New analysis sounds a note of caution for UK immigration reforms

Within the UK's higher education system, there are a group of institutions known as "Post-1992 universities". The term derives from enabling legislation – the Further and Higher Education Act 1992 – that has conferred university status (and degree-granting authority) to as many as 78 former polytechnics and colleges. This group of institutions, sometimes referred to as "modern universities" or "new universities", accounts for nearly half of all universities in the UK system today.

That sort of expansion of the higher education system is typically designed to build out capacity in underserved areas of the country and improve access to degree programmes in the process. We can find other such examples across well-established higher education systems – a similar initiative in British Columbia, Canada in the 1990s and 2000s comes to mind – and those newly commissioned universities are in their nature closely connected to their local communities and regions. Due in part to their polytechnic roots, they also tend to be more focused on applied programmes, labour market needs, and graduate employability. And as younger institutions, they also operate within relatively agile structures, offering more flexible programme options and expanding access to higher education to a wider field of learners in the process.

A new think tank analysis from the Tony Blair Institute for Global Change highlights that these Post-92 universities may also be especially vulnerable to the reforms announced in the UK government's immigration white paper.

The paper finds that nearly half of UK universities (43%) are expected to report a deficit for 2024/25, with a weakening outlook for the year head. "Projections published in November suggest that by 2025/26, 72% of providers in England could be in deficit, with 40% expected to have fewer than 30 days’ liquidity – a clear signal of systemic risk," says the report.

The vulnerability in the system

Driven in part by surging graduate student numbers, international students have come to account for a greater share of total higher education enrolment in the UK, having doubled from 12% of total enrolment in 2001/02 to 24% as of 2021/22. "The growth in international-student numbers has been matched by a sharp rise in their financial contribution to the sector," adds the paper. "In the 2023/24 academic year, nearly a fifth of UK universities’ total income came from the tuition fees of students from outside the European Union – a 15-fold increase since 2000/01. In real terms, income more than doubled over just eight years – rising from £4.7 billion in 2016/17 to £10 billion in 2023/24."

The government's recent immigration white paper, however, explicitly intends to curb migration to the United Kingdom across all visa classes, including the Student Route. "The modelling for the paper assumes that, as a result of these reforms, the number of international students in the UK will reduce," adds the report.

The Institute goes on to argue that that impact will not be uniformly felt "with the post-1992 institutions more likely to be affected." There are a number of observations behind this projection, including that:

• Once we step outside of the top-ranked universities in the UK – notably the Russell Group universities that tend to generate larger budget surpluses – institutions tend to be more dependent on international student fees, and, by extension, more vulnerable to any declines in student numbers.

• At the same time, those Post-92 universities often have an out-sized impact on the communities in which they are based, both in terms of providing access to higher education and as significant employers and drivers of local economies in their own right.

"The government faces two legitimate policy objectives: to reduce net migration and to support economic growth and opportunity, including through the contribution of the higher-education sector," concludes the Tony Blair Institute. "Any serious conversation about student migration must recognise that, under the current higher-education funding model, there are trade-offs in balancing these two goals."

"Given the extent to which international students’ fees now prop up the finances of many institutions, especially those in more economically deprived areas – any fall in student numbers will have consequences. The current model cannot absorb a sudden drop without serious implications for institutional viability, course provision and regional access to higher education."

For additional background, please see:

• "UK sets out new immigration strategy, will reduce Graduate Route work term to 18 months"
• "UK commission calls for a more strategic and sustainable approach to international student recruitment"
• "Full-year data highlights decline in foreign enrolment in UK universities in 2023/24"