Overseas student surge drives expansion at London universities

Across London, from the Olympic Park in the east to White City in the west, universities are breaking new ground.

A surge of international students keen to combine the attractions of the capital with a good university education has spawned campus extensions, building projects and acquisitions worth a combined total of more than £4bn.

But these costly expansion plans are not without risk, given the prospect of tighter public funding for research, increased visa restrictions on overseas students, and even an eventual exit from the EU, depending on who wins the general election.

The past few years have provided ample evidence of London's academic institutions growing in strength. Official figures on research published in December showed universities in the capital dominating UK funding allocations, with the London School of Economics taking the top spot and Imperial College, UCL and King's College all in the top seven. Earlier this year, a survey by the Times Higher Education named London as the city with the largest number of highly regarded universities in the world.

Ed Byrne, principal of King's College, says the most interesting trend among top universities in the past decade has "not been the ongoing strength of Oxford and Cambridge - which have been great forever and still are - but the relentless rise of the great London universities".

This success has given them new confidence. Imperial College is creating Imperial West, a £3bn 25-acre site in White City and UCL is building UCL East, a £350m campus extension in the Olympic Park in Stratford. King's College is leasing the former BBC World Service headquarters to expand its presence on the Strand in central London. All three have also contributed to the £650m Francis Crick Institute, a new biomedical research centre.

The driving force behind these projects is the rapidly-expanding market in overseas students. "International demand is soaring," says UCL's president, Michael Arthur. "For us, that's partly our reputational growth and league table positions . . . and it is partly being in London. London is a huge, huge magnet for international students. They want to be in the capital city and they want to come to a good university and we happen to be both. So we are experiencing 6-7 per cent growth a year."

By enlarging its campus, King's College hopes to increase student numbers from 27,000 to 30,000. Imperial West already provides accommodation for 600 postgraduate students and will eventually host up to 50 entrepreneurial spinouts, as well as several industrial collaborators.

But despite the strength of the foreign student market, there are risks to these ventures. In an effort to reduce the deficit, both the main parties are expected to seek cuts of up to 33 per cent in non-ringfenced departments over the next parliament, putting spending on higher education, science and research under considerable strain.

A Labour government has said it will cut the maximum annual tuition fee from £9,000 to £6,000, while the Conservative manifesto, published his week, promised a further clampdown on international students with reforms to the visa system for those coming to study.

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The universities say most of the political risks can be mitigated. Imperial is using significant corporate and philanthropic funds to pay for its White City site, and is becoming less dependent on public funding. Mr Byrne of King's College believes that despite the rhetoric on funding and visas, both the main parties are committed to higher education.

Nick Hillman, director of the Higher Education Policy Institute, and a former special adviser on universities, agrees. "Clearly, more austerity is going to happen in higher education but some forces are close to unstoppable," he says. "Except in the very poorest countries, demand for higher education just keeps on rising and some countries have [education] participation rates way above ours so growth is likely to continue."

He adds that while higher education has been a hotly contested area politically, "none of [the parties] . . . want to be accused of watering down the world-class quality of our higher education sector".

What causes most alarm among university heads is the prospect of Britain leaving the EU. UCL, for example, receives £60m a year in research funding from the bloc and 10 per cent of its students are from member states. In the event of Brexit, that number would "drop substantially", Mr Arthur says. "I think it would be a really significant perturbation."

However, Mr Arthur acknowledges it would probably be possible to compensate for the drop in EU students by bringing in more from elsewhere. In the short term, at least, he is confident of the expansion plans. "There is clearly some risk, but measured risk," he says.

This sense of optimism is reflected across the sector. Alice Gast, a US native who arrived in the UK as president of Imperial last summer, says the capital is "booming" as she describes her plans for White City.

"I see London as becoming a university town that rivals Boston, with a financial centre that rivals New York, and an innovation and entrepreneurial environment that's growing up like San Francisco," she says. "So being all in one place with financial, arts, government and higher education of such strength means it's a very special place."

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