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Circulating towards and across the British Isles: People, Ideologies, Social and Political Models

The Con-Lib Government and overseas students in the UK: Killing the goose that lays golden eggs?

Anne Beauvallet


This article analyses the development of the overseas students industry in the UK which is based on the enrolment of a high number of students from outside the European Union. Their fees are uncapped and they have been constituting a lucrative market for private- and public-sector institutions at school level and in further and higher education. The policy of the Con-Lib coalition Government since May 2010 is also examined as their primary objective of cutting immigration to the country may well prove detrimental to this industry and to the British economy as a whole at a time of recession.

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1This paper focuses on overseas students in the United Kingdom (UK) and on the approach to this issue the Con-Lib coalition Government has adopted. Overseas students are defined here as students from outside the European Union (EU). EU students take part in subsidised higher education and contrary to other foreign students their tuition fees are capped. What we wish to analyse is an industry, that of non-EU students who are enrolled at private schools, traditional and private higher education and further education institutions across Britain. We will here use terms such as markets and customers but are fully aware that they are problematic to many, particularly at university level. Although immigration is a reserved matter, education has been part and parcel of devolution and Scottish, Welsh and Ulster institutions therefore have to negotiate with the London government via the devolved parliaments and assemblies. Their policies may thus somewhat differ from those of the central government, which is impossible for English higher and further education organisations. This is why we will not dwell on the specific experiences of England, Scotland, Wales or Northern Ireland which constitute a subject for further investigation. The lucrative overseas students industry in Britain has developed over the years as a result of government policies and private enterprise. The Con-Lib coalition Government has vowed to cut immigration and this has primarily targeted overseas students via work visa restrictions and wider controls. Can this policy backfire at a time when the British economy vitally needs to recover? We will first study the industry, its protagonists and the profits it has generated. We will then focus on current government policies, the ideological arguments underpinning them and their inherent difficulties. Finally, the potential impact of this policy will be analysed, particularly from the perspective of the industry’s protagonists, since they are far from enthusiastic about the government approach.

Development of the UK overseas students industry and its economic significance

2The overseas students market in the UK finds its roots in the British Empire as Dr Tamson Pietsch, a New College Oxford academic, underlined in April 2011:

By making a British university education mandatory for all positions in the Indian Civil Service, it [the British government] ensured that British degrees carried a prestige that – particularly in India – has lasted into the XXIst century.

3Although such an education was only available to very few Indians, this laid the basis for the current situation. In 1967 in an effort to curb public spending, the Labour Government of Harold Wilson introduced differential fees for overseas students but the key to this industry’s development is to be found in the 1980s with Conservative Prime Minister Margaret Thatcher. The Education (Fees and Awards) Act 1983 enshrined this concept of differential fees for overseas students who have had to meet the full cost of their tuition. EU students have not been targeted as this would have violated the regulations on freedom and circulation in the European Economic Community. In June 2010, Andy Masheter, then pro-vice chancellor of Roehampton University, recalled the days when he had just been appointed chief executive of the UK Council for Overseas Student Affairs, or UKCOSA in the early 1980s (it was renamed UK Council for International Student Affairs in 2007). He draws an interesting parallel with current events: “Universities had suffered budget cuts of about 15 per cent, which, coupled with the introduction of full-cost fees for foreign students, had led to a sudden and massive interest in recruiting internationally” (Masheter). Overseas students had become a target market and institutions went to great lengths to attract and retain these customers, trying to ensure that their experience was both rewarding and cost-effective. In the words of Andy Masheter, “they were future ambassadors for UK universities.”

4The protagonists of the industry fall into three main categories. The first is at higher education level with traditional universities such as the London School of Economics, London Metropolitan University, King’s College London, Cambridge, the University of St Andrews or the University of Strathclyde. Private higher education institutions are also part of the overseas students market with for instance the Thames Graduate School, West London College or Blake Hall College in London. The second category is to be found among further education colleges, particularly language schools. Such institutions are part of the public sector like Bradford College, City of Sunderland College, Central Sussex College, Ealing, and Hammersmith & West London College. They also belong to the private sector like London International College, St George International in London and the Peartree Language School in Cardiff. Further education is not to be seen as an altogether separate entity as it provides feeder institutions for higher education. English language schools and further education colleges offer the potential stepping stone to university for overseas students through Higher National Diplomas or foundation degrees. The third category lies entirely in the private sector with independent schools. They are upmarket as they charge high fees for tuition and boarding. Independent schools too play the part of feeder institutions for higher education. Some institutions have clearly acknowledged this like the Universities of East Anglia, Exeter and Manchester since they have established a partnership with the INTO group which describes itself as “a rapidly growing network of university-based study centres, offering new and higher quality standards of preparation for undergraduate and postgraduate degrees in the UK and US.” After completing foundation courses, in partnership with the university and on the university campus, students move on to higher education.

5It is difficult to find figures for further education colleges, both private and public, and for private schools and higher education institutions. No overall set of data is collected by an umbrella organisation and private sector figures are particularly hard to come by. This is why the following statistics only deal with traditional universities which compile them on a regular basis. The industry has experienced a steady increase in the past years. Enrolment from non-EU countries in British universities went up by 48% from 2000 to 2006 for instance (BBC News Online 24 September 2009). It must also be said that statistics were not entirely reliable as the British Council realised in 2009 when it included nationality for the first time as a compulsory category (Lightfoot). Figures were thus found to be higher than previously envisaged: “It is only now that we can see the full picture showing the extent of the UK’s success in global recruitment, particularly from some of the world’s most important emerging economies” (British Council, Lightfoot). Higher Education Statistics Agency (Hesa) statistics showed that there was a further rise in 2008-09 with just over 10% of students enrolled at British universities being from outside the EU (251,000 overseas students in 2008-09, BBC News Online 26 March 2010). On 17 February 2011, The Economist published a chart on the overseas students industry from 2005 to 2010 and it shows a further increase in the number of clients of “a successful British business” in 2010 (about 450,000).

6Tuition fees paid by overseas students are not capped and this is precisely what makes them such an attractive market and where the goose’s golden eggs are to be found. In 2010, Universities UK, an association of vice-chancellors representing most universities, released figures proving that fees had gone up by between a third and more than half, that is well above the rate of inflation (Eason). That particular year, overseas undergraduates had to pay £ 8,500 to £ 11,700 a year for classroom-based courses. Fees for courses using workshops and labs went up from £ 9,500 to £ 14,800. Classroom-based postgraduate courses cost from £ 9,000 to £ 13,200 and those using labs cost £ 10,300 to £ 16,000. The fees for overseas students at further education colleges of both sectors are slightly lower since a year to complete a Diploma in Business Studies at the private-sector West London College cost £ 5,940 in 2012 (Pre-Bachelor of Business Administration). A year to complete a BTEC HNC at the private-sector London International College costs £ 5,850 (Business and Technology Higher National Certificate) and a year to complete a National Diploma Level 3 at the public-sector Bradford College costs £ 5,500. Fees at private institutions are typically higher with INTO offering three terms on the campus of the University of East Anglia for an International Foundation in Business and Economics for £ 11,490 to £ 12,450 in fees in 2012.

7After considering what overseas students pay each, let us turn to the profits generated by the industry, bearing in mind that this is not the full picture since we only use higher education figures. Professor Geoffrey Crossick’s introduction to The Patterns of Higher Education Institutions, the report released by Universities UK in September 2008, stated that “fees from international students have become a more significant income source for most institutions than research grants from the funding councils” (4). Figures for 2009-10 published by the Higher Education Funding Council for England revealed that “fees from non-European Union students accounted for 9.6 per cent of all income, the highest level to date”, showing how crucial they had become (Baker 7 March 2011). A vice-chancellor was quoted by The Sunday Times in September 2009 expressing the financial importance of overseas students as opposed to UK students when he described educating the latter as “the charity end of the business” (Griffiths and Grimston). He added: “We do want to educate them and we have to but in financial terms they are nothing but a drain” (Griffiths and Grimston). Let us remember that from the late 1970s to the 1990s universities faced a growing student population and dwindling government funding as Susan Trouvé makes it abundantly clear in her 1999 article on “The Dearing Report. July 1997: Origins and Outcome” (43-5). Tuition fees have provided more resources but they are far from adequate, thus making overseas students a crucial market for higher education.

8In August 2010, The Economist published figures from the Organisation for Economic Cooperation and Development showing profits for British universities on the overseas students market amounting to £ 25.4 billion. Revenues generated by institutions in this market cannot be considered as the accurate picture of overall revenues. Universities often provide accommodation (another source of income) but foreign students also pay for eating, drinking, and entertainment to some extent, although these features are difficult to quantify. Figures released in October 2011 showed that UK higher education generated “£ 59 billion to the UK economy annually” and thus amounted to “3% of all services exports” in 2010, making it “a major export earner” (Straw, Institute for Public Policy Research). Some academics are even more emphatic like Steve Smith, of Universities UK, who stated in February 2011 that “higher education alone is the country’s seventh-biggest export” (The Economist 17 February 2011). The dynamism of universities and their relative importance to the British economy at difficult time cannot be questioned, just as the fact that further education and independent schools too play a key role cannot be overlooked. This is precisely why the approach adopted by the Con-Lib coalition Government is crucial as it may affect the overseas students industry.

The Con-Lib coalition Government policies on overseas students and their potential impact

9Prior to 2010 the Labour Cabinet pursued a twofold strategy. As part of its efforts to attract a highly skilled workforce, it broadened the Science and Engineering Graduate Scheme (SEGS) in 2006 to allow all international students to work in the UK for twelve months after completing post-graduate courses. In 2007, non-EU students were allowed to work in the country after graduating (International Graduates Scheme). Both schemes were replaced by the Tier 1 (Post Study Work) in the points-based immigration system in 2008 but their key features were retained regarding the authorization of non-EU students to work in Britain after the end of their studies. Furthermore, following the terrorist attacks in New York on 11 September 2001 and in London on 7 July 2005, the Home Office came to play a greater role in the international students industry. In 2009 it set up a new licensing system. The previous system was administered by the Department for Innovation, Universities and Skills (DIUS) but seemed unable to tackle fraud. Institutions now had to be inspected and obtain accreditation from organisations approved by the UK Border Agency (UKBA) like Accreditation UK for language centres, the British Accreditation Council, the Accreditation Service for International Colleges and Ofsted. Tighter checks on students themselves were also part of this policy, especially biometric identity cards (Coughlan), the need to prove near GCSE level standards in English (BBC News Online 7 February 2010) and to attend courses, although this proved unpopular with academics. In May 2009 for instance, delegates at the University and College Union’s annual conference said they did not want to become a branch of the UK Border Agency (BBC News Online 29 May 2009). Regarding fraud levels and illegal immigration among international students, the Labour government’s record failed to impress the Commons Home Affairs Committee and the latter issued a critical report in July 2009, underlining the problem of bogus colleges (Lipsett). It must be said that the government policy on standards in English among non-EU students was exposed after the 2010 general election when English language schools convinced High Court judges that such regulations were improper as they had not been referred to Parliament (Harrison). The title of a Times Higher Education article published in February 2010 seems an apt description of the New Labour record in terms of international students’ entry into the country: “Visa rules change but the door remains open” (Morgan 10 February 2010).

10One of the first moves of the Con-Lib coalition Government regarding overseas students was precisely to reinstate the English standard tests which had just been overturned in the High Court (de Lotbinière). A review of student visas by the Home Office was announced shortly afterwards, underlying its central role in this issue (BBC News Online 2 August 2010). Some like William Evans, former secretary and solicitor of the University of the West of England, condemned such a stance. In January 2011 he wrote in Times Higher Education that “higher education now has boundaries and they are patrolled by the UK Border Agency.” Reforms were announced in March 2011 by Home Secretary Theresa May in an attempt “to cut overseas students by 80,000” (Travis 23 March 2011). Educational institutions now need to obtain the Highly Trusted sponsor status from the UK Border Agency. Like in most European countries, all overseas students have to speak English at an “upper intermediate” level (B2 instead of lower B1) and entry to all individuals who need an interpreter is denied. Only students who are currently enrolled at further and higher education institutions retain the right to work in Britain. Time allowed on a student visa now stands at three years at lower levels and five years at higher levels. Bringing dependants is only possible for postgraduate students and government-sponsored students. Finally, the Tier 1 (or Post-study work) route is now closed. Only graduates who have been offered a skilled job by a sponsoring employer under Tier 2 of the points-based system are allowed to work in the UK.

11Before analysing in greater detail the impact of the policy implemented by the Con-Lib coalition Government, it is relevant to study the ideological arguments underpinning it. The Liberal Democrats’ manifesto for the 2010 general election entitled Change That Works for You makes no reference to overseas students and expresses several objectives in terms of immigration. Interestingly, headings like “a safe haven for those fleeing persecution and “a firm but fair immigration system” are put on a par (Liberal Democrats 75-6). Criticising the Labour Government for its handling of immigration is the common point to the Liberal Democrat and the Conservative manifestos, in particular the lack of accurate data on illegal immigration. Here is for instance an excerpt from Change That Works for You:

The immigration system is in chaos after decades of incompetent management. The Government has failed to plan properly for new migrants, making it harder for people to integrate. No-one has any idea how many people are here illegally, and there aren’t even exit checks at all ports and airports to ensure that people here on temporary visas go home on time (Liberal Democrats 75).

12Well before the 2010 general election, the Conservatives already planned to cut the number of foreign students as they appeared to use educational schemes and institutions in order to fuel illegal immigration to the UK (Wintour). In January 2010, Shadow Home Secretary Chris Grayling asserted that “the student visa system is a huge loophole in our border controls” (Wintour). This argument was used in the 2010 Conservative manifesto entitled Invitation to Join the Government of Britain: “[...] our student visa system has become the biggest weakness in our border controls” (21). The Conservatives also promised to boost the number of foreign students at “reputable” universities and colleges, ensure that all students “have the financial means to support themselves in the UK” and apply for a work permit before getting a job in the country (21). The party was clear on its objective to cut the number of migrants to the UK: “immigration today is too high and needs to be reduced” (Conservative Party 21). Interestingly, the coalition government agreement document took up the same agenda in order to “minimise abuse of the immigration system, for example via student route” (Her Majesty’s Government 21). The Home Office and in particular Damian Green, who was Immigration Minister until September 2012, have regularly intervened on overseas students’ issues and the coalition Government’s policy in this respect is based on a phrase taken from the 2010 Conservative manifesto: “Attract the brightest and best to our country” (21). This is what Damian Green expressed in September 2010 when he stated: “We need to tighten the regulations so that every student coming in is benefiting us” (BBC News Online 6 September 2010).

13The Government has encountered several difficulties regarding this policy, the first being institutional. Two departments, the Home Office and the Department for Business, Innovation and Skills (BIS), are part and parcel of this approach and they sometimes seem at odds with each other. In March 2011, Universities Minister David Willetts told the Commons Home Affairs Committee that differences remained between the two departments in particular over the ability of spouses of overseas students to work in the UK and the limited ability of overseas students to work after graduation (Travis 3 March 2011). Some in the industry like Ed Smith, pro-chancellor and chair of council at the University of Birmingham, have publicly commented on this issue: “He [Smith] said that whereas David Willetts, the universities and science minister, seemed to understand the sector’s concerns, he did not think that ’the rest of the Cabinet gets it’” (quoted by Baker 17 November 2011). The second problem the Con-Lib Government has been facing stems from the fact that in its efforts to “attract the brightest and best” it has clearly favoured higher education at the expense of further education. In June 2011, in an effort to draw foreign investment into British higher education, Universities Minister David Willetts negotiated an agreement with the Brazilian government which was willing to finance nine-month stays at UK universities for up to 10,000 undergraduates (Boffey). Immigration Minister Damian Green played a very different part in the government strategy. In September 2010 for instance, he attacked overseas students at UK further education institutions, describing them as not the most desirable immigrants to the country since they “may, or frankly may not be, the brightest and the best.” Unsurprisingly, further education institutions reacted angrily through the 157 Group, one of the organisations representing them, (Tickle) and in December 2010 Damian Green was once again the butt of criticism from further education colleges (Murray).

14The potential impact of the current policy on overseas students now needs to be assessed. In November 2011, the Home Office proudly pointed out the consequences of the new measures with 470 colleges having lost their licence altogether or being now unable to accept foreign students (Casciani). In the words of Immigration Minister Damian Green, “the changes we have made are beginning to bite” as about 11,000 foreigners would be unable to enter the country (Travis 2 November 2011). Yet, such policies have aroused widespread opposition. The Commons Home Affairs Committee issued a scathing report in March 2011 (BBC News Online 17 March 2011). Its arguments were ideological in the Committee’s refusal to consider students as immigrants (House of Commons Home Affairs Committee 40) but also methodological as government measures were presented as “based on flawed evidence” (40). The reactions of the industry’s protagonists have been just as negative. In December 2010 Catherine Vines from the Ealing, Hammersmith & West London College stated:

Because colleges are closely monitored by Ofsted and have to meet government targets for the ’success rates’ of their students, we keep detailed records on attendance. I’m not sure universities could say the same, which is why it is puzzling that further education looks likely to be hit the hardest. (Murray)

15In August 2011 the Association of UK Private Schools and Colleges was given the right to challenge the student visa policy (The Guardian). Higher education institutions have been no happier although the Government has insisted their success is to be celebrated and protected: “I don’t want to interfere with the success stories of our universities” (Immigration Minister Damian Green, BBC News Online 6 September 2010). Both private- and public-sector universities have repeatedly expressed their dismay and disapproval of current policies. In January 2011, Nicola Dandridge, chief executive of Universities UK, declared: “[The proposals] are damaging, they’re dangerous and we are very opposed and very concerned about them” (BBC News Online 27 January 2011). A few months later, private institutions warned Damian Green their very survival might well be threatened by government policies (Baker 14 July 2011). The UK Council for International Student Affairs (UKCISA) which describes itself as “the UK’s national advisory body serving the interests of international students and those who work with them”, also opposed the measures (Swain). So did the think tank Higher Education Policy Institute (Hepi) in a February 2011 report entitled The UKBA’s Proposed Restrictions on Tier 4 visas: implications for University recruitment of overseas students. Its author Professor Edward Acton could not have expressed his opinion more bluntly: “To implement the proposed measures as they stand would amount to a hostile act against Britain’s universities.” (1).

16The arguments behind the opposition to government policy on overseas students fall into two broad categories which are clearly intertwined. The first relates to the potential harm it might do to the UK industry in academic and economic terms. The second category focuses on the impact on its clients in terms of personal finances and experience in the UK. In October 2011, Oxford University’s vice-chancellor Andrew Hamilton criticised reforms underlining the academic damage they might inflict (Grove). Drawing on his experience as Yale university provost after 9/11 and the cuts in student visas which followed, he argued that academics and postgraduate students would find it more difficult to go the UK and that this might damage “the health of the UK’s research base” (Grove). Most of the economic criticism levelled at government policy is based on its potentially disastrous impact on the industry. Key to the fortunes of its protagonists is publicity as was pointed out by Paul Webley, former director and principal of the School of Oriental and African Studies, University of London, and new chair of the UK Council for International Student Affairs in July 2011. The very announcement of the Con-Lib Government’s reforms “damaged” British universities’ reputation: “The country itself is not perceived as being as welcoming as it used to be” (Morgan 14 July 2011). Beyond harming the image offered by the country to potential customers, government policy could directly affect the UK higher education industry according to British universities. In March 2011 as the first measures were to be announced by the government, Steve Smith, vice-chancellor of the University of Exeter and head of Universities UK, exposed the plans as harmful: “We think the impact could be really damaging to the UK economy. It is about jobs. Where else are growth and jobs coming from? They are not just academic and professional service jobs, but also jobs in the cities where the students are” (Morgan 14 March 2011). He insisted that higher education would suffer indirectly, that is through the impact of this policy on further education colleges: “But they [the government] do seem to think that higher education starts at university and [seem] not [to] understand the pathway point” (Morgan 14 March 2011). The analysis presented in The Economist, known for its neoliberal stance and advocacy of free trade, is also critical. Although it acknowledges the use of education by some as a way to enter Britain illegally, the magazine insists the measures are excessive and therefore damaging to the industry: “[...] the government, desperate to redeem a misguided promise, seems to be reaching for a hatchet instead of a scalpel” (The Economist 17 February 2011). In June 2011, the Home Office candidly released statistics showing that, in spite of expected savings, costs to the British economy would probably amount to £ 2.4 billion (Travis 13 June 2011). Figures showed a predicted loss amounting to £ 170 million in tuition fees but the Home Office described this statistic as “relatively uncertain” since it expected that British and EU students would fill 80% of the places thus lost (Travis 13 June 2011).

17Another criticism of government policy based on economic arguments has been raised by private higher education institutions which claimed in July 2011, via their representative organisation Study UK, that so many would be forced to go under that true competition would never operate in this field: “These people are going out of business before such time as David Willetts’ vision can be realised where the private sector has a role to play” said Sue Hindley, principal of East Thames Graduate School and chair of the private-college membership group Study UK (Baker 14 July 2011). The June 2011 White Paper entitled Students at the Heart of the System promised “a level playing field for higher education providers of all types” (Department for Business, Innovation and Skills 5). According to BIS, such a move would “further improve student choice by supporting a more diverse sector” and would “also lead to higher education institutions concentrating on high-quality teaching” (Department for Business, Innovation and Skills 5). This criticism from private-sector organisations against a government ideologically bent on opening up this market thus seems ironic.

18The second type of argument against government policy on overseas students focuses on its potential impact on customers. Clients of the UK industry tend to pay their own bills and are not entitled to financial help unlike in American universities which offer bursaries to the ablest students. UK institutions’ increasing reliance on the uncapped fees paid by international students may well backfire as the British Council warned already in March 2010 (BBC News Online 26 March 2010). Overseas students are not “cash cows”, the British Council asserted, and treating them as such “would be seriously counter-productive and, in the long run, potentially self-defeating” for UK higher education (BBC News Online 26 March 2010). The human impact of government policy on overseas students was raised by the Institute for Public Policy Research in October 2011 (Straw). To put it mildly, the Con-Lib Government and the think tank have had their ideological differences but IPPR’s argument is interesting here because it focuses on an asset of the UK industry which might thus be undermined. Satisfaction rates among overseas students have so far been fairly high (The Economist 5 August 2010) and the difficulties presented by the visa system may well modify this point: “[...] there is a danger that the lived experience of international students in the UK goes backwards” (Straw). The Con-Lib coalition Government’s policy on overseas students has thus faced opposition from this industry as its protagonists fear it may be damaged academically and economically, particularly through its public image and its customer base.


19The market of non-EU students has developed since the 1980s and its protagonists are higher and further education institutions, not to forget language schools and colleges, belonging to both the public and private sectors. Although lagging behind its American counterpart, the British industry had gone from strength to strength and had brought the domestic economy undeniable financial benefits. New Labour governments both encouraged the influx of international students and tried to curb fraud by illegal entrants. Since March 2011 the Con-Lib coalition government has implemented a policy mostly based on the Conservative election promise to cut the number of immigrants to the country, overseas students in further education in particular. The industry’s protagonists have reacted angrily, arguing that it might be harmed at a time when the British economy is finding it difficult to get out of recession. It is as yet too early to safely predict the impact of this policy but it would be ironic if this industry suffered, thus delaying the signs of recovery the Government has eagerly been waiting for. Time will also tell if a solution has been found with transnational education, that is enrolling students at overseas campuses of British institutions in order to avoid the domestic pitfalls of government policies (Morgan 19 January 2012).

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Electronic reference

Anne Beauvallet, The Con-Lib Government and overseas students in the UK: Killing the goose that lays golden eggs? Miranda [Online], 9 | 2014, Online since 03 March 2014, connection on 02 March 2021. URL:; DOI:

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About the author

Anne Beauvallet

Université de Toulouse 2 – Jean Jaures
Maître de conférences

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