English universities warned not to over-rely on fees of students from China

England’s higher education regulator has warned universities against over-reliance on tuition fees of students from China, as Rishi Sunak backtracked on his earlier pledge to close UK branches of the Beijing-sponsored Confucius Institute.

The Office for Students (OfS) wrote to 23 universities with high numbers of Chinese students on Thursday, asking to see their contingency planning in case of a sudden interruption to overseas recruitment.

“Such interruptions could result from, for example, a changing geopolitical environment which could cause an immediate and significant impact on income,” an OfS report said. “We have written to providers that are particularly exposed to these risks to ask them to share their plans with us.”

Universities have become increasingly dependent on international students as part of their business models because of the significantly higher fees they can charge, which offset the decreasing value of domestic tuition fees that have gone up little since they were introduced in 2012.

China is of particular concern because it sends more students to study in the UK than any other country. Twenty-seven per cent of all non-EU students in UK higher education institutions, or 151,690 pupils, were from China in 2021/22. University College London and Manchester University recruited the highest numbers.

The OfS chief executive, Susan Lapworth, said: “International students bring enormous economic, cultural and educational benefits to higher education in England. But we continue to have concerns that some universities have become too reliant on fee income from international students, with students from one country sometimes a significant part of the financial model.

“Universities must know what they would do if international recruitment fails to meet expectations. We have written to a number of institutions today to ensure they are alert to this risk, and have credible contingency plans in place to protect them from the consequences of a sudden reduction in their income.”

The OfS’s concerns come as the government admitted it had backtracked on the prime minister’s pledge to shut branches of the Confucius Institute (CI), which are attached to universities across the UK.

Sunak’s predecessor, Liz Truss, used her visit to Taiwan to issue a reminder of his pledge during the Conservative party leadership race in July 2022, claiming the institutes promoted Chinese soft power.

She said: “Last summer the now British prime minister described China as the biggest long-term threat to Britain and said the Confucius Institutes should be closed. He was right and we need to see those policies enacted urgently.”

Number 10, however, effectively admitted on Wednesday that Sunak had changed his mind. A spokesperson said: “Like any international body operating in the UK, the CI needs to operate transparently and within the law. We’re taking action to remove all government funding from the CI in the UK, but we currently judge that it would be disproportionate to ban them.”

They also said it was important to note that the government did not directly fund the institute.

A UK charity that last month published a highly critical report about the role of the institutes in Britain will, however, argue on Thursday that the Higher Education (Freedom of Speech) Act – which became law last week – empowers regulators to shut them down.

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The act has a specific section on overseas funding, amending previous legislation to oblige the OfS to monitor overseas funding of higher education providers to gauge implications for freedom of speech and academic freedom.

UK-China Transparency found in its report last month that Beijing vetted Chinese people applying to teach at the institutes for their political leaning, ethnicity and ability to comply with Chinese Communist Party (CCP) guidelines for foreign affairs.

Those guidelines require staff to enforce CCP values, leading to claims that universities are in breach of legal responsibilities to protect their students from harassment.

Universities UK (UUK), which speaks for 140 universities, said the sector was well aware of the risks of over-reliance on narrow streams of student applications and had been working to diversify their student base. Student numbers from India, Nigeria and the UAE have all gone up.

UUK highlighted instead the financial risks universities face from fee freezes and increased costs. “Universities need a clear, well thought out and consistent funding model in order to safeguard their work both now and in the future,” a spokesperson said.

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