Jim is an Associate Editor at Wonkhe

Here in late August 2022, we’re at an interesting point in the post-pandemic cycle when it comes to student numbers.

We know that at one end of the league tables, providers were “forced” to admit more students than planned in September 2020 and 2021 – ostensibly to cope with two iterations of pandemic examnishambles.

We also know that across the sector, but particularly at the other end of the tables, providers were “forced” to admit significantly more PGT students – taking advantage of demand for the new graduate route visa ostensibly to balance budgets and in some cases to shore up collapsing finances.

What we don’t know yet is the real impact of those changes on the sector, and the towns and cities in which students and graduates live – because we (still) only have 2020/21 HESA figures. We don’t know yet the extent to which the two factors are cementing into trends rather than blips. And we also don’t know yet what’s happening to the private rented housing sector, and its ability to cope with expansion as a result.

Do we need to know these things? I think we do if we are to avert a crisis.

Compound impacts

First, a reminder of a tale I told on the site last year. Back when I worked in a university students’ union in the middle of the last decade, I was disturbed to discover that the then registrar hadn’t really thought about (or talked to the council about) the ability of the local housing market to take extra undergraduates in a period of planned expansion – “the invisible hand of the market will take care of that, Jim.”

Worse still, various senior figures kept telling me that x per cent growth in first year undergraduates would need the housing market to find that same x per cent of houses – without considering the compound impact of that expansion.

This was ironic given how much chat there was around about pensions and investments at the time, but let’s run some numbers. Imagine you grow your undergraduate recruitment by ten per cent three years in a row, and then leave it flat. Then imagine that three quarters of those students study away from home in the city, renting bed spaces in the local housing market:

You forget that plenty of the undergrads you’ve recruited like to stay in the city and stay on to do postgraduate courses. The city can’t cope. Expensive private halls shoot up (but not fast enough), rents increase for everyone, and town-gown relations head south. Eventually this plays out in the national press.

Results week 2022

Now let’s consider what’s happening right now. A major argument during results week 2022 has been about whether international students are “displacing” home students.

The government and the sector’s argument has been that taking more international students actually funds more places for home students – a la this quote from the Department for Education:

It is a myth that offering a place to an international student takes away a place from a student from the UK. Most universities have separate home and international student recruitment targets, set before the admissions cycle even begins.

As I was saying over on Wonk Corner, if you have a course with a capacity constraint it may well be true that more international students in that basket allows you to keep the course running and offering places to home students. It also allows you to grow that capacity over time.

But it’s also true that if you have a course that can take 300 students this year, even if the internationals have allowed to you to invest in staff and capital to get it up from 250, if 100 of those places are going to international students that’s 100 that could be going to home students if the funding was better.

In other words, a capacity constraint and economics that require universities to take on more international students are not mutually exclusive concepts. It’s not which is true, it’s that both are true.

Getting into an argument

In response to the results week we’ve had, you could argue that universities set an academic standard and admits whoever meets it, domicile-blind. Nobody believes that – and the DfE quote reinforces that that’s not really true.

You could argue there isn’t a real capacity constraint – on plenty of courses at most providers it would appear that universities can grow faster than they thought, without regulatory intervention and without an overwhelming outcry from overworked staff or ripped off students. That seems to be true but also appears to mask deep and growing unrest that will surely switch from implosion to explosion at some stage as “quality” slips.

You could argue that all this talk of the proportion of international students is xenophobic and we should celebrate the rich diversity of perspectives and economic benefits of this kind of migration. I’d agree with that – but I’d also argue that via a Boris Johnson No.10, the sector has had an unusually relaxed immigration attitude when it comes to international students for a few years that may not last the month, let alone the autumn.

But the problem for me is that all those arguments miss the bigger migration picture – the figures for which at this point in the cycle remain piecemeal yet potentially highly problematic.

Dirty CASH

Having noticed a couple of weeks of stories surrounding Glasgow’s student housing crisis, a story in the Scotsman over the weekend stood out. It that said that the problem has spread to St Andrews, quoting the Campaign for Affordable Student Housing (CASH) which suggests that 400 students are still without accommodation days before the start of the Scottish semester.

CASH says that students who were housed in Dundee in 2020 – the first year the incoming class of students exceeded the capacity of the extant halls of residence – were spending nearly an hour commuting each way via public transport, and had a sense of separation that had “a serious negative impact on their mental health” and affected their studies. There will be plenty in this boat this year too.

Apparently, in an email on August 4 responding to students regarding the housing crisis, the university cited “external factors” beyond its control as the cause of a shortage of available housing. It cited a recently imposed cap on houses of multiple occupation in St Andrews, a high number of conversions of student rentals into Airbnbs, and the Private Housing Act in 2017, which increased tenants’ rights and has “caused” landlords to exit the market.

CASH cites St Andrews’ “acceptance of 40 per cent more postgraduate students in 2020” as a key issue – expansion which it points out “was not government mandated”. I don’t know where they get that from – but HESA does tell me that PGR was pretty flat, and PGT increased by about 25 percent.

Nevertheless, if the 240 increase was then matched by similar percentage increases in 2021 and now this September, St Andrews would be looking at 1,875 PGTs up from 960 in 2019 all looking for somewhere to live. Add in a clutch of last summer and this summer’s international PGs jumping on the graduate route looking for housing either in St Andrews or another Scottish city (like, I don’t know, Glasgow) and you suddenly have a huge housing problem.

I’m not of course saying that St Andrews really is up to almost 2,000 PGTs this September, I don’t know the percentage of its students that are international, I don’t know the percentage jumping on the graduate route, and I don’t know where they’re living if they do. But I do know that I don’t know, if you see what I mean. And that’s a big problem.

Welcome to Jimsville

Let’s fag-packet this anoither way. Let’s imagine you work in a city that has two big providers – the pre-1992 University of Jimchester, and the post-1992 Jimsville Met.

In 2020, the University of Jimchester had to admit 300 more undergraduates than usual, under pressure from Gavin and Michelle. It had to admit 250 more than it had planned for in 2021. This autumn, having realised that it could stretch things internally more than it had previously dared, it has admitted 150 more than the 2019 baseline by choice, largely in cheap to teach subjects.

Almost all of Jimchester’s students undergraduates live away from home – and they’re pretty much all still around. It means that 700 more bedpaces are needed for UGs than in 2019.

Then add in Jimchester’s PGT expansion – all international, and 300 more of them in 2020, 350 more in 2021 and 400 more this September all keen to get onto the graduate route the following summer. Let’s assume for modelling purposes that 90 percent pass the course, 90 percent of them take advantage of the graduate route and 90 percent of them stay in the city. This September, that’s (219+255+400=)874 more bedspaces needed than in 2019.

That’s just Jimchester. Over in Jimsville Met, home domiciled undergraduate demand was down by 100 against the 2019 baseline in each of 2020, 2021 and 2022. Consistently half of Jimsville’s UGs are commuters – so its impact on the rental market was relieved to the tune of 50 bedspaces in 2020, and (assuming no drop outs) 150 this coming year. But if we do that 90 percent of the 90 percent of the 90 percent thing again, if 20 percent of UGs are international, then 146 more students stayed in the area in 2021 and this year another 146 are sticking around – a net increase in demand of (292-150=)142.

But of course Jimsville Met has taken on additional international numbers to keep budgets flat. As it charges £18,500 a year for international PGT, it has taken on 100 more PGTs to compensate (ignore inflation and agent’s fees for a minute). Again if we do the 90, 90, 90 thing that’s another 146 more – taking our grand total of extra bedspaces needed for the university to 288, and 1,162 for the city overall in 2022/23 – with more to come next year.

And if you’re thinking about this carefully, you’ll note an issue with the calc. I’ve only added in the implications of the extra international students staying in the UK. If we add in the baseline 2019 internationals at both universities (let’s call it 4,000) staying on at my 90x90x90 rate, you end up with an additional 2,916 bedspaces needed.

Suddenly – off the back of what felt like modest or mandated increases – you have a huge problem. People can’t get to see a GP, people can’t get on the bus – and all they see in the city they’ve lived in all their life is significant numbers of international students. When their niece gets much better A Levels than they ever did but can’t get into the Russell Group university their school advised them to aim for, they’re angry. When they opt for a middle-ranking university in clearing but then can’t find accommodation in anything like a sensible price range, they’re angier still.

The clue is in the questions

Is this a realistic set of scenarios? Outside of anecdote, at the macro level it’s too early to say for sure given where we are in that stats cycle – but there are plenty of clues.

In 2019/20 there were 395,630 non-EU students in the UK, and by 2020/21 there were 452,225 – an increase of 15 percent. In the year ending September 2020 there were 176,101 sponsored study (Tier 4) visas granted (including dependents) – in the year ending March 2022, 466,611 were granted – the highest annual number of study visas granted on record.

These are the sorts of figures that have caused the sector to celebrate that the international education strategy target has been reached early – but there are implications.

If you add a bunch of renters into an already tight housing market because of home domiciled expansion, add more because of international domiciled expansion, and add even more again because a proportion of international grads that used to leave are now staying for two more years, and you have a problem.

Again, let’s fag-packet this – if you draw the lines on the graph, 150,000 more home domiciled students in 2020 than 2019 could easily end up as 225,000 more bedspaces for home students needed this coming year. But then add in the extras you need for international expansion – and then an astonishing and eye-watering increase needed for graduate route stays – and you easily end up with a crisis.

And that leaves you with a seven-step issue:

  1. The Home Office’s 2021 impact assessment for the graduate route policy already looks to have underestimated the general expansion in international students;
  2. It also looks like it underestimated the proportion of that expansion that would be PGT, and so in turn it looks like that it underestimated the proportion of that expansion that would take up the graduate route;
  3. While it had a punt on net migration by calculating inflows and outflows, it didn’t ever calculate the impact on the requirement for bedspaces or other infrastructure, and neither did the Levelling Up, Housing and Communities department;
  4. That all means that the failure to attempt to quantify or properly measure impacts on “access to local housing, congestion, access to public services, environmental impacts and crime” is left to anecdote and imagination;
  5. In turn that means that the Migration Advisory Committee’s warning that rising numbers of students can cause pressures on the private rental market “if the stock of housing is fixed in the short-term” while, in the realm of transport, students “may add to congestion” will be seen to be coming true;
  6. In turn that means Migration Watch will be able to re-trumpet their unpleasant and xenophobic lines that if institutions have a very high proportion of international students, “this might make it less likely that the foreign students will mix with the British students”, domestic students have raised concerns “over the quality of academic discussions and international students requiring more attention from the lecturer” and that it is likely to the detriment of British students “that so many of the places in our top universities are allocated to foreign students”.
  7. And in the context of a new Prime Minister and a new Home Secretary, will this be framed as the fault of the state when planning and managing this migration, or one of “greedy vice chancellors”? What do you think?

A failure to plan properly

For all four governments’ education departments, the ability to recruit more international students, in the context of a political environment keen to promote “global Britain” post-Brexit, has been a settlement that has stuck for a few years now as a way of avoiding the funding of demand-driven domestic expansion.

But what is astonishing about it is the dearth of planning and projection of impact on both bedspaces and local infrastructure at provider level, city level, regional level, (devolved) national level or even UK-wide level.

And in turn – because the join-up wasn’t done in the planning, the join-up isn’t there in the monitoring either – and given the lag on the stats, by the time we realise, it may just be too late.

The casualty in all this is potentially housing reform. Over the weekend we learned that room rents in 40 of the 50 biggest towns and cities in the UK have reached record levels. SpareRoom said that average monthly room rents in London are up 15 percent in the second quarter of this year compared to 2021, to £815, while room rents have risen 21 percent in Sunderland, 20 percent in Belfast and 18 percent in Cardiff.

But it’s not just price. There has been a deep and pressing need for decades to improve the quality of student accommodation in the private rented sector, but a lack of willingness to regulate and a willingness to allow student numbers expansion to run ahead of bedspace expansion has consistently seen standards (in HMOs) fall, and prices rise.

There was a glimmer of hope back in June when Michael Gove promised to include students in most of the reforms being mooted to improve tenants’ rights. But there are 11m people in the private rented sector in England. If – and I know this is an if – say 8m are in university cities, and we’re in the middle of adding the best part of half a million to the demand – guess what happens next.

Ever since Gove’s announcement, the National Residential Landlord Association (NRLA) has been on the warpath – writing to SUs and VCs to argue that improved regulation and rights will choke supply and “have a damaging impact on students’ mental health”, while its Scottish counterpart argues that the tenancy reform in 2017 “reduced the number of homes available to students as landlords were no longer able to offer fixed-term leases which matched term times.”

It is too early to say whether that’s true in Scotland, and even earlier to say that that would be in the impact of similar reforms in England. But universities arguing that housing shortages are outside of its “control” won’t work. Haven’t you noticed? It’s always VCs that are greedy, never landlords. Always Mickey Mouse courses instead of Roland Rat houses. Tuition fees must be frozen, but never rent. Rent caps don’t work unless you’re renting access to some recorded lectures and PC labs, then it’s all cappity cap cap a rama. You think that’ll change any time soon? You want to place a bet on whether the renter’s reform bill will survive at all, let alone for students?

So as pressure mounts on the Home Office to address immigration, and a Levelling Up department finds itself having address supply, something in those education departments will have to give. Maybe the sector will find that there are constraints on expansion after all – and students will likely find that promises to protect them in their homes disappear just as fast as Johnson and Gove.

3 responses to “Is the international expansion miracle about to push up against capacity constraints?

  1. 1) Short of legal restrictions no University is going to change course – it cannot as inflation takes hold.

    2) The talk of govt restricting immigration is just stuff for readers of the Telegraph. The party funders rely on a ready supply of cheap labour and so the pressure is to increase not decrease immigration. Also, future trade deals will include it. The trend is upwards not downwards.

    3) On the mixing question – many PGT programmes are entirely international – there is no mixing with home students because they simply aren’t on the course. I have the numbers for a PGT course in front of me – it’s about 300 and home students make up 5. Not 5%, 5.

  2. This is a very weird article, starting from the almost gleeful tone at the prospect of Migration Watch describing the HE sector as elites flooding your town with undesirables who squeeze out more deserving people.

    Here is a different way to think about it. One problem with Jimsville is that its very poor planning process has choked off the possibility of economic growth to potential.

    The council, dominated by a collection of pastoralist aristos and degrowth cranks has made it impossible to provide adequate housing capacity, hoping that skilled graduates will leave instead of working in the area.

    With the constraint in place, it is a miracle that any student housing is available at all: holiday properties of various time pay extra council tax and do not use the schools; families who work do use the schools, but also pay council tax at the normal rates; students, on the other hand, don’t pay council tax at all. Given the overall financial situation, the optimal amount of student housing, from the council’s point of view, is zero.

  3. Great article. Those of us working in the North West can recognise where authorities in Jimchester have got it wrong and what that means for the poor students who will end up living in Jimerpool or Jimston and commuting over an hour to lectures. I’ve thought for a while that the increase in immigration by PG students – and their families – would be noticed at some stage by the gutter press. Truss and Sunak need to outdo each other in their attitude to immigration to appeal to the Tory members and closing this “loophole” seems like an easy win in that context. The implications for some institutions if that happened would be considerable and that will probably mean even higher home UG recruitment in the short term, further exacerbating the accommodation supply issues in some cities. Are Jimeeds and Jimingham next to suffer this problem and will that eventually even spread to Jimcastle, Jimfield and Jimerpool? Unthinkable a couple of years ago but not now.

Leave a Reply