Ross Clark Ross Clark

A crackdown on foreign students isn’t the only reason universities will struggle

David Cameron meets university students in Kazakhstan (Getty images)

Reducing the number of overseas students able to come to Britain would be a needless attack on one of our most successful export industries. But should we really believe David Cameron’s warnings to Rishi Sunak that universities are in danger of going bust if the graduate visa scheme is removed, or reformed (graduate visas give graduates the chance to stay on and work in Britain for up to two years)?

The government would be foolish to choke off foreign students

Data from the Higher Education Statistics Agency (HESA) does not appear to show any desperate crisis in university finances. On the contrary, their income has shown a steady and healthy, above inflation rise over the past decade. Between 2014/15 and 2022/23, their collective income from tuition fees and education contracts nearly doubled from £15.5 billion to £27.0 billion. This was in spite of tuition fees being held down at below inflation. Funding body grants surged from £5.3 billion to £9 billion and research grants and contrast from £5.9 billion to £7.3 billion – all this in spite of universities bleating that Brexit would starve them of research money. Investment income also saw a healthy rise, from £230 million to £907 million.   

Universities like to pose as highly-successful businesses when it comes to rewarding their vice chancellors – an analysis of 115 universities by the Times Higher Education Supplement earlier this year showed that the average Vice Chancellor is paid £325,000. In spite of rising income, a couple of dozen universities managed to make a loss in 2022/23, the biggest among them the £16.3 million lost by South Bank University. The then salary of £295,000 paid to the vice chancellor of South Bank came in for criticism by Lord Adonis in 2017. Wolverhampton University lost £11.8 million and Middlesex University £10.4 million. The only Russell Group University which made a loss was Durham, which lost £4.9 million. The biggest loss of any education provider in HESA’s statistics for 2022/23, by the way, was Multiverse, Euan Blair’s apprenticeship outfit, which managed to lose £43.8 million. Not that that prevented the younger Blair appearing on the Sunday Times’ rich list for the first time, with a reported wealth of £327 million.    

There seems to be plenty of money, then, for the people who run higher education – even as they plead poverty. There are also some universities which seem to be under poor financial management. It is not impossible that a university or two will go bust over the coming years, but it won’t necessarily be because they are losing out on foreign students – it may equally well be because they have failed to contain their costs. Many universities have continued to fob off their students with token amounts of teaching time, long after the pandemic. Yet even so, they have allowed salaries and other costs to rise out of control. 

The government would be foolish to choke off foreign students – although there is certainly some room for reforming the student visa system and properly enforcing it, so that it is only available for graduates who have obtained good degrees on proper courses. But no, we shouldn’t listen to highly-paid university chancellors who constantly plead for state bailouts under threat of going bust.