Levy on international students’ tuition fees not in best interest of UK, says leader of top university | Higher education

A tax on tuition fees paid by international students is “wrong”, “will damage the industry” and is “not in the long-term interests” of the UK, according to the vice-chancellor of one of the country’s leading universities.

Duncan Ivison, who took over as president and vice-chancellor of the University of Manchester (UoM) last year, was speaking ahead of the budget later this month, when chancellor Rachel Reeves is expected to detail her plans for the proposed 6% surcharge.

Ivison, an experienced higher education scholar who has held leadership roles in Australia and Canada, said the UK had a golden opportunity to become a global destination for international students at a time when Canada has a cap on overseas students and US universities are under attack from the Trump administration.

“Higher education is something the UK does really well. That’s why I came to Manchester. It’s kind of the jewel in the crown,” he said.

“We really have a chance to become a global destination for the best and the brightest. Now we can still do that, but things like taxes don’t help, and that’s frustrating to me more than anything.”

Ivison, who joined Manchester from the University of Sydney, welcomed the government’s determination to increase tuition fees for domestic students in line with inflation: “I know our students would prefer it didn’t happen, but in the long run I think it’s better for everyone.”

But he called on ministers to rethink the tax: “I think implementing an international student tax is the wrong policy. I think it will harm the industry. And I don’t think it’s in the long-term interests of the UK.”

Analysts have suggested that if a 6% levy were introduced it would cost UK universities more than £600 million a year, with leading institutions such as the UoM particularly affected.

Manchester has one of the largest international student communities in the country, with 10,000 students from over 160 countries. Chinese students form the largest group, accounting for one-fifth of all students at the university.

The government said that the revenue generated from the tax will be used to refund maintenance scholarships given to poor students.

“I fully support the return of care grants but I think there are better ways of providing funding to improve support for students, particularly our most disadvantaged students,” Ivison said.

“It will cause financial hardship for all of us. We don’t know exactly how it will be implemented, but it could potentially cost us £20-30 million a year. If it’s really a 6% tax, we can’t just pass on a 6% tax to our international students. We can’t do that. We don’t think the market will handle it.”

“We’re going to have to find ways to cover that cost from our existing balance sheet, so that’s very difficult at a time when many universities are struggling. Our financial situation is solid, but we’re exposed to downsides. Imagine that for an institution that’s less financially sound. It’s really difficult.”

The UK higher education sector is facing serious financial challenges, leading to mass redundancies and sweeping cuts to courses at many institutions.

Universities are relying on higher-fee-paying international students to make up for shortfalls from teaching UK students whose tuition fees have been reduced by inflation, but recent immigration and visa changes have triggered a decline in international recruitment since 2023.

This week the UoM launched a £400 million fundraising appeal to help build future resilience. “We are in a very solid position, but we are not immune to the forces that are sweeping the industry,” Ivison said.

“We think philanthropy should be a big part of our future. It gives you some independence from government. It allows you to do things that you wouldn’t be able to do otherwise, so it’s a really important part of how we think about future resilience and allows us to do the transformative things that we want to do.”