The early 1950s saw a continued reduction of the large overseas network which had been built up during the Second World War, and a decline in Government funding.  In the few countries where there was a complete withdrawal of British Council activity, however, this was mostly due to political rather than financial factors.  So, the British Council had to pull out of Eastern Europe - with the notable exception of Poland - as well as from China and Persia.  Later, the 1956 Suez Crisis in Egypt and political troubles in Cyprus disrupted British Council work in Egypt, Syria, Jordan, Greece and Cyprus.

There were regular Government reviews during this period, looking at such questions as whether the Government should continue to support the British Council and what its priorities should be in terms of activities and geographical focus.  These reviews were known as the Drogheda, Hill, Vosper and Duncan Reports, named after the chairmen of the review committees.  By the end of the 1950s, the Drogheda Report had led to an expansion of activity in the developing countries of Africa and Asia, and the Hill Report had led to a move away from the teaching of English by British teachers towards more support and training for local English teachers.

The setting up of the Government's new Department for Technical Cooperation in 1961, responsible for British aid to developing countries, led to important changes for the British Council.  Throughout the rest of the 1960s and up until the 1990s, the British Council took on an increasing share of responsibility for education programmes and student training schemes in the developing countries of Africa and Asia, and received an substantial proportion of its Government funding from the new Department.

Within Europe, an important development in the mid-50s was the setting up of the Soviet Relations Committee to develop cultural relations between the UK and the Soviet Union.

The 1960s saw a renewed commitment to work in Western Europe, following the recommendations of the Vosper Review, which interpreted Britain's failure to join the European Common Market in 1963 partly as a result of the lack of attention paid to relationship-building with the people of those countries.  These recommendations were reinforced by the Duncan Report of 1969.

In the mid to late 1960s, following a period of considerable growth, financial constraints and the political troubles in the Middle East, Nigeria and Vietnam forced the closure of some operations, but this period also saw further expansion in Asia and Sub-saharan Africa and renewed activity in Eastern Europe.