THE BLOG

Brexit Threatens A Perfect Storm For UK Universities

20/03/2017 13:07

Like more than 80% of academics and a substantial majority of young people who will be most affected by Brexit, I voted to remain in the European Union.

British Universities have always been considered the global gold standard for quality but Brexit, in combination with reduced government funding, immigration policy, a changing 18 year-old demographic and the Higher Education and Research Bill, has created 'A Perfect Storm' for the sector.

Universities are big business. Last year there were 2.24 million students at British universities, generating a gross revenue of around £33.2 Billion and adding on average two to three times their turnover into local economies.

The total direct contribution to the UK economy is between £73 billion and £100 billion, depending on the figures one relies upon. Universities also employ more than 400,000 staff directly, and a further 10,000 spin-off companies.

There are now a number of direct issues raised by Brexit that will directly affect universities:

Student recruitment
Around 25% of students in the UK are not British citizens. At present some 130,000 (5.4%), come from the continental EU. This brings revenue of slightly more than £2.4 billion directly into universities, and a total of approximately £10 billion into local economies.

The most likely outcome of Brexit is that continental EU students will be required to gain Tier IV visas and will no longer have access to the UK Student Loans Company.

At present the vast majority of continental EU students draw down the available fee loans, and in some cases maintenance loans as well. They rarely pay it back, and it is for this reason that most of them come to the UK.

London-based institutions have a disproportionate percentage of non-UK EU students and will be most impacted by a drop in numbers. Low tariff post-92 universities have also placed an increasing reliance on UK EU students, and now that student number caps have been removed they have been increasingly turning to recruit in Europe as a solution to fill financial gaps.

As an example, one low-tariff London Post-92 institution currently has more than 2,000 non-UK EU students, almost all of whom take full advantage of the Student Loans Company. It is estimated that as many as 75% of these would not come to Britain without financial support, resulting in a revenue drop of more than £24 million for this university alone.

Without decisive action the total negative revenue impact the sector as a whole would probably be around £2.4 billion, which would eradicate the surplus made last year and place some institutions in severe difficulties.

Student Experience
No one should think of students simply as a source of revenue. The most important contribution of international students is the richness of perspective they bring to share with domestic students and others. This is essential in a globalising environment and contributes to mutual understanding and facilitating peace in an increasingly complex world.

We must also not ignore the contribution made by international staff. The potential loss of European colleagues may hasten the departure of academics from elsewhere in the world to the detriment of the student experience and research participation. The free movement of staff and students is vital in maintaining a sustainable, quality system.

Another possible casualty of Brexit may be the loss of access to the Erasmus Plus funding for travel and exchange. Currently more than 15,000 UK students receive additional funding to facilitate their study in other EU countries. For many, study abroad would not be possible without the £130 million agreed to support British students this year. Thousands of staff also receive funding to help European collaboration.

Access to research funding and third-stream revenue
The office for national statistics suggests that in the period from 2007-13 there was a net inflow of £3.4 billion to the UK for research from the EU. The government has guaranteed to maintain equivalent funding until 2019.

However, after this there are no guarantees, except to existing research partnerships that will continue beyond the 2019 date. Research may well be yet another of those areas, like health, farming and fisheries, that will be funded from the apparently inexhaustible savings that we will make by not paying into the EU?

The possible ineligibility for UK academics and institutions for EU funding is already having a perceptible effect. Continental EU universities are already withdrawing from planned research bids and academics are rejecting job offers from British universities and transferring to EU institutions. There is a genuine danger of a brain drain of the brightest and best academics seeking to secure their research futures.

There are those who say that any shortfall will be made up by increased investment from the private sector. Brexit supporters point to the recent commitment of the Danish pharmaceutical company, Novo Nordisk, for Oxford University to host a £115m diabetes research centre funded over the next 10 years.

Of course, there will continue to be investments in specialist areas where we have world-leading units and this should be applauded. But, this is not a demonstration that Brexit is brilliant. The big issue is about all those who will not invest in the UK now, such as Bill Gates. He has said that Brexit will make Britain 'significantly less attractive'. Microsoft has invested more than £1 billion pounds in UK research in the last few years but has indicated that it will no longer do so.

Lack of research investment will lead to reduced business investment, jobs and the UK GDP.

Soft power
Britain has a tradition of being the selected country of study for people who go on to be world leaders or individuals of influence. The Higher Education Policy Institute (HEPI) has undertaken research, which reveals that 55 world leaders - presidents, prime ministers and monarchs - took their higher education in the UK.

Nick Hillman, Director of HEPI, said: "We punch above our weight internationally partly because of the soft power benefits that arise from educating the world's leaders. It is staggering that 55 world leaders should have studied in a country of the UK's size. We benefit enormously from the fact that they did."

As a direct result of Brexit, international students feel less welcome and are turning to other providers. Research shows that students who do come to the UK believe that they are only valued for the money they bring, and now feel less loyalty to Britain than before for business and political alliances. This is a sad loss.

David Davis and Boris Johnson constantly chide the Remain camp for moaning and urge us to identify the great new opportunities that will be presented. It is sad to say that in higher education it is becoming increasingly difficult to identify opportunities in the face of growing threats.

We must continue to see how any agreed solution includes the continuation of the free movement of staff and students, protection of the Erasmus+ fund and continued participation in Europe-wide research.

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