Last June’s UK referendum vote to leave the EU was greeted with widespread dismay in higher education circles and, as reflected in the columns of Times Higher Education, the implications of Brexit remain a major source of concern for the sector.
But this is more than a parochial issue. According to a report by Universities UK (2015), the sector accounts for about 10% of the country’s exports of services, for nearly 3% of GDP, and for over 2.5% of total employment. Spin-offs from university research activities are critical for innovation, while universities are often key employers in their local economies.
My analysis indicates that the main threats to the sector come not just from Brexit itself, but also from the fact that it is likely to be accompanied by government reforms to the way the sector is regulated and by a general tightening of immigration controls (Mayhew 2017).
Leaders in UK higher education have expressed their concerns under four broad headings:
- The implications of Brexit for the number of EU students studying in the UK and the potential consequences for university revenues;
- The impact on the ability of UK students to study abroad;
- The impact of exit on UK universities’ access to EU research funding;
- The impact on the ability of UK universities to hire and retain staff from EU countries.
EU students in the UK
In 2015/16, EU students accounted for 5.5% of full-time undergraduates in the UK, 10.3% of taught master’s students and 14.7% of doctoral students. The corresponding figures for other foreign students were 10.1%, 49.3%, and 36.5%. In other words, EU nationals represent a small, though significant, presence among the UK’s foreign students.
But some universities, including some of the London colleges and some of the Scottish universities, are more exposed than others, particularly at the graduate level. Although short-term assurances have been given to students already on courses and those due to start in 2017 (2018 in Scotland) that they will continue to be charged domestic fees and have access to current loan and funding arrangements, universities are concerned that Brexit will lead to a fall in their numbers. And indeed early signs have not been particularly reassuring.
Nevertheless, perhaps this concern is being overplayed. There is no fundamental reason why universities could not choose to continue to apply the domestic fee to EU nationals if they so wished. Of course, whether or not the students would have access to loans and other funding will be out of the universities’ control and a matter for government decision. So will whether the EU students would be subject to the same onerous and expensive visa requirements faced by non-EU students.
Furthermore, it may be that some EU citizens have been applying to UK institutions partly because they are attracted by the prospect of remaining in the UK to work after their studies. This attraction will diminish if they become subject to immigration law as it applies to non-EU citizens.
UK students abroad
Over 15,000 UK students spent time abroad under the Erasmus Plus scheme last year. Brexit need not seriously affect the UK’s participation in the scheme while it is important to remember that there are many other study abroad and exchange schemes entirely independent of the EU.
A small but growing number of UK students have been choosing to pursue their entire university studies in other EU countries. Potentially Brexit will expose them to higher fees, but generally fees in other EU countries are significantly lower than in the UK and, in any case, it will be open to foreign university authorities to continue to charge the EU fee if they so choose.
EU research funding and collaborations
As with EU students, it is possible to exaggerate the significance of EU research funding and EU collaborations in the overall picture. UK academics still collaborate more with US scholars than with continental Europeans, while not all collaborations with the latter – for example, UK membership of the Open Research Area – are dependent on EU agreement or funding.
The bulk of the UK’s EU research monies come from the Framework Programmes (the current manifestation of which is Horizon 2020) and structural funds, with the former being the more important of the two. EU funding currently comprises about 16% of the research income of UK universities or 2.5-3% of total income.
UK researchers have been particularly successful in bidding for EU funds and the UK pays in less than these researchers take out. So any replacement of EU funding by the UK government would be harmful for net government finances. Moreover, as with students, the funding is very unequally distributed across UK universities, while UK scientists have particular worries about infrastructure investments founded in whole or part by the EU.
But the key point to note is that non-EU countries can and do participate in Framework Programmes. Some of these are members of the European Economic Area (EEA) and/or the European Free Trade Area (EFTA), and therefore as members of the Single Market they accept freedom of movement. But others are outside the Single Market and do not allow complete freedom of movement. In other words, there is no single associate model.
What is clear is that, as is the case for other associate members, UK negotiators would have to agree to a financial contribution (and that contribution could well be higher than that currently made). What is less clear is the impact that the politics of the Brexit negotiations and the defensive reactions of some other EU states will have on attitudes towards freedom of movement in achieving a deal. The difficulties experienced by Switzerland after its referendum in favour of restricting mass migration sound warning bells in this regard.
About 17% of UK academic staff originate from other EU countries and about 12% from outside the EU. Higher education authorities worry that after Brexit, EU staff (or at least new recruits) will be treated by the immigration authorities in just the same way as their other foreign employees. Yet it is far from clear just how much difficulty universities have in fact experienced in hiring non-EU staff, though recent increases in visa and associated costs together with reports in Times Higher Education and elsewhere suggest that difficulties have increased.
But a major threat looms if there is a general toughening of immigration policy. In this context, one serious issue relates to post-doctoral researchers who have come to work in the UK on short-term contracts in the hope that this would lead to permanent positions. The attractiveness of such posts could well diminish under tougher immigration rules.
The best outcome for higher education would be a comprehensive sectoral agreement with freedom of movement within the sector for students and staff and access to EU funding in return for a contribution. Short of that, it will be important to achieve associate status in EU funding programmes. But a satisfactory outcome could be prejudiced by disputes in the negotiations about freedom of movement more generally. And this is where the UK’s general stance on immigration enters the picture.
There is a likelihood of a general tightening of immigration policy (Portes 2016) and the government continues to insist on including students in the overall immigration figures. Moreover, a Home Office consultation paper, published in late 2016, floated the idea of tougher immigration rules for foreign students, possibly linked to judgments about the quality of institutions and courses. At the 2016 Conservative Party conference Home Secretary Amber Rudd promised to “ask ‘what more can we do to support our best universities – and those that stick to the rules – to attract the best talent?’, while looking at tougher rules for students on lower quality courses”.
In that spirit, an experiment is already in place: a two-year pilot that eases visa rules for Masters students at Bath, Cambridge, Imperial, and Oxford and offers them more generous staying-on rights after completing their studies. Such developments, together with a possible tightening of the resident labour market test, could pose a threat for some of the UK’s lower ranking universities.
The UK government’s White Paper on higher education (Department for Business, Innovation and Skills 2016) and the Parliamentary Bill that followed intensify the sense of looming threat. The proposed Office for Students, which is set to replace the Office for Fair Access (OFFA) and the Higher Education Funding Council for England (HEFCE), raises the prospect of more direct and draconian regulation and quality control.
At the same time, the new regime would offer easier and more rapid entry for new higher education institutions. Such institutions, possibly for-profit foreign ones, could well undercut established universities, not least via a substantial online offering.
Brexit presents threats to the higher education sector. What in fact materialises will depend not only on the uncertain outcome of the exit negotiations but also on the ability of UK universities to adjust to the new order. But the perfect storm of Brexit, a general toughening of immigration policy, and the changes presaged by the Higher Education Bill will offer real challenges to the lower ranking institutions in the sector. If some institutions succumb under the challenge, the costs to society are uncertain.
Department for Business, Innovation and Skills (2016), Success as a Knowledge Economy: Teaching Excellence, Social Mobility and Student Choice, Higher Education White Paper.
Mayhew, K (2017), ‘UK Higher Education and Brexit’, Oxford Review of Economic Policy 33 (suppl_1): S155-61.
Portes, J. (2016), ‘Immigration after Brexit’, National Institute Economic Review, November.
Universities UK (2015), The Impact of Universities on the UK Economy.