Hefce warning over overseas students and pensions

Slowing growth in international student numbers could have “a material impact on the sector”, while a financial blow from pensions could be looming.

March 5, 2014

Student loans

The Higher Education Funding Council for England’s annual report on the ‘Financial health of the higher education sector’, based on 2012-13 results and 2013-14 forecasts, also predicts that the abolition of student number controls will widen the financial gap between individual universities.

Overseas student numbers across all years of study in English higher education institutions grew by 1.2 per cent in 2012-13, compared with 4.6 per cent in 2011-12, says the report, published on 4 March.

Universities fear that the government’s tightening of the visa regime has deterred overseas students from coming to the UK.

Hefce says in the report: “In terms of overseas student recruitment, the latest data for 2012-13 and 2013-14 indicate a slowing of growth in the numbers of overseas students recruited by the sector, compared to recent years, which could make plans for income growth more difficult to achieve.

“This could have a material impact on the sector as overseas fee income represents a significant source of income for many institutions.”

Hefce also notes that the increase in home/European Union student numbers in 2014-15 and the abolition of quotas in 2015-16, announced by George Osborne in his autumn statement, will have financial impacts.

Institutions “will face increasing levels of uncertainty over student recruitment, with some institutions being more successful in attracting students than others. This could lead to greater volatility of financial forecasting and a widening of institutional financial performance in the coming years,” Hefce says.

The report also says that “a new requirement on institutions to include pension scheme liabilities” for multi-employer funds such as the Universities Superannuation Scheme “will have a significant impact on the financial plans and performance of institutions in future”.

The deficit of the USS, used by pre-1992 universities, stood at £7.9 billion in June 2013, the report notes.

Hefce adds that this “indicates that sector reserves could be significantly overstated, depending on the value of the USS deficit”.

It continues: “Confidence levels in the financial strength of the sector may be impacted by the inclusion of USS deficits on institutions’ balance sheets.”

The English sector’s income grew to £24.3 billion in 2012-13, up from £23.3 billion the previous year. Forecast income for 2013-14 is £25.3 billion.

However, the sector’s operating surplus as a percentage of total income fell from 4.2 per cent to 3.9 per cent in 2012-13. And the collective surplus is forecast to be 2.2 per cent in 2013-14.

john.morgan@tsleducation.com

You've reached your article limit

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 6 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments

Most Commented

question marks PhD study

Selecting the right doctorate is crucial for success. Robert MacIntosh and Kevin O'Gorman share top 10 tips on how to pick a PhD

India, UK, flag

Sir Keith Burnett reflects on what he learned about international students while in India with the UK prime minister

Pencil lying on open diary

Requesting a log of daily activity means that trust between the institution and the scholar has broken down, says Toby Miller

Application for graduate job
Universities producing the most employable graduates have been ranked by companies around the world in the Global University Employability Ranking 2016
Construction workers erecting barriers

Directly linking non-EU recruitment to award levels in teaching assessment has also been under consideration, sources suggest