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.

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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.

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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 ¨C 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.¡±

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¡°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.¡±

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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.¡±

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john.morgan@timeshighereducation.com