TNAG-2764-FCO40-3981-UK-Hong-Kong-Scholarship-Scheme-donation-to-the-UK-Governme-1993 — Page 94

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(iv)

Reference..

use it directly for FCOSAS purposes. However it seems that route is not an option. If the British Council felt it worth setting up a trust to administer such a small amount, I should only want to see that happen if we are able to lay down pre-determined conditions directing the Council to use the money for scholarships purposes in line with FCO objectives see attached. (This leaves aside the other British Council point that they would want to get their hands on both principal and interest). From the look of the 1988 correspondence with the Council, I wonder whether we could achieve this objective?

Perhaps the best option on the scholarships part of the Bequest is to leave the £666,000 principal in Hong Kong until very near 1997, hope that the bottom does not drop out of the Hong Kong money market before then and that they can continue to secure a high rate of interest, and continue funding UK/HK Scholarships on the present agreed basis. We could do our joint review in 1994/95 and explain to Hong Kong that we could only make commitments up to 1997 (and there would have to be a run down of commitments to any 3-year candidates three years before then). Just before 1997 we would transfer our £666,000 to the UK and then (or before) think in terms of setting up some new replacement scholarship scheme based in the UK - for the continued benefit of Hong Kong students if appropriate (though we might also perhaps consider using the money for the benefit of a wider trawl of overseas students). At that stage we could consider bringing the British Council into the picture but only on the terms indicated at (iv) above.

CODE 18-77

isconej

M J Long

Overseas Students Policy Section

Cultural Relations Department 26 January 1993