fst.nb/fst/21£.07.93 MANAGEMENT IN CONFIDENCE HUD 406245 attachmet
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FINANCIAL
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SECRETARY
THE TREASURY
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for advice ph.
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Treasury Chambers, Parliament Street, London, SW1P 3AG
Secretary of State
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B/57 Lenox Bond PS/PVS Chief Cur r Alston
The Rt Hon Douglas Hurd CBE MP
Foreign and Commonwealth Office King Charles Street
23 July 1993
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LONDON
SW1A 2AA
Dear Songlas
QUINQUENNIAL REVIEW OF THE BRITISH COUNCIL
(466)
Hd/RFD
MRS Plonnes
Neus
Thank you for your letter of 5 July saying that you are ready in principle to consider in 2 years time whether there should be a further, more limited, review of the privatisation options for the British Council.
Sp. Admin
I am disappointed that you do not feel able to make now a firmer commitment about a further, more limited, review. However, I would not wish to second-guess you and agree that, before settling a further review, your officials should monitor progress during the next two years with the changes now taking place in the Council. I should be particularly interested to learn about the results of the growing practice of the geographical AUSS having more responsibility for the allocation of "their" resources generally, including ensuring that the Council gives proper value for money in their regions. I would also be interested in the effects of a new unit to manage the expenditure and financial dimension of the customer/contractor relationship between FCO/ODA and the Council. In monitoring the operation of the British Council I should be grateful if your officials would check that, where FCO provides the Council with services, the charges (eg rent in jointly occupied buildings) reflect full costs. I am sure you will agree that there can be no possibility of subsidising unfair competition by the British Council, which would be a waste of its grant in aid.
I think we must agree to differ over the depth to which the recent review considered fundamental options. The important point is that we make sure that care is taken to ensure that the next review is particularly thorough in identifying and analysing privatisation options. Perhaps it would be useful to commission an independent review, such as you had conducted of the Commonwealth Institute.
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