The British Council is preparing to shed hundreds of jobs and scale back operations across Europe as the fallout from Keir Starmer’s aid cuts collides with years of financial strain at one of the U.K.’s key soft power institutions.

The Council, which is tasked with promoting British culture and education overseas, is grappling with the looming repayment of a government loan of almost £200 million dating back to the pandemic. In the midst of bruising negotiations with the Foreign Office, it has begun formal consultations on a sweeping restructuring that could lead to around 400 roles cut across Europe and the U.K., according to four people familiar with the plans.

An internal consultation document emailed to staff and seen by POLITICO lists 784 jobs “in scope” across the U.K. and Europe, with at least 404 roles expected to be “displaced” — 15 percent of total current staff, according to one of the people familiar with the plans. 

The scale of the planned British Council retrenchment is likely to fuel concerns in Westminster that Britain is hollowing out its soft power footprint just as other geopolitical rivals ramp up theirs. Russia and China have poured resources into overseas cultural and language programs in recent years, while the U.K.’s global engagement budget has been repeatedly squeezed.

The shift in London away from supporting a longstanding pillar of British cultural diplomacy also echoes moves in Washington, where the Trump administration has dismantled the United States Agency for International Development and slashed other U.S. foreign outreach programs, including government-backed overseas media organizations.

Much of the financial strain at the Council stems from a £197 million government loan agreed under Conservative leader Boris Johnson, originally pitched as a stabilization measure during the pandemic but on commercial terms with annual interest of around £14 million. 

Critics argue the debt burden has constrained investment just as government funding has been cut, forcing the organization into successive rounds of cuts. The Council is largely self-funding from its English language teaching and exams divisions, but it still receives around £160 million a year in government grants. 

A spokesperson for the British Council said: “We are in the early stages of beginning consultation about proposed changes to our operations around the world and we will work with employee representative bodies and local authorities to ensure that we meet all legal obligations and support colleagues fairly.”

The cuts were triggered as the body approached a new three-year funding settlement with the Foreign, Commonwealth and Development Office, which one person familiar with negotiations said would demand savings of around £50 million a year. The FCDO declined to comment. 

The Council has asked the government to relieve the financial pressure of the loan and declining grants, requesting an extra £20 million in annual funding. Its chief executive warned last year that the organization might have to sell assets to survive, and that dozens of country operations were at risk. 

A similar process has unfolded at the BBC World Service, often cited as another standard bearer of British soft power. The BBC said in a statement this week that the service is facing hundreds of millions of pounds in cuts in the next three years.

‘Detaching from foreign engagement‘

“The axe has finally fallen,” said one British Council staffer whose role is expected to go. “It’s going to be a bloodbath, and we are not going to go quietly.”

Italy is expected to be especially hard hit. Of 150 roles in the country, 120 are “in scope” — about 80 percent of the workforce. Plans in a European Works Council consultation pack emailed to staff indicate that in Italy the entire teaching division would close and the exams arm would be outsourced. 

Elsewhere, middle management and lower level roles, including customer service positions, have been targeted. In the U.K., 147 roles are under review, while in France 52 and Germany 23, according to the document. In Spain, 160 roles are under review with around 60 redundancies expected. In Portugal, 45 roles are in scope with roughly 25 job losses anticipated. 

In Italy, employees have met union representatives and FLC CGIL is preparing industrial action. “The British Council’s teaching was renowned,” said Leonardo Croatto of FLC CGIL. “Now the U.K. government is closing the U.K. in on itself and detaching from foreign engagement. We are seeing the death of cultural multilateralism.”

One MP briefed on the changes, granted anonymity to speak freely, said: “It’s losing huge amounts of money and needs a proper overhaul.”

Critics of the cuts inside and outside the organization argue, however, that the strategy risks long-term damage. The British Council was founded to counter fascism and totalitarianism through cultural engagement. Now, as nationalist politics resurge across parts of Europe, insiders fear Britain is retreating from the field.

“In the EU, affection for the U.K. is not there just because they like us but because we built it,” one insider said, arguing that goodwill painstakingly built over decades was dented by Brexit and cannot be taken for granted. The U.K. remains one of the world’s leading soft power players, this person added, but the position is fragile: “It’s an awful lot cheaper than hard power, the price of a few missiles.”

Dan Bloom contributed reporting.