The UK has suffered its real drop in overseas recruitment. Phil Baty counts the numbers and surveys efforts to halt the fall.
An 11 per cent slump in overseas student recruitment by British universities has been revealed in new figures from the British Council.
The dramatic fall, after about 20 years of steady growth, raises big questions about the United Kingdom's ability to keep its Pounds 7 billion share of the highly lucrative overseas recruitment market.
And the figures, released just a week after the British Council launched its Pounds 5 million Education UK "brand" to sell courses to the world (see box opposite), cast doubt on the prime minister's campaign to attract 75,000 more fee-paying overseas students to the UK within five years.
There are 213,119 overseas students in the UK. The British Council figures - based on overseas student entry to undergraduate and postgraduate programmes from 30 "priority countries" - show that the number of new entrants fell from 73,240 in 1997-98 to 64,885 in 1998-99.
"This is the first dip for a long time, after a long curve of growing intakes," confirmed Alan Barnes, director of the council's Education Counselling Service. "It is the first real drop in 15 or so years - the first since overseas recruitment has been big business for universities."
Recruitment to first-degree courses fell the most - 15 per cent, down to 29,452. And demand for taught postgraduate courses slipped 6 per cent to 16,677. A healthy increase in overseas recruitment to postgraduate research - a 16 per cent rise to 3,679 - was not enough to offset the overall drop.
This comes from a big decline in recruitment from the UK's traditional strongholds - Malaysia, Singapore and Hong Kong. Recruitment from Malaysia plummeted by 56 per cent - just 2,373 new recruits last year compared with 5,413 in 1997-98. The United States has overtaken Malaysia as Britain's largest recruitment ground, but numbers from the US too slipped by 5 per cent (4,934 to 4,692).
Recruitment from Singapore fell 20 per cent to just over 1,600 students. And almost 200 fewer students came from Hong Kong than came in 1997-98. Recruitment from Hong Kong slipped 9 per cent, falling just below 2,000 for the first time in several years.
Smaller but still important markets also registered drops: recruitment from Thailand slid 36 per cent to just 600 students and numbers from Indonesia fell 22 per cent to 322 students.
The British Council had anticipated the slump, blaming it on economics. "The collapse of the financial markets in Asia had a particular affect on our traditionally strong areas," Mr Barnes said. "The Malaysian government stopped sponsoring students, a substantial part of the market. And of course, many more potential students simply cannot afford it now."
These factors have also hit Britain's competitors. But not only has the market slumped, so has the UK's share in it. "The UK has lost its competitive advantage," Mr Barnes said. "The pound has been stronger against some of the currencies of our rivals - Australia, for example, has gained a competitive advantage. So we have lost competitiveness as the market has been declining."
British complacency may also have had a role, damaging the reputation of its higher education sector in key markets. Last month John Grote, British Council director in Singapore, said that UK institutions had been slow to respond to new opportunities.
But there are also concerns about abusing the market, especially when it comes to UK activity abroad.
Last week The THES reported that British Council officials in Malaysia had warned that British universities were getting their fingers burned by dabbling "naively" in Malaysia's unregulated private sector. This followed a Quality Assurance Agency audit of provision in Malaysia in which half of the inspected British provision was criticised.
As QAA chief executive John Randall said in his most recent annual report:
"Nowhere is the maintenance of standards and the credibility of awards more important than in overseas markets.
"Universities are able to succeed in these competitive markets because of the value attached to the quality and standards of UK higher education. If that high standing is damaged, the UK's position in the global marketplace is undermined."
Mr Barnes concurred: "There is a problem with various scandals or damning quality reports. It definitely affects people's perceptions of UK higher education and can affect overseas student recruitment. But these are the exceptions rather than the rule, and they tend to be a short-term problem.
"Because the quality regime has extended its reach to overseas operations, our overseas image is getting even stronger. The weaker providers are getting fewer and fewer. Scandals have yet to totally undermine our position and because we are seen to be dealing with these issues, people see that UK education has not lost the plot - it is stronger than it ever was."
Surprisingly, another market identified for growth, Russia, saw a further decline in new entrants. The already minimal 300 students who came to the UK from Russia in 1997-98 fell to 285 last year.
The British Council is confident that recruitment in its key markets will pick up. "Economic circumstances change all the time," Mr Barnes said. "We are already starting to see a strong comeback in several markets."
And the UK still retains a disproportionately large share of the global market, illustrating its persisting popularity, the British Council believes. The US has captured 63 per cent of the market, compared with 17 per cent for Britain, 10 per cent for Australia, and about 5 per cent for Canada.
"But if you look at this from a different perspective, in UK higher education 12 per cent of all students are from overseas. In the US, only 3 per cent are," Mr Barnes said. "In terms relative to our size and number of institutions, we are stronger."
The council believes that the UK will be able to meet the ambitious goals set for it by the prime minister. "The targets were set knowing what was happening in our traditional markets," Mr Barnes said. "They are based on those markets recovering to a degree, but we are not relying on spectacular growth there."
Beatrix Marrick, director of services and research at the UK Council for Overseas Student Affairs, believes the success of the "Blair project" - which will be supported by Pounds 5 million of government funds and the marketing skills of McCann Erickson and the PR firm Shandwick - depends on universities fulfilling their side of the bargain.
"We've had all the fuss of the big marketing launch, we've had all the pizazz," she said. "Now we must make sure that we follow through. We must make sure we can deliver - that the students persuaded to come to the UK find that what is delivered matches up to all the marketing."
UKCOSA is monitoring the student experience. The results will not be known for a year or so, but Ms Marrick believes that the sector is "getting its act together" and that exploitation of the fee-paying overseas student is rare.
"There is always room for improvement in the treatment of overseas students," she said. "But the UK is no worse than anywhere else. We always hear how wonderful the Australian experience is, but in terms of the care of students, they are no better than us. The British have a habit of knocking themselves, but there is lots of really good practice here."
Launching his drive to recruit more overseas students last year, Tony Blair said: "To universities and colleges - I ask you to live up to your reputation, to professionalise your approach, to deliver a quality education to overseas students that encourages involvement and rises to the challenge of our competitors."
The marketing push will focus on emerging markets. Among eight "priority countries" - which include Hong Kong, Malaysia and Singapore - the British Council will also target relative newcomers including India, Russia and China.
Recruitment from India rose 21 per cent to 1,283. This has almost doubled from about 700 three years earlier.
The biggest growth potential the British Council has identified is from China. In 1996-97, only 633 students came from China to study in the UK. Last year there were 1,282, a 53 per cent increase over 1997-98.
"With our traditional markets, where the size of the market is already largely stable, it is about increasing our market share," Mr Barnes said. "But in countries such as India and China, market growth is the issue."
There is also enthusiasm for cultivating relatively tiny markets. "Around the world there is an increasing number of countries where people can't get the education they want at home.
"They may be small numbers," Mr Barnes said, "but they all add up. We operate in 110 markets and the demand for education is very, very strong."