We recently hosted a roundtable debate for the Chairs of Audit Committees at UK universities regarding recruiting and supporting overseas students, and trans-national education (TNE)1 and its importance for the sustainability of the country’s university sector, held under the Chatham House Rule. Debbie Watson outlines the key messages and considerations that arose from the discussion.
A truly global market
Higher education (HE) in the UK should be appreciated as an export success. In 2019, the UK was the second-most popular destination for international students after the USA and the total number studying here has grown by 28% between 2008 and 20172. TNE has grown even faster, with an 81% increase in numbers over the same period3. Under the leadership of Theresa May, the UK’s competitive advantage was arguably less exploited than it could have been due to domestic political choices, and growth was slow in 2018/2019 – only 0.3% – while numbers studying in the USA grew by 7%. The recent change in government has brought a new administration to power, which appears more open to the export potential of universities. This change in tone means that universities should be redoubling efforts to strengthen links with the Department for International Trade (DIT) and bodies like the British Council.
Outside the relative shelter of the UK’s domestic higher-education market, the competition for international students is getting tougher and the geography of the major institutions is becoming ever wider. International students are consumers of education and the market can be volatile; for example, the UK government’s decision to restrict visa entitlements to Indian students in 2012 led to a rapid drop in numbers. The lifting of some of those limitations has seen a rapid rebound.
Broadly, there are three factors affecting how the UK’s HE market experiences the vicissitudes of the international flow of students:
The supply of, and ease of access to, education provided by a nation’s HE providers - the ‘exporters’ of HE - could be limited by visa or access rules
The demand from individual national markets, including perceptions of a country’s open-ness and historical reputation - the ‘importers’ of education
Competition from other nations’ HE providers, who offer different choices and substitutes for undertaking higher education
A future in flux?
The interplay of these factors has historically seen the UK able to apply its competitive advantage in reputation, language and quality. However, risks continue to morph and change, so audit committees need to be alert to the wider global environment in which their institutions are operating. Examples include:
Reliance on a relatively small number of countries, particularly China, enhances the susceptibility of some institutions to sudden changes in demand, perhaps due to official policy or unforeseen events, such as the COVID-19 situation. A fall in student numbers from China due to the circumstances could hit the incomes of UK universities very hard, perhaps into the hundreds of millions of pounds. Some universities have implemented their emergency planning protocols and audit committees should be prepared to scrutinise these as well as appraise if they work. For example, Monash University in Australia has produced a factsheet , which gives simple answers to international and domestic students.
The UK government is very interested in the developing relationship with particular nations, again particularly China, as both a source of finance and a research partner. While universities have their autonomy enshrined in legislation, and function on the premise of open-sourced research, they are not immune to this. A deep relationship with a state such as China could:
1 Create the impression that an institution is influenced in its public pronouncements or fails to challenge international and domestic policies where that would be appropriate
2 Lead to questions of national security involving the transfer of technology and R&D to countries that might be considered long-term competitors
Although a No Deal Brexit has been avoided for now, it remains a definite possibility as trade talks begin in earnest. The government has said that it hopes to make participation in Horizon Europe part of the outcome of talks, but much is still uncertain. There is still little clarity about access to tuition fees for EU students, for example, and students struggle to find up-to-date information. There is also the tone of the negotiations; for example, on access to Erasmus, the government’s Approach to Negotiations document says “the UK will consider options for participation in elements of Erasmus+ on a time-limited basis, provided the terms are in the UK’s interests”.
The Office for Students (OfS) interprets its role as a regulator for the consumers of education. Specifically, it regulates in the interests of all students, including those on TNE courses abroad. This means that the international student experience, and the outcomes of their education, will be of great interest to the regulator as time progresses. This could have two key results:
Unlike data on UK students, there is relatively little outcome data of high enough quality to make many judgements. It is possible the OfS will ask or require universities to try and understand the long-term prospects of their graduates and students. Arguably, universities should be doing this already, since good results are a powerful marketing tool, when information is dominated by various league tables in the absence of anything else.
Both OfS and UK Visa and Immigration (UKVI) are concerned about ‘mis-selling’ courses. For domestic students, this has already been partially addressed through advice on consumer rights law, but for international students, there has historically been little protection. In particular, the use of agents who exist at arms-length to the actual university represent a verifiable risk to the reputation of institutions, so audit committees need to understand what controls and results are in place to protect their institution.
Risks but also rewards
Many UK universities are financially dependent on international student income and audit committees have to understand the risk and sheer competitiveness of the market. However, it is also full of opportunities, and by working across borders, it is arguably in its international reach that an institution genuinely achieves the meaning of ‘university’.
For some, perhaps the majority, there is an imperative to grow their international reach, but the good news is that it appears this isn’t a market that has reached saturation yet. There are numerous locations around the world with young populations looking for new chances, which lack highly reputable HE institutions that can expand to meet demand.