Management of the British Council

Report by the Comptroller and Auditor General NATIONAL AUDIT OFFICE Management of the British Council Ordered by the House of Commons to be printed 22 May 1991 LONDON: HMSO E6.95 net 464 This report has been prepared under Section 6 of the National Audit Act, 1983 for presentation to the House of Commons in accordance with Section 9 of the Act. John Bourn Comptroller and Auditor General National Audit Office 20 May 1991 The Comptroller and Auditor Generalis the head of the National Audit Office employing some 900 staff. He, and the NAO, are totally independent of Government. He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies use their resources. MANAGEMENT OF THE BRITISH COUNCIL Contents Pages Summary and conclusions 1 Part 1: Background and scope 6 Part 2: Planning and monitoring 10 Part 3: Interchanges and specialist services 14 Part 4: Promotion of English, libraries and the arts 18 Part 5: Management initiatives 21 Appendices 1. Organisational structure of the British Council 28 2. Main British Council expenditure on activities grouped by funding source 29 3. Gross expenditure by country 1989-90 30 4. Main British Council activities in four overseas countries, 1989-90 31 5. Checklist of good practice 34 Summary and conclusions 1. The British Council, developed fiorn a small committee in 1934, has become one of the principal arms of the United Kingdom’s overseas diplomacy. In the shifting patterns of international relations the r61e of the Council remains constant: to promote an enduring understanding and appreciation of Britain abroad. 2. The Council is a non-departmental public body funded by grants-in- aid and grants from its sponsor departments - the Diplomatic and Overseas Development Administration Wings of the Foreign and Commonwealth Office. The Council also carries out agency work on their behalf, for which it is reimbursed its costs; and it operates a number of revenue-earning activities. In 1989-90 the Council’s income totalled E321 million of which El65 million was operating income and 9~156 million was passed on as agency receipts. 3. The Council employs some 4,500 staff: about 1,700 in the United Kingdom and 2,800, mostly locally-engaged, in 90 countries. In addition the Council employs about 1,500 contract teachers. Its work covers a wide range of activities including the interchange of people to and from Britain; library and information services; advisory, information, training and promotional work in support of the English language and literature; specialist services in education and social sciences, and in scientific and technical co-operation; and promotion of the arts. 4. The Council has been in existence for over 55 years during which time the environment in which it operates has changed substantially. The Council itself has also changed, particularly in the last four years. Major developments which have taken place cover new corporate and subordinate planning systems, the introduction of objectives and priorities, and radical changes in working methods. It was against this background that the National Audit Office examined the management of the British Council, at the end of its first corporate planning year, concentrating on the Council’s procedures for ensuring that: (a) it had an effective planning mechanism which took full account of its aims and those of its sponsors; (b) its use of resources was commensurate with its aims and objectives and was efficient; and (c) its programmes were effective and had the desired impact. 1 MANAGEMENT OF THE BRI”SH COUNCIL Planning mechanisms 5. On the effectiveness of the Council’s planning mechanisms, the National Audit Office examined the main features of the Council’s system of corporate and management planning at headquarters and at its UK regional and overseas offices. They also examined links with the sponsor departments. The National Audit Office’s main findings and conclusions were: (a) The Council had successfully introduced a highly structured corporate planning system in a short space of time [paragraphs 2.1 to 2.10). (b) The Council had identified weaknesses in the 1989-90 management plans and had issued revised guidance and altered its training accordingly (paragraphs 2.4 and 2.5). (c) The 1990-91 management plans were markedly better but with some continuing variability in quality: consistency with planning guidelines ranged from 50 per cent to over 80 per cent in the country plans examined. The Council considered that it could take up to five years to develop systematic and consistent performance measurement and evaluation to support its corporate planning system (paragraphs 2.5 to 2.8). (d) The Council had five corporate priority objectives and 150 management plans with a total of some 1,300 objectives and 4,000 targets. The Council did not consider this an unreasonable responsibility for its 180 or so senior managers (paragraph 2.9). (e) Overseas offices had reacted positively to the changes in the planning system and many initial difficulties had been resolved, though some problems or inconsistencies remained [paragraph 2.10). 6. The National Audit Office concluded that the Council had made considerable progress in a short space of time in introducing a completely new planning system. Inevitably some aspects needed refinement - for example, in better links between individual and country management plans, and by reducing the number of open-ended objectives. But overall the National Audit Office considered that the Council had developed a very good model. It involved all the key requisite elements: building up long-term proposals by those undertaking the work; strategic decisions and priorities taken by senior management; and the translation of the final product into working plans at a broad and individual level. Above all it involved the whole spectrum of Council staff and provided management and individuals with a clear sense of purpose and direction. Efficiency 7. On efficiency the National Audit Office examined the Council’s use of resources and its arrangements for monitoring and measurement of activities. Their main findings were: 2 (a) The Council’s use of resources closely matched that forecast in the first two corporate plans (paragraph 5.9). (b) The Council had managed to absorb reductions in grants-in-aid, but not without effect on its activities in some countries and regions (paragraphs 4.14, 5.2, 5.5, 5.12 and 5.13). (c) In the first year of the management planning process, monitoring did not always reflect efficiency savings in relation to impact on activity. Units were often unable to measure additional efficiency savings from increased output achieved with the same input (paragraphs 5.6 to 5.8). (d) A recent review by the Administration of agency work on technical co-operation training concluded that significant savings could be made and saw scope for improved financial monitoring ’ (paragraphs 3.7 to 3.11). (e) Financial and management information systems could be improved (paragraphs 3.27 to 3.30, 4.13, 5.16 and 5.17). (f) Although there was a corporate information technology strategy, the introduction of new technology through projects at some UK regional and overseas offices had been uneven (paragraphs 5.14 to 5.20). [g) Sponsors had not set specific output and performance measures for agency work. They intend to do so in 1991-92 (paragraphs 3.7, 3.11 and 3.16). (h) Managers had not made full use of the information available to monitor costs and impacts (paragraphs 3.8, 4.7, 4.8 and 5.21 to 5.23). (i) The Council had not carried out detailed cost-benefit analyses of the continued need for overseas offices (paragraphs 5.10 and 5.11). (j) The estimates for the project to move a large number of jobs to new office accommodation in Manchester had almost doubled to El5 million since the original indicative castings were drawn up. This was partly because the scale of the move had increased by 25 per cent to 30 per cent; but also because the indicative castings were prepared before a site had been identified and before the share of costs between the developer and the Council could be estimated. Some financial risks remained though the Council judged them to be containable and estimated that the recurrent return on the investment had more than doubled (paragraphs 5.24 to 5.27). (k) Potential savings from a proposed reorganisation of regional offices had been deferred because they were partly dependent on relocation. The Council has recently completed a further review (paragraph 5.28). (1) The Council had experienced considerable difficulty in 1988-89 in operating within its approved working balance (paragraphs 5.29 to 5.35). 3 MANAGEMENTOFTHEBRlTISHCOUNCIL (m) The relevance of the Council’s form of accounts needed to be reconsidered in the light of its current activities (paragraphs 5.36 to 5.42). 8. The Council had been able to meet changing requirements within the broad base of its original Charter. It has improved its efficiency, for example through various internal reviews, by imposing an efficiency levy, by starting to monitor impact through efficiency measures in management plans, and through relocation plans. In these it is achieving considerable success. The National Audit Office consider, however, that there is a need to take account of further issues in some areas, as described below. 9. In some countries, the Council opcratcs with only a very limited grant-funding. The Council considers that the retention of such operations does provide a platform for expansion if British interests change and that maintaining a presence can have a value in terms of bilateral relations out of all proportion to the grant-in-aid investment.

Load more