Following meetings between the French and British Governements in 1970, so-called 'Heath-Pompidou money' was made available as extra funding for new programmes of youth exchanges, scholarships and civic links between the UK and France. This was followed by a more general increase in cultural and educational activity in Western and Southern Europe, with new science, arts and English language teaching programmes being set up.
The rapid development of the countries of the Gulf following the discovery of oil in the 1960s led to interest in the expansion of British Council programmes in those countries, and new operations were opened in Oman and Qatar, with expansion in Bahrain and the United Arab Emirates. In addition to the activity which could be funded from the British Council's own budget, discussions with the governments of these countries led to what became known as 'Paid Educational Services' - British Council educational services which are paid for by the host government. The first project under the new arrangement was for support to the development of the English Language Centre at King Abdul Aziz University in Jeddah, Saudi Arabia.
The mid-1970s saw the start of renewed priority given to the direct teaching of English, particularly in Southern Europe and the Middle East. Over the next twenty years or so, new teaching centres were set up in countries across the world, and the income from teaching became an important means by which the British Council was able to maintain or increase its activity independent of the Government grant.
In 1976, a review of all UK foreign policy, including the work of the British Council, was commissioned by the then Foreign Secretary (later Prime Minister) James Callaghan. The body commissioned to do this was the Central Policy Review Staff, popularly known as the 'Think Tank'. Their report, produced in 1977, caused a storm by recommending either the outright abolition of the British Council, or the closure of its entire overseas network. Although the Government decided not to follow the Think Tank's recommendations, the Berrill Report is remembered as the greatest threat to the British Council in its history.
The actual result of the Berrill Report was a sharp reduction in Government funding up to the mid-1980s, leading to reduction in activity and closures of offices and libraries overseas. However, political events also caused the withdrawal of the British Council from Iran in 1979, Afghanistan in 1980, and from Argentina and Lebanon in 1982.
One of the major reductions in this period caused by the need to make financial savings was the closure of ten of the twenty-five regional offices in the UK and of the Overseas Students' Centre in Portland Place, London. The gap would be filled partly by collaboration with institutions such as International Students House in London, but mostly by universities and educational institutions increasingly taking on the responsibility for the welfare of their overseas students.
The continual reductions in the Government grant were, however, compensated for by growth in other areas of British Council activity which attracted its own funding: project management funded by overseas governments, the UK Government's Overseas Development Administration and multilateral development agencies, teaching of English to fee-paying students, and joint-funded events and programmes.
The 1980s ended with a spurt of growth caused by a long-awaited funding increase, and saw new or expanded offices and programmes in Europe, Africa, the Middle East, China and the Caribbean.
