A Crossroad for the HE Sector: Immigration Reform Signals Change Ahead

The new Immigration White Paper and updated immigration statistics mark a line in the sand between where UK immigration policy was, and where it is heading. The future looks more strategic, but slimmed down and all together less attractive – and higher education will be getting ready to react.

HE Providers are Economic Anchors in Choppy Waters

The UK’s Higher Education institutes form a central pillar of our national innovation system. This is true for all providers, not just an elite few. These institutions supply the skilled graduates needed to drive business success, and support clusters of innovative businesses – accelerating local economies. International students and researchers are not ancillary to this system – they are core to it.

Policy decisions that disrupt this delicate yet vital ecosystem risk jeopardising crucial innovation efforts and their outcomes.

Recent reforms to dependency visas for taught overseas learners, alongside other pressures, have led to a 17% drop in international students studying in the UK. After nearly a decade of domestic tuition fee income lagging below inflation, alongside ever rising operations and innovation costs, it’s no secret this loss creates a major financial blow.  

Against this backdrop, and with political pressures rising, many in the sector feared the White Paper’s reforms would target international students, and warned of the potential impacts. Hearing these concerns, it’s clear concessions were made, and the outcome was something more mixed.

Leaders across Higher Education now look to navigate forthcoming reforms.

The Future: More Strategic, but Slimmed Down and Altogether Less Attractive

More strategic. Prioritising and enhancing highly skilled immigration routes is critical to enabling innovative businesses to recruit world-leading teams. In a global market, international talent is an asset, driving R&D outcomes, productivity and competitiveness. Linking routes such as the Global Talent, High Potential Individual, and Innovator Founder visas to the Industrial Strategy sectors will support success across our strategic industries.

Slimmed down. The reduction of the Graduate Visa length from 24 to 18 months sends a clear message that the UK is reducing low-skilled employment whilst prioritising pathways for top talent. But the bar has been raised to access these roles. Employers will face increased sponsorship costs when hiring international talent (including graduates), as well as additional requirements to invest in UK skills (a move that looks suspiciously like a double tax on our most innovative employers, when taken alongside the forthcoming Growth and Skills levy).

All together less attractive. These new costs and barriers combine to undermine positive action and make the UK a less attractive place to work and learn. They punish employers for hiring international talent. The disincentives look set to drop overseas students in UK universities by 12,000, and we expect to see a dramatic reduction in overseas workers in UK businesses. If realised, these figures risk destabilising the finely balanced ecosystem that underpins the UK’s global strength in research, innovation and enterprise.

But perhaps most surprising in the Paper is the announcement of a new levy on the income universities generate from international students. At a time when these funds are so crucial for broader operations, innovation, and economic activities, alarm bells are ringing. Penalising high-performing institutions for attracting and educating international talent would jeopardise their broader economic contributions. These universities deliver global advantages by enhancing the UK’s soft power and fostering a worldwide skills supply. They should be supported.

So, What’s Next?

NCUB are advocating for a system that is open, strategic, collaborative and globally connected. As the White Paper moves towards legislation, we urge policymakers to consider its full impact on the UK’s research and innovation future. Immigration reform must not come at the cost of the very strengths it claims to support.

The UK cannot lead the world in research, knowledge and innovation with one hand tied behind its back. The government must work with universities and business alike to ensure policy enables – rather than undermines – our shared ambitions.

By Danni Croucher, Policy Lead, NCUB.