HC 743 Support for the creative economy

Supplementary written evidence submitted by Universities UK [SCE 022a]

Further to the oral evidence provided on behalf of Universities UK on 8 January 2013 by Professor Geoffrey Crossick, former Vice-Chancellor of the University of London, I am writing to offer the committee some additional supporting information, which I hope you will find helpful. This supplementary evidence focuses on student immigration and the role of higher education research in supporting the creative economy.


Research carried out in higher education institutions is a crucial source of new ideas and practices that drive innovation in the creative economy. The public funding for research in support of the creative industries comes primarily from the two arms of the dual support system. The Arts & Humanities Research Council (AHRC) has the smallest of all the research council budgets, but it has been helpful that the level of its resources have largely moved in line with those of the other research councils. The AHRC invests significantly in research and support relevant to the creative industries.

In contrast to research in the sciences, for which research council funding is the larger element, in the arts and humanities HEFCE quality-related funding accounts for more than 80 per cent of the total research funding. It is therefore important for the success of research in support of the creative industries that both parts of the dual support system continue to receive strong funding.

The relationship between research in the university sector and innovation in the creative industries is a dynamic and changing one. The most exciting new ideas often come from the large number of small and micro-businesses that are present in the sector, working in informal collaboration with each other and researchers. This contrasts with many other sectors.

The last decade has seen very successful investments by governments to support the transfer and exchange of new knowledge to industry across all sectors. The main source of this funding, the Higher Education Innovation Fund (HEIF), has grown and has been maintained by governments, even in difficult times, in recognition of its success. In recent years, the formula by which the HEIF is distributed to universities has changed. Whereas it previously rested on a range of interactions, it now rests entirely on the income that a university derives from its knowledge transfer activities.

A significant proportion of knowledge exchange activity in higher education institutions, particularly in relation to small-scale creative businesses, arts institutions and community cultural institutions, provides returns to the economy that are not financially measurable in the conventional sense. Much of the knowledge exchange between universities and the creative sector does not generate significant income for the university, because the organisations involved are too small or limited in their own funds to be able to pay significant amounts for the benefits that they receive. The HEIF funding formula, with its focus on income derived from knowledge transfer activities, does not take account of (and so cannot support or incentivise) the full range of knowledge transfer activities undertaken by universities which are of benefit to the cultural sector. There are many examples in Universities UK’s Creating Prosperity report, copies of which have been distributed to members of the committee, of the centres and labs established in the university sector to support interactions with the creative economy that might be less easily sustained under the new funding system. Therefore, consideration should be given to revisiting the HEIF funding formula, and including social return on investment (SROI) measures.

Student immigration

Student immigration was discussed in the committee session in which Professor Geoffrey Crossick gave evidence, in particular the difficulties associated with new overseas graduates in the creative industries being able to demonstrate the required minimum £20,000 income from a single employer in a sector in which freelancing or ‘portfolio careers’ are common.

Internationally, the UK is widely seen as an ideal place to launch a career in the creative sector, with its combination of the highest quality higher education and a large and vibrant cultural sector in which to gain experience after graduation. The vibrancy of the cultural sector in the UK is dependent upon its international nature, and its ability to attract international talent. Similarly, the quality of the education experience available in our universities, particularly for cultural and creative subjects, is greatly improved by the diverse and international nature of the students who study here.

Those who come to study here form lifelong cultural links and an affinity with the UK, which supports the continued ability of the creative industries in this country to attract the very best international talent. In this way the creative industries are both a source and beneficiary of the UK’s so-called ‘soft power’. The ability of UK universities to continue to attract and recruit students from overseas is an important part of this soft power, and a part that is particularly important to the creative industries in this country.

However, Universities UK is concerned that the collective impact of changes in student visa policy, such as the limits placed on post-graduation work with its particular difficulties for those working in the creative sectors, and some of the ways in which the government has in the past presented their visa policies, is having a damaging effect on the perception of study in the UK in a number of important markets. HESA data shows that the number of non-EU students entering new courses of study in UK universities decreased in 2011–12, with a worrying 1.9% drop in new entrants to postgraduate courses. The number entering postgraduate courses in the ‘Creative Arts and Design’ HESA subject grouping rose by 1.5%. Such an increase is, of course, very welcome, but it should be seen in the context of an international market that is growing rapidly. The number of internationally mobile students is estimated to rise from 4.1 million in 2010 to 7 million in 2020.

Non-EU students make up 29% of all students on taught postgraduate degrees in this subject grouping. This figure is significantly higher in other subjects that have relevance to the creative industries, such as in computer science where they make up 55% of the student body. Non-EU students ensure the continued viability of a range of postgraduate courses in the UK, including those that provide the highly skilled workforce required for a strong creative sector.

Universities UK is concerned that, in the short term, the government’s target of reducing net migration to the ‘tens of thousands’ cannot be achieved without considerable cuts to the numbers of international students coming to the UK. We are calling on the government to remove university-sponsored international students from net migration targets, recognising the Home Office’s confirmation of their strong visa compliance, and that in the large majority of cases they are temporary rather than permanent migrants. We would like the government to take a much more active role in promoting UK higher education internationally, and believe that the inclusion of international university students in the net migration target is a barrier to this in policy terms.

February 2013

Prepared 18th March 2013