The EPC has responded to the Education Committee Inquiry: Higher Education and Funding: Threat of Insolvency and International Students.
The inquiry looked into into the financial viability of universities as they face the challenges of rising costs and falling numbers of international students after years of tuition fee freezes, following an Office for Students report outlining the declining financial health of the sector, and warning that it may not be able to rely on the recruitment of international students for financial stability in the years ahead.
Summary of our response
Engineering is a strategically critical subject and a key driver of economic growth, with engineering accounting for nearly a third of the entire value of the economy. It drives key government mission and opportunity, including the new industrial strategy, and is a powerhouse of regional development as it is spread remarkably evenly throughout the country.
Engineering is at the financial sharp end of the inquiry’s focus. A structural £8k annual underfunding per domestic undergraduate student means that expanding student numbers does not help dilute fixed costs. Instead, each additional home engineering student deepening the deficit, as losses increase as enrolment rises. Providers are mitigating this phenomenon by actively flatlining recruitment in a buoyant applicant market.
Within the current funding model, international student fees operate as the only viable cross-subsidy. International student recruitment is already critical to balancing budgets, without which Engineering programmes are essentially insolvent. Any disruption to international enrolments risks destabilising engineering faculty finances and could precipitate insolvency at departmental or provider level. Adding the proposed Government six per cent international tuition fee levy would be unworkable and OfS’s forecast to improve sector finances with overseas recruitment is overambitious.
Government policy should recognise international engineering students as strategic assets. International engineering students are a critical part of the UK’s future skilled workforce. Restricting this talent pipeline via visa constraints undermines national industrial and innovation strategies.
There is now an urgent need for realignment of funding to actual course delivery costs and to enhance and sustain international student pipelines (including by resisting visa cost increases).
You can read the full response on the next page.
