London is the most popular city in the world for international students. We currently play host to 40,000 from continental Europe and 67,000 from the rest of the world. They enrich the city and country by sharing their cultures and becoming friends of Britain in ways that boost our diplomatic and trade links in future years.These students – and their domestic counterparts – also play a crucial role in providing our businesses with the skills they need. Recent research from Deloitte showed more people are employed in London in high-skill, knowledge-based sectors than any other city in the world. While this explains why London has more graduates as a percentage of the population than any other city, it also brings our nation’s skills shortage sharply into relief. Despite the top notch students emerging from universities across the country, the very high-skill, knowledge-based sectors in which London excels remain under the most pressure from talent shortages. In short, we need more of them and a thriving higher education sector to provide them.And we mustn’t forget the substantial economic boost universities give us. As the UK tries to rebalance its economy towards being export-led, higher education is one of the sectors leading the way. In 2010/11 the sector contributed £40 billion to the country’s GDP, with £5.8 billion of that being generated in London alone.Our recent report, ‘London Calling’, quantified the net economic impact of non-EU students on our country, and the results showed that international students in London bring a net benefit of £2.3 billion.Put simply, the capital’s many and varied institutions contribute a great deal to London – and the UK’s – economic performance and cultural wellbeing.But there are two particular issues that could put this hard-won success at risk.Firstly, immigration policy. Our recent report, London 2036: An Agenda for Jobs and Growth was a year-long project for the Mayor that set out a formula for London to achieve world-beating income growth, greater job opportunities, and a diverse and shock-proof economy. It was not only clear on the central role higher education plays in our economic ecosystem, it was clear when it came to the relationship between skills and immigration policy.Its conclusion: any changes to immigration policy that affect the ability of universities to recruit international students and staff would impede the talent pipeline that helps to power both London and the national economy.Of course, the government is right to be concerned about migration – politicians reflect the views of the voters, and immigration undoubtedly is a doorstep issue. However, we are particularly opposed to the way in which it treats students as if they were permanent migrants when, in fact, the majority leave the UK after completing their studies.This not only distorts migration data but also diverts border and immigration authorities away from tackling genuine abuses of the system and keeping the border secure. The result has been that overseas students are less likely to apply for places at UK higher education institutions (the number of first-year non-EU students at universities decreased by 0.4% in 2011–12, whilst postgraduates fell by 2.6% – this against a growing global market).Secondly, universities’ valuable and varied contribution to the UK – not least in London – is underpinned by stable and sustained government funding. While they have become increasingly self-reliant in recent years, universities’ positive impact – often working closely with business in various ways – would be jeopardised if support for research, innovation and teaching is compromised in the forthcoming Spending Review.The Treasury will have some tough decisions to make before the November review – and other sectors will have their own compelling cases – but we need to be very careful in undermining one of the country’s real success stories. Cutting back on investment in universities would be to cut back on producing the highly skilled graduates businesses need and on the research that can fuel innovation and enterprise.For all these reasons, London First will continue to champion our universities, helping them ward off the threats they face, while fostering an environment that lets them continue to enrich our country; socially, culturally and economically.
This is the second in a series of blogs commenting on the issues discussed in Universities UK’s submission to the government’s Comprehensive Spending Review.