Question to the Foreign, Commonwealth & Development Office:

To ask the Secretary of State for Foreign and Commonwealth Affairs, with reference to note 19 on page 106 of the British Council's Annual Report, 2013-14, what the reasons were for the losses and special payments.

As stated in the British Council's Annual Report, during the year ended 31 March 2014, the British Council made no payments that fall within the category of special payments as defined in Managing Public Money.

The losses referenced in the Annual Report fall into three major categories:

1) £1.9m worth of claims waived or abandoned. This included a write off of £1.7m worth of fees for work done in 2011-12. These fees were owed by education institutions in a country where the deteriorating political and security situation meant they are not likely to be recoverable in the foreseeable future. £0.4m of this was provided for in the year to March 2013 and only the balance was charged in the year ended March 2014. The debt was part of the Council’s full cost recovery work and no grant-in-aid funds were involved. Approval was sought from HMT and granted.

2) £540k worth of fruitless payments. This included:

a) £402k (122 cases) of historic contract balances from 2007 to 2010 in relation to funds granted to beneficiaries under the Youth in Action agreement, which were deemed ineligible for reimbursements to the British Council by the European Union. These were provided for in the year to 31 March 2013.

b) £137k in relation to a final court judgement of damages due from a long running court case in the UAE about a failed premises project that concluded in January 2014.

3) £170k worth of cash losses. This included net losses from frauds in Kenya and Senegal disclosed in the Governance Statement on page 54 of the Annual Report.