The British Council has declined to comment on government plans to make the charity exempt.
The charity is the largest on the Charity Commission's register by annual income, with an income of almost £1.3bn in the year to the end of March 2020.
The council, which receives most of its income from running English language and cultural programmes around the world, is also an executive non-departmental public body, sponsored by the Foreign, Commonwealth & Development Office.
The FCDO earlier this week published in parliament a draft statutory instrument to change the charity’s status.
A statutory instrument allows the provisions of an act of parliament to be subsequently brought into force or altered without parliament having to pass a new act.
In this case, the instrument must be approved by both houses of parliament, but most succeed without the need for a debate or vote.
An exempt charity is one that has charitable status and is still required to comply with charity law but, unlike other charities, it cannot register with the Charity Commission, is not directly regulated by the commission and instead has another principal regulator.
In addition, it can only be investigated by the commission as part of a statutory inquiry at the request of its principal regulator.
In this case, the FCDO will become the charity’s principal regulator.
Any concerns about the charity or its work will now have to be raised with the FCDO first, and the commission does not expect exempt charities to report serious incidents to it directly.
Trustees must report to the FCDO and, where the principal regulator does not have the power it needs to address abuse or wrongdoing, it is responsible for referring the concern to the commission, which will then consider whether regulatory action is needed.
The commission must consult the principal regulator before using any of its powers, and it can only open a statutory inquiry into an exempt charity if the principal regulator asks it to.
The statutory instrument states: “In so far as these regulations make provision to secure that the British Council becomes an exempt charity, the secretary of state is satisfied, in accordance with section 23(2) of the [Charities Act 2011], that these regulations are desirable in the interests of ensuring appropriate or effective regulation of the British Council in connection with compliance by its trustees with their legal obligations in exercising control and management of its administration.”
The British Council declined to comment and the FCDO did not provide a response before publication of this story.