UK ministers will have to?¡°own¡± the fact that any changes to?the graduate visa route will have a?rapid impact on?universities as?the perilous nature of?some institutions¡¯ finances can no?longer plausibly be?denied, sector leaders have warned.

After being left with a headache when its own Migration Advisory Committee (MAC) cautioned against scrapping the visa that allows overseas students to?stay and work for two to?three years post-graduation, Downing Street was believed to?be still considering revising or?removing the route, eyeing a?chance to score political points on?the key issue of?immigration in?the run-up to?the general election.

Such a move was being fiercely resisted by universities, whose case has been strengthened by a?watershed report from the English regulator, the Office for Students, that warned that there was now a?¡°material risk¡± that some providers might close if sector finances worsen.

¡°No one can claim they are unaware of what the implications of a further restriction on international students are going to mean across the higher education sector,¡± said Jamie Arrowsmith, the director of Universities?UK International.

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¡°The government would have to own that. If there is a perception this is a cost-free policy with an election coming up ¨C that you can take the political benefit ahead of an election of appearing tough on immigration and trying to force a dividing line with Labour ¨C that is maybe misreading the precarity of the finances in the sector.

¡°I don¡¯t think this is something where we would need wait months to see the effects. I?imagine many universities would have to respond much quicker than that.¡±

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Mr Arrowsmith predicted that key migration figures due out on 23?May ¨C which might prove to be the spur for government action ¨C would show the beginnings of a downward trend in people entering the UK, but not enough to satisfy the right of the Conservative Party.

Although some additional student data are being released at the same time, the main statistics only cover to December 2023 and therefore will not reflect the full extent of a?steep drop in university applications following restrictions on dependant visas introduced in January.

Mr Arrowsmith said ministers should look at ¡°what is happening right now on the ground¡± to ¡°avoid a massive overcorrection that is going to cause significant problems for universities and the communities they support¡±.

One of the Conservative MPs pushing for the visa to be abolished, Neil O¡¯Brien, told Times Higher Education that the MAC review had been ¡°quite narrowly defined, looking at whether people are breaking the law¡±, but he felt information gathered as part of the exercise that appeared to show the low earnings of visa recipients strengthened his case.

¡°For 30 years, politicians have been saying they want high wage, high skill migration, but the graduate visa is delivering the opposite,¡± the MP for Harborough said.

Sector leaders have sought to counter this view by stressing the wider economic benefits of the visa, an argument reportedly confirmed by an internal Department for Education (DfE) analysis that found that a halving in the number of international students could lead to a 0.5?per cent drop in the UK¡¯s gross domestic product, .

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Sir Anton Muscatelli, the principal of the University of Glasgow, said the MAC had provided an ¡°unequivocal verdict¡± that the visa benefits the UK economy and its universities.

¡°The hope is that politicians will use this clear evidence to support the current visa policy,¡± Sir Anton said, adding that what the country needed ¡°above all is economic stability¡±.

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A policy said to be under consideration in Whitehall was limiting the graduate visa to the ¡°brightest and best¡± by restricting its use to only highly ranked universities. This phrase was criticised in the MAC report as being poorly defined, while the review also said the visa had helped to expand the benefits of hosting international students beyond elite institutions.

Sir David Bell, the vice-chancellor of the University of Sunderland and a former permanent secretary of the DfE, said the MAC had confirmed ¡°that universities across the sector are ensuring that students from overseas are benefiting from their studies in the UK without academic standards being compromised¡±.

¡°If I was in government, I?would be very tempted to trumpet the argument that its policies on attracting international talent to the UK have been a resounding success,¡± Sir David added. ¡°To?undermine such a policy would be odd in the extreme.¡±

Andy Westwood, professor of government practice at the University of Manchester, said the government¡¯s promise to tackle both legal and illegal migration numbers had ¡°become a test of faith and competence in ministers¡± and a ¡°major dividing line¡± with Labour.

These factors will ultimately likely have more influence than the MAC review on the position the government decides to take, Professor Westwood said, with the most important element still how the issue plays with existing and potential Conservative voters.

Labour, too, will not want to be seen as soft on immigration issues, Professor Westwood added, ¡°so I?suspect their immediate instincts will be to neutralise the issue rather than reject it out of?hand¡±.

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tom.williams@timeshighereducation.com