Tag: visapolicy

In The Doldrums

The doldrums were a miserable place for sailors in the age of sail because it was an area where the trade winds converged but a lack of surface winds meant they might be becalmed for weeks in hot, muggy weather. It’s not a bad metaphor for the higher education sector as it awaits the Migration Advisory Committee (MAC) review on 14 May and reviews of pathway courses commissioned by Universities UK and the Government after the Sunday Times “cash for courses” reporting. All of this while the signs of recovery from the pandemic are patchy and international applications have foundered after changes to visas for dependents.

For pathway operators almost entirely reliant on international students the outcomes might make it feel more like the “horse latitudes”1 where it was suggested survival was about knowing what to keep what to keep and what to throw overboard. Rumours of delayed investments and potential sales are also swirling around the sector as the uncertainty makes the future even more opaque than usual. There are few guarantees of future growth.

The past month has seen a degree of information about some UK pathway performance in 2022/23 emerge as annual accounts have been published at Companies House. While the financial years of the main pathway operators are not consistent some of the major players and their operating subsidiaries2 do have similar year ends. This blog focuses on operations where figures for 2022/23 are available.

Navitas

Overall, Navitas had a strong year in 2023 (year ending 30 June 2023) with its overall financial statement indicating a rise from 7,605 to 10,869 student enrolments.

Source: Navitas UK Holdings Limited Annual Reports

However, Navitas has lost two universities from its portfolio for Autumn 2024 enrolments with the University of Leicester and University of Northampton both terminating their pathway college contracts. On the face of it the Leicester decision was surprising given that the Global Study Centre appeared to have a student enrolment driven turnover growth of over 50% from 2021/22 to 2022/23. Northampton’s figures are still pending.

At a more granular level there are still a number of operational reports at individual college level to come for 2022/23 but up until 2021/22 Brunel and Hertfordshire had shown consistent growth in turnover (generally confirmed as being largely due to student enrolment growth) since 2019 while the ventures at Portsmouth, Swansea and Cambridge Ruskin appeared to be struggling. The scale of Northampton and Leicester is relatively small by this comparison and it may be that enrolment numbers have not met expectations.

Source: Individual Annual Reports

During 2023 Navitas appeared to be the likely winner of the contract tender for the proposed Manchester Metropolitan Embedded International Study Centre. The £150m contract was due to start in November 2023 which was the point at which Navitas changed the name of an existing company (Navitas UK College Limited) to Manchester Met IC. Not a peep since then but it has been amusing to see INTO University Partnerships posting on LinkedIn about its relationship with Manchester Metropolitan University in recent days. Perhaps a reminder to the university’s leadership that there are options.

Navitas has also been among those at the forefront of the charge to introduce the International Year One pathways that have been of particular concern to some commentators because there is no comparable option for domestic students. It remains unclear if any of the reviews will specifically consider this route but any restrictions would be damaging for future recruitment. Having acquired Study Group’s interests in Australia last year it may be that the business will look for a similar boost in the UK.

INTO University Partnerships (INTO)

With all of INTO’s UK joint venture partnerships except UEA having reported on 2022/23 it seems that enrolments from continuing UK operations have not even returned to 2018 levels let alone 2019. The problems at UEA have been discussed at length and it seems possible that a more aggressive recruitment strategy from the university might begin to pay dividends. With joint ventures struggling there is a bright spot at the wholly owned INTO Manchester which saw a second year of strong growth and enrolments up at a record 1112.

Source: Joint Venture Annual Reports (INTO UEA 2023 enrolment is an indicative figure pitched just below the 2020 enrolment figure which would represent an increase of 61% on 2022). INTO Newcastle is 51% owned by INTO.

At a corporate level INTO’s adjusted turnover3 was up from £141m to £160m year on year in 2022/23. Although the portfolio is global there has been little evidence of accelerating growth in US partners, even for direct recruitment, and the shadow of the court-case with University of South Florida seems to lengthen in terms of time before resolution. The INTO annual report indicates that what were historically shown as joint venture debtors are now shown as loans to joint ventures with almost all at higher levels than in 2019.

INTO’s early USP of 30-year deeply embedded joint venture partnerships with universities appears to have lost out to third-party, shorter-term contracts in both the UK and US. Winning Lancaster University in 2023 must have boosted morale, even though it’s not a joint venture, but geographical location, high entry standards and lack of Russell Group glitz made the university a notoriously hard sell for previous pathway providers Study Group, so the jury is still out. In the absence of a differentiated offer, several partnerships already shuttered and no real sign of a return to the boom days it is not easy to see how the company reinvents and reinvigorates itself.

Rumours of a sale earlier in the year seem to have quietened down which is no surprise given the uncertainties facing the UK. However, a number of sources have indicated that Navitas were a suitor before the pandemic and a trade sale would at least offer the benefit of consolidation in the sector and significant overhead savings. The current trading outlook and sector uncertainties do not seem strong or certain enough to attract a premium price but if the future looks no brighter there may be little point in waiting.

Kaplan

Kaplan’s corporate year end is December so we won’t get that update until later in 2024 but their joint venture international college with the University of York has a financial year aligned with the INTO operations. The 2022/23 results make stark reading and underpin that even for Russell Group universities the path is not smooth. The University’s overall recruitment problems have made the headlines and the Kaplan machine seems to be having an equal struggle at pathway level. While specific student enrolment numbers are not published the turnover and operating profit figures suggest a continuing and serious decline.

Source: University of York International College Annual Reports

As a point of contrast, INTO’s joint venture with Exeter, another Russell Group university, has shown growth post pandemic. It is twice the size of the Kaplan joint venture and Exeter is probably a stronger international brand than York. The likelihood is that both will be affected even more as global competition bites and if recruitment from China does not pick up.

Sources: INTO Exeter Annual Reports

None of this is to suggest that Kaplan’s overall performance can be extrapolated from the situation at the University of York but coterminous financial year end dates at two Russell Group universities offer a reasonable point of comparison.

When Zones Converge

The doldrums is known more properly as the Inter Tropical Convergence Zone and while people are always keen to talk about “perfect storms” affecting the higher education sector it seems to me that the forces currently converging may be more like a deep freeze. Feynman argued that even at absolute zero atoms still have some motion but it is fair to say that movement could become the exception rather than the rule. It is not an attractive outcome.

NOTES

  1. The “horse latitudes” are about 30 degrees north and south of the equator. They are under a high-pressure ridge which creates a dry environment (unlike the doldrums which have moist air). The name derives from stories that ships that became becalmed had to throw horses overboard in order to conserve water. Alternatively, it is suggested horse effigies were thrown into the sea to celebrate working off what was known as “dead horse” debt. A third explanation suggests the use of the term “horsed” for when a sail ship uses a strong current rather than wind to progress.
  2. As a general guide, most universities finish their financial year on 31 July each year, INTO has aligned its corporate and joint ventures with that and Navitas seems to have settled on 30 June in the UK. Kaplan International Colleges UK Limited and Study Group Holdings UK Limited are both 31 December year end but the Kaplan joint venture with University of York has a 31 July year end.
  3. Three of INTO University Partnerships’ “Key Performance Indicators” have adjustments which mean caution should be exercised in interpreting them. Adjusted turnover removes discontinued operations of which there have been at least ten since 2015.

Image by 851878 from Pixabay

Election O’Clock Tick, Tock

For visa policy, the year ahead will be shaped by a Tory party that is a bit like end of season Tottenham Hotspur – out of Europe, on their third manager in a year and worried about what life looks like without their star striker.  Sunak could face and lose three by-elections before the party conference so going route one with radical action on visas could become an attractive diversion.  The party may even, just like Spurs, chose to appoint a fourth manager in an attempt to be in contention in 2025.

UK Home Secretary, Suella Braverman, having been thwarted by the Cabinet on more far-reaching student visa reform last time round, could start her speeches with the words, “I shall fight on. I fight to win.”  Conviction politics and evoking the spirit of Margaret Thatcher have always gone down well with most parts of the Conservative party and if she has aspirations for the top job it’s not a bad ploy.  With the clock ticking down to a General Election just 20 months she has every chance of being centre stage.

Some universities have made quite extraordinary increases in international student numbers in recent years and should carefully weigh the consequences of their choices this Autumn.  One plausible scenario is that institutions will be suckered into maximizing recruitment from affected countries in September ahead of the clampdown on dependent visas.  The resulting visa figures would be more than enough for the Home Office and worried Tories to bay about irresponsible recruitment and seek a further round of constraints. 

Pitched against populist right wing politicians fighting for re-election and a public that is largely disengaged from higher education the sector becomes increasingly vulnerable.  However cynical or wrong-headed, an MP can claim the authority of having been publicly elected to represent the views of constituents which is more than any vice-chancellor can say.  They will be listening to people like Eric Kaufmann who spoke at the first National Conservatism conference and likes to remind Tories of the view there is no election victory in increasing immigration.

More Than This or Hold the Line?

Despite all the happy talk and positioning by the higher education sector, MP’s may believe that there is little evidence of public support, let alone a mandate, for significantly more international students. 

Even the sector’s own research commissioned by UniversitiesUK from Public First suggests that the public does not support a rise in international students.  The answer to question 15c, which has been largely misrepresented by the sector as indicating the public favours growth in numbers, shows that 46% would accept the same number and 21% want fewer.  It seems reasonable to argue that this means that 67% of the public do not support a continuation of the rise in international students that we have seen in the past few years.

YouGov tell us that concern over migration has been climbing for a year – from 53% up to 57% say that immigration has been too high for the last ten years and 17% say it’s about right which indicates 74% want immigration the same or lower.  A politician attuned to the data and public opinion will be questioning unfettered growth in international student numbers.  This is particularly so when the surge in growth is driven by countries where the biggest influence on a study abroad decision is “Immigration policies of destination countries” above even job opportunities and quality of higher education.

Money For Nothing

The sector’s fightback is summarized by ApplyBoard UK Advisory Group member (and director of HEPI) Nicholas Hillman who is reported as saying, “If people want to oppose the presence of international students, fine, but they should only do that if they know the benefits they bring and do so with their eyes wide open.”

The glossy launches and expensive research making that economic case are presumably an attempt to open those eyes. But when respondents were told by Public First that the sector contributed nearly £28bn to the UK economy a majority (57%) still said they wanted the same number or fewer international students. One suspects that the obsession with making the economic case, at a point when some headlines reflect how much universities are raking in, is aligned with self-interest and possibly even morally shabby.  

Lord Bilimoria, the co-chair of the All-Party Parliamentary Group for International Students, suggests there should be an aim of 1 million international students in the UK by 2030. ApplyBoard’s Jo Johnson considered, with unusual circumspection, 900,000 or more as appropriate.   Neither seemed to engage with the polling evidence that the majority of the public do not support such growth.

Where Is The Love?

While the sector’s tendency to pitch a case based on the economic value of universities seems reasonable it doesn’t cut to the heart of people’s suspicions that are partly driven by the drip, drip of years of stories about fat cat vice chancellors, dissatisfied students, Mickey Mouse degrees and grade inflation.  Unfortunately, the sector, when challenged, is Wildean in suggesting it has nothing to declare but its genius when a little more humility might go a long way.  It is difficult for the public to trust a sector that doesn’t accept its fallibility.

There are other deep-seated problems for universities in the recent Public Attitudes to Higher Education 2022 research by UPP Foundation/HEPI. Among the figures, 58% don’t think university prepares people for the real world and 52% think society values a university degree too highly.   27% are sceptical or negative about universities and 30% are broadly uninterested which indicates that more than half those surveyed actively oppose universities or think them irrelevant*.

Another drumbeat is whether universities are turning out students with qualifications that fit them for the workplace let alone justify the level of debt.  The current Prime Minister is on record as saying that he wants to “take a tougher approach to university degrees that saddle students with debt, without improving their earning potential.”  A former Prime Minister’s son says degrees are “irrelevant” and Reed Recruitment says,  “It looks like traditional graduate jobs are going out of fashion.”   

Sha la-la-la-lee

That’s the sound of the higher education sector sticking its fingers in its ears while complaining to an uncaring universe. 

What the public hears from universities is that home students should be charged more, that the loss of EU applicants has been a tragedy and that the sector is a major contributor to Britain’s soft power around the world.  This plays into a population facing the largest hit to living standards since records began in 1956,  taxpayers underwriting student loans to a record tune of £205bn, and no obvious evidence that soft power is helping secure trade deals.  Sceptics might even suggest that if UK higher education is so highly regarded then EU students would, whatever the price, always choose Ipswich over Paris and Canterbury over Rome.

The sector’s efforts to promulgate its message often looks like a self-interest, or perhaps self-help, group.  Chris Skidmore’s, International Higher Education Commission, is the latest example and doesn’t appear to have anybody without a vested and sometimes commercial interest in recruiting more international students.  Among the grandly titled “founding commissioners” the ubiquitous Jo Johnson from ApplyBoard makes an appearance, along with seven VCs and three CEOs of sector pressure groups, with Oxford International Education Group claiming they support the Commission under the banner of corporate social responsibility(!).

This is, of course, the Chris Skidmore who co-wrote a book, with those paragons of political, economic and personal credibility Kwasi Kwarteng, Priti Patel, Dominic Raab and Liz Truss,  which claimed, “”Once they enter the workplace, the British are among the worst idlers in the world.”  He was Minister with responsibility for universities for five months which was, for the record, longer than Jo Johnson who managed six weeks.  Would it be a great surprise that the public took their protestations with a pinch of salt?

Where there may be some hope is Johnson’s recent acceptance that “…there is a weakening consensus in British politics on the benefits of international study in our system…We need to acknowledge that and understand why it’s become weaker and what the sector needs to do to reinforce support for international study and its contribution to the UK.”  It’s unfortunate that he then chose to talk about “false narratives” because although these do exist it would have been more refreshing to see the sector accept that it is not without fault.  Disparaging public opinion as being driven by fake news is a tired and demeaning stance that should be replaced by open engagement and dialogue.

NOTES

  1. The headline is derived from U2’s first single on Island Records “Eleven O’Clock Tick Tock”.  They played it to start and end their gig supporting The Photos at the Marquee in July 1980 which is when I first saw them😊.
  2. “More Than This” is a 1982 song from Roxy Music.  “Hold the Line” is a 1978 tune from American rock behemoths Toto whose name apparently comes from the Latin phrase for “all encompassing” and not the dog in The Wizard of Oz.
  3. “Money for Nothing” is a 1985 song from Dire Straits that is distinguished with a great riff but also Sting singing backing vocal, “I want my MTV” to the same melody as The Police song “Don’t Stand So Close to Me” (which is why Virgin insisted on getting a percentage).
  4. 1972’s “Where is the Love” by Donny Hathaway and Roberta Flack is sublime and not to be confused with the Black Eyed Peas song of the same name which is just quite good.
  5. “Sha La La La La Lee” is a 1966 number from the Small Faces and a great reminder of what a force the late Steve Marriott was.  He recorded the song when he was 19.

* I am conscious that the UPP/HEPI research had some good news such as “77% agree universities are important to research and innovation; and 57% agree they are important to the UK economy as a whole”. However, it was startling that the “Broadly Uninterested” segment was so large that the authors had to acknowledge its presence but “focus the majority of our exploration of the segments on the other groups”.

Image by Davie Bicker from Pixabay