Fall in Business School enrolment will hit finances of parent universities

Business Schools’ enrolment has fallen for the new academic year, putting financial pressures on their parent universities.

A new survey by the Chartered Association of Business Schools, the UK’s national body for business schools, whose members represent the largest recruiters of students in UK universities, has reported reductions in student enrolments from both the UK and abroad in many business schools for the new academic year.

It said one of the key reasons for the slump in enrolment is a ban on visas for the dependents of international students due to come into force next year.

The North West is home to 12 business schools. These are operated by: The University of Manchester; Edge Hill University; University of Bolton; Lancaster University; Liverpool John Moores University; Liverpool Hope University; Manchester Metropolitan University; University of Salford; University of Central Lancashire; University of Chester; The University of Liverpool; and The University of Cumbria.

Against a backdrop of a cost-of-living crisis, rising university costs, and government changes to visa policies, the results of the survey signal concerns for those universities that are heavily dependent on business students for vital income to support a diverse range of learning experiences and research across subject areas.

Respondents to the survey revealed the extent to which universities are reliant on the international students which business schools recruit. The survey revealed that 92% of business school Deans stated that their school was, to some extent, reliant on international student fees to ensure financial viability. For undergraduate domestic and postgraduate international students, 94% and 98% of respondents, respectively, reported that their parent universities were reliant on this income.

Edge Hill University Business School

With the survey revealing that an average of 59% of business schools’ net income goes to their parent institutions, any change in business school income is significant for the wider university sector.

For the current financial year, 30% of business schools expect a decrease in income compared with only two per cent in last year’s survey. In contrast, costs are rising – 64% of respondents stated that actual expenditure was higher than expectations.

A majority of business schools maintained a strong performance in recruiting international students; 60% reported undergraduate enrolments were higher and 50% stated that postgraduate enrolments were up. Yet this may mask a stratified sector where 44% of business schools said their overall non-EU student enrolments fell short of target.

At postgraduate level, the picture is more challenging with nearly 50% of schools reporting that recruitment was either significantly or moderately below target, while nearly a third (31%) reported a decline in actual enrolments.

Business schools point to the Government’s ban on visas for the dependents of international students, due to come into force in January 2024, as adversely impacting enrolments.

Nearly all respondents (93%) believe that these changes will have a negative impact on postgraduate student numbers.

While only 39% of the business schools surveyed reported a drop in UK student enrolments, 50% reported that enrolments of UK students fell below their target.

Taken together, home and international students studying business courses make up one in six of all university students. One in three of all international students studying in the UK are taught in business schools.

According to Universities UK International and the Higher Education Policy Institute the financial benefits of all international students to the UK economy are £41.9bn over the duration of their studies.

Alliance Manchester Business School

Business schools responding to the survey have shown how important their programmes are to social mobility and government policy on lifelong learning.

The proportion of business students from low participation neighbourhoods has increased at 49% of business schools over the past five years. In response to the Lifelong Learning Entitlement, most business schools (51%) stated they are adapting their executive education offering, and more than a third are making changes to their postgraduate offering (39%).

Robert MacIntosh, chair of the Chartered Association of Business Schools, said: “Business students, and in particular international business students, are a vital source of revenue for the entire university ecosystem, underpinning the costs of teaching and research across a much broader range of subject areas than just business.

“As one of the UK’s most successful exports, our business and management education is also an asset to the UK’s soft power abroad.

“This year’s member survey suggests that there is genuine cause for concern with declines in UK and non-EU international students. If those trends continue, there would be huge implications for business schools, for their parent universities and more widely for UK plc.”

He added: “We are calling for a national cross-sector and cross-party conversation on university funding to ensure that the consequences of policy changes, such as those relating to foundation year funding and to student visas, are fully understood. Only by working in partnership will we secure the global reputation of our business schools and universities.”