Feb 18, 2011 - for pre-degree pathway courses. The previous government increased the threshold in 2010, and any further
Summary
Pathway to prosperity:
The Coalition government’s proposed reform of the immigration system seeks to reduce total net migration. The Coalition Agreement stated that whilst immigration has been beneficial to the economy and society, “to ensure cohesion and protect our public services, we need to introduce a cap on immigration and reduce the number of non-EU immigrants”. International students have received particular scrutiny, especially in relation to reducing immigration fraud as they represent the largest proportion of nonEU visas.
making student immigration work for universities and the economy
Whilst the aim to prevent fraudulent students is understandable, the method proposed by the government to enact this policy would deter many genuine students. In particular, two changes will block potential students:
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The increase in the minimum level of English language required for a student visa to be granted for university and for pre-degree pathway courses. The previous government increased the threshold in 2010, and any further increase could deter significant numbers of legitimate students from attending pre-degree courses which prepare them for university study. The proposal to increase the minimum level of student visa provision to courses only above A-level standard will hinder talented foreign students whose domestic education systems do not provide them with the equivalent of Britain’s year 13. A-level equivalent pathway courses are vital for many international students to be able to study at British universities.
These proposals will block genuine students from studying which will harm the British economy, higher education system and Britain’s global standing. Previous studies have sought to estimate the impact of the proposals but have noted the lack of reliable data. This study has had access to actual data on the 2009/10 cohort of students at five leading providers offering pathways to university study. Research by the Parthenon Group estimates that the five pathway college groups in our study represent almost half of the pathway market. Hence we are able to estimate the total impact of the changes on UK universities and the economy by scaling up the results from our
Thomas Brooks with Chris Nicholson
‘The Coalition: our programme for government’, May 2010. Recent reports include: E Acton, ‘The UKBA’s Proposed Restrictions onTier 4 visas: implications for University recruitment of overseas students’, The Higher Education Policy Institute, 18 February 2011, S Mulley and A Sachrajda, ‘Student Migration in the UK’, Institute for Public Policy Research, 22 February 2011, The Bell Trust, ‘The Student Immigration System: a Consultation. Response from the Bell Educational Trust’, 11 February 2011. The pathway providers included in our study are The Cambridge Education Group, INTO University Partnerships, Navitas, Kaplan International Colleges and Study Group UK.
February 2011
study of the five pathway providers. From this data we estimate that:
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The pathway providers examined, which work with more than 30 British partner universities, will lose the majority of their business: 70% of their students currently begin on (B1) English language levels below the proposed new minimum standard, and 60% study at a level equivalent to year 13 (NQF level 3).
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Universities will lose thousands of students. In total more than 20,000 students per annum progress from pathway colleges. This would mean a loss of £600 million annually from British universities.
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This year over 7,000 students progressed to British universities from the language level (B1) that the government is proposing to block.
— Pathway to success
There are clear tensions between efforts to create a re-balanced, competitive economy and the commitment to cap immigration. :
Up to £1.34 billion is spent annually by international students from pathway providers on basic living costs in Britain. Combining this with university tuition fees of £600 million, their total contribution is almost £2 billion per annum.
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A total of 24,000 UK jobs in education and the broader economy are supported by international students who have progressed from pathway colleges.
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Even if a more conservative assumption were used that the 60 per cent of students who have to take NQF level 3 courses no longer attended pathway colleges, then it is still estimated that around 14,400 FTE jobs and spending of £1.2 billion would be lost.
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A reduction in international students will limit future networks with business and politics, and could be especially detrimental to relations with significant markets such as Japan, South Korea and China, which do not have an equivalent domestic year 13 (NQF level 3).
Making Britain ‘open for business’ was one of George Osborne’s economic benchmarks. As the figures above show, there are clear tensions between efforts to create a competitive economy and the commitment to cap immigration.
CentreForum has consistently argued that a fair migration system can enhance Britain’s position in the contemporary globalised economy. Philippe Legrain’s report ‘The economics of migration’ (CentreForum, September 2008) argues that immigration restrictions are economically perverse, and that Britain should aim to employ a migration policy that encourages a progressive rather than reactionary society. Alasdair Murray’s ‘Britain’s points based migration system‘ (CentreForum, January 2011) suggested improvements for the Points Based System (PBS), and emphasised the importance of the fiscal contribution made by individuals on Tier 4 student visas. We believe that international students should not be categorised as migrants. Rather, a properly functioning immigration system should consider students as temporary visitors. The only students remaining will be those who apply for a new visa based on a job offer or high level of skill. It is therefore misleading to include student visas in figures for permanent and long term migration. We recommend therefore that students should not be included in any immigration cap. Universities are currently the seventh largest employment sector in the British economy. A recent report by McKinsey suggests that if Britain maintains its share of the growing market, international students could provide £5 billion a year in tuition fees to universities by 2030. Much of this would be put at risk by the proposed immigration changes. There is particular potential for increased revenue from non-EU students because the international student market is growing rapidly, Britain’s world-class universities are maintaining their share of the market, and the only country with a higher share – America – has seen its overall proportion fall significantly.
The Conservative Party, ‘A new economic model: eight benchmarks for Britain’, February 2010.
See McKinsey and Company, ‘From austerity to prosperity: Seven priorities for the long term’, November 2010.
Summary of data direct from five pathway providers and estimated total impact on whole sector Current figures
The 5 providers in our study
Whole pathway sector
Percentage of total progressing students from B1
70%
70%
Progress of B1 from pathway to partner universities
7,000
14,000
Progress rate for B1 students
82%
82%
Progress rate for B2 students
84%
84%
Percentage of students on NQF 3 level
60%
60%
Total progressing from NQF level 3 courses
6,000
12,000
Students progressing from pathway to university
10,200
20,400
Projected impact of proposals (range is based on assumption that between 60 and 100 per cent of students are lost) Annual contribution of university fees
£180 - 300 million
£360 - 600 million
Annual total contribution to UK economy
£580 - 970 million
£1,160 – 1,940 million
Jobs at pathway providers (FTE)
1,140 -1,900
2,280 – 3,800
Jobs at universities (FTE)
2,400 – 4,000
4,800 - 8,000
Jobs in broader economy (FTE)
3,600 – 6,000
7,200 – 12,000
All jobs
7,200 – 12,000
14,400 – 24,000
Pathway to success —
The Prime Minister committed to cut annual net migration from 200,000 to “tens of thousands”. This represents a shift from the Points Based System, which did not set an explicit nominal limit. If we view higher education for international students as an export service industry – spending on higher education and other services comes from foreign sources – then the pathway sector contributes £2 billion a year in exports, greater than the management consultancy industry. Moreover, if growth continues as McKinsey predict, by 2030 higher education would generate a higher value of service exports than the £7.5 billion that the whole computer services sector currently generates. There is a number of changes which would strengthen the Tier 4 student visa system without preventing genuine students from studying in the UK. These include proposals to:
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Improve the Highly Trusted Sponsor (HTS) system for higher education institutions with stronger checks and inspections.
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Streamline the accreditation of HTS from five competing bodies into a single uniform accreditation body.
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Increase border controls and tracking, and encourage more collaboration between the UKBA and education institutions.
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Give the more accountable HTS institutions exclusive rights to sponsor pre-degree Tier 4 student visas.
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Continue to allow HTS to offer year 13 (NQF level 3) foundation courses.
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Check commitment of applicants by requesting a deposit before study or requesting fees and living costs up to a year in advance, which could be deposited in an escrow account.
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1. Introduction Immigration has become a major policy issue, and since the 1990s Britain has consistently experienced net immigration. It has become a particularly salient and emotive issue since the global financial crisis led to economic contraction and higher levels of unemployment; emigration to Spain has decreased and immigration has increased from countries including Greece, Portugal and Ireland as their economies have stuttered. However, the government cannot block EU nationals because of freedom of movement laws, so has focused on non-EU migration. The Prime Minister committed to cut annual net migration from 200,000 to “tens of thousands”. This represents a shift from the Points Based System (PBS), which did not set an explicit nominal limit. Having agreed upon the necessity to reduce net migration with a cap, international students have come under scrutiny as they accounted for three-quarters of all visas in 2009:
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Tier 1: 27,000 visas Tier 2: 34,000 visas Tier 3: Closed Tier 4: 270,000 visas Tier 5: 37,000 visas
The PBS was first introduced in 2008, and sought to bring transparency and objectivity to migration policy. It employs core criteria such as education and language aptitude, and can add points for other factors such as job offers. PBS is a predominantly supplyled system, as opposed to a demand-led one in which individual employers have greater influence over migration. The PBS was split into the following five categories: Tier 1: Highly skilled migrants who can be admitted without a job offer. Tier 2: Admits migrants with job offers, and can add a demand-led dimension to the PBS. Tier 3: Short-term and low skilled labour, this route has been suspended. Tier 4: Student visas require a certificate of sponsorship from an educational institution.
International students could be required to acquire health, personal and travel insurance as conditions of visa provision.
Tier 5: Youth mobility and mainly unpaid or temporary workers. Employing a hard cap and a generally supplyled PBS gives the government control over immigration, but reduces the adaptability of the labour market; by its very nature, a cap reduces flexibility and is even more supply-led than the original PBS. Moreover,
D Cameron, ‘The Andrew Marr Show’, BBC 1, 9 January 2010. Home Office Statistical Bulletin, ‘Control of Immigration: statistics United Kingdom 2009’, August 2010.
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The objectives announced in the student migration consultation paper are to eradicate abuse of the student visa system and to ensure that only the “brightest and best” students are admitted.
disingenuous applicants it will limit the ability of students to work whilst studying and, in an effort to provide more job opportunities for domestic students, will close the Tier 1 post study work route. This section focuses on the consequences of the increase to a B2 threshold of English language and the potential removal of Tier 4 visas for NQF level 3 foundation courses. The government’s consultation paper highlights two benefits from limiting nonEU students:
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Restricting fraud: There has been abuse of the system after non-EU citizens enter under false pretences of study. This problem is particularly caused by bogus education institutions and poor border control and scrutiny of applications.
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Meeting the cap: Limiting international student numbers can help meet the pre-election pledge and deliver a cut in immigration figures. Two-thirds of nonEU migrants who enter the UK come on student visas. However this does not affect long-term migration if they return home after studying or reapply for a Tier 1 or Tier 2 visa.
by focusing on net migration, the policy becomes dependent on the number of departures from Britain, which further limits adaptability within the system. Nothing can be done to prevent unskilled EU workers from entering the UK. This is why, as well as promising to minimise abuse of the system, support the use of e-borders and reintroduce exit checks, the Coalition Agreement committed to introduce an ‘annual limit’ on the number of non-EU migrants admitted. But making disproportionate cuts to non-EU migration risks skewing broader national goals such as fostering a vibrant economy. This paper begins by introducing the context of the migration debate, and discusses the government’s new proposals. It then explains the role of pre-university pathway providers, and considers the potential impact of the proposed immigration reforms on jobs, education and the economy. It then examines options to tighten the visa system for students which will be considerably less harmful. The paper concludes that the proposed reforms are too restrictive and will unnecessarily harm the British economy, higher education and Britain’s international ‘soft power’.
2. Government proposals Proposed cap to focus on preuniversity students The general objectives announced in the student migration consultation paper are to eradicate abuse of the student visa system and to ensure that only the “brightest and best” students are admitted. The proposals build on measures already introduced by the previous government to tighten up the student visa system. To this end, the main proposals increase scrutiny of compliance and toughen entry criteria, such as raising minimum English language and academic requirements. It proposes to increase Highly Trusted Sponsor (HTS) scrutiny, and subsequently extend exclusive permission for HTS to run pre-degree level courses such as NQF levels 4 and 5. To deter further
The symbiotic and reinforcing nature of these two desired policy outcomes is emphasised by the assertion that: “The aim of minimising abuse also coincides with the Government’s intention to reduce annual net migration to the UK to sustainable levels, in the tens of thousands a year. The Government has started its reduction programme through a limit on the number of non-EU economic migrants admitted to the UK to work. The Government has made clear that it will also expect the student route to make its contribution towards reducing net migration to the UK.”10 So Tier 4 is in the spotlight because it is a major contributor to non-EU migration. According to government figures, 270,000 visas were issued to students in 2009, and non-EU students accounted for 76 per cent of total net immigration.11 Tier 4 is also under scrutiny because it is seen as particularly vulnerable to fraud. According to government research, students were non-compliant at just 8 per cent of public institutions, compared with 14 per cent at language schools and 26 per cent at private institutions.12 This is significant, because it is also estimated that between the launch of Tier 4 in March 2009 and March 2010 almost 40 per cent of Tier 4 students were undertaking courses below degree level. These students are discussed further in section 3 of this paper.
10
Cabinet Office, ‘The Coalition: our programme for government’. Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’, December 2010.
11 12
Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’. Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’. Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’.
Pathway to success —
The changes to language requirements and the removal of foundation courses for university studies will not reduce the risk of student visa fraud, and will harm the higher education sector.
Limiting fraud There has clearly been a problem with abuse of the immigration system, and in particular theTier 4 route. Many examples have emerged of students using forged documents to attend British education institutions, as well as sham providers offering visas in return for cash, sending their students on thinly veiled ‘work placements’ or providing no teaching whatsoever. Furthermore, the evidence is that most fraud on Tier 4 visas came from private education institutions and, in particular, from courses below degree level. It is vital to differentiate clearly, however, between bogus colleges and genuine providers which offer pre-degree preparation for international students and are closely linked and aligned with specific university partners. Indeed, around half of foreign undergraduates have previously studied non-degree courses in the UK, which are a “major feeder route for universities”.13 As a way to reduce abuse of the system, the HTS licence was introduced in April 2010 and gave licence-holding institutions sole rights to teach NQF level 3 courses. HTS were also given exclusive rights to offer visas for courses involving work placements at NQF levels 4 and 5. The Coalition now wants to tighten this further following immigration minister Damian Green’s warning that last year as many as 91,000 students came to institutions that were not HTS. The government recognises that there are important courses below degree level that should remain within Tier 4, so will give HTS exclusive rights to sponsor students in courses of NQF levels 4 and 5. The HTS regime itself will be tightened; by July 2010, 56 Tier 4 sponsors had seen their licences revoked, and of these three-quarters were private institutions for further and higher education. This emphasises the importance not only of having HTS, but also of ensuring that institutions awarded HTS status are regulated effectively. Currently private institutions are subject to HTS accreditation by one of five UK Border Agency-approved accreditation bodies.14 The problems with the Tier 4 visa route have already been outlined, and in response the Labour government made a number of amendments to the system in 2010, including:
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Reducing work rights of students below degree-level.
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Raising the minimum level of English to B1.
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Limiting the ability of dependants to work.15
13 14
15
Restricting the ability of students to bring dependants.
J Boxell, ‘Academics plead for foreign students’, Financial Times, 1 February 2011. These are Accreditation UK, the Accreditation Body for Language Services, the Accreditation Service for International Colleges, the British Accreditation Council and the Church of England Ministry Division. House of Commons briefing paper, ‘Immigration: international students and Tier 4 of the pointsbased system’, 23 July 2010.
These changes helped remove the incentive for a proportion of disingenuous applicants, and the new policy should also be judged by the extent that it achieves this. The current government’s proposals to tighten the rules will only allow students to work on campuses during term time, and to work elsewhere during holidays. Also, students will only be allowed to have dependants visit if they are studying in Britain for more than 12 months, and even then these dependants will not be allowed to work. These proposals may deter postgraduate students, although they also reduce incentives to come to Britain on a student visa for purely economic motives. Thus these proposals will help reduce the risk that students come to this country with the aim of working and consequently, in the opinion of some, substituting for British workers. However, the same cannot be said of two other proposals: the changes to language requirements and the removal of foundation courses for university studies (NQF level 3). These will not reduce the risk of student visa fraud, and will harm the higher education sector. These changes come after the previous government increased language requirements last year, and as the Bell Educational Trust argues, “it is still far too early to assess the full effectiveness of the measures already introduced”.16
Introduction of B2 minimum and potential removal of NQF 3 These two proposals build on Labour’s initial reforms by increasing the minimum English level from B1 (IELTS 5.0) to B2 requirement (IELTS 6.0), and consider removing NQF level 3.17 The policy emphasises the desire for students to demonstrate:
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Proficiency in English language. Educational courses.
achievement
in
relevant
That students at British universities have these attributes is important – good English is vital for pupils to derive maximum benefit from British higher education and society. 16 17
The BellTrust, ‘The Student Immigration System: a Consultation. Response from the Bell Educational Trust’, January 2011. The International English Language Testing System is a standardised test of proficiency in English language.
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The Common European Framework of Reference for Languages divides learners into three broad divisions which can be divided into six specific levels: A Basic Speaker A1 Breakthrough or beginner A2 Waystage or elementary B Independent Speaker B1 Threshold or pre-intermediate B2 Vantage or intermediate C Proficient Speaker C1 Effective Operational Proficiency or upper intermediate C2 Mastery or advanced
for an international student to commence university study in Britain. Moreover, willingness to study a preuniversity course at B1 level indicates that they do have motivation to learn, and should not reflect negatively on their ability. Indeed, many of the brightest and best students originate from countries where little or no English is spoken and which use completely different alphabets, such as Korea and Japan. These countries also represent the lowest risk of migration fraud, and comply with plans to make simpler checks for low-risk applicants.19 The proposals would mean that students would be excluded from university preparation level study who:
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Are very good at mathematics, for example, but not as proficient at English language when they commence studies. Language competency is not linked to intelligence or aptitude to learn and acquire knowledge, and a preparation level course, undertaken at a specialist provider, is designed to enable them to gain sufficient English language skills to support successful onward study.
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Want to study a subject in Britain that they are skilled at, but whose domestic education system does not provide an equivalent of our year 13 education, such as China and Malaysia.
Currently the majority of students at pathway providers study English language at B1. Students at this level are able to: “Understand the main ideas of complex text on both concrete and abstract topics, including technical discussions in his/her field of specialisation. Can interact with a degree of fluency and spontaneity that makes regular interaction with native speakers quite possible without strain for either party. Can produce clear, detailed text on a wide range of subjects and explain a viewpoint on a topical issue giving the advantages and disadvantages of various options”. Source: The Common European Framework of Reference for Languages
The proposals argue that “English language is a key indicator of a student’s ability and motivation”18 to complete a higher level course, and so all Tier 4 visas will be subject to a secure English language test for competence at B2 level. Applicants who wish to improve their English can still study at language colleges via the six month student visitor route, and the government has temporarily introduced an extended student visitor with a duration of up to eleven months. When combined with the removal of B1, however, this could still act as a deterrent; students needing to take a foundation course will have to come to complete a language course on a student visitor visa before re-applying for aTier 4 visa - a process which could take two academic years before starting university. Having completed a language course on a visitor visa, students must return home to apply for a Tier 4 visa if they wish to study an academic foundation course. This is problematic as there is often a short period between the conclusion of the language course and the start of a foundation course. Especially during busy periods, the application process can take weeks or months, which can prevent students from enrolling on a foundation course in time. This can significantly extend the time it takes 18
Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’.
These proposals run the risk of barring an unnecessarily high number of genuine students that everyone agrees we want to attract. As Professor David Wark of Imperial College, London, told the Home Affairs Committee on student visas: “I can run through each one of the proposals in order if you like but, all in all, they seem to be producing an attempt to reduce the numbers by making it less attractive to come here to study. We feel that that would be a disastrous thing for Imperial. Imperial competes for the very best students in the world, and if you simply make it less attractive to come here to study the people you deter first are the very best, not the scammers that you want to get rid of”.20
3. The role of pathway colleges The five providers considered in our analysis, which made data available to CentreForum, are The Cambridge Education Group, INTO University Partnerships, Kaplan International Colleges, Navitas and Study Group UK. Together they are estimated by the Parthenon Group to represent about half the market for pathway providers. These providers operate ‘pathways’ to degree studies at their respective partner British universities. The provision is specifically designed to prepare non-EU students for entry to over 30 partner universities, including Exeter, Glasgow, 19 20
Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’. D Wark, House of Commons oral evidence, Home Affairs Committee: student visas, 1 February 2010.
Pathway to success —
70 per cent of the pathway providers’ most recent cohort of students began study below the new B2 requirement.
Leicester, Manchester, Queen’s University Belfast, Sheffield, Stirling and Swansea. These providers operate pathway colleges that are normally part of the partner university’s oncampus facility, offering a highly embedded and integrated approach to the student experience and academic provision. Non-EU students come from very different learning backgrounds and this process facilitates their assimilation to the university’s learning environment. Students are confirmed as having a place at a pathway provider and a partner university from the start of their pathway studies on the basis that they meet progression requirements. Pathway providers primarily operate taught academic programmes for students requiring foundation studies (NQF level 3) and languages to underpin their onward undergraduate degree studies. Some also offer studies at first year undergraduate degree or equivalent (NQF level 4), and Masters preparation. The curriculum is normally specific to a student’s ongoing degree plans and the partner university’s designated learning outcomes. All studies cover fundamental cognate academic subject specifics and associated study skills. For students taking NQF level 3, focus is placed on raising students to a standard in their specific subject equivalent to year 13. The development of English language skills is also a vital part of the preparation provision. It ensures that international students acquire appropriate language skills prior to, and during, academic study. These language skills are tailored with future study and the social environment in mind, and, by being immersed on a university campus, students acclimatise and enhance their relevant understanding and use of English. Pathway providers operate under two key models:
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Legally binding formal articulation agreements with partner universities, under which both parties are accountable to a ‘Partnership Board’.
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Joint ventures with partner universities and accountable to a Joint Venture Board.
Under both models there must be an equal number of representatives from both the university and the pathway provider on any Board, which ensures that there is an equal and cooperative relationship. All partner universities and joint ventures operate directly within the Quality Assurance Agency’s (QAA’s) collaborative provision protocols. All of the pathway colleges in our study are individually accredited with the main bodies including the British Accreditation Council (BAC) and Accreditation UK. All study provision is fully approved as working within the quality assurance framework of the specific partner university.
4. Direct economic impact of proposed changes The government stresses that the positive benefits of students, including fees, spending and relationships, “is not to be underestimated”, and asserts its commitment to attracting the best students to British universities.21 How then will the proposed changes to English language capability and removal of ability to attract NQF level 3 students affect universities and the wider economy?
Pathway Providers We analysed the impact of the proposed changes on five of Britain’s largest pathway providers, and the likely consequences for British universities. This work shows that 70 per cent of the pathway providers’ most recent cohort of students began study below the new B2 requirement, so it is likely that the majority of their business would be lost if B2 becomes the new minimum level. This is despite the fact that the progression rates between students on B1 and B2 are very similar.22 The similarity of the progress rates indicates that initial English language capability is a poor guide to the risk of system abuse among students at pathway providers. Further, 60 per cent of their students are involved in foundation courses (NQF level 3 pre-degree courses) designed to raise students, from countries where the national curriculum does not include a year 13, up to A-level.23 Our calculations are based on figures for the five pathway providers; in order to generate estimates of total impact we have doubled the results from the five pathway providers based on data from the Pantheon group which calculated that these five represented just under 50 per cent of the pathway college market. Considering that such a high proportion of their business is dependent on students studying at B1 and NQF level 3, pathway providers will suffer significantly. Our study of five pathway providers suggests that were they to stop operating as a result of the proposed policies, 1,900 FTE jobs would be lost at the providers themselves, which 21 22 23
Home Office UK Border Agency, ‘The Student Immigration System: A Consultation’. 82.4 per cent of B1 level students progressed to university from the 2009/10 cohort, compared with 83.8 percent from B2. 79.4 per cent of students enrolled in 2009/10 foundation courses progressed to British partner universities from the five pathway providers in our study.
— Pathway to success
The proposed immigration reforms risk positioning British universities at a competitive disadvantage against those in other countries. indicates that 3,800 jobs would be lost from the whole pathway provision sector. A more conservative assumption would be that if 60 per cent of students (those who have to take NQF level 3 courses) no longer attended pathway colleges, then around 1,200 FTE jobs would be lost directly at the five pathway colleges, and 2,400 from the whole sector. The economy would also lose the spending of students whilst on the foundation courses.
Universities International students are becoming increasingly important for universities; currently 37 per cent of total university fee revenue comes from non-EU students, which constitutes 8 per cent of all university income.24 The proposed changes to immigration policy would mean that universities could lose a large share of these international students. Our research shows that the five pathway companies took on 12,500 students for the 2009/10 academic year, and of these over 10,000 have so far progressed to university. These students will pay £300 million in fees to their universities during the period of their study. Assuming an equal number of students continue to enrol and progress in future, this would mean an annual loss of £300 million per year to universities, which rises to £600 million annually when considering the whole pathway market. This will hurt universities at a particularly difficult time financially. If students from the pathway colleges in our study ceased attending British universities, the universities would suffer 4,000 job losses.25 Similarly, the loss from the whole pathway sector for university jobs would be around 8,000. Students studying to an English language level of B1 are a major component of predegree level intake. Following the 2009/10 academic year almost 8,000 students commenced study at the B1 level, of which over 7,000 students have progressed onto partner universities from the five pathway college providers. Demanding a higher level of English will preclude students from study in the UK and will lead many to choose alternative colleges in Australia, 24 25
A Murray, ‘Britain’s points based migration system’, CentreForum January 2011. The figure of 4,000 university figures is based on a multiplier of 13.4 jobs created per £1 million of university revenue. See ‘UK Universities and the economy: Summary issues and regional revenue-employment / output multipliers’, U Kelly and I McNicoll, November 2010.
Canada, America or Europe. Of course some students will still attend British universities having completed NQF level 3 courses in other countries, and could improve their English on a student visitor visa before studying at British universities. However, we think this is likely to be a small minority of students and this would significantly harm the competitiveness of UK universities.
The British economy Higher education is already the seventh largest employment sector in Britain. The proposed immigration reforms risk positioning British universities at a competitive disadvantage against those in other countries. The benefits of nonEU students spread far beyond university campuses, as students spend money on accommodation, food, drink and other living costs. Tuition fees and broader spending directly create jobs in local economies, which then lead to further spending from these employed individuals, creating further jobs through a multiplier effect. Our research indicates that pathway students enrolled at the main five pathway providers in the 2009/10 academic year will spend up to £670 million in the British economy beyond their fees on basic living requirements, both during the pathway courses and at universities.26 This does not include the potential contribution to areas of the economy such as tourism, which is boosted by students exploring Britain during weekends and holidays, sometimes with visiting family and friends. Combining fees and basic living expenditure, the 2009/10 cohort from the five providers alone will contribute almost £1 billion to the British economy in the duration of their studies. If we assume that there is a constant intake of international students at this level, then this figure can also be seen as an annual contribution of £1 billion per year. These students directly generate 1,900 jobs at pathway providers and up to 4,000 at universities.27 At least 6,000 additional jobs are funded in communities around universities and pathway colleges, meaning a total of around 12,000 jobs are supported by students from the five pathway providers.28 Even if we assume that only 60 per cent of students are lost, on the extreme assumption that the remainder can improve their English to B2 on student visitor visas, the policy would still cost almost £600 million a year and over 7,000 jobs. 26
27 28
Spending figure based on recommendations from the British Council. See www.britishcouncil. org/global-common-etg-resource-sheet-tuitionfees-and-cost-of-living.pdf. The figure of 1,900 is based on staff figures at pathway colleges, and total losses assuming they ceased operating business as a result. The figure of 6,000 extra jobs is derived from the multiplier for employment in other regional sectors of 13.8 per £1 million of university revenue. See ‘UK Universities and the economy: Summary issues and regional revenueemployment / output multipliers’, U Kelly and I McNicoll, November 2010.
Pathway to success —
Moreover, the Parthenon Group’s study found that the five pathway providers in our research have 46 per cent of the university preparation market for international students. Thus the total contribution of international students who have enrolled on pathway courses is up to £2 billion per annum. This also means that up to 24,000 jobs depend on international students using pathway courses. Even using the conservative assumption that students would be able to improve their English to B1 levels despite the proposals, if all students who needed NQF level 3 courses did not study in the UK, over 14,000 jobs and revenue of £1.2 billion would be jeopardised by the migration proposals. Another advantage of international students is that because they are generally young, healthy and committed to full-time study, they have very little demand for support from the welfare state. They do not create a significant drain on the NHS. Full-time students do not claim unemployment benefits, and do not drive down wages as they are not competing for jobs - measures to curb their ability to work will only strengthen this case.
5. Broader economic benefits of international students Export earner Provision of higher education for non-EU students can be viewed as an export industry, because money spent by international students comes from their home countries. Students on pathway courses alone can be considered to contribute to an export industry worth up to £2 billion annually. This current contribution is greater than the service sector export of British management consultancy which had exports of £1.84 billion in 2008.29 It is also important to look beyond short term cash benefits derived from international students, and to consider longer term growth. This was the focus of a recent report by McKinsey, which considers medium and long run growth in the British economy, and presents higher education as an important pillar of economic prosperity.30 Higher education currently provides one of the most significant areas of expansion for jobs in the British economy at a time when most other sectors are sluggish. Whereas this paper has so far taken a traditional view of international students as contributing fees and improving research quality, higher education is also increasingly being viewed as an important industry. Universities are particularly important from this perspective, and four factors suggest that they will become increasingly so:
Since 1998, the number of non-EU students in Britain has doubled.
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Large growth in the international student market.
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Market leading brands in Britain.
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Nationwide spread of universities.
According to OECD research, there were over 1 million individuals studying at higher education institutions outside their home country in 1980. This figure has now tripled to 3.3 million foreign students, which has been boosted by recent annual growth in students of 7 per cent.31 Since 1998, the number of non-EU students in Britain has doubled.32 Britain also has truly world class universities, which can compete on the international market. Our strength in this area goes well beyond Oxbridge, the English-speaking world’s oldest universities. According to QS rankings, Britain is home to 19 of the world’s 100 best universities.33 This is largely thanks to Britain’s tradition of university education, which is boosted by the significant natural advantage of teaching in English, the international language. The potential for growth is even greater if we consider that the only country with a higher share of the international student market, the United States, has seen its proportion of total international students decline from 24 per cent in 2000 to 19 per cent by 2008. A primary reason for America’s relative decline in this sector is its restrictive immigration policy.34 In contrast to the American experience, the UK has held its market share during this period. Thus combining the recent trend of 7 per cent growth of the international student market with Britain’s ability to hold share, McKinsey estimate that by 2030 we could host 1 million extra students. Even if only half a million additional students attended, they would contribute £5 billion to the British economy in tuition fees alone, which could create more than 35,000 academic jobs and 45,000 support jobs in British higher education.35 Increasingly, as abuse of the system is removed, foreign students should be considered to be as important to the economy as foreign tourism. 31 32 33
29 30
Office for National Statistics, ‘International Trade in Services 2008’, R Birt and H Dinsdale, March 2010. McKinsey and Company, ‘From austerity to prosperity: Seven priorities for the long term’, November 2010.
Competitive opportunities as the market leader declines relatively.
34 35
McKinsey and Company, ‘From austerity to prosperity: Seven priorities for the long term’, November 2010. A Murray, ‘Britain’s points based system’, CentreForum 2011. QS World University Rankings 2010, see www. topuniversities.com/university-rankings/worlduniversity-rankings/2010. McKinsey and Company, ‘From austerity to prosperity: Seven priorities for the long term’, November 2010. McKinsey and Company, ‘From austerity to prosperity: Seven priorities for the long term’.
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To make the most of our market share and comparative advantage we need to see higher education as not just a vital public service but also a significant source of economic growth potential. The fourth major advantage of the higher education sector is that it is spread across the whole of Britain, with pathway partners in places such as Belfast, Exeter, Glasgow Liverpool, London, Newcastle and Swansea. This is crucial for a balanced national economy, and is exactly the way to ‘ensure the whole country shares in rising prosperity’ as outlined in the Conservative Party’s economic benchmark proposals.36 A move that limits the growth of universities appears to contradict this objective. The McKinsey report stresses that to maintain competitiveness, the government must ensure that it is easy for legitimate international students to study here. It focuses especially on the potential limitations from changes to the PBS and other immigration restrictions.37 The report also warns that to make the most of our market share and comparative advantage we need to see higher education as not just a vital public service but also a significant source of economic growth potential. To this end more work can be done to promote British universities abroad, but also crucially reforms to Tier 4 or the PBS in general must not prevent legitimate students from higher education. McKinsey further recommend that higher education is excluded from any migration caps.
Wider impact on UK global standing International students also provide significant benefits which cannot be readily quantified. Universities significantly promote British ‘soft power’ around the world, as graduates network at internationally high levels. The majority of international students who study in Britain leave with a positive impression, and share a deeper understanding of British society and culture with their compatriots. This is also likely to encourage them to maintain ties with British connections in business, political and financial spheres. Similarly, British students make connections with future foreign leaders and business people, and these relationships will be particularly beneficial with emerging powers such as China and India. 36 37
The Conservative Party, ‘A new economic model: eight benchmarks for Britain’, February 2010. McKinsey and Company, ‘From austerity to prosperity: Seven priorities for the long term’.
International students also make large cultural contributions to the fabric of university life. They enhance the learning experience for domestic students by bringing a different world view to their study approach, and can help domestic students develop a greater understanding of global issues. Foreign students also increase the diversity of culture on campuses and beyond, and can help to raise awareness of international events and cultures. In an increasingly globalised world, it can only help to increase our awareness of societies beyond our own shores.
6. Policy Options In this section we examine possible measures which would reduce risk of abuse of the system whilst not deterring genuine students.
Colleges Unreliable operators have harmed the reputation of the sector, and allowed many individuals to enter Britain under false pretences. Attention and vigilance of any new student immigration policy should be focused on this aspect and continue the work already completed. The HTS system needs to be reviewed, in close cooperation with relevant stakeholders, to make it more appropriate to the sector with better defined and more realistic criteria, and to make the process more transparent. Only colleges with HTS status should be allowed to sponsor Tier 4 visas. There is also a risk with five agencies offering accreditation that there is a race to the bottom, as less stringent agencies can gain custom from colleges that have been rejected by another agency. Thus one option could be for government, pathway providers and universities to work with these accreditation agencies to form a central accrediting body, which could collaborate with the Quality Assurance Agency for Higher Education.
Students We consider that there are fairer and more effective ways to deter fraudulent students and applications than those being proposed. By using B2 language as a proxy for intelligence and motivation to study, universities will lose many talented students. Language skills at pre-university level are not a strong indicator of a student’s academic ability, or of the likelihood that they will complete a degree or break the terms of their visa. Indeed, our research shows that there is a very minor difference between progression rates from students who commenced at the B1 and B2 levels. 82.4 per cent of B1 level students have so far progressed to university from the 2009/10 cohort, compared with 83.8 percent from B2. Similarly, blocking NQF level 3 does not practically eliminate fraudulent or untalented students, but penalises students who want to raise their qualifications in specific academic subject to A-level to allow them to attend university.
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The HTS system needs to be reviewed, in close cooperation with relevant stakeholders... Only colleges with HTS status should be allowed to sponsor Tier 4 visas.
The government wishes to ensure that students are genuine and committed to study. One way to do this would be to require students to pay their fees up front as well as a deposit if necessary, which could be processed via an escrow account. Similarly, in cases where a student or college is not fully trusted, a bond could be demanded which is repaid when the student completes their studies.
Further proposals A further step which would make Tier 4 more watertight is to improve transparency and record-keeping at both education institutions and border controls. The introduction of eborders should make it easier for the United Kingdom Border Agency (UKBA) to know when students leave the country, and the reintroduction of exit checks scheduled for this year will further improve standards. As part of the HTS reform, colleges could agree to share their admission and progression data with the government, and there is more scope for the Higher Education Statistics Agency to cross-reference records with visa details to gain a more detailed account of the student immigration system. As with all policy, greater scrutiny and enforcement will inevitably incur greater costs. However, there are relatively straightforward ways to ensure that there are fewer bogus students without increasing the cost to the taxpayer. For example, a modest levy could be placed on each international student which could be put into a fund to improve HTS regulation, application checks and cooperation with the UKBA. Similarly, although they have a limited use of the welfare state, if deemed necessary students could be required to purchase health, travel and personal insurance as part of their visa claim to minimise potential costs to the state. Furthermore we consider that there is a strong argument for removing Tier 4 from net migration figures. Once reforms outlined above have been completed, the government will have more ability to locate and enforce the original conditions of visa provision. Students who return home upon completion of their studies have not contributed to long term immigration, whereas students who remain with Tier 1 or 2 visas should be included in net migration, albeit distinct from their earlier Tier 4 status. In this way, the government could seek a more realistic limit without harming the higher education sector and the broader economy.
7. Conclusions and Recommendations The government is seeking to tackle flaws in the Tier 4 student visa system by raising requirements, and increasing the scrutiny of students and education institutions. Reducing the ability of students to work and preventing their dependents from seeking employment will further decrease incentives
for bogus applications. A more reliable HTS system will strengthen the legitimate predegree pathway providers that provide a vital service in preparing international students for university study. Additional proposed restrictions - such as increasing the minimum language requirement to B2 and ending provision of Tier 4 visas for NQF level 3 courses - are purportedly designed to ensure only the best students are admitted. But this report has shown the substantial adverse impact on UK universities and the wider economy of such an approach. The potential impacts of the policy are:
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The five pathway providers considered in CentreForum’s study will lose the majority of their business – 70% of their students are on B1 courses and 60% study at NQF level 3. This would make their current business models no longer tenable.
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Universities, who currently receive 37% of fee revenue from international students, will lose thousands of students. This year more than 14,000 students progressed to British universities from B1 language levels at pathway colleges.
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In total students progressing from pathway colleges contribute £600 million per annum in fees to British universities.
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An estimated further £1.34 billion per annum in spending to the UK economy is created beyond their tuition expenditure, creating a total contribution approaching £2 billion per year.
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24,000 jobs will be lost in education and the broader economy.
There are fairer and more effective measures to ensure that students are committed to genuine study. If we consider higher education as an industry and a long term source of job creation, it is clear that this policy is counterproductive. This comes at a time when the only country with a greater share of the international student market is experiencing relative decline, and Britain is maintaining its share of growth. McKinsey predicts that by 2030 British universities could receive an additional £5 billion per annum in tuition fees from international students. Thus it is especially important not to harm higher education by unnecessarily tightening student visa requirements. We consider that Tier 4 students should be removed from net immigration caps as they are temporary visitors rather than permanent
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migrants. Our further recommendations for more constructive student immigration policy are to:
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Improve the HTS system with stronger checks and inspections.
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Streamline the accreditation of HTS from five competing bodies into a single uniform accreditation body.
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Increase border controls and tracking, and encourage more collaboration between the UKBA and education institutions.
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The more accountable HTS institutions should be given exclusive rights to sponsor pre-degree Tier 4 visas.
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HTS should be allowed to continue offering NQF level 3 courses.
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Check commitment of applicants by requesting a deposit before study or requesting fees and living costs up to a year in advance which could be deposited in an escrow account.
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International students could be required to acquire health, personal and travel insurance as conditions of visa provision.
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