Objective of the Review

Good corporate governance requires that public bodies are efficient, effective and accountable, and provide value for money. The government’s approach to public bodies’ reform for 2015 to 2020 builds on the successes of the 2010 to 2015 Public Bodies Reform Programme. This new approach is based on a 2-tier approach to transformation: a programme of cross-departmental, functional reviews coordinated by the Cabinet Office, coupled with ongoing, robust ‘tailored reviews’ (TRs) led by departments with Cabinet Office oversight and challenge. The aim of all such reviews is to provide a robust challenge to, and assurance on, the continuing need for the organisation in question – both in function and form.

The Review will assess in particular:

• the British Council’s capacity for delivering more effectively and efficiently, including identifying the potential for efficiency savings, and where appropriate, its ability to contribute to economic growth. The TR should include an assessment of the performance of the organisation or assurance that processes are in place for making such assessments

• the control and governance arrangements in place to ensure that the British Council and Foreign and Commonwealth Office (FCO) are aligned with the Cabinet Office’s code of good practice on partnerships with arm’s length bodies and that they are optimal for the organisation’s effectiveness

2. The scope of the Review

A Tailored Review of the British Council will begin in July 2018. The Review will cover the contribution by the British Council, in the context of the Royal Charter which provides the legal governance of the organisation and the objects for which it exists, to the priorities of the FCO, of the Government as a whole and of the Devolved Administrations; the efficiency and governance of the organisation; and any outstanding issues brought forward from the previous Triennial Review.

The Review will look both at the current performance of the British Council and at how it is able to respond and adapt to those factors which are most likely to affect demand for its services as the UK’s international organisation for educational opportunities and cultural relations in the future. The Review team will consult with a broad range of stakeholders including UK government departments and the Devolved Administrations, businesses and civil society, as well as with the British Council’s own staff and management.

The review approach and methodology is set out in Annex A.

2.1 Form and function

• the TR should determine whether the function of the British Council is still required and aligned to wider departmental and government objectives in the context of the Royal Charter
• The TR should look at the form of the British Council and whether its status is the most appropriate to deliver its functions. This should include the current classification of the British Council as a Public Corporation by ONS and as an NDPB by the Cabinet Office

2.2 Efficiency

• the TR should consider, if, how and where further efficiencies can be made within the British Council taking account of the organisation’s diverse funding sources and benchmarking performance against commercial providers of similar services where appropriate
• it should examine the British Council’s current operational structure, corporate functions and costs, including current and potential future use of a shared services model
• it should consider efficiencies made since the 2014 Triennial Review including those created by the move to the new HQ in Stratford (and subsequent relocations) and wider, global efficiency work

2.3 Effectiveness

• the TR should consider the contribution of the British Council to the priorities of HMG, the FCO and the Devolved Administrations in the context the Royal Charter. As part of this it will assess the British Council’s own processes and metrics for assessing its impact against strategic objectives.

• it should take into account wider developments in HMG policy and the global context, including international soft power objectives, and the potential impact of exiting the European Union on the UK’s international priorities

2.4 Economic model and sustainability

• the TR should consider if the British Council’s funding model is the most appropriate to deliver its functions and the broad outlook for its commercial activities
• it should consider whether its objectives can be met by other delivery mechanisms
• it should assess the long term sustainability of the British Council’s finances to deliver its objectives, with specific reference to delivery in non-ODA countries

2.5 Governance

• the TR should investigate the effectiveness of the British Council’s management and governance structures (including the Board, the Audit and Finance Committee, and Commercial Committee) including:

• the effectiveness of the Board in setting the strategy of the British Council and monitoring its impact
• the British Council’s effectiveness in promoting equality, diversity and inclusion throughout the organisation
• the effectiveness of the Commercial Committee and separate commercial legal entities in driving transparency and alleviating concerns about perceptions of conflicts of interest
• progress made on the issue identified during the 2014 Triennial Review of the separation of surplus-generating from grant-in-aid funded activities

2.6 The British Council’s relationship with the UK government and the devolved administrations

• the TR will consider whether the sponsor relationship between the British Council and the FCO is being managed in alignment with good corporate governance as described in the Cabinet Office code of good practice for partnerships with arm’s length bodies
• it will look at whether current controls and oversight processes as formally agreed between the FCO and British Council and as applied in practice provide sound governance and robust control of public money and allow the British Council the freedom to operate to deliver its functions effectively. This will include consideration of whether the current appointments processes for the Chair and Deputy Chair are appropriate, and whether the British Council should be on the Public Appointments Order in Council
• the TR will consider the relationship between the British Council and UK government Departments and the Devolved Administration, and assess whether current arrangements best enable the British Council to contribute to UK government priorities in the context of the Royal Charter

3. Issues which are out of scope for the Tailored Review

1. Progress on implementing recommendations from the 2014 Triennial Review has been reported on by the British Council to the FCO and other government departments, through the previous government engagement group (GEG) and the current Operational and Policy & Strategy Groups. The British Council has reported that it has successfully implemented the majority of actions arising from the 2014 Triennial Review and the TR will not seek to repeat this work. The TR will only consider issues for which actions are outstanding and which have a direct bearing on the areas outlined in these Terms of Reference.

2. The Review team will not undertake an audit of Council finances, nor detailed financial or economic modelling of future options.

3. The Review team will make strategic recommendations for the British Council and the FCO but will not seek to negotiate new arrangements or agreements between the FCO or other government departments and the British Council.  

4. Annex A: approach and methodology

4.1 Review Team and Challenge Panel

The independent review team consists of FCO officials from outside the Sponsor Team. The team will formally take up their role in June 2018. The Review Team is responsible for launching the review by Written Ministerial Statement, consulting stakeholders, gathering evidence, analysing results, writing the report and disseminating its results.

The Tailored Review will include a Challenge Panel to test and challenge the assumptions and conclusions of the Review Team. The final makeup of the Challenge Panel is still to be determined but will include:

• an FCO Non-Executive Director as Chair;
• a Cabinet Office representative
• a Treasury Representative
• an Academic with background on soft power issues
• FCO professional and policy advisers as appropriate

4.2 Methodology

The methodology will include:

• desk research of key documents
• a call for evidence with relevant stakeholders followed by meetings to explore some of the issues in more detail
• site visits to the British Council to speak to staff members and external partners and beneficiaries to gain an in-depth understanding of how the organisation operates and its effectiveness
• consultations with FCO policy colleagues, Whitehall and Devolved Administration partners and sponsors to inform and support the TR

The review is anticipated to be concluded in late 2018 with the report published early 2019.

4.3 Ministerial approval

The Minister for the Constitution will sign off the Terms of Reference and the final report.

FCO Ministers will have the opportunity to comment on the scope of the review and will sign off the final report and recommendations.

Interim emerging findings will be shared with the Minister for the Constitution and FCO Ministers.