The British Council. Achieving Impact

Transcription

1 The British Coucil Achievig Impact REPORT BY THE COMPTROLLER AND AUDITOR GENERAL HC 625 Sessio Jue 2008

2 The Natioal Audit Office scrutiises public spedig o behalf of Parliamet. The Comptroller ad Auditor Geeral, Tim Burr, is a Officer of the House of Commos. He is the head of the Natioal Audit Office which employs some 850 staff. He ad the Natioal Audit Office are totally idepedet of Govermet. He certifies the accouts of all Govermet departmets ad a wide rage of other public sector bodies; ad he has statutory authority to report to Parliamet o the ecoomy, efficiecy ad effectiveess with which departmets ad other bodies have used their resources. Our work saves the taxpayer millios of pouds every year: at least 9 for every 1 spet ruig the Office.

3 The British Coucil Achievig Impact LONDON: The Statioery Office Ordered by the House of Commos to be prited o 9 Jue 2008 REPORT BY THE COMPTROLLER AND AUDITOR GENERAL HC 625 Sessio Jue 2008

4 This report has bee prepared uder Sectio 6 of the Natioal Audit Act 1983 for presetatio to the House of Commos i accordace with Sectio 9 of the Act. Tim Burr Comptroller ad Auditor Geeral Natioal Audit Office 29 May 2008 The Natioal Audit Office study team cosisted of: Tim Bafield, Neil Carey, Sascha Kiess, Jaey Sacoto, Leae Sheldo, Kevi Summersgill This report ca be foud o the Natioal Audit Office web site at For further iformatio about the Natioal Audit Office please cotact: Natioal Audit Office Press Office Buckigham Palace Road Victoria Lodo SW1W 9SP Tel: equiries@ao.gsi.gov.uk Natioal Audit Office 2008

5 contents summary 4 PArT oe Itroductio 7 PArT TWo Deliverig customer-facig activities 10 PArT Three measurig Performace 22 APPeDiCes 1 Detailed recommedatios 30 2 British coucil Resources 34 3 Product areas for Eglish teachig 35 ad exams 4 The British coucil s ew performace 36 measuremet tools 5 Study methodology 37 Photograph o frot cover, cotets ad page 4 courtesy of Goh Seg Chog. Photograph o page 7 courtesy of Matt Wright ad photographs o page 10 ad 22 courtesy of Nick Fraser.

6 SummARy 1 The British Coucil is a Registered Charity, a executive No-Departmetal Public Body ad a Public Corporatio. The Coucil is operatioally idepedet of Govermet ad its aim is to build mutually beeficial relatioships betwee people i the Uited Kigdom ad other coutries, ad to icrease appreciatio of the Uited Kigdom s creative ideas ad achievemets. It has described itself as the UK s iteratioal orgaisatio for educatioal opportuities ad cultural relatios, ad operates i some 110 coutries. I it received some 195 millio from public grats, maily from the Foreig ad Commowealth Office, ad eared a further 350 millio pricipally by teachig Eglish, deliverig examiatios overseas ad maagig cliet fuded cotracts. 2 The role of the British Coucil was cosidered by Lord Carter of Coles i his review of UK Public Diplomacy i 2005 ad agai by the Select Committee for Foreig Affairs i The Select Committee oted that the Carter review did ot have a value-for-moey focus as part of its remit, ad recommeded that the Natioal Audit Office cosider coductig a Value for Moey Report o the Coucil. I their deliberatios, the Committee for 1 Public Diplomacy is defied as Work aimig to iform ad egage idividuals ad orgaisatios overseas, i order to improve uderstadig of ad ifluece for the Uited Kigdom i a maer cosistet with govermetal medium ad log term goals. Review of UK Public Diplomacy by Lord Carter of Coles December Third Report of the Foreig Affairs Select Committee , Public Diplomacy. 4 AcHIEvING ImPAcT

7 summary Foreig Affairs expressed wide-ragig iterest, both i how the Coucil used its resources ad i how it measured its performace. This examiatio cosiders whether the British Coucil uses its resources ecoomically ad efficietly ad adequately measures ad ehaces its impact i meetig public diplomacy objectives. Our examiatio, summarised i Figure 1, icluded the Coucil s key support services, the way it develops ad delivers services to customers, ad its Performace Measuremet systems. Fidigs from our work o the Coucil s support services ad its far reachig programme of chage are published i a separate o lie report. 2 3 Our overall coclusio, based o our work overseas ad i the UK, is that the British Coucil s performace is strog ad valued by its customers ad stakeholders, although it is a challege to secure cosistetly good performace across such a dispersed global etwork. The Coucil is flexibly allocatig its resources to alig with ew UK priorities, ad cotiues to implemet umerous ad extesive chage programmes aimed at icreasig its effectiveess ad efficiecy. Maagig so may simultaeous ad iter depedet projects has preseted challeges. There is a eed for improvemet i support fuctios ad i terms of the maagemet iformatio ad tools that it has i place to ru its busiesses. 4 Sice , the British Coucil has moved from coutry-specific cultural ad educatioal projects to fewer, larger regioal ad global products, maaged uder a cetral commissioig process. Early large scale projects have see icreasig audiece umbers, ad risig customer satisfactio. However, Regios have ot moved to commissioed products i a cosistet way or at similar pace. The Coucil s fiace ad maagemet iformatio systems do ot yet sufficietly support project plaig ad delivery i this ew, more complex, regioal ad global eviromet, where staff located i may coutries eed to work closely together. There has also bee isufficiet project maagemet traiig to support staff. Geeratig support ad fudig from local parters is critical to project success, but sposorship ad parter icome has falle sice I 2007 the Coucil developed a ew strategy to geerate icreased sposorship ad parter icome. 1 The scope of the Natioal Audit Office examiatio (mai features) Key support services ad chage maagemet 1 Customer-facig activities (Part 1) Outcomes (Part 2) Chage Maagemet People Maagemet The Eglish Laguage Teachig ad Examiatios Busiess The curret system to measure the Coucil s activities ad impacts Iformatio Techology Fiacial Maagemet Grat-fuded cultural ad educatioal activities The Coucil s performace as show by its Scorecard Procuremet Estates Maagemet Customer Service Excellece iitiatives ad Customer Relatioship Maagemet systems Chages i progress to improve performace measuremet, (i cojuctio with other UK bodies ivolved i public diplomacy) Source: Natioal Audit Office NOTES 1 Fidigs from our work o the Coucil s support services are published olie at 2 The methodology used to coduct the examiatio is described i Appedix 5. 3 The mai exclusio from the scope of the study was the Coucil s work uder cotract for a rage of UK ad Iteratioal agecies, maily i support of Iteratioal Developmet Programmes. Such work is wo uder competitio ad at least covers its costs overall. Primary resposibility for the value for moey of this work lies with the agecies procurig it. 2 At Achievig Impact 5

8 summary 5 The British Coucil s 181 millio Eglish laguage teachig ad examiatios busiess has a high reputatio i the market ad is fiacially successful, geeratig surpluses i places such as Hog Kog ad Spai which are used i part to support teachig cetres i less established markets, some i the developig world. Its best cetres operate i a maer comparable with good busiess practice i major private sector laguage schools. The teachig ad exams busiess also provides a platform for other activity i support of UK public diplomacy, particularly by helpig overseas govermets expad the teachig of Eglish i their educatio systems. But the busiess has a high cost base, charges premium prices, ad has achieved limited reach outside overseas capital cities, with the umber of teachig cetres reducig rather tha expadig i recet years. 6 The British Coucil s curret systems to measure its performace are well desiged: they provide a good mix of iformatio; pricipally o the scale of its activities, customer satisfactio ad perceptio chages, the perceptios of key UK stakeholders ad of Coucil staff. Some improvemets could be made to the way data is collected ad collated. The Coucil is workig with the Foreig ad Commowealth Office ad the BBC World Service to ehace performace measures for public diplomacy. These improvemets are well-coceived, but i order to be affordable, it is likely that the Coucil will have to implemet these selectively. Coclusios ad Recommedatios Our recommedatios are expaded o i greater detail at Appedix 1 i The Coucil does ot yet fully uderstad the implicatios of its move from local to regioal projects or the savigs geerated through beefits of scale. It iteds to move to eve larger, global projects from April The Coucil should verify whether o average large scale projects have geerated greater outcomes at least i proportio to their greater cost. Measures may iclude direct audiece size per 1,000 spet, customer satisfactio scores ad the ratio of grat to exteral fudig. ii iii iv v vi I movig to regioal projects, Regios have bee able to commissio projects i differet ways ad have achieved differig rates of progress. This, coupled with the challeges of staffig ad coordiatig large multi-coutry projects, has tested the Coucil s overall programme ad project maagemet. I itroducig its ew process to commissio large scale projects, the Coucil should raise the cosistecy of project maagemet i the UK ad across the overseas etwork. Chage should iclude better mechaisms for poolig successful project desigs, tighter cotrols o project fudig ad improved traiig for project maagemet staff. Exteral fudig from parters ad sposors has declied sice 2001 ad there are large variatios betwee coutries; half of the etwork geerates almost all the Coucil s exteral cotributios. The Coucil should cofirm the reasos behid acute variatios i exteral fudig betwee coutries, ad more cosistetly apply its policy o workig with private compaies across its etwork. We recommed a corporate target to at least restore exteral fudig to 2001 levels (equivalet to 16 per cet of total Coucil resources). The Coucil has idetified a umber of ways of expadig the reach of its Eglish teachig ad exams operatios. But it eeds to demostrate more clearly to its stakeholders ad competitors how growth supports the Coucil s missio ad charitable purposes ad that it does ot represet ufair competitio. The Coucil ca draw o methods used by, amogst others, the BBC, to give added assurace o fair competitio. The Coucil is icreasigly recogisig the importace of good customer service, but it is ot yet meetig all of its customer service excellece improvemet targets. The Coucil should develop a agreed specificatio for a commo customer relatioship maagemet tool to eable it to track customer cotacts ad better uderstad its audieces across its etire busiess. The Coucil s published coutry ad regioal performace scorecards ted to cocetrate their reportig o positive customer commets. The Coucil should report a balace of positive ad egative customer commets through its coutry ad regioal scorecard reports, i order to promote trasparecy ad to better idetify areas for improvemet from a wider rage of sources. 6 Achievig Impact

9 PART ONE Itroductio The Status ad Roles of the British Coucil 1.1 The British Coucil was fouded i 1940 through a Royal Charter. For policy ad admiistrative purposes it is classified as a executive No-Departmetal Public Body ad it is registered as a Charity. Its aims are set out i Figure 2 ad a brief overview of the Coucil s mai activities is at Figure 3 overleaf. Whilst workig withi agreed themes ad priorities, the Coucil remais operatioally idepedet of Govermet. I practical terms, this meas that it decides for itself which products ad services to deliver, to which audieces ad usig what methods. 2 The objects of the British coucil eshried i its Royal charter The objects for which the coucil is established ad icorporated are to advace ay purpose which is exclusively charitable ad which shall: promote a wider kowledge of the uited Kigdom; develop a wider kowledge of the Eglish laguage; ecourage cultural, scietific, techological ad other educatioal co-operatio betwee the uited Kigdom ad other coutries; or otherwise promote the advacemet of educatio. Source: Royal Charter 1940, supplemeted The Coucil s icome is derived from a variety of sources, icludig grat-i-aid from the Foreig ad Commowealth Office (FCO), which sets strategic objectives for UK public diplomacy, (Figure 4 o page 9). 3 A fiacial memoradum with the FCO icludes the Coucil s resposibilities for fiacial maagemet ad to achieve value for moey, as well as provisio for the Comptroller ad Auditor Geeral to examie the ecoomy, efficiecy ad effectiveess with which it uses its resources. A Public Diplomacy Board chaired by a Foreig ad Commowealth Office Miister ad icludig the Coucil s Chief Executive coordiates the overall UK Public Diplomacy effort; specifically work udertake maily by the FCO, the Coucil, ad the BBC World Service. 1.3 The British Coucil has o direct iteratioal peers. Probably its closest aalogue is Germay s Goethe Istitut, which promotes Germa culture overseas, ad teaches the Germa laguage i the home coutry (ulike the Coucil) as well as overseas. Frech cultural diplomacy is pursued through a etwork of govermet departmets, agecies ad alliaces. The Uited States pursues public ad cultural diplomacy largely from withi the State Departmet. US authorities commeted to Lord Carter s Review that their public diplomacy has bee less effective tha the UK s, due i part to the lack of strog, idepedet supportig istitutios ad brads, such as the BBC ad the Coucil. 4 Stakeholders i foreig educatioal ad cultural establishmets compare the Coucil favourably to other iteratioal istitutios, ad felt that these istitutios should use the British Coucil as a model. 5 3 Public Diplomacy is defied as work aimig to iform ad egage idividuals ad orgaisatios overseas, i order to improve uderstadig of ad ifluece for the Uited Kigdom i a maer cosistet with govermetal medium ad log term goals. Source: Review of UK Public Diplomacy by Lord Carter of Coles December Source: Lord Carter s Report o UK public diplomacy 2005, Aex E. 5 NAO iterviews with stakeholders durig field visits, ad NAO Commissioed research ito o-users of British Coucil services. AcHIEvING ImPAcT 7

10 part oe Chagig priorities ad approaches 1.4 It is iheretly difficult to maage a orgaisatio dispersed to over 100 coutries worldwide, esurig cosistet global stadards of efficiecy ad effectiveess whilst at the same time givig sufficiet autoomy to i coutry teams to respod flexibly to local circumstaces. Util 2004, the Coucil s approach required each coutry operatio to iteract directly with the corporate cetre i the UK. Though a corporate strategy ad policies were set, idividual Coutry Directors had cosiderable autoomy to determie what services their offices should offer, to what audieces, ad how local support fuctios such as huma resources ad property maagemet would be ru. 1.5 I 2005, the British Coucil embarked o its Strategy 2010, a five year chage programme affectig the whole orgaisatio iteded to deliver high quality products ad services more efficietly to bigger audieces. It has ivolved reorgaisatio ad ratioalisatio i the UK ad overseas, radical chages i product desig ad delivery, ad implemetatio of a major ew resource maagemet system. The chage from 110 coutries to a regioal maagemet structure based o 12 regios, (Appedix 2), has give the Coucil a basis to esure that its activities are more cosistet worldwide. 3 Key Iformatio about the British Coucil Overall Reach Iformatio Services Staff Eglish laguage teachig ad examiatios Worked i 110 coutries/territories, icludig the UK. As a result, the Coucil worked directly with 16.5m people, maily through its large scale projects ad Eglish laguage teachig ad Exams activities. Over 15 millio uique visitors used British Coucil websites, ad viewed 108 millio pages. Olie resources iclude materials for learig the Eglish laguage. Employed 1,100 staff i the UK ad 6,800 overseas. Employed over 2,000 teachers who taught 1.2 millio class hours of Eglish to 300,000 learers i 53 coutries. Delivered 1.3 millio UK exams to 925,000 cadidates worldwide, brigig 25 millio i export earigs for UK exam boards. Work with govermet miistries i most coutries i the Middle East, North Africa ad Cetral Asia, providig teachig traiig for Eglish ad support for moderisatio of the state educatio system. Educatio Lead delivery parter for the Prime Miister s Iitiative ad UK-Idia Educatio ad Research Iitiative. Activities iclude: establishmet of 23 higher educatio parterships likig istitutios i the UK with Idia parters. recruitmet of oe millio iteratioal studets ito UK educatio. Promotig iteratioal school liks betwee the UK ad overseas, reachig 4.7 millio studets. Promotig iteratioal school liks betwee the UK ad overseas, reachig 4.7m studets. Developmet cotracts Arts Examples of other grat-aided activities Implemeted 141 developmet cotracts i more tha 40 coutries worldwide to a value of 51 millio. Cotracts were commissioed by UK govermet departmets ad the EU. Held 1,435 arts evets aroud the world. 63 coutries participated i ZeroCarboCity, the Coucil s climate chage programme. So far 2.5 millio people have directly participated i the programme. Media coverage of the programme has geerated a further audiece of a estimated ie millio people. The Coectig Futures programme, aimed at fosterig uderstadig betwee youg people, was deployed i 44 coutries ad ivolved 30,000 participats. The IterActio leadership programme, operatig across Africa, buildig youg leaders skills i govermet, civil service ad busiess. Developig leadership skills ad cross-cultural awareess amog youg people through sport. The Coucil s Dreams & Teams programme ivolved 424 schools i 43 coutries, ad 280,000 people i their schools ad commuities. Source: British Coucil 8 Achievig Impact

11 part oe 1.6 Liked to these chages, the British Coucil is also movig resources across its etwork to respod to resource limitatios ad to better alig with UK strategic priorities. A key elemet is a relative shift from areas such as Wester ad Cetral Europe, towards the Islamic World ad emergig ecoomic powers such as Idia ad Chia. For example, i Prague the Coucil has reduced its operatio from 23 staff developig ad deliverig bespoke local products ad evets, to a team of ie focused o deliverig global ad regioal products developed elsewhere. Cultural agecies i other coutries express a similar aspiratio, but have struggled to attai it. Officials i the Germa Foreig Miistry felt that Germa public diplomacy efforts were less focused ad less flexible tha the UK efforts, ad that i spite of their desire to focus o Easter Europe, the Middle East ad Asia, it was provig difficult to shift away from more traditioal areas. To illustrate the challege, the Goethe Istitut was said to sped per cet of its resources i Frace ad Italy where much of the fudig is tied up i fixed costs such as buildigs ad salaries. There are seve separate offices i Italy aloe, ad attempts to reduce overheads are felt to be slow, with a target of brigig that figure dow to 20 per cet by Aother factor is that, like Frace, a large proportio of the Foreig Miistry s culture budget (oe third) is devoted to subsidisig their etwork of schools overseas. 6 Progress to date by the British Coucil is summarised i Appedix 2. 4 The British Coucil s mai sources of icome ad areas of expediture Sources of Icome millio Grats (pricipally 188 millio Grat-i-aid from 195 the Foreig ad Commowealth Office) Work uder cotract (for UK Departmets, 122 iteratioal developmet agecies, ad the EU) Fees ad icome from services (maily Eglish 232 laguage teachig & examiatios) ad other sources Iterest eared 2 Total Icome 551 Expediture agaist programme areas Icreasig learig opportuities ad stregtheig 235 educatioal co-operatio Buildig appreciatio of ad stregtheig 71 egagemet with UK creativity Stregtheig good goverace ad huma rights 31 Promotio of Eglish Laguage learig 206 Other costs. Corporate goverace ad 6 otioal cost of capital Total Expediture 549 Mai Assets (at valuatio) Lad ad Buildigs 86 Equipmet (maily IT) 16 Source: British Coucil aual report ad accouts Lord Carter s Report o UK public diplomacy Achievig Impact 9

12 PART TWO Deliverig customerfacig activities 2.1 The British Coucil delivers projects ad services, icludig Eglish laguage teachig ad exams, to customers across five mai busiess sectors; arts, educatio, sciece, goverace, ad Eglish. Part 1 of this report examies the delivery of the Coucil s customer facig activities, as well as the measures i place to maage its customer relatioships. How the British Coucil targets its work 2.2 Workig i may large coutries, the Coucil eeds to target its fiite resources to maximise its ability to meet its corporate objectives. It has to target its work to best effect withi very large ad complex host coutry populatios, ad cocetrate resources o those who have, or i time are likely to have, the ability to ifluece policy or decisio makig i its busiess areas. The Coucil idetifies three mai audiece groups, segmeted by the level or potetial ifluece of the cotact; T1 High-level decisio-makers ad leaders: are people i key positios of ifluece icludig govermet miisters, importat media figures ad commetators, leadig sports or culture persoalities, atioal religious leaders ad UK-based ambassadors of overseas coutries. T2 Key ifluecers: are curret (or potetial) leadig members of orgaisatios, groups ad etworks who develop or deliver policy, or have a sigificat ifluece o the lives ad opiios of others. They ca also be gatekeepers who provide access to T1 cotacts. T3 People with potetial: are far more umerous. They ted to be youger (uder 35) ad idetified by category rather tha beig i key positios. They iclude studets of Eglish or those wishig to study overseas. T1 ad T2 groups are also sub-divided ito geographic locatio ad sector, depedig o the eeds of each specific coutry or activity. Defiig audieces 2.3 Elastic defiitios of target audieces mea that the British Coucil has difficulty i adequately prioritisig resources betwee groups. Historically, the Coucil has placed a high premium o developig persoal relatioships with T1 ad T2 cotacts ad sees them as vital to makig their work a success. For example, securig seior level buy-i from the Chiese Miistry of Sciece ad Techology has bee vital to the success of the Climate Cool Chia project, (page 12). 2.4 Target audieces are ot rigidly defied, ad there ca be disagreemets over whether a particular type of cotact is a T1, T2 or T3. Earlier versios of the target audiece guidace also icluded a T4 category which equated to wider groups of educated people ad the geeral public. The Coucil is icreasigly recogisig the potetial of the T3 audiece, both i terms of its size (Idia aloe has 380 millio people aged betwee 15 ad 34, who could have the potetial to become T3s) ad its potetial to geerate the T1 ad T2s of the future. Segmetig the T3 audiece ad prioritisig key sectors withi it for attetio, is vital to targetig the Coucil s resources. The Coucil has specified factors which should be cosidered whe determiig the target T3 audiece, icludig age, the ability to pay for services, geographical locatio, ad lifestyle. Oce these groups are defied, further research ca be doe o their characteristics, which Coucil activities are most likely to egage them, ad how best to market these. 2.5 All Coucil Regios were due to have completed a market segmetatio ad research audit by July Some Coucil operatios have made good progress. British Coucil Idia ad Chia have both carried out detailed research ito the characteristics of their potetial T3 audiece ad have segmeted these ito groups which are assiged various levels of priority (Figure 5). British Coucil Idia is usig the research to develop its ew Youg Audieces Project aimed at egagig youg, urba, educated Idias i Coucil activities. But other coutries 10 AcHIEvING ImPAcT

13 part two are further behid. By December 2007, three of the 12 regios had ot carried out ay segmetatio work. While corporate guidace o marketig priciples ad a step by step guide to segmetatio is available o the Coucil s Itraet, it is ot cosistetly applied throughout the etwork. Few coutries have reached the stage where the idetificatio of specific audiece groups has bee used i developig specific projects or targetig services. Developig iovative products 2.6 Iovative regioal ad global products are icreasig audiece reach ad impact, but are challegig to deliver cosistetly across the etwork. The British Coucil speds some 95 millio of grat fuds per year o a diverse rage of projects. It geerated a further 23 millio 7 from exteral sources. For example Shell, KPMG, Glaxo Smith Klie, BAE Systems, BP ad Shell are ivolved with the UK Idia Educatio ad Research Iitiative project to improve educatioal liks betwee Idia ad the UK. The Coucil also uses exteral parters to help deliver projects. For example, the Coucil works with Volutary Service Overseas o the Global Xchage project, which supports the developmet of active global citizes through a series of iteratioal voluteerig exchage programmes for youg people. 2.7 Sice , the Coucil has begu to move to a ew approach for desigig ad deliverig its diverse rage of projects. It is shiftig the focus away from locally developed, coutry-specific projects to fewer, larger products at a regioal ad global scale, delivered uder a more formal commissioig process ad champioed by a ewly formed Commissioig ad Iovatio Support Office. Regioal ad global projects will ivolve more people ad have the potetial for greater impact (for example, the Coucil s UK Idia Educatio ad Research Iitiative was aouced by the Prime Miister ad has so far attracted several large corporate sposors), as well as providig opportuities to make savigs based o usig commo project templates across multiple coutries ad regios. At the time of writig most of these larger scale projects are i relatively early stages of delivery, ad it is too early to coclude o the success of the trasitio as a whole. This part of the report examies the Coucil s experieces to date. 2.8 The British Coucil has already developed some iovative ad well-received projects across its rage of activities ad its key busiess sectors: Art, Eglish, Sciece, Goverace ad Educatio. These rage from highly focused coutry-specific projects aimed at a small umber of T1 ad T2 audieces, such as the Idia Naotechology project aimed at developig mutually beeficial relatioships betwee Naoscietists i the UK ad Idia, to Coectig Classrooms, a 5 millio project aimed at reachig over oe millio youg people (T3s) i Africa. 5 British Coucil Idia has idetified six T3 groups to focus their resources o Characteristics Aged 19 24, strog Eglish, low price sesitivity, high iteratioalism ad high aspiratios Aged 25 29, strog Eglish, low price sesitivity, high iteratioalism ad high aspiratios Aged 15 18, strog Eglish, high price sesitivity, high iteratioalism ad high aspiratios Aged 30 34, strog Eglish, low price sesitivity, high iteratioalism ad high aspiratios Aged 15 18, weak Eglish, high price sesitivity, low iteratioalism ad high aspiratios Aged 19 24, weak Eglish, high price sesitivity, high iteratioalism ad high aspiratios Source: British Coucil Idia ad Sri Laka Ivestmet priority High High Medium Medium Low Low Mai reaso for egagemet They are likely to be future opiio formers, are opemided ad have potetial to act as multipliers (positively ifluecig their peers). Ofte early adopters, potetial to act as multipliers, will be gaiig positios of ifluece withi their orgaisatios ad commuities ad are potetially ope to creative ideas from the UK. Potetial to become future opiio formers ad possibly wat to study overseas at some time i the future. Geerally time poor, but i positios of ifluece. Are potetially ope to creative ideas from the UK. Potetial to act as multipliers ad may wat to ivest i gaiig higher level academic qualificatios. They have high aspiratios ad could potetially be ope to UK creative ideas. Their families are willig to ivest i improvig their prospects. They have high aspiratios, are potetially ope to creative ideas from the UK ad are willig to ivest i improvig their prospects. 7 Cash ad o cash doatios, such as free veue use or sposored flights. Achievig Impact 11

14 part two Coectig Classrooms: East ad West Africa ad Souther Africa Regios The Coectig Classrooms project forms partership clusters, each of three schools (oe i the UK ad two i Sub-Sahara Africa). The aim is to promote itercultural dialogue (oe of the British Coucil s three programme areas) ad icrease kowledge ad uderstadig of differet societies. It was approved i February 2006 as oe of the earliest Regioal projects, ad acted as a pilot for a ew dual key project commissioig process ivolvig the Commissioig ad Iovatio Support Office. Durig ad the first two quarters of , the project reached over 232,000 people. As at Jauary 2008, the project was supportig 84 parterships, which icluded 750 schools, ad a total school populatio of aroud 600,000 studets. Climate Cool Chia Climate Cool Chia is a two year programme to raise awareess of ad promote ways to tackle Climate Chage, through a series of programmes such as workshops, UK Chia exchages, exhibitios, competitios ad awardig schemes. It was developed followig the success of British Coucil Chia s Zero Carbo Cities project, which eded i April Scopig work started i Jue 2006, usig a UK-based climate chage commuicatio cosultacy ad the project was formally started i March 2007, although some elemets preceded sig off, for example a Climate Ambassadors programme was ru i late Climate Cool will maily target youg, educated urba professioals aged It will focus o Where the target audiece comes from Urba school childre aged What the target audiece buys the Cosumer idustry Who the target audiece liste to the Commuicatio idustry A Midsummer Night s Dream, Idia ad Sri Laka Regio I 2004, British Coucil Idia refocused its arts programme to better attract ew audieces, icrease co-productio to develop relatioships betwee the UK ad Idia arts sectors, ad support creative etrepreeurship. 2.9 The British Coucil has traditioally delivered sector-specific ad coutry-specific projects, but its ew approach will icrease the umber of projects which spa multiple sectors ad regios. For example, British Coucil Chia s Climate Cool Project ivolved staff from the Sciece ad Educatio teams ad has sice bee exteded to East Asia. The Idia ad Sri Laka regio has merged its sector teams ito cross-disciplie project teams with sector specialists actig as cosultats across projects. The Coucil has some way to go before its projects work ca take full advatage of the large T3 populatio already reached through the Coucils Eglish Laguage Teachig busiess, due to problems capturig cotact iformatio ad prefereces (paragraphs ). The Coucil is curretly reassessig its project portfolio to esure its large scale projects represet the best meas of achievig its revised corporate outcomes (Appedix 4) which may lead to some projects beig discotiued or merged Iitial feedback from customers has bee positive. Early idicatios are that larger Regioal projects are startig to geerate icreased audiece satisfactio scores, though the data set is as yet too icomplete to be statistically coclusive. It is difficult to measure the eormity of the impact made by our Africa visitors The visit made the partership real ad gave it a ew level of importace to all... It allowed for a icrease i the kowledge ad uderstadig of the differet cultures ad helped to break away from stereotypes that people have of each other. UK participat i Atelope partership, Coectig Classrooms, April 2007 Govermet iovatio aloe caot solve social problems. We also eed iovatio from civil society. This (Social Iovatio) coferece will cotribute to the harmoious developmet of Chia, referrig to Chia s recet commitmet to achievig a balace betwee ecoomic growth ad social welfare. Attedee at the British Coucil s Social Iovatio Iteratioal coferece i Beijig i October 2006 I 2006, the British Coucil commissioed a productio of William Shakespeare s A Midsummer Night s Dream by UK director Tim Supple usig actors from across Idia. The productio toured four Idia cities (Delhi, Mumbai, Cheai, Kolkata) ad the performed i the UK, i partership with the Royal Shakespeare Compay. The productio had a total audiece of aroud 10,000, with a estimated further 5 millio people reached idirectly through the media, ad received favourable reviews. Despite the success of the productio, the Coucil ecoutered problems securig sposorship ad had to reduce the tour from eight to four cities. 12 Achievig Impact

15 part two The trasitio to larger scale projects 2.11 Progress i movig to large scale projects is variable betwee Regios, but audiece size ad project scale are already icreasig. I , oly 16 per cet of the Coucil s programme expediture was o large scale (regioal or global) projects ad 84 per cet local (Figure 6). I , this has moved to 45 per cet programme spedig o large scale projects ad 55 per cet o local projects. The Coucil s target is that by 2011, 80 per cet of programme expediture will be o large scale projects. As a result, sigle coutries will be uable to roll out sigificat projects outside their regio s priorities ad the corporate commissioig process, as they will ot have the ecessary budgets. 6 All British Coucil regios are shiftig towards larger scale regioal ad global projects, though at very differet rates Regioal projects as a percetage of total project sped Near East & North Africa Chia & Hog Kog Idia & Sri Laka East Asia Cetral & Souther Asia Lati America South East Europe West Europe & Americas NACE & Russia Middle East East & West Africa 2.12 Although may regioal projects are i the early stages of implemetatio, there has bee a evidet icrease i the scale ad scope of projects; from average aual spedig of aroud 40,000 per project i to 246,000 i , ad a reductio i the umber of projects each regio progresses. I East ad West Africa, the umber of projects has reduced from over 200 to aroud 60 sice The aticipated reach of projects has also icreased: the Coectig Classrooms project has a target audiece of 1.3 millio youg people i 19 coutries across Sub-Sahara Africa The British Coucil must balace its eed to tailor projects to local circumstaces with the advatages of projects delivered i a cosistet way across multiple coutries. Movig away from local projects meas that the Coucil will have to work to maage expectatios ad to maitai relatioships with existig customers. Local projects will remai the resposibility of Coutry Directors ad be based o developig local relatioships. They will be fuded from coutry budgets, so the Coucil will have to balace the ability of local projects to respod rapidly ad flexibly to emergig opportuities i a coutry, with the eed to esure that projects are still plaed, delivered ad evaluated rigorously. At preset, o stadard busiess case or project iitiatio documet is required for local projects ad the quality of project plaig documetatio that the NAO reviewed was variable Smaller coutries have already show that regioalisatio will eable them to roll out projects which they would ot have bee able to do aloe. British Coucil Tazaia is participatig i IterActio, a 4 millio per aum Leadership traiig project coverig over 20 coutries i Sub-Sahara Africa, ad which is ow beig exteded to Pakista. Though a relatively small Coucil office with seve project delivery staff, Coucil Tazaia was able to draw o plaig ad developmet work by other Coucil staff across the Souther Africa Regio ad the UK. However, experiece i rollig out early regioal ad global projects has demostrated the importace of beig able to tailor projects to coutryspecific circumstaces. For example, the Climate Cool Chia project allowed the Coucil Hog Kog to select the right combiatio of project elemets to fit with its wider project portfolio. Souther Africa FY FY Source: British Coucil Achievig Impact 13

16 part two Challeges to project maagemet 2.15 Larger ad more complex regioal projects have posed challeges to good project maagemet. Each regio has maaged its ow trasitio to regioal projects ad has set up its processes as appropriate to feed ito commissioig. This has led to variatios i project developmet ad plaig, ad i the stage at which regios sought approval to proceed. Projects were, i some cases, well ito detailed plaig before beig set for sig-off by the cetral Commissioig ad Iovatio Support Office, makig ay sigificat chages difficult to icorporate, ad projects were seldom rejected at this stage. Moreover, there have bee o cotrols to prevet projects from startig before beig formally approved while budgets have bee held at a regioal or coutry level. For example, the Social Iovatios project i Chia was iitially set for sig off i September 2006; but 78,000 was spet before this, i order to deliver a major coferece i October The dual key sig off was ot completed util August 2007 at which time actual project expediture was 208,000. From April 2008, the Coucil iteds to stregthe Commissioig by releasig fuds at key stages withi the project approval process, to prevet such problems recurrig Larger Coucil operatios have foud that developig regioal projects requirig iput from sector staff across differet coutries has placed more demads o their staff time. As projects become larger ad more complex, the plaig phase icreases i time ad cost, ad more resources are required at a early stage; a typical regioal project will have a plaig phase of six to ie moths, ad some of the largest projects, such as IterActio, ca take twice this. The Coucil does ot yet have a system of time loggig for all staff. This meas that accurate data o staff costs per project is ot available; staff time is apportioed to the project based o the percetage of their work allocated to it i their job descriptio rather tha actual time spet. The Coucil caot yet measure how much effort the ew regioal projects are takig to develop, ad what the overall effect will be of movig to eve larger ad more complex global projects. Uder the ew Commissioig approach, to be itroduced i , the Coucil iteds that the iitial stages of project developmet will be shorter, therefore avoidig large amouts of time ad moey spet o projects which may ot ultimately go ahead Rollig out larger ad more complex projects across atioal ad lie maagemet boudaries also requires more sophisticated project maagemet skills. British Coucil staff who respoded to a NAO olie survey cited that project maagemet traiig was iadequate or ot available. 8 The Coucil has yet to decide o the corporate stadard to adopt for project maagemet traiig. Some regios have arraged their ow traiig to esure that staff are sufficietly skilled to deliver larger projects. For example, Idia commissioed a exteral cosultat to trai its project staff after problems arose i the project maagemet of A Midsummer s Nights Dream (see paragraph 2.20) Maagig ad moitorig regioal projects is also challegig as curret Coucil systems do ot yet fully eable regioal workig. For example the dispersed Coectig Classrooms project team foud that moitorig project expediture was more problematic where participatig coutries use a mix of old ad ew resource maagemet systems. They idetified a eed for more corporate guidace o how to maage project fiacig. The Coucil s curret fiacial plaig system allocates fudig o a coutry basis, accordig to corporate priorities. This ca cause difficulties over how to fud projects which require a regioal source of fiace ad how to match project fudig with coutry, regioal ad corporate priorities. From April 2008, the Coucil iteds to hold programme fuds i a global pot, allocated to the Regios depedig o their project portfolio ad corporate priorities. Project fudig will be released at certai trigger poits so that regios will oly be able to progress a project oce it has bee formally approved. Geeratig exteral fudig 2.19 Geeratig exteral fudig ad resources has had limited success across the etwork. The Coucil has log recogised that a successful strategy to geerate more cotributios from exteral sources ca eable it to deliver programmes ad impacts o a bigger scale. These exteral sources ca be UK-based or foreig private compaies, multiatioals, volutary bodies such as charitable foudatios, or public sector agecies withi host coutries. The cotributios take the form of cash paymets towards Coucil-led projects, or cotributios i kid, such as loaed staff, facilities or publicity. Egagig suitable parters is icreasigly critical to project success, ad ca provide further beefits, such as commercial expertise, local kowledge, or better access ad cotact with the iteded project audiece. 8 The NAO s olie survey of British Coucil staff is published o the NAO website at 14 Achievig Impact

17 part two 2.20 As Figure 7 shows, cash icome from sposorship ad commercial parterships has falle substatially sice 2001; from 16 per cet of the Coucil s total icome to just 4 per cet i the last five years. Whilst the Coucil has ot systematically aalysed the reasos for the fall, we have idetified a umber of cotributory factors: The Coucil has moved away from fudig evets such as prestigious music cocerts or theatre tours uless these have specific purposes cosistet with UK strategic priorities. Traditioally such major arts evets attracted commercial sposorship. Opportuities to raise sposorship were ot always grasped. For example, the 2006 Midsummer Night s Dream tour of Idia, whilst well received by audieces, was almost etirely fuded by public moey (equivalet to some 20 per audiece member), because efforts to raise sposorship did ot firmly commit the mai sposor i good time. Staffig difficulties were a factor. The et cash cost was limited to some 167,000 by reducig the tour to four rather tha eight cities. The Coucil has recogised the lessos ad a follow-up productio i 2008 has raised over half of the estimated 230,000 cash budget from parters, plus a further 10 per cet from box office receipts. The tour is plaed to reach twice as large a live audiece as did the 2006 tour. 9 Maximisig sposorship requires a active partership betwee Coucil staff i the UK ad aroud the world. Major UK compaies ad multiatioals have differet practices but usually major sposorship fuds ad decisios are reserved for corporate headquarters, rather tha budget holders i idividual coutries, which makes it more difficult for coutry ad regioal project teams to geerate major fudig without UK ivolvemet. The Coucil has a small commercial team of five based i Lodo which besides determiig corporate policy ad circulatig guidace ad good practice, has a importat role i brokerig relatioships with major UK corporates. It more tha covers its costs by fud-raisig, attractig some 440,000 i , ad fuds two further commercial posts i Idia The Coucil s success i fud raisig ad commercial parterships has varied greatly from Coutry to Coutry (Figure 8 overleaf). I half of the Coucil s coutry operatios geerated 99 per cet of its total cotributios from the private sector ad 90 per cet of those from public ad volutary bodies. Variatio is ot always explicable by low local ecoomic prosperity, weak private or volutary sectors, or other difficult operatig cotexts. British Coucil Idia has raised substatial cotributios recetly by closely ivolvig major UK compaies i the UK Idia Educatio ad Research Iitiative. I cotrast, i Spai commercial participatio had bee miimal. Globally, variatios reflect: Icosistet applicatio of Coucil policy o workig with compaies; for example to address variable staff perspectives o whether or ot it is acceptable to work with eergy compaies to preset climate chage evets ad products; 7 The British Coucil s icome from sposorship ad commercial parterships has falle steadily sice millio Percetage Cash I Kid Total exterally geerated as a percetage of total Coucil resources Source: Natioal Audit Office aalysis of Coucil data 9 I the 2008 tour, the ivolvemet of a televisio compay also provides distributio to a much larger broadcast audiece. Achievig Impact 15

18 part two The eed for greater clarity about the owership of global or regioal products that will be delivered across more tha oe coutry, ad early decisios durig project desig about whether to pursue sposorship ad participatio at the global, regioal, or local level, or a combiatio of these. The Coucil s ew arragemets for commissioig products requires more specific commitmets o the plaed sources of fudig, though early experiece i usig these has bee mixed. For example for Coectig Classrooms, the Regioal Project Maager ad a exteral cosultat developed a pla to raise 2,484,000 sposorship icome. Despite iitial iterest from potetial fudig parters, this pla was cacelled while awaitig a strategy for the global Coectig Classrooms project. A umber of schools have sice secured fudig or doatios from local parters, for example subsidised air travel to eable Nigeria schools to visit UK parters. The ability ad cofidece of Coucil staff to close partership deals with parters, withi plaed project delivery timescales The Coucil aims to do better i future. A Commercial Director appoited from the private sector i mid-2007 has developed a ew strategy, a key elemet of which is a ew etwork of 40 i-house champios to stimulate activity i each busiess area ad regio. A traiig programme is beig developed, with the first modules curretly beig rolled out. Some coutry operatios have also recruited busiess developmet maagers. It is too early to say how far such iitiatives will help to reverse the adverse tred of the last five years. The British Coucil s Eglish laguage teachig ad exams busiess 2.23 The Coucil teaches Eglish to approximately 300,000 studets i 54 coutries ad admiisters exams to over a millio cadidates i oe hudred coutries. The objectives of the teachig ad exams busiess are to deliver strategic impact by forgig relatioships with the Coucil s idetified target audieces, whilst ruig these services o a full cost recovery basis which at least covers its costs ad delivers surpluses to the corporate cetre. It geerates substatial impact ad icome, but the Coucil recogises the potetial to develop this further ad is lookig to chage the way it operates I , Eglish teachig ad exams geerated 181 millio i icome, a icrease of 27 per cet over the last five years; most of that growth beig derived from admiisterig examiatios (Figure 9). Exteral factors icludig the SARS virus, the Gulf War ad foreig exchage movemets adversely affected the busiess betwee 2003 ad The Eglish ad Exams busiess operates a risk reserve which is either draw o or repleished accordig to swigs i the busiess cycle. 8 Coutry performace i raisig third party cotributios Private sector Public sector (cash ad i kid) (cash ad i kid) Top Five Coucil operatios raked by private sector cotributios Thailad Chia Malaysia Japa UK Commercial Parterships Team 440 N/A Half (57 of 115) Coucil operatios reported private sector cotributios uder 10,000. These icluded Idoesia 0 0 South Africa 0 5 Uited Arab Emirates 0 0 Keya 0 0 Germay 5 47 Source: Natioal Audit Office aalysis of British Coucil Global Fudig Returs 16 Achievig Impact

19 part two Sice 2005 it has recovered ad i it delivered a surplus, (after deductio of all local, corporate ad ivestmet costs directly attributable to the busiess) of 10 millio. The surplus is used to fud idirect overhead costs ad ivestmet projects across the Coucil. This effectively supplemets the FCO s grat-i-aid ad the orgaisatio s grat-aided fuctios. The Coucil does ot report explicitly o this wider beefit i its published report ad accouts. Nor does it collate ad disclose the staff-hours ad fiacial cotributios provided by teachig cetres to grat-aided programmes The surplus geerated i strog Eglish teachig markets such as Europe or the Far East eables the Coucil to offer teachig ad exams i coutries where the market would ot sustai a fully commercial retur. I , Eglish teachig cetres i five cities; Madrid, Sigapore, Hog Kog, Seoul ad Barceloa geerated over a third of total icome ad about half of the gross cotributio for Eglish teachig. Missio critical cetres i 10 coutries, maily i the developig world, sustaied a small overall loss of 0.6 millio. Where coutries make losses, the Coucil is followig two paths. First, sice 2005, the Coucil has closed te cetres which had performed poorly i fiacial terms ad were cosidered ot to have cotributed sigificatly to strategic aims of buildig relatioships with target audieces. I other coutries, the Coucil has refocused its operatios more closely oto the target audiece. For example, over the past five years the Dar Es Salaam teachig cetre i Tazaia had cosistetly sustaied a loss. Difficult local market coditios ad the cost of providig expatriate teachig staff had led to geeral Eglish courses beig offered at a loss. The teachig cetre is movig away from geeral Eglish courses to teachig busiess Eglish as part of a suite of maagemet traiig courses. These courses provide access to Tazaia s future busiess leaders ad geerate a better retur o ivestmet, with the cetre forecast to break eve i A better product offer, based o market research, ca eable a fiacially successful operatio which targets key audieces eve i difficult markets. Applyig good commercial practices 2.26 The teachig ad exams busiess is successful, though good commercial practice could be more cosistetly applied. The Coucil s activities i Eglish teachig ad exams comprise seve mai product areas; adult learers, youg learers, professioal learers, olie cotet, peacekeepig Eglish ad teacher developmet (Appedix 4). I October 2007, the Coucil aalysed across the etwork for the first time the et fiacial cotributios from its differet products. Such aalysis is importat i iformig maagers o how best to chage the products offered to customers locally, ad o where the orgaisatio cetrally should develop ew products. The Coucil s aalysis showed that adult ad youg learer teachig each geerated almost half of the total teachig cotributio, with adult teachig geeratig the highest cotributio per studet, ad youg learer teachig geeratig a higher cotributio per teacher hour due to larger class sizes. The two mai examiatios offered each represeted a third of busiess, but oe geerated much higher cotributios per exam. 9 Eglish Teachig ad Exams: Growth i turover ad surpluses has come maily from the examiatios busiess millio Fiacial Year Teachig Icome Exams Icome Source: British Coucil Achievig Impact 17

20 part two 2.27 Idividual teachig cetres are required to aalyse ad report to the corporate cetre oly gross icome ad busiess volumes i respect of most products ad have had discretio over how far to aalyse profitability. Util the Coucil s ew Fiace ad Busiess system, curretly beig itroduced, maagers have ot had tools to aalyse profit margis easily, though this more powerful system will require accurate apportiomet of costs if it is to support soud decisios. Of the cetres we visited, oly the large cetre i Hog Kog already demostrated robust ad active maagemet of product profitability. Its busiess maagers use margi aalysis of each timetabled class to iform decisios o premium pricig, the commissioig or de-commissioig of courses or the developmet of ew products. We foud much less evidece i other cetres of detailed margi aalysis, for example to vary pricig to ecourage off peak tuitio. We also foud that, eve though the Coucil charges premium prices for Eglish teachig, the cetres were oversubscribed with waitig lists at peak times. This strogly suggests that the market is there to expad profitable product lies if the Coucil ca adopt other suitable busiess models ad practices There is little evidece globally that the Coucil has a systematic ad documeted approach for market testig ad opeig ew cetres. Guidace exists o how to research a area i order to establish if it would sustai a Coucil teachig cetre, but awareess ad applicatio of this was limited i the cetres we visited. Dedicatig sufficiet skilled resource to busiess developmet is vital i icreasigly competitive eviromets for both teachig ad exams. I 2002, the Australia compay IDP decided to offer examiatios i the Iteratioal Eglish Laguage Testig System (IELTS) qualificatio i Idia, i competitio with the Coucil s ow offerig. 10 IDP etered ito a partership with a local busiess, which adopted iovatios such as easy olie registratio ad targetig the most profitable States with aggressive marketig. By 2007 the Coucil had lost two thirds of its market share for IELTS i Idia, ad it has respoded with the appoitmet of a marketig maager to try to reverse the tred. The Coucil s stadard busiess model for Eglish Teachig 2.29 Historically, the British Coucil has adopted a stadard busiess model which limits its ability to maximise its fiacial performace ad its audiece reach. The Coucil s stadard busiess model for Eglish Teachig has bee deliberately positioed i the market as a high cost /high quality/high price oe, drive maily by the relatively high cost of its premises (paragraphs ) ad its teachers ( ) I most coutries teachig cetres are co-located with the Coucil s grat-aided operatios. Some 49 of the 70 cetres are i capital cities, usually i promiet busiess or admiistrative districts chose primarily to help the Coucil iteract successfully with key decisio takers ad ifluecers. Co-locatio was reaffirmed i the Coucil s Strategy But the Coucil also recogises that operatig a teachig busiess out of such locatios ca be a costrait, i terms of accessibility to potetial customers ad the relatively high premises ad capital costs it ca impose. High corporate stadards of fit-out have also bee applied to meet perceived expectatios of a British Coucil operatio. The Eglish teachig busiess has to compete with other Coucil programmes for capital resources to ivest i remodellig or expadig the etwork, to better reach potetial customers who live outside the catchmet areas of its curret cetres. 11 Recet research coducted by the Coucil suggests that existig ad potetial customers place less value o a promiet ad attractive buildig tha was previously perceived to be the case, ad place great value o quality teachig ad a locatio coveiet to their homes or workplaces Aother factor i the Coucil s busiess model, which teds to drive up course prices is that daytime utilisatio of classrooms i most cetres is low, with demad for teachig higher i the eveigs ad at weekeds, as most studets are either i full time educatio or employed. Off-peak markets ofte pursued by private sector schools, such as mothers ad youg childre, require particularly coveiet locatios which the Coucil is ofte ot i the right place to provide. Such markets ted ot to be corporate priorities for the Coucil, but they ca make a major cotributio to esurig fiacial viability ad to broadeig the reach ad capabilities of the teachig busiess where there is spare capacity. The cosequeces of poor fiacial performace ca be closures: i 2005 the Coucil s Czech operatio closed its cetres i the cities of Pilse ad Bro, havig foud that these markets had become more price-sesitive tha Prague. 10 IDP is a co-ower of the IELTS test, with the British Coucil ad the Cambridge ESOL exams provider. 11 Capital Ivestmet i the teachig busiess was 1.3 millio i Achievig Impact