TNAG-2962-FCO40-4241-Future-of-Hong-Kong-British-Consulate-General-building-incl-1993 — Page 96

circumstances there would be no capital expenditure to the

FCO, and no rent would arise to the British Council. The

British Council would of course be expected to meet their full share of running and long term maintenance/ refurbishment costs, ground rent and rates.

Seek your agreement to this basis for the British Council's presence.

Understand and share your concern that whatever arrangements are worked out for costs to the British Council should not have the effect of increasing the British

Council's grant in aid, nor allow the British Council to compete unfairly in the provision of non grant in aid services. But surely not Treasury intention to penalise British Council for falling in with Ministers' wishes or to make it impossible for the British Council to comply with Ministers' requirements.

You gained the impression (Marr's letter of 22 July to Alan

Wootton) that the British Council would make a saving by

moving into the new building and that the arrangement would allow the British Council to compete unfairly in the provision of non grant in aid services. I hope that we can show you

that this will not be the case.

Charges paid by the British Council in the new building will reflect the full costs for services provided or engaged on their behalf by the FCO. Like to acquaint you with the costs

which the British Council will be expected to meet in the new

building. Have prepared figures showing projected outgoings and current expenses. [As you will see, the list is a comprehensive one which allows for long term maintenance in

addition to annually recurring elements.] Note: would like to be able to say this or to explain to the Treasury what provision British Council will make for long term maintenance. OED to draft please on this point and to draw up list to be

treasury.CONGEN.dbj