UK reliance on overseas students an ‘uncomfortable reality’

Universities already “finding it very difficult to make ends meet” have been put under further financial pressure by UK government immigration policy deterring international students, with institutions’ reliance on overseas income being the “uncomfortable reality”, according to vice-chancellors.

A Westminster Higher Education Forum event on university funding heard from speakers including Jenny Higham, the St George’s, University of London vice-chancellor who chaired Universities UK’s group looking for funding solutions via a “national conversation” on funding.

Professor Higham highlighted the impact of the tuition fee cap freeze in England alongside high inflation. “Now we’re in a situation where the unit of resource has fallen away so steeply and costs have increased, that universities are finding it very difficult to make ends meet,” she warned.

Universities have “tried to cross-subsidise” the cost of educating domestic students via “aspirations” to increase international recruitment, but “interestingly in the very last cycle people didn’t meet those aspirations”, she added, after Ucas figures showed a fall in international student acceptances this year.

While there was variation across the sector and not every university was facing financial struggle, “at least a third of universities now are posting deficits”, said Professor Higham.

The impact of falling international recruitment was highlighted by another speaker, George Boyne, principal of the University of Aberdeen.

In Scotland, this year had seen “an almost 20 per cent reduction on average in the number of international students coming to study at Scottish universities”, he said. “That puts the whole sector under pressure because we have been relying on year-on-year growth in international student numbers and international student revenue to be able to invest in our high-quality education and research.”

As to why there has been a drop in international recruitment in the UK, Professor Boyne said it “must be noted” that international recruitment was up in Australia, the US and Canada.

He continued: “Our interpretation at this stage is that of course this [the UK’s fall] may be connected to cost of living and a variety of other things, but it’s also connected to the UK government’s immigration policy, visa requirements, debarring of international students from bringing their dependants with them – starting in January [but] already having a negative impact on the perception of the UK as a welcoming place for international students.”

Professor Boyne said alternative revenue streams could include transnational education working in overseas countries directly, more online provision or “greater commercialisation of our research and education activity”.

But to tell staff they “must do more for the university to remain financially viable” was “a really significant ask and puts more pressure on a workforce already working very hard and very successfully”, he added.

Asked about ways forward on funding, Professor Higham said on overseas student income: “Realistically, that is the stream that we need to continue.”

“I do not believe there is lots of money in the [government] coffers to make alternative [funding] moves for universities,” she added.

Asked whether universities had become too reliant on overseas student income, Professor Higham said it was the situation in which universities had been placed by the funding system. “It is uncomfortable, isn’t it, that that is the way we are funding our system. Let’s be honest. Would we ideally want this situation? No, we wouldn’t. We would want to think we weren’t so reliant [on international students] in this way. But that is the reality.”

At a different event on the same day, Mark Smith, vice-chancellor of the University of Southampton, also discussed the damage that immigration policies could do to research.

Highlighting figures showing a “huge gap” in the full economic costing of the sustainability of research, he said that without certain sources of income, such as fees from the non-publicly funded teaching of international students, the sector “would be in a lot of trouble”.

Professor Smith warned that immigration policy shifts could spell even greater challenges because less demand from international students would have a significant knock-on effect in making the system less sustainable.

Speaking at a research-focused conference organised by Universities UK, Professor Smith said the UK has benefited from controlled immigration for centuries and it should continue to do that.

“My real worry is that immigration policy will end up in a place where we become less and less attractive. If we get into that situation, that is a really difficult hole to dig ourselves out of,” he said.

“We benefit from having colleagues from across the world wanting to come and make their careers in this country. We want to attract the best, and there’s no reason the best should just be UK born and bred.”

john.morgan@timeshighereducation.com