Exiting the EU: challenges and opportunities for higher education Contents

1People

Students

10.In 2015–16, there were 2.28 million students at UK universities,15 127,440 of whom were from the EU (5.6%) and 310,575 (13.6%) of whom were from non-EU countries.16 EU students have a right to reside in the UK as stipulated in the Citizens’ Rights Directive (see Box 1) as long as they are enrolled on an accredited course and have comprehensive sickness insurance.17 EU law prevents discrimination on the basis of nationality. On that basis, EU nationals studying in the UK have the same rights as home students. As such, in England, EU students pay the same fees as home students—up to the maximum of £9,250 per year—and are eligible to apply for a tuition fee loan. The DfE estimated that around 65% of EU students on full-time courses eligible for tuition fee loan received the support in the academic year 2013/14 (compared to 90% of English students).18 This is in contrast to international students, who must meet the eligibility requirements for a Tier 4 (General) student visa19 and who pay the overseas rate for tuition fees (which has no limit).

11.The rights of EU students currently studying in the UK after Brexit, and the immigration rules for future EU students, is unknown. The Government has guaranteed full funding and financial support for EU students starting their course in 2017/18, but there is currently no clarity on the funding status of EU students for the academic year 2018/19 and beyond. The timing of the Government’s announcement on 2017/18 funding was criticised in our evidence.20 It was communicated just three days before the 11 October application deadline. Nonetheless, this reassurance, albeit late, was the correct move and we welcome the Government’s efforts to provide clarity.

12.We heard in our evidence how important it was to provide the same clarity on the status of EU students in 2018/19 and 2019/20. The Russell Group told us this should be one of the Government’s short-term priorities as it would help provide the message that the UK would continue to welcome EU students.21 Professor Andrew Wathey, Vice-Chancellor of Northumbria University, said that this was something urgent that could easily be resolved.22 The fee status of EU postgraduate students was also a concern in our evidence. Postgraduates support research activity in the UK, and EU students make up a larger proportion of all postgraduates than undergraduates.23

13.UCAS released data for the January deadline for university places in February 2017, which showed that EU undergraduate applications had declined by 7.4% across the sector over the last year.24 Professor Alistair Fitt, Vice-Chancellor of Oxford Brookes University, pointed out that this reduction occurred despite these students knowing they would have access to tuition fee loans.25 It is likely this figure will drop even further if there is uncertainty over 2018/19 loan support or, beyond that, the future migration status and residency rights of students from the EU. The University of Cambridge told us that:

It is clear that uncertainty around EU student status will create turbulence in numbers applying and being admitted, and the University anticipates a fall in numbers—even before any change in fee levels [ … ] Assuming that EU students move to the unregulated international rate it is almost certain that application numbers will fall further. We are currently modelling a two-third reduction in admissions from the non-UK EU.26

14.We discussed the potential financial impact of fewer EU students at several of our meetings, in terms of both the higher education sector and the wider economy. A report by London Economics (commissioned by the Higher Education Policy Institute and Kaplan) concluded that the removal of tuition fee support would likely cause demand from EU students to decline by potentially as much as 57%.27 However, the report found that based on the forecast depreciation of the pound and harmonisation of tuition fee charges with international students, the financial impact on the wider sector could overall be positive. The analysis by London Economics was based on historical data, and assumed factors would remain constant, such as sentiments towards the UK and the general attractiveness of the sector. It is also reliant on the Government being open to an increase in the recruitment of international students. When we asked Dr Gavan Conlon, one of the co-authors of the report, about its reliability, he told us:

The issue is about the uncertainty. As an economist, this holds everything else constant. Because it is historical data, this assumes that there is no identifiable impact of Brexit in terms of how people perceive the UK economy or the UK higher education institutions [ … ] So we cannot say, but, if everything else was equal, this is the sort of effect we would see: £2 billion per annum. What the effect of Brexit is, the reputation of UK higher education and perceptions, it will potentially be lower than that but you would imagine it would be positive.28

15.It is difficult to argue against retaining the attractiveness of the UK higher education sector for EU students, though, as in 2011/12 they generated an estimated £3.7 billion for the UK economy and 34,000 jobs.29 The report by London Economics suggests that if the Government can ensure the sector remains appealing to EU students, it could be favourable to both higher education finances—of up to £463 million in additional income a year—and the rest of country, with up to £2 billion a year forecast to be available.30

16.The higher education sector needs to be able to maintain its competitiveness internationally. Europe is our closest market geographically for students. The UK is currently the most popular destination for students from the European Economic Area (and candidate countries) wanting to study abroad. Through analysis of figures from the European Commission from 2014, we estimate the UK received around 132,000 students from other EU member states, with Germany in second place with around 88,000, and Austria, France, Italy and the Netherlands ranging somewhere between 40,000 and 50,000.31 Nicola Dandridge, Chief Executive of Universities UK, noted in response to the UCAS figures:

[ … ] this is coinciding with our competitor countries, particularly in the EU, seeing this as a huge advantage for them and they are redoubling their marketing efforts since Brexit is posing a good opportunity for them to recruit internationally mobile EU students, quite regardless of international students.32

17.Dr Jo Beall, Director of Education and Society at the British Council, commented on the increasing regionalisation of the international higher education market:

We are losing market share from south-east Asian students who are going to Australia, Malaysia and so on. In a context where the US is capitalising on Latin America, and Australia on south-east Asia, we would be mad to lose our regional market and our regional connections.33

18.We were also told about the consequence of a reduction in the number of EU students for diversity and culture of higher education. Birkbeck, University of London, said fewer EU students in England “may lead to a loss of cross-cultural fertilisation of ideas and culture on our campuses”.34 Sorana Vieru, Vice-President for Higher Education at the National Union of Students (NUS), said that EU students challenge perspectives, enrich the overall university experience and help home students develop new views.35

19.The Government should guarantee home rate fees and access to tuition fee loans for EU undergraduate students starting in England in the academic year 2018/19 well in advance of the early deadline for course applications. The status of postgraduate students should also be clarified. This will create some immediate stability during the negotiations.

20.It is important that the higher education sector is given enough notice of any changes to the migration status of EU students, their fee rate and access to loans. The Government needs to ensure sufficient time for universities and others in the higher education sector to adjust and plan ahead. It must also ensure that changes to fees or loans do not occur midway through a student’s course.

21.We believe the best model for EU students is to retain a reciprocal open approach with light touch controls, such as visa-free access, which would enable preservation of a system closely resembling freedom of movement. We recommend the Government takes this open approach with all international students if it is serious in its desire for the UK to remain a global leader in higher education.

International students and the migration target

22.The Prime Minister has reiterated36 the Conservative Party’s manifesto commitment to reduce net migration to below 100,000 per year.37 As of February 2017, net migration is at 273,000.38 The Government includes international students in its net migration target because it follows the United Nations definition, which states that a long-term international migrant is a person who moves to a country other than their country of residence for at least a year.39 In its White Paper on Brexit, the Government has expressed its desire to maintain the supply of talent coming into the country.40 The desire to reduce net migration into the UK creates some tension with this simultaneous desire for talent. While it is true there is no formal cap on international students, as the Government has repeatedly stated,41 these students are nonetheless part of a wider group that the Government wants to actively reduce. Furthermore, a possible reduction in international students was also implied by the Home Secretary, Rt. Hon Amber Rudd MP, at the Conservative Party conference in October 2016.42

23.The majority of our written evidence and witnesses at our meetings around the country were clear that removing international students from the net migration target would help offset risks to higher education from leaving the EU.43 Our evidence was unanimous in saying that international students were a positive force in both economic and educational terms. In 2014–15 international students contributed £25.8 billion in gross output via on- and off-campus spending, and supported 206,600 jobs.44 We heard they contribute to the diversity and quality of higher education, as well as the UK’s soft power abroad.45 Dr Peter Simpson, Director of the N8 Research Partnership said:

International students are an unmitigated good thing for the UK [ … ] At every single stage in their life cycle they are benefiting the UK. The tone from the Government that international students are in some way a problem to be solved seems to be wholly foolhardy. They are not a problem to be solved. They are a benefit to be celebrated and to be welcomed.46

A ComRes poll of 2,000 British adults after the referendum in 2016 found that only 24% thought international students were immigrants—with only a 2 point difference when split into Leave (25%) and Remain (23%) voters. 71% said they would support policies to boost growth by increasing overseas students.47

24.Currently, the UK is second only to the USA in attracting international students.48 Hobsons’ annual International Student Survey found that 36% of prospective international students felt the vote to leave the EU had made them less likely to study in the UK.49 An NUS poll found that even in 2014 slightly over half of overseas students thought the British Government was either not welcoming or not at all welcoming to international students.50 Even before the referendum, overseas recruitment had stagnated—key international markets have suffered, with half as many Indian students as in 2015 compared to 2010,51 and overall there has been a decline of 2%.52 Meanwhile, the share of competitor countries like Australia, Canada, and Germany is growing year by year by around 8%.53 Other countries, including the UK’s main competitors for international students like the USA, Canada and Australia, consider students as temporary migrants rather than permanent migrants.54

25.The main source for calculating net migration is the International Passenger Survey (IPS). From 2012, the IPS has included a question asking all emigrants who were former immigrants their main reason for moving to the UK when they originally immigrated. The data shows a significant gap between the number of students recorded as entering the UK and former students departing—suggesting that around 90,000 students overstay their visas. The IPS has faced criticism for its method of recording international students. Universities UK told us that the IPS was a questionable evidence base, for several reasons, including: small sampling size, margin of error, and potential unknown biases.55 Newcastle University said in their written evidence that the IPS is “flawed and significantly overestimates how many students overstay their visas”.56

26.Other studies have suggested far fewer international students overstay than the Government believes—for example, the Annual Population Survey estimates the number is closer to 30–40,000, with the majority of these employed full-time. In October 2016, The Times reported that a leaked Home Office-commissioned report has concluded that only 1% of international students overstay their visas—which would mean around 1,500 overstayed a year, compared to IPS figure of 90,000.57 This figure is reportedly based on new exit checks, introduced in April 2015, for which no data has yet been released. The Government has also indicated that the Office for Students, once formed, would have powers to gather the information it needs on international student numbers.58 In our pre-appointment hearing with Sir Michael Barber, now the Chair of the Office for Students (OfS), he confirmed that the OfS would have a role in ensuring universities were recruiting international students “from all over the world based on merit”.59 We note that we did not take evidence on post-study work visas.

27.Over the last few years, six parliamentary committees have recommended the removal of students from the net migration target.60 There also appears to be a diversity of opinion within the highest levels of Government, with both the Foreign Secretary, Rt Hon Boris Johnson MP, and the International Trade Secretary, Rt Hon Dr Liam Fox MP—two supporters of the campaign to leave the European Union—reportedly expressing their disagreement with the Prime Minister.61 To sum up, there is widespread support for treating international students as temporary rather than permanent migrants: from the public, Parliament, and parts of the Government.

28.International students should be removed from the net migration target. The Government’s refusal to do so is putting at risk the higher education sector’s share of the international student market. Removing international students from the target would be a simple way to offset some of the risks from leaving the European Union. For domestic policy purposes, these students could be recorded under a separate classification and not be counted against the overall limit. The Office for Students should monitor and report on the overall trends of international student recruitment. The Government should continue to improve its data recording, prioritising exit check data.

Staff

29.31,635 EU staff work at higher education institutions in the UK and comprise 16% of the total workforce.62 Over the last six years, these numbers have grown by over 10,000.63 While the UK remains an EU member, EU citizens have the right to reside and the freedom to work in the UK. The 2004 Citizens’ Rights Directive, or the Free Movement Directive, consolidated the provisions on the right of citizens and their family members to move and reside freely in EU Member States (see box 1). The future residency rights of EU citizens currently living in the UK remain to be clarified.

30.The Government’s recent White Paper on Brexit outlined its 12 priorities for the upcoming negotiations.64 Priority number six stated that the Government wanted to “secure the status of EU citizens who are already living in the UK, and that of UK nationals in other Member states, as early as we can”. The current uncertainty for EU nationals over their future status was one of the major concerns for the UK higher education sector.65

Box 1: The Free Movement Directive

EU citizens (anyone with the nationality of an EU country) possessing a valid identity card or passport may:

  • Enter another EU country (with family members, whether EU citizens or not) without an exit or entry visa;
  • Live in another EU country for up to 3 months without any conditions;
  • Live in another EU country for longer than 3 months if employed or self-employed. Other people not working for payment or retired are required to have sufficient resources and sickness insurance.
  • Register with relevant authorities if living in the country longer than 3 months. Family members if not EU nationals require a residence card.
  • Be entitled to permanent residence if they have lived legally in another EU country for a 5 year continuous period.
  • Have the right to be treated equally to nationals of the host country.

Source: European Parliament and Council, Directive 2004/38/C, 29 April 2004

31.A survey by the University and College Union (UCU) in early 2017 questioned its members on the impact of the EU referendum result.66 Over three-quarters (76%) of EU academics at UK universities said that, due to the referendum result, they were now more likely to consider leaving UK higher education. A Times Higher Education poll in March 2017 of academics found that 53% of non-UK nationals were “actively looking to leave the UK” and 88% said that the prospect of Brexit has made them more likely to do so in the medium- to long-term.67 Although an objection to the “hostile current climate” caused by the referendum result was cited as the main reason, 40% of respondents also cited fears over their future immigration status.

32.Professor Margret Wintermantel, President of the German Academic Exchange Service (DAAD), told us that:

the British Government should guarantee the current status of EU national academics at United Kingdom universities. Furthermore, the freedom of movement for academics from EU nationality who wish to join UK universities in the future should be secured [ … ] This would benefit all parties involved, the UK’s higher education institutions and their reputation as well as academics of every nationality, including the British and their respective international careers.68

33.Professor John Latham, Vice-Chancellor of Coventry University , said that “surety” was important:

While there is not surety, people are uncomfortable to commit themselves to either come or go. Until you have a system in place that people understand how it is going to operate, it is going to be very difficult for people to have all of the comfort.69

34.Several other witnesses were critical of the Government’s decision not to unilaterally protect the rights of EU nationals currently residing in the UK ahead of negotiations.70 Professor Michael Arthur, President and Provost of University College London, told us the Government needed “to take the initiative, take the lead, and indicate to European citizens who are working here in the UK that they will be allowed to stay and challenge the rest of Europe to follow suit”.71 Sally Hunt, General Secretary of UCU, said that “the higher education sector in this country [ … ] is built on team in terms of UK nationals working alongside those from within the UK” and the Prime Minister’s speech merely expressed an aspiration, and had “emphatically not” provided enough reassurance for university staff.72

35.There is the very real possibility that even if the British Government heads into negotiations hoping to guarantee reciprocal residency and work rights, it may be that “nothing is agreed until everything is agreed”.73 This could lead to EU nationals employed in the UK higher education sector facing two years of uncertainty. We are concerned that during this time the UK’s international competitors would be able to benefit from this uncertainty and potential decline in the attractiveness of UK as a destination. At our evidence session in Oxford, our witnesses told us that the Republic of Ireland, Germany, Netherlands and Scandinavia, amongst others, would see this as an excellent opportunity to attract researchers.74 The Republic of Ireland included in its October 2016 budget an unspecified level of funding to attract “world-leading researchers in the context of Brexit”.75 Continued ambiguity will only serve to weaken the world-class reputation of our higher education sector.

36.The rights of EU higher education staff to work and reside in the UK need to be guaranteed as soon as possible. The Government has rightly identified the agreement of the rights of EU nationals as its first priority in the negotiations. However, we caution that a delay in confirming these rights will only intensify the current uncertainty for universities, and likely lead to a significant ‘brain drain’ in talented staff. The Government must be prepared to unilaterally agree the rights of EU nationals before the end of 2017 if a reciprocal deal is not agreed before then.

A new immigration system

37.The main immigration route for non-EU international academics wishing to work in the UK is the Tier 2 (skilled worker) visa. The Tier 2 visa has an annual cap of 20,700.76 From April 2017, the minimum salary requirement for Tier 2 eligibility for experienced staff will be £30,000 per annum.77 If EU staff were considered the same as non-EU staff in the future, the Russell Group said in written evidence that only 26% of their EU staff would meet this salary requirement.78 We were also told by Professor Catherine Barnard of Cambridge University that the Tier 2 route was “extremely cumbersome” and “highly labour intensive for universities and colleges that have to administer it”.79 From our meetings across the UK, it is clear that administering EU and international staff through the current system in the future would be detrimental to the UK higher education sector. The cap, for example, would not be sufficient to deal with the increased numbers of international staff.

38.We heard throughout our inquiry that there was a need for the immigration system to be finessed to ensure a continued flow of higher education talent. Nicola Dandridge, representing Universities UK, told us that:

If we can sort out our immigration system, so that it works for staff and students, then it makes a lot of the exit negotiations a lot easier. If we can have coherence in Government, in terms of their immigration policy, and can have proper engagement with the Home Office, then a lot of this looks a lot more optimistic. In a way I think Brexit—talking about opportunities that it might present—does present an unparalleled opportunity to revisit our immigration system.80

39.In an ideal world, the preference for many of our witnesses would be for continued freedom of movement between UK and EU academics. For example, Professor Alistair Buchan, Head of Brexit Strategy at the University of Oxford, said that the current movement of staff allowed for strong collaboration, and asked “why would you draw talent from 50, 60 million people when you can draw talent from 600 million people?”81 It is clear this is unlikely to continue. In a written statement, the Secretary of State for Exiting the European Union stated that “we will manage our immigration system properly, which means that free movement to the UK from the European Union cannot continue as before.”82 The White Paper stated that the Government will carefully consider the options available “to gain control of the numbers of people coming to the UK from the EU”.83 The Government has also said it “would welcome agreement to continue to collaborate with our European partners on major science, research and technology initiatives”.84 As we make clear in Chapter 2, collaboration, driven by the ability for academics to work across Europe together, is a strong reason the UK punches above its weight in producing world-class research.

40.Reforms to the immigration system need to reflect the requirements of higher education. The new immigration system after the UK leaves the European Union will need to facilitate, rather than inhibit, the movement of people in and out of our universities. Otherwise, continued academic collaboration and the sector’s international competitiveness will be at risk.

41.We recommend a new visa for all highly-skilled academics, more liberal than the Tier 2 route. This should have a lower salary threshold and a separate, higher cap, as well as lower bureaucratic burdens and costs. This new approach would show the Government was serious in its aim to bring in the best from around the world and encourage collaboration.


16 As above

17 EEA citizens and their family members are allowed to use the NHS in the UK, but the Home Office does not count this as comprehensive sickness insurance.

18 Department for Education (XHE0159) para 38

19 These include: being offered a place on a course, proving knowledge of the English language, possession of sufficient money to support themselves and pay for their course, from a country not in the EEA, and other requirements. See more details: Home Office, ‘Tier 4 (General) student visa,’ accessed 30 March 2017

20 See, for example, Q21 (Professor Barnard), The University of Cambridge (XHE0084) paras 19–21, Universities UK (XHE0195) para 13. The October deadline, or the ‘early deadline’, is for any course at the University of Oxford and Cambridge, and most courses in medicine, veterinary medicine/science, and dentistry.

21 The Russell Group (XHE0094) para 3.4

22 Q132

23 See, for example, Q26 (Professor Buchan), Q90 (Sally Hunt)

25 Q26

26 The University of Cambridge (XHE0084) paras 8–9

28 Q113

29 Universities UK (XHE0195) para 4

31 Analysis of data in Tables 1 and 2 from Eurostat, ‘Learning mobility statistics,’ accessed 30 March 2017

32 Q116

33 Q82

34 Birkbeck, University of London (XHE0086) para 2

35 Q87

36 HC Deb, 20 July 2016, col 826

37 The Conservative Party, The Conservative Party Manifesto 2015, (April 2015) p.29

38Net migration to UK falls by 49,000’, BBC News, 23 February 2017

40 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017, paras 5.1–5.2

41 See, for example, PQ 66301 [on overseas students], 02 March 2017, PQ 51675 [on overseas students], 02 November 2016

42 The Conservative Party, ‘Rudd: Speech to Conservative Party Conference 2016’, accessed 30 March 2017

43 See, for example, Q26 (Professor Barnard), Q57 (Professor Haywood, Professor Roper), Q91 (Rosie Birchard, Sorana Vieru, Sally Hunt), Q122 (Nicola Dandridge), Q123 (Professor Arthur), Q129 (Dr Conlon), MillionPlus (XHE0076) paras 31–36, London School of Economic and Political Science (XHE0107) paras 21–23, University of Cambridge (XHE0084) paras 19–20

44 Universities UK, The economic impact of international students (March 2017) p 2

45 See, for example, Qq87–89, British Council (XHE0199) para 2.3, Dr Liz Gloyn (XHE0075) para 5, GuildHE (XHE0169) para 10

46 Q157

48 Universities UK, International higher education in facts and figures (June 2016) p 4

49 Hobsons (XHE0162) para 4

50 Q91 (Sorana Vieru)

51 Sannam S4 (XHE0102) para 13

53 Creative Industries Foundation (XHE0188)

54 See, for example, Oral evidence taken by the Business, Innovation and Skills Committee on 26 June 2012, HC (2012–13) 425, Qq8, 13, 21

55 Universities UK (XHE0208) paras 4–8

56 Newcastle University (XHE0104) para 5.5

57Ministers hide report on migrant numbers’, The Times, October 13 2016

58 HL Deb, 13 March 2017, col 1685

59 Oral evidence taken on 21 February 2017, HC (2016–17) 882, Q10

60 Business, Innovation and Skills Committee, Fourth Report of Session 2012–13, Overseas Students and Net Migration, HC 425, paras 37–39; Home Affairs Committee, Fifth Report of Session 2012–13, The work of the UK Border Agency (December 2011-March 2012), HC 71, para 46; House of Lords Select Committee on Science and Technology, Second Report of Session 2012–13, Higher Education in Science, Technology, Engineering and Mathematics (STEM) subjects, HL paper 37, para 239; Public Accounts Committee, Seventh Report of Session 2012–13, Immigration: the points based system-student route, HC 101, p 6; The Committee on Soft Power and the UK’s influence, Report of Session 2013–14, Persuasion and Power in the Modern World, HL paper 150, para 235; House of Lords European Union Committee, Eighth Report of Session 2012–13, The EU’s Global Approach to Migration and Mobility, HL paper 91, para 188

62 HESA, Staff numbers and characteristics,’ accessed 30 March 2017

63 Department for Education (XHE0159) para 46

64 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017

65 See, for example, Case for Science and Engineering (XHE0187) para 8, Engineering Professors’ Council (XHE0122) para 13, The Open University (XHE0180) para 17, The Russell Group (XHE0094) para 5.15, University of Sheffield (XHE0114) para 10, University Alliance (XHE0115) paras 6–7

66 University and College Union, ‘Academics’ survey shows little support for HE Bill amid Brexit brain drain fears,’ accessed 30 March 2017

67The great escape: bolthole for academics fleeing Brexit and Trump,” Times Higher Education, 2 March 2017

68 Q39

69 Q12

70 The Government has attempted to secure an early agreement on reciprocal rights with other EU member states since the referendum result. It was reported in late 2016 that Angela Merkel, the German Chancellor, rejected this on the basis that there could not be negotiations before the UK formally invoked article 50. Both the Lords EU Select Committee in its report Brexit: acquired rights and the Commons Exiting the EU Committee in its report The Government’s negotiating objectives: the rights of UK and EU citizens recommended the Government should unilaterally guarantee all EU nationals in the UK. In debates on the UK exiting the EU and on the European Union (Notification of Withdrawal) Bill 2017, there was support in both Houses from Members from across the parties.

71 Q106

72 Qq71, 94

73 See, for example: Oral evidence taken before the House of Lords EU Justice Sub-Committee HL (2016–17) 82, Q23, Oral evidence taken before the Exiting the EU Committee on 22 February 2017, HC (2016–17) 1072, Q1079

74 Q13

75 Department of Education and Skills (The Republic of Ireland), ‘Minister Burton announces breakdown of €36.5m Third Level spend,’ accessed 30 March 2017

76 HC Deb, 24 March 2016, col 660WS

77 As above

78 The Russell Group (XHE0094) para 5.7

79 Q6

80 Q108

81 Q9

82 HC Deb, 17 January 2017, col 793WS

83 HM Government, The United Kingdom’s exit from and new partnership with the European Union, Cm 9417, February 2017, para 5.9

84 As above, para 10.14




21 April 2017