Source · Select Committees · Public Accounts Committee
Recommendation 15
15
We received written evidence from the Universities and Colleges Admissions Service (UCAS), which told us...
Conclusion
We received written evidence from the Universities and Colleges Admissions Service (UCAS), which told us that it also projected growth in recruitment of both domestic 18-year-olds and international students between now and 2026. UCAS projected that the 2026 admissions cycle would have one million applicants compared with just over 700,000 in 2021. About 40% of this increase would be attributable to growth in demand from UK 18- year-olds (driven by increases in both application rates and the population), with the remaining 60% driven by continued growth in demand from mature and international students.27 The OfS assured us that it would be checking whether, if projections do not materialise, providers still have the ability to remain financially viable and sustainable.28 The Department told us that, among its main international competitors, the UK was 22 Qq 44–49; Office for Students Strategy 2022 to 2025, Office for Students, 23 March 2022; C&AG’s Report, para 3.25 23 Qq 59–63; C&AG’s Report, para 3.6 24 Q 24; FSE0003 Financial Sustainability of the higher education sector in England, The Russell Group, 21 March 2022, para 28; C&AG’s Report, para 1.12 and Figure 3 25 Q 80 26 Q 5; C&AG’s Report, paras 2.9–2.11 and Figure 8 27 FSE0001 Financial Sustainability of the higher education sector in England, UCAS, 21 March 2022, page 2 28 Q 5 12 Financial sustainability of the higher education sector in England the only country that significantly grew its international student recruitment during the pandemic. The Department recognised, however, that it is a very competitive market and that there are many countries around the world seeking to bring in more international students, for exactly the same reasons that UK providers are.29
Government Response
Not Addressed
HM Government
Not Addressed
4: PAC conclusion: We are concerned that the financial sustainability of some providers is being put at risk by their heavy dependence on their ability to continue growing overseas student numbers. 4: PAC recommendation: The Department, drawing on OfS analysis as appropriate, should set out what it considers to be the risks to achieving the continued forecast growth in overseas student numbers universities are relying on for their future financial security, and explain how it is mitigating those risks. 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department recognises that the financial sustainability of the higher education sector depends on the continuing contribution made by income from overseas students, if not necessarily on the growth trend as currently forecast. Many factors affect overseas students’ decisions about where to pursue higher education, ranging from geopolitical developments, through public health issues, to students’ behavioural changes. No government could mitigate the full risk of such factors, but through the International Education Strategy (IES) and the 2021 update, the government has established a thorough approach to promoting higher education to overseas students and mitigating risks associated with providers’ dependence on overseas fee income. 4.3 The IES is committed to growing the value of education exports to £35 billion and to hosting at least 600,000 international higher education students in the UK per year by 2030. The international students ambition of 600,000 was met for the first time in 2020-21, with over 605,000 international students studying in the UK. 4.4 The IES sets out the government’s ambition to enhance the entire international student experience, from application to employment. It also makes clear that the diversification and sustainable recruitment of international students remains a key strategic priority for the sector. 4.5 It is a matter for higher education providers, as autonomous bodies, to forecast sensibly when planning for their financial sustainability. The OfS monitors this, including reviewing forecasts for optimism bias amongst providers. The department and the OfS continue to work closely together in considering financial risks facing the sector. Updated analysis of those risks will continue to inform departmental strategy.