The head of the Russell Group has warned that government plans to impose a levy on overseas students will undermine universities’ ability to support growth, skills and social mobility.

The proposal, first announced in May’s Immigration White Paper, would see universities charged a 6% levy on tuition fees paid by international students. The money raised would be directed into the wider higher education and skills system, with further details expected in the Autumn Budget.

The move comes alongside tighter visa rules and is part of Labour’s broader effort to reduce net migration. But critics argue it risks destabilising an already financially stretched sector.

“Taking money off universities is not the way to do it”

Dr Tim Bradshaw, chief executive of the Russell Group, said the policy would strip resources from institutions at the very moment they are being asked to deliver on national priorities.

“If the government wants universities to contribute to economic growth, widening participation, civic improvement, and critical skills like nuclear, then taking money off them is not the way to do it,” he told PoliticsHome.

The Russell Group estimates the levy would now cost its 20 English members £370m a year – a sum far greater than the £250m universities invest annually in widening access, a key focus for Education Secretary Bridget Phillipson.

“What we’re talking about is a tax on universities, £100m more than we’re currently putting into access and participation. That could force us to scale back schemes that improve opportunities and raise aspirations,” Bradshaw warned.

Sector-wide alarm

University leaders fear that institutions will be forced either to absorb the levy or pass the costs on to international students through higher fees, risking competitiveness in a global market.

Malcolm Press, president of Universities UK, echoed Bradshaw’s concerns:
“There’s no mechanism for collecting it, no mechanism for deploying it. At present, I can see how it could cause damage to the sector, but I’m not clear on how it could deliver benefits.”

The warning comes at a time when many universities are already cutting staff and courses to cope with rising financial pressures.

Government response

A Department for Education spokesperson defended the policy, insisting the funds would be reinvested in “our higher education and skills system, ensuring contributions are more widely shared and felt throughout our communities.”

They added: “No decisions have been made on the size of the levy or its implementation, and we will set out more details in due course.”