Examination of Witnesses (Questions 20-39)
MR DAVID
GREEN, DR
NEIL KEMP
AND MR
NICK BUTLER
7 JUNE 2004
Q20 Jonathan Shaw: So, it is nothing
to do with your marketing, it is all to do with events in the
Middle East, is it not?
Dr Kemp: No. It did start picking
up after the marketing started in a major way.
Q21 Jonathan Shaw: But they just coincided
rather conveniently.
Dr Kemp: No because it started
before then, in 2000. What we have developed in the UK is a quality
affordable product. The big growth has been seen in particular
for those postgraduate taught programmes and we have worked with
the institutions on assisting them to market etc. Disaggregating
all the different effects, yes, it is very complex and probably
impossible to do. All we can say is that, when we started the
investment, in the target countries we focused on, it definitely
took off.
Mr Green: If I can draw your attention
to the chart on page 29 in the Vision 2020 document, you
can see there that Australia and Canada have increased their market
share quite dramatically: Canada from 4.3% to 7% and Australia
from 6.6% to 9.7%. We have stayed around the same sort of level
or in fact we are actually lower than we were in 1997 but we would
be very, very much lower had we not had the campaign.
Q22 Jonathan Shaw: Do we know how the
figure of 75,000 additional students which is the Prime Minister's
target was arrived at? Why was it 75,000?
Mr Green: I think there was an
element of arbitrariness about it but what was sought was an ambitious
target and there was a feeling that to increase the market—and
remember that this is from non-EU countries, it was an additional
50,000 from non-EU countries—was a pretty demanding target
to set, but it had not been carefully calculated although, certainly
at the time, we did believe that it was realistic if there was
a concerted campaign and if everybody pulled together.
Dr Kemp: What we did look at was
market share originally and we found that the way the different
countries recorded their data on students was very different.
Therefore, getting meaningful comparisons on which to base market
share was impossible. So, we had to come up with a different approach
and so we thought of taking a number as a target rather than gaining
market share because we just could not measure it.
Q23 Jonathan Shaw: In your document Vision
2020, you have three options: maintaining the status quo which
would perhaps see a reduction in market share but an increase
in numbers, then there is the pessimistic approach where the economy
will be at risk, and then there is the optimistic scenario where
we will get a total of 870,000 international students by 2020.
So, when you are in discussions with Charles Clarke at the department,
what is on your list of things to do in order to meet this target?
Undoubtedly, if we can meet this target, it will generate a great
deal of money for universities and the British economy.
Mr Green: Can I suggest that Neil
comment on that because he has been very much involved in the
Vision 2020 document.
Q24 Jonathan Shaw: What are you saying
to your officials, Dr Kemp?
Dr Kemp: There are two or three
key points there. First is that it is a projected demand. So,
if we are going to convert that demand—even in the pessimistic
scenario, it is still about demand—into real numbers, we
have to invest, we have to do something about it and it raises
a whole series of issues which we hope we have done. Also, about
the supply of places and what might be available from the UK to
meet that demand. What we have discussed with the DfES colleagues
in this—and we still maintain the project working group
for the Prime Minister's initiative—is how to maintain a
strategy in the long term to continue to position the UK relative
to the competitor countries and we are asking questions about
that all the time. The positioning is relative to what we called
the primary attractiveness factors: the quality, the perception
of employability, the perception of affordability. So, it is these
messages that we are asking how we can get over and it is those
that we said we would work with together with our colleagues from
DfES.
Q25 Jonathan Shaw: On that list, you
have told us that you spent £5 million per year on the Prime
Minister's initiative; what are you asking for this time? The
same? More? Could it be £44 million like Australia? The economy
is at risk! I am very worried about this! This is what the British
Council has said—the UK economy is at risk unless you get
your money, unless you get your marketing. That is your pitch,
not mine. So, tell us, for goodness sake! I am very worried!
Mr Green: What we have put up
in the spending review bid process that is going on at the moment
is for an addition £3 million for the British Council over
the next three years, but we would expect that to be matched from
other sources. We think that the minimum to continue a refreshed
campaign of Education UK and to keep our level up and, even then,
it will result in a lowering of the market share but will increase
the numbers coming into the UK along the lines that we have talked
about, will require at least £5 million to £6 million.
If we want to really make the most of the opportunities that exist,
we think more like £10 million would be appropriate and that
would enable us to catch more of the students available on the
market and not just coming to the UK but also through transnational
education where it could be that students study at a UK university
but not in the UK.
Jonathan Shaw: Is there room in all our
universities for these undergraduates given the growth that there
is within the domestic market? Is that not going to impact on
the quality that the Chairman was talking about? Then we might
be in danger of losing our reputation because if more and more
youngsters come here and take up courses, then word could very
easily get round in countries that we are trying to recruit, "I
went there, there were no lecturers, the class sizes were too
big, the accommodation . . . " and all that.
Chairman: "And everyone was from
home!"
Q26 Jonathan Shaw: Exactly.
Mr Green: Clearly there are issues
in terms of capacity but talking to institutions and talking to
umbrella bodies such as Universities UK, they do believe that
there is capacity for the sort of increases that we are talking
about and of course that additional revenue is very important
to those universities and some courses are dependent on overseas
students for them to be run. There is an issue that you have just
referred to, Chairman, about a proliferation of one particular
nationality in single universities and that is an issue that we
are, with the other concerned bodies, addressing, but we do not
think that is an issue which affects the overall increase in numbers
because that is a question of how you spread them across the whole
sector and prevent them just being concentrated in single universities
which does cause problems and is not such a beneficial experience
for those individual students because they do not get a feel for
the UK, they just see their own counterparts.
Dr Kemp: Can I just expand a couple
of points on the supply side of places. We did survey UK universities
and 70% came back saying that they have some capacity or significant
capacity to take more international students. What we are saying
here is that this is to 2020. What the UK university scene will
look like by 2015 by the changes in university title and the involvement
in different groupings we cannot predict. All we can say is that
there is a demand here. Even with the optimistic scenario of 800,000
international students, given the UK domestic growth, we are still
in the twenties in terms of the percentage of international students,
less than 20% compared to the total student population. So, it
looks manageable. I do not quite know how but that is 10 to 15
years down the line.
Q27 Chairman: Can I just tease out one
element of Jonathan's question and this is very important. On
your optimistic scenario, that is a lot of money coming into British
education. When I first looked at these figures, I thought, well,
there is the missing amount for the gap. If Universities UK thought
it was an £8 billion gap and that only £1.5 billion
to £2 billion would come out of top-up fees, then here is
your £6 billion if it could come from international students
coming here on this optimistic scenario. That is true, is it not?
Dr Kemp: Yes.
Q28 Chairman: So, you look like something
the Government and Charles Clarke in particular have been praying
for. So, why would they give you a measly £10 million to
help this come about? Is it as big as I am saying?
Dr Kemp: If you are taking 800,000
students and if you are looking at a projection of maybe 150,000
of those being from the EU, that means, under an optimistic scenario,
650,000 could be from non-EU, ie full fee paying, at £7,000
say on average at current rates. Yes, we are looking at £7,000
times 650,000 which gives you about £5 billion.[4]
Q29 Helen Jones: Are you assuming that
all those students would be in the universities rather than in
English language schools or in FE in that answer?
Dr Kemp: That is HE only. In the
English language institutions, it is difficult to get a fix but
it is between 500,000 and 600,000 in the English language institutions
currently.
Q30 Chairman: So, you are talking about
£5 billion plus that could be flowing into the education
sector in the UK. Most businesses in the private sector faced
with that would be busy getting contractors, expanding the infrastructure,
investing in new colleges in Oxford and Cambridge, building new
spaces in Warwick and every university in the land. Is that what
you are saying is necessary to do now or should we just wait for
it all to happen sort of organically and intuitively?
Dr Kemp: It is already happening
in a whole variety of different ways. There are already private
sector providers active in this area that are offering degrees
validated by UK public sector institutions.
Q31 Chairman: Can you give an example
of that?
Dr Kemp: The London School of
Commerce. Even the American University of Richmond does Open University
validated degrees. So, we are already seeing a variety of different
private providers coming in and offering validated degrees, mainly
for international students. We are also seeing what I call public
partnerships where validated degrees from a central university
are then offered through an FE sector institution. So, we are
seeing lots of different ways of provision being put in place
that is responding to this growing demand. What it will be like
in 10 years' time is difficult to imagine.
Q32 Chairman: But your scenario is holding
still, freezing in a sense, the home UK university market, is
it not? Surely, if that is growing, the present infrastructure
is not going to cope with the sort of growth that we are extrapolating
already from now to 2020 on HEFCE figures and gives us an enormous
increase of undergraduates? coming into the system and you are
really saying that everything is okay, we do not have to build
any more colleges, no new buildings, nothing.
Dr Kemp: No, I am sorry, I do
not think I said that. I know from the HEPI figures that, by 2010,
you are talking about anything between an extra 175,000 and 250,000
UK students—I think it was about that figure in the HEFCE
report. So, yes, we did take those into account. What I am suggesting
is that over the next five years or so, the feedback we get from
the institutions in terms of the structures they have currently
in place could accommodate the sort of numbers we are talking
about over the next five years. What is going to happen after
that as we move to 10 and 15 years on as you are changing university
title and coming to different arrangements with delivery we cannot
predict. All I can do is say that, from macro-economic terms,
this appears to be the demand. It could be that there will be
feedback because there will be supply-side constraints, but that
is very difficult for us to predict in this sort of macro-economic
modelling.
Q33 Mr Gibb: I am not entirely clear
from the questions Jonathan was asking about why it is that the
numbers have been going up quite slowly, by 4,000-odd in most
years until about 2002 when it jumps by 38,000. I am unclear why
that is. It is just a lack of marketing or are there any other
perceived problems?
Mr Green: Where are you?
Q34 Mr Gibb: I am on the table at page
29 to which you referred.[5]
Dr Kemp: There are a multiple
group of factors that can impact on that. In the early part of
the 1990s, we were going quite strongly. Then, if you look here,
you can see the impact of Australia coming quite strongly into
the market, particularly South East Asia, and if you look down
the Malaysian numbers, for example, over this period, they actually
go down.
Q35 Mr Gibb: Why?
Dr Kemp: Because Australia started
taking them away from us very, very strongly.
Q36 Mr Gibb: Was that because of marketing
or proximity?
Dr Kemp: The two go hand in hand.
There is a whole range of reasons why Malaysian students might
be attracted to Australia. What we have seen over the last three
years, for example, is that we have started building that up again
because more and more Malaysians are seeking the UK as a postgraduate
destination/postgraduate research destination. Yes, we have introduced
marketing globally. New markets have come in over the last two
or three years which have seen a massive rise. For example, in
the last three years, the biggest growth has been, admittedly
from small beginnings, in countries like Nigeria, Ghana, Bangladesh,
Sri Lanka and the Philippines. All of these have started taking
off for the UK. Underneath all of this, the key driver as to why
students seek international education outside their own country
is normally lack of supply of provision in their own country coupled
with income growth. So, we are getting students in counties like
India and China who are more and more wealthy, who cannot access
quality higher education in their country, so they are seeking
it overseas. It is only in these last few years that we have suddenly
seen the GDP take off.
Q37 Mr Gibb: Of those 273,000 overseas
students, in broad terms, how does that break down nationality-wise
and regional-wise?
Dr Kemp: 32,000 Chinese, officially
about 15,000 US, 23,000/24,000 Greek . . . There is an appendix
there which gives the full breakdown.[6]
Q38 Mr Gibb: It is spread evenly really
across the whole world.
Dr Kemp: It is spread evenly.
Q39 Mr Gibb: No one country dominates.
Dr Kemp: EU is 100,000/95,000
students and now, with the wider EU, it is about 105,000.[7]
4 Note by Witness: We are looking at £7,000
times 650,000 which gives you about £4.55 billion, not £5
billion. Back
5
Note: See British Council: Vision 2020: Forecasting
international student mobility-A UK perspective (P267/NLP). Back
6
Note: See British Council: The Global Value of Education
and Training Exports to the UK Economy, Geraint Johnes, Professor
of Economics, Lancaster University, April 2004. Back
7
Note: The EU is 95,000 students and now, with the wider
EU, it is about 105,000. Not 100,000/95,000 students as indicated
during the evidence session. Back
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