What is the future of universities? That is the question many have been asking as a financial crisis engulfs the sector across the UK. With home student fees frozen since 2017, universities have focused on attracting more overseas students who can be charged as much as four times more to study than
UK students. While this has led to a surge in international student recruitment in the last five years, recent changes in visa regulations have brought this money-making operation to a sudden halt with a recent study showing that overseas enrolment in postgraduate-taught courses had decreased by 44%. At the same time, at least 45 universities have announced staff redundancies or course closures in the last few weeks. And what about Wales? The latest financial accounts of Welsh universities show that while the overall income from full-time home students has dropped by £16 million between 2022 and 2023, that from overseas students has gone up by £44m. As a result, the financial dependency on international fees in Welsh higher education has increased to 30% of all student income in 2023 (or £312m). This means that even a moderate decrease in the international market will have severe financial repercussions. And there are differences across the sector – while Cardiff, Swansea, Bangor, and Aberystwyth universities have collectively had a 6% growth in overseas income in the last year, post-1992 institutions such as the University of South Wales, Wrexham University, University of Wales Trinity St David’s, and Cardiff Metropolitan University have together seen an increase of 43% over the same period. The situation seems to be most acute at the University of South Wales (USW). Whilst it managed to attract an additional £15m in overseas fees in the last year, it also experienced a fall of £9m in home fees, the largest decrease of any university in Wales. In 2019, only 11% of its income came from overseas, but this had increased to 32% (or £48m) by 2023 thus ensuring that USW’s finances are now firmly entwined with persuading more international students to enrol. Unfortunately, and as this column pointed out last year, most of its overseas intake originates from Nigeria,
India,
Pakistan, Bangladesh, and Sri Lanka where students were most likely to bring their families with them to the UK. But with the UK Government now banning dependents from accompanying taught postgraduate students, it in inevitable that numbers will fall dramatically, leading to a serious financial problem for the university. There should also be concerns over the strategies adopted by USW and other universities to attract overseas students. Recent press articles have revealed that agents are paid vast amounts of money to bring international students to the UK, and it was reported in The Guardian that the University of Greenwich alone had spent £29m on agents in 2022-23. An examination of the last annual accounts for USW showed that there had been an increase of £6.2m in fees to overseas agents although, following a Freedom of Information request, it declined to reveal how much it had spent last year, citing ‘commercial confidentiality’ despite being a charity and not a business. However, as this increase in payments to agents equates to around 41% of the increase in overseas fee income, it suggests that as much as £20m could have been spent on agents to secure overseas students. In addition, USW revealed it had allocated nearly £10m on ‘scholarships’ for self-funded international students to provide a discount of up to £2,500 on certain courses. Such an approach is clearly not sustainable, and this level of subsidy suggests that USW may, after agents’ fees and scholarships are considered, be receiving less income from an overseas student than they would from the average home student. If that is the case, then this approach makes no financial sense whatsoever and comes across as a knee-jerk response by senior management to their failure to attract enough home students at a time when the numbers of those from the UK going to university has been growing. Whatever the reason, it is clearly not working given that USW became the first Welsh university this year to propose voluntary redundancies to cut costs. It also begs the question why an institution whose main campus is in the heart of the South Wales Valleys is spending so much to attract overseas students and not focusing its efforts to support the educational aspirations of some of the poorest communities in Europe? Unfortunately, its financial situation is not unique given the dependency on overseas income in the last few years and it is inevitable that other Welsh universities will also be looking to make budget savings over the next few months. Is it wholly the sector’s fault that it is now facing an uncertain future? Whilst responsibility for higher education is devolved, it is fair to say it has been largely ignored by Welsh politicians from all parties in recent years despite being a major employer across the country, its vital role in producing the workforce of the future, and its massive impact in developing ground-breaking research and innovation. Many of us who live and work in Wales know the critical importance of universities to our
economy and society. My great-grandfathers were among those quarrymen who gave their pennies to set up the first university in North Wales, and their legacy, and that of many others who valued education for their children, should amount to more than what is happening right now. Given this, it is imperative that the new Welsh Government now undertakes an urgent review of the future of our universities and conducts an honest and open debate on whether the Welsh higher education sector is fit for purpose, how it should be organised and funded in the future and, most importantly, does it meet the needs of our nation. If it does not, and our universities continue their decline, then Wales will be a poorer place in more ways than one.