How refreshing it is to read a vice-chancellor accepting that an outsourcing activity is purely market-driven, without a single academic argument presented for or against the decision.
Steve Smith is correct in one respect: competition to attract international students is becoming more intense, especially as universities in Europe and elsewhere introduce more English-medium programmes.
The irony is that while these institutions support professional academic departments to research academic literacies and applied linguistics, and to provide research-led teaching that initiates international students into the global professional discourse communities - of which they aspire to be members - some UK universities are dumbing down provision to "pre-university" recruitment-led teaching. When international students realise that they can get this anywhere, the marketing bubble will burst.
If the problem is marketing, as Smith argues, perhaps a sounder solution would be to outsource the operation of the international office to an established international marketing operation. This would be less likely to backfire than handing over an academic discipline to a property developer.