The UK is slipping behind foreign competitors in the higher education spending stakes, according to international comparisons.
Spending per higher education student grew 8 per cent in the UK in real terms between 1995 and 2001, compared with an average of 30 per cent across other Organisation for Economic Cooperation and Development countries.
UK spending on higher education as a proportion of gross domestic product remained below the OECD mean in 2001, falling behind the US, Canada, Denmark, Finland, the Netherlands, Sweden, Australia, Ireland and Korea.
Many countries that invest more than the UK, most notably Korea, do so by means of private spending via industry and parental contributions.
The OECD study shows that this is where the UK could make up ground. The proportion of its higher education spending coming from private sources is growing faster than of any other European Union country.
But it will take a lot of extra investment for the UK to catch up with other countries in spending on higher education infrastructure. The share of higher education funding ploughed into capital expenditure in the UK is, at 2.3 per cent, among the lowest in the OECD, and compares unfavourably with a 11.5 per cent average.
Andreas Schleicher, head of the OECD's indicators and analysis division, said this finding reflected the fact that the UK invested more than average in staffing costs. He added: "It will be interesting to see how this evolves because sustainable education requires infrastructure to be in place."
Dr Schleicher said there was no evidence of a link between the UK's level of investment in higher education and the fact that it has lost its top position for graduation rates among OECD countries.
Two years ago, the UK had the best graduation rate record, but it has been overtaken by Australia, Finland, Iceland and Poland.
The UK's market share of foreign students has declined since 1998, according to the OECD. Six years ago, the UK enrolled 16 per cent of the total number of overseas students on higher education courses in OECD countries - second only to the US. By 2002, Germany had an equal share to the UK with 12 per cent of students. Australia's and France's share was 10 and 9 per cent respectively.
Nearly 2 million overseas students were enrolled on higher education courses in OECD countries in 2002. This amounts to an average of a third more for each country than in 1998 and 15 per cent more than in 2001.
Five countries in 2002 received nearly three-quarters of foreign students studying in the OECD: the US, UK, Germany, Australia and France. With 30 per cent of the market share, the US dominates.
Relative to a country's total higher education enrolment, the percentage of foreign students ranges from below 1 per cent in Mexico to almost 18 per cent in Australia. At just over 10 per cent, the UK has the fifth highest proportion of foreign students.
Among OECD countries, the biggest number of overseas students come from France, Germany, Greece, Japan, Korea and Turkey.