Universities prepare for a fall in student numbers

More than half of English universities expect fewer students as a result of the fees rise.

Will tuition fees of £9,000 deter pupils from applying to university? That's one of the questions that has been occupying David Willetts in recent months. Today, we're a little closer to getting an answer. A survey of institutions by the Higher Education Funding Council [HEFC] has found that more than half of English universities expect to be teaching fewer UK and EU undergraduates when the fee rise kicks in next year. On average, universities expect a 1.9 per cent fall in numbers, but one institution is forecasting a 20 per cent drop while five others believe numbers will be cut by a tenth. Just under a quarter - 24 per cent - expect an increase and a fifth anticipate no change.

It's something of a headache for Willetts, who, while eschewing the target culture favoured by New Labour, has made it clear that he both hopes and expects student numbers to rise. As Steve Smith, the recently departed head of Universities UK, told me when I interviewed him: "Willetts wants more people at university, not everyone in the Conservative Party agrees with that." The key question, of course, is whether this is likely to be a temporary or a permanent reduction. When Labour tripled fees to £3,000, student numbers fell by 15,000 (3.7 per cent) in the first year (2006) but they later more than recovered.

Then there's the question of what it all means for universities' balance sheets. Under the Willetts model, money will follow the student, meaning that some universities dramatically expand, while others shrink. The HEFC warns that the sector continues to operate on "very fine margins" which make insitutions vulnerable to "small changes". It adds that universities will be in a "financially sustainable position" in the medium term, but some "will need to generate better financial results in the longer term". All of which raises the question of whether some institutions could even go bankrupt. When I asked Smith about this, he replied that ministers would never allow this to happen "because they'll work out what it would mean for the local economy." In some communities, he pointed out, the university is one of the largest, if not the largest, net contributors to the economy. Like the banks, the universities, it appears, are too big to fail.

But ultimately if the decision to charge the highest public university fees in the worldleads to fewer students, particularly those from poorer backgrounds, then Willetts's grand experiment will be judged a failure.

George Eaton is political editor of the New Statesman.

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How Theresa May laid a trap for herself on the immigration target

When Home Secretary, she insisted on keeping foreign students in the figures – causing a headache for herself today.

When Home Secretary, Theresa May insisted that foreign students should continue to be counted in the overall immigration figures. Some cabinet colleagues, including then Business Secretary Vince Cable and Chancellor George Osborne wanted to reverse this. It was economically illiterate. Current ministers, like the Foreign Secretary Boris Johnson, Chancellor Philip Hammond and Home Secretary Amber Rudd, also want foreign students exempted from the total.

David Cameron’s government aimed to cut immigration figures – including overseas students in that aim meant trying to limit one of the UK’s crucial financial resources. They are worth £25bn to the UK economy, and their fees make up 14 per cent of total university income. And the impact is not just financial – welcoming foreign students is diplomatically and culturally key to Britain’s reputation and its relationship with the rest of the world too. Even more important now Brexit is on its way.

But they stayed in the figures – a situation that, along with counterproductive visa restrictions also introduced by May’s old department, put a lot of foreign students off studying here. For example, there has been a 44 per cent decrease in the number of Indian students coming to Britain to study in the last five years.

Now May’s stubbornness on the migration figures appears to have caught up with her. The Times has revealed that the Prime Minister is ready to “soften her longstanding opposition to taking foreign students out of immigration totals”. It reports that she will offer to change the way the numbers are calculated.

Why the u-turn? No 10 says the concession is to ensure the Higher and Research Bill, key university legislation, can pass due to a Lords amendment urging the government not to count students as “long-term migrants” for “public policy purposes”.

But it will also be a factor in May’s manifesto pledge (and continuation of Cameron’s promise) to cut immigration to the “tens of thousands”. Until today, ministers had been unclear about whether this would be in the manifesto.

Now her u-turn on student figures is being seized upon by opposition parties as “massaging” the migration figures to meet her target. An accusation for which May only has herself, and her steadfast politicising of immigration, to blame.

Anoosh Chakelian is senior writer at the New Statesman.

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