Further education faces an even tougher task than higher education in meeting government targets for overseas student recruitment (page 4). The targets are ambitious and achieving them will depend on overseas students seeing education in Britain as a good buy. This perception is at risk. Figures emerging from the transparency review of teaching and research show clearly the cumulative effect of underfunding for teaching home and European Union students.
Twenty years ago the International Monetary Fund ordered an end to subsidies for foreign students. They were to pay full cost. Since then, the unit of funding for home and subsequently EU students has been whittled down but overseas fees have remained high. Imposing home fees in higher education has not reduced the growing gap because universities and colleges have not been able to keep the proceeds.
Subsidies are now reversed. Not only is this seen as unfair; it also means universities and colleges cannot provide facilities appropriate to the fees they charge their overseas students.
If the government is serious about ensuring the UK is an attractive destination for overseas students, this underlying flaw in higher education funding will need to be sorted out. Perhaps that is why the spending review has so far addressed only one year.