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Experts have said the London School of Economics and Political Science’s status as the British university with the highest proportion of international students means it is facing an acute financial problem next year -- but its case highlights wider issues within British higher education.
In April, the LSE announced that its director, Minouche Shafik, would take a 20 percent pay cut and that other members of the leadership team would reduce their pay by 10 percent, initially for six months. Times Higher Education understands that the LSE has also discussed implementing wider pay cuts across its faculty, as well as not renewing fixed-term contracts, although no formal decision has been made.
As the most international institution in the U.K., “[The LSE’s] forecasts are particularly pessimistic, and that informs everything else at this point. They are ahead of others when it comes to wider pay cuts, though of course others may follow,” one academic said.
A spokesman for the LSE said that “like most HE institutions in the U.K., we may be facing a substantial loss of income in the coming year. We are putting in place a number of practical actions to mitigate this, including delays to spending on capital projects, a conditional freeze on all hiring proposals and reducing the total nonpay budget by 10 percent, and we will undertake further borrowing.”
University and College Union regional official Barry Jones said, “We know that the LSE is facing challenges during this crisis, but instead of shortsighted cuts, we need the sector to pull together and make the case for vital funding to safeguard the future of our universities.”
Higher Education Statistics Agency data analyzed by Martine Garland, a lecturer at Aberystwyth University’s Business School, showed that in 2018-19, the LSE had 8,000 non-U.K. students, which amounted to 68 percent of its student body, and 30 percent were from Asia alone.
While other institutions have higher numbers of non-U.K. students, such as UCL and the University of Manchester, the LSE had the largest proportion of international students at a British university, the analysis demonstrated.
Garland said the problem was that the “most successful institutions” at enticing international students now have the most problems. “It costs roughly the same to teach an overseas student, but you will have charged them twice or three times as much as a home student.”
Simon Marginson, professor of higher education at the University of Oxford, said the LSE was a special case. “It is a high-status institution without many options to fall back on. They don’t have the big medical or engineering research bases,” he said. “We are all in trouble if we can’t fill those places, the LSE more than most.”
“It is a very good institution that we want to preserve and develop; we don’t want to see it disappear or be weak,” he added. “[Its reputation] can survive a couple of bad years, even a bit longer, but it would deteriorate longer term” without a rebound in international enrollments.
Most experts agree that what will save the LSE is its reputation -- it consistently ranks among the top 30 in THE’s World University Rankings -- and its cash reserves.
The LSE, however, is far from alone in facing these problems. Andrew McGettigan, author of The Great University Gamble: Money, Markets and the Future of Higher Education, said that financially weaker institutions and established universities alike were threatened by shrinking international enrollments.
“Some [well-established institutions] could absorb a one-off hit, while some will in effect need a government loan to get them through this period,” he said. “It’s not a question of bailing out unviable institutions but providing loans to universities that are otherwise financially viable and have been doing what successive governments have asked them to do, which is expand their international student intake.”
Mark Corver, founder of the consultancy firm DataHE, said there was a group of institutions, including the LSE, whose members faced losing about two-thirds of their tuition fee income as overseas traffic slowed; another group whose intake of international students was about a third and would still lose a significant proportion of fee income; and other institutions that did not enjoy those higher revenues so did not have this particular problem.
“Of course, an institution like the LSE could fill its [places] -- it wouldn’t get back the same levels of fee income, but we would argue some is better than none,” he said.
