Anton Muscatelli argues that universities’ international competitiveness will be an election issue
Last week began with the higher education sector eagerly awaiting the government’s response to the review commissioned from the Migration Advisory Committee. It ended, very unexpectedly, with the prime minister’s announcement of a general election on 4 July.
How will the conversations of the past few weeks around the importance to the UK sector of international student flows feed into wider discussions about higher education during a general election campaign?
As is already apparent from the campaign’s opening salvos, economic issues will be at the centre of the political debate. Although improvements in higher education funding are not a priority for either of the main parties, this offers an opportunity for the sector to underline its key role in the UK economy.
The UK’s post-2008 productivity malaise has been made worse by several serious shocks: Brexit, Covid and the post-pandemic surge in inflation linked to the Russia-Ukraine war. In addition to its negative impact on standards of living, this economic underperformance has seriously squeezed the available fiscal space for public services.
Overton window
What the flurry of debate on the student graduate route visa revealed is that the voting public have a strong understanding of the HE sector’s key role within the economy and in the UK’s global standing. A recent opinion poll commissioned by the Russell Group from Survation highlights this well.
A small number of politicians have attempted to frame the debate on the graduate route as a generic (and negative) immigration issue. But voters have a more sophisticated view. They regard students and graduates staying in the UK—alongside skilled workers, healthcare workers, academics and those bringing in business—as a positive.
While illegal immigration is a key negative issue in the election debate, legal skilled migration seems to be firmly within the Overton window as a policy that is not only acceptable but sensible and indeed popular.
This gives the political parties some short-run room for manoeuvre in HE policy terms, particularly as the prospects look poor for any increases in public investment in teaching for UK HE.
Teaching resource
The major issue for the university sector has been the erosion of the teaching unit of resource for undergraduate study. And that applies whether one looks at the English university system, which is mainly dependent on fees and income-contingent loans with no caps on university student places, or at the Scottish system, which has remained as a publicly funded system with fixed caps on student places.
Both these systems, alongside those in Wales and Northern Ireland, now operate in a world in which resources for undergraduate education have been seriously eroded by inflation. Without the cross-subsidy from non-publicly funded teaching (mainly international and postgraduate taught students), UK universities would need to reduce provision of teaching and non-teaching support for home undergraduates drastically.
Indeed, since 2023-24, reductions in international student numbers (partially linked to earlier changes in student visa policy on dependants as well as greater global competition) have led around 50 to 60 universities to announce major cost cuts and staff redundancies.
Fiscal space
In the short run, the fiscal space a future government will face is tight. Labour has, subject to a different treatment of public investment, adopted a similar stance on its fiscal rules to that of the current Conservative government. Neither party will prioritise restoring the teaching unit of resource given the many demands from health and social care spending and public infrastructure—all identified in the Survation poll as higher priorities with the voting public. It’s also inconceivable, given the cost-of-living crisis, that home student fees will be raised in the immediate future.
Ensuring the UK remains competitive, and indeed raises its game internationally, therefore becomes highly desirable. Maintaining the UK’s international competitiveness in HE is the only way of securing the sustainability of our universities and, more importantly, maintaining some degree of stability in the UK’s skills base in the next five years.
Whether your favourite electoral mantra is ‘securonomics’ or ‘economic stability’, there is a strong argument to be made for an ambitious international education strategy at the heart of UK HE policy in the 2024-29 parliament.
Research investment
What is striking from the Survation poll is also how well-regarded our universities are as a sector; they rank above all other economic sectors in terms of reputation and performance. At a time of crisis, they are one of the few assets that can be leveraged for economic recovery.
But to remain globally competitive, the UK must invest in its research and innovation base. This is one of the major drivers of our reputation, and other countries are investing heavily in public spending on R&D. Total spending on R&D in the UK was just above the OECD average in 2021 at 2.92 per cent, but that still lags behind key competitors such as Germany (3.13 per cent), the US (3.47 per cent) and many other leading European economies. These total R&D spend figures also oversimplify matters and fail to capture investment in the major critical technologies that will define the UK’s future growth prospects.
The manifestos of the two main political parties will offer many touchpoints providing opportunities for higher education to feature in election debates: the sector’s contribution to local and regional economies (the UK’s growth crisis is partly because it’s so much more uneven regionally than most other OECD economies); the contribution of higher education to the UK’s innovation ecosystem, which is centred around major research-intensive universities; the importance of anchor institutions (the crisis in local authority funding means that universities have a key role to play in communities); the sector’s role, with further education, in developing the skills system.
But these essential activities depend on the resources that come from universities’ international competitiveness. That should be a lesson that all political parties will take with them into the general election campaign.
Anton Muscatelli is principal and vice-chancellor of the University of Glasgow.