Why the UK government is opposing universities on immigration

The UK government has announced its plans for controlling immigration, and these include new rules for international students.

The recent white paper on immigration proposes that most graduates will be allowed to stay in the UK for 18 months after their course finishes. This is six months less than currently permitted.

There will be a higher bar for universities to sponsor visas, excluding those universities at which higher numbers of students fail to complete their courses. The white paper also proposes a 6% levy on universities’ income from international students.

Universities think these changes will worsen their financial problems. However, this appears less important to the government than controlling immigration.

Universities are one of the UK’s strongest global assets, generating influence alongside export income. After the general election last year, science minister Peter Kyle vowed Labour would end what he termed the “war on universities” conducted by the previous Conservative government. That included a more welcoming approach to international students.

One reason for the change in tone and policy signalled by the white paper is common to other popular destinations for international students: the rise of nationalist parties opposed to immigration. But there is another reason specific to the UK, which is the government’s aim to reform higher education.

Politics and immigration

Two weeks before the release of the immigration white paper, the Reform party secured control of ten local authorities across England, winning 677 seats. The party’s rising popularity will be of increasing concern to the Labour government.

Reform is concerned about the effects of immigration on communities and wages. This affects international students because they figure within immigration statistics and increasingly stay for work.

Like nationalist and anti-immigration parties in other countries, Reform also gains more support from voters without a university degree.

In the US and Netherlands, similar movements have taken steps to reduce university funding and international students once in power. But these policies are not confined to nationalist parties.

Canada and Australia’s Liberal and Labour governments also signalled caps on international student recruitment before their re-election earlier this year.

This appears to be the strategy adopted by the UK’s Labour party – that it wants to assure voters who are more concerned about immigration than university finances.

Higher education policy

Alongside this, the government thinks employers are too reliant on migrant labour, and universities on international students. It wants them to focus more on developing the UK workforce. That requires employers to invest in skills development, and universities to provide courses that build crucial capabilities for the future.

The white paper states that “at a time when skills matter more than ever to the economy and people’s employment prospects, there has been a long-term lack of coordination or investment to deliver the skills and capabilities our economy needs”.

In England, coordinated higher education investment is difficult because most government funding is routed through loans to students. This encourages universities to meet demand from young people, which does not necessarily align with economic and public service priorities.

After years of anaemic economic and productivity growth but repeated increases to the minimum wage, one-tenth of graduates now earn little more than that threshold.

In response, the last government encouraged young people to take apprenticeships rather than university degrees. It also allowed student maintenance loans and fees to decline in value in real terms.

Universities filled the gap in their income with international students – particularly one-year taught postgraduates from Nigeria and India who often bring family members then stay for work. This made universities reliant on short-term income, while increasing immigration statistics.

Changes to family visa rules, combined with a global economic downturn and geopolitical tensions, have led universities to forecast a 21% reduction in new international student entrants this year. And 44% of universities are expecting to be in financial deficit.

Unlike its predecessor, the government accepts that UK student fees should increase with inflation, so has allowed this for the first time since 2017. But it wants a change from universities in return. Rather than relying on international students, they should make efficiencies and focus on courses that align with government priorities.

In a system mostly financed by student fees, there are few levers for influencing this. The Office for Students, which regulates higher education, has been asked to focus on managing quality and financial risks rather than policy.

Its funding for strategic priorities has been reduced. There are, though, three measures highlighted within the white paper that could become influential.

First, the government is reforming the apprenticeships levy, so it can be used more flexibly for workforce development priorities. Second, the tightening of sponsorship rules aims to drive international recruitment towards courses supplying the highest levels of skills and knowledge. Third, the proposed levy on international student income equips the government to invest in priority courses, rather than relying on student choice.

The first measure is already being implemented. A new organisation, Skills England, has been established to determine priorities for investment.

This may include funds from the proposed levy on international student income, though the precedent of Australia suggests that may be difficult. Regardless, there is a mood in government for higher education reform.