Written evidence from Navitas
1. Executive Summary
1.1 Rebalancing THE
economy through trade and investment requires coordinated Government
action across and between key Ministries eg BIS and the Home Office.
1.2 The Education Services Export Industry is
second only to Finance in its positive economic impact to the
UK.
1.3 It is very much in the interests of the sustainability
of the UK's Education Services Export Industry that the UK remains
a top priority destination for legitimate non-EU students; however
it is imperative that policy be based on empirically sound data
derived from comprehensive consultation and analysis.
1.4 The Education Services Export Industry in
the UK is a complex and dynamic industry comprised of public and
private providers. Regulation is welcomed by all bona fide providers;
however any regulatory regime implemented should be encouraging
of export revenue and equitable across both the public and private
sectors.
1.5 Ireland and the USA have recently come out
strongly in support of the economic and cultural importance of
the Education Services Export Services industry. The Australian
Government has also recently recognised the negative impact on
GDP of recent visa tightening measures. (See http://www.abc.net.au/lateline/content/2010/s3068304.htm.)
1.6 The UK is sending mixed messages to the world.
Government words are signalling that the UK is keen to enhance
its global engagement, build trade links particularly in China
and India and, welcomes international students; however, Government
action is signalling to the world that the UK is not really open
for business and does not want export value and trade links that
international students bring to the UK.
1.7 International student mobility is a very
successful activity for the UK and contributes to the success
of HE sector. It should be considered as an export success and
not as an immigration problem.
1.8 International students/graduates play a key
role as diplomatic/trade/cultural assets for the UK - "soft
power" as it is known.
2. NAVITAS LIMITED
- AN INTRODUCTION
2.1 Navitas Limited (http://www.navitas.com/corporate.html)
is a diversified global education provider and has been active
in the Education Services Export Industry since 1994. Navitas
offers an extensive range of educational services for students
and professionals including university programmes, language training,
work-force education and student recruitment. Navitas Limited
is a public listed company on the Australian Securities Exchange
(ASX) and is known as a world leader in the development and provision
of educational services and learning solutions. Navitas Limited
had a market capitalisation of approximately AUD$1.4 billion as
at June 2010. Navitas consists of five operating divisions: University
Programmes (the largest Division with operations in Australia,
the UK, the USA, Canada, Singapore, Sri Lanka and Indonesia);
English; Work-force; Recruitment; SAE Group, all of which report
to the corporate headquarters located in Perth, Western Australia.
2.2 Navitas is known for its focus on the provision
of quality education and training and therefore all Navitas Group
members comply with accreditation and licensing requirements imposed
by government and government endorsed organisations including
in the UK, the British Accreditation Council (BAC) and, the UK
Border Agency (UKBA) to provide education and training services
in their respective operating environments/countries.
2.3 Navitas established its University Programmes
Division in the UK in 2000 and its Recruitment Division in 2007.
Navitas' UK operation is self funding and is not a recipient of
any form of Government funding.
2.4 Navitas' University Programmes Division UK's
Colleges are located on university campuses in Aberdeen (Robert
Gordon University opening in October 2011), Cambridge (Anglia
Ruskin University), Edinburgh (Edinburgh Napier University opening
in June 2011), Hertfordshire (University of Hertfordshire), Plymouth
(University of Plymouth), Portsmouth (University of Portsmouth),
Swansea (Swansea University) and West London (Brunel University),
locations which enable students to experience the UK city, climate,
culture and lifestyle of their choice. Navitas' partner universities
are internationally renowned for their teaching and research.
3. FACTUAL INFORMATION
3.1 Private Colleges like the Navitas Colleges
in the UK, via their legally enforceable (UK Law) Recognition
and Articulation Agreements, provide significant third stream
revenue to their respective Host Universities via the direct royalty
paid per head each semester (three semesters in one calendar year)
as well as "pipeline" income as students move through
the articulation process and pay the full cost recovery University
fees directly to the Host University for the remainder (usually
a minimum of two academic years) of their degree programme. In
the period from September 2000 to December 2010 Navitas UK:
- has paid direct royalties to six Host Universities
totalling GBP£13,241,295.00;
- facilitated access to university education for
c16,400 international fee paying students who would otherwise
have been denied access to a UK University degree; and
- facilitated Host Universities' access to cGBP£220
million in pipeline income i.e. that income derived from students
progressing through the articulation agreement from a Navitas
College to their respective Host University in order to complete
their degree studies.
Indeed in the current financial year (2010-11) alone
our Host Universities will receive over GBP£6 million in
royalties and cGBP£27 million in pipeline revenue. Any reduction
in international student numbers as a result of the current focus
of Government on reducing net migration through restrictions on
international students will not only have a severe financial impact
on a HE sector already under threat from funding cuts but result
in job losses that in the case of Navitas as an example, could
result in a reduction in the size of the UK operation by at least
half.
3.2 The Education Services Export Industry is
a major contributor to the UK economy; current moves to reduce
international student numbers threaten the ongoing viability of
this major export industry.
3.3 International (non-EU) students from degree-preparation
courses are a significantly critical source of students for UK
universities. Universities UK has estimated that 46% of all non-EU
full fee paying students admitted to UK universities come via
preparatory programmes inclusive of those via formal articulation
and recognition agreements.
3.4 Current HO/UKBA initiatives related to the
restriction of international student numbers could, for Navitas
as an example, turn our forecast pre-tax profit in the UK of £1.7
million into a loss of £2.1 million, thus jeopardising over
230 full time and sessional academic jobs and our future plans
for growth and would impact (negatively) revenue streams to our
Host Universities via a reduction in the direct royalty payments
and pipeline income for our Host Universities.
3.5 Regulatory regimes should also be consistent
and equitable across both public and private providers; prohibiting
institutions from offering NQF Level 3 may well raise legal issues
such as restraint of trade.
3.6 Non-EU students make a significant contribution
to UK universities to the tune of between 10 - 30% of total income;
the substantial contribution via full fees ie cost recovery, ensures
that the enviable breadth of courses available in the UK is protected.
3.7 Non-EU (International Students) make an extremely
important economic contribution to the UK, so Government's intention
to restrict an invaluable export earning industry in this way
does not match the need to rebuild the economy and engage private
industry to a greater extent. The Government's own data (from
the Home Office's publication September 2010: The Migrant Journey)
illustrates that international students are not immigrants. Of
the 186,500 students granted visas in 2004, only 5,568 later gained
settlement rights - ie only 3%. They have a minimal effect on
net migration as there are roughly the same numbers of students
leaving the UK each year as there are entering it. It is also
arguable that UK-educated, highly skilled workers are migrants
who will make an above-average contribution to the UK's economic
future and therefore should be encouraged.
3.8 A 2007 British Council Report (britishcouncil.pdf)
stated that in 2003-04, the Education and Training export sector
was worth £27.7 billion. In 2010, we estimate this to be
closer to £40billion and thus making it the UK's second biggest
contributor to our net balance of payments, after financial services.
3.9 In addition to the full cost recovery course
fees and living costs paid by non-EU students, staff employed
in the Education Services Export Industry also bring significant
income to their local and the national economy through their spend
on accommodation, food, local taxis and buses, clothing, leisure
and social activities and their use of national bus, rail and
air transport systems. The spread of international students in
locations across the UK means that the revenue generated via this
export industry is not restricted to one geographic region of
the UK.
3.10 On average, an international student can
easily spend up to GBP£12,000 in each year of study. Given
the diversity of locations across the UK this is an important
regional economic impact. Students are also visited regularly
by family and friends further adding to the economic value add
element.
3.11 There will be major job losses running into
the thousands, in the public and private sector as a result of
a cap on international students. These job losses may well be
concentrated in areas where there are large numbers of private
educational establishments in university towns and cities which
may have little access to the benefits of other major export industries.
The Australian government has just acknowledged the negative material
impact on GDP that its recent tightening of visa restrictions
for international students has had. Job losses in the sector are
expected to be in the thousands, including university staff.
For more details see http://www.abc.net.au/lateline/content/2010/s3068304.htm.
3.12 The negative material impact on GDP of unnecessarily
tightened visa restrictions for non-EU students at a time when
the UK needs thriving export industries and harbours an expectation
that the private sector will pick up the shortfall in government
spending will be considerable.
3.13 International students not only enrich the
learning environment for domestic students and provide substantial
economic support to universities, but also act as valuable ambassadors
for future commercial, diplomatic and cultural ties that benefit
the UK. Note the Prime Minister's recent trips to India and China
in which he emphasised, "...how much we [the UK] want to
welcome international students to Britain". Changes to the
student visa regime give the lie to this statement.
3.14 In addition to the in-country economic value
add of non-EU students to the UK, the UK also benefits from the
global networks and links the education services export industry
has established, particularly in key source countries such as
India and China, which coincidentally happen to be foreign policy
priorities. Given the particularly high levels of satisfaction
experienced in the UK by non-EU students during their study programme,
it makes sense that the UK should capitalise on this potential
for life-long advocacy for the UK.
4.0 RECOMMENDATIONS
FOR ACTION
It is suggested that the following recommendations be considered:
4.1 The Education Services Export Industry is
recognised as a major contributor to the UK economy and compliance
regimes should be facilitative to its growth and development.
4.2 Current measures to restrict the number of
international students coming to the UK are reviewed and modified
to enable bona fide participants in the Education Services Export
Industry to conduct financially viable businesses.
4.3 A comprehensive economic impact study be
undertaken to substantiate the value-add impact of the Education
Services Export Industry to the UK's economy and thereby inform
the decision making processes related to Government's dual commitments
to reduce net-migration and "...boosting trade to rebalance
the economy…". (Right Hon. Adrian Bailey MP, Chair of
the Business Innovation and Skills Committee http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-innovation-and-skills/inquiries/trade-and-investment/)
4.4 BIS and the Home Office better coordinate
policy development in order to ensure that a major export industry
is not damaged at a time when the UK economy needs success stories.
The role of the BIS is central to supporting trade and investment
in the UK by removing barriers to trade and in determining sensible
approaches to this important export industry.
10 January 2011
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