The key to reviving the UK is fixing its universities

What does it mean to be British? It’s a subject that comes up repeatedly when I talk at public meetings around the country, especially since the United Kingdom of Great Britain and Northern Ireland – to use the whole name as it appears on our passports – is a complex country.

One part of Britishness, and something that tends to make British people proud, turns on a vital yet vague term: British culture. Culture can mean everything from the English language and literature to television programmes, the BBC, football, rugby and even the food we like to eat and the design of our towns, villages and countryside.

But one part of British culture, something most of us are proud of, is under threat: British universities. They are famous around the world, but many of them – one estimate suggests almost half of the total – are now in financial difficulty. They have been forced to make cuts.

I need to declare an interest. I’m the first in my family to go to university. For me, the two universities I attended were literally life changing. This month, I also finished 10 years as chancellor of the University of Kent, a non-executive position.

The university was one of a number of new universities created in the 1960s. Most have been hugely successful. Back in the 1950s, only a little more than 3 per cent of British people went to university. Now it is more than 10 times that number, about 37 per cent. The UK is, as the jargon goes, a “knowledge economy” and universities are a key part of its soft power.

One university – Cambridge – famously has more Nobel laureates than any country in the world except the US and UK itself. The University of Kent has two Nobel prize-winners for literature – Kazuo Ishiguro and Abdulrazak Gurnah. Their names give a clue to the diversity that is so important to university life and to a thriving UK knowledge economy.

But the new Labour government inherits a mess.

About 40 per cent of England’s universities are on course to run budget deficits. A third – more than 60 – have faced financial difficulties in the past academic year, resulting in redundancies of academic staff. Departments are closing or merging. Courses are being cut. Some universities may also be forced to merge with others nearby.

There are a number of reasons for this turmoil, but the simplest explanation is that funding has stayed the same while costs have gone up. Inflation means that wage demands from staff have also increased. One university’s vice chancellor mentioned to me that heating costs last winter were themselves a budget-busting problem.

What can be done? Well, at least the new Labour government and the various ministers involved are aware that this is a problem on the edge of becoming a crisis. Also, government ministers understand that this is not some question about an “elite” group of people, especially given the opportunities that a university education confers on those clever students from lower-income backgrounds.

Universities are huge employers, directly and indirectly. A university town like Canterbury, where the University of Kent is sited, sees jobs in the university and a boost to the economy in the places students go to live, shop and eat.

Moreover, the knowledge economy is the key to a successful future for a nation as well as an individual student. One of the reasons that the UAE has invested so much in education is its understanding that most of the planet’s natural resources – including oil – are ultimately finite, but human resourcefulness can, if nurtured, seem almost infinite.

The coal and steel economy, then the oil economy, are already giving way to the knowledge economy. Worldwide the biggest and most successful companies include Microsoft, Google and those at the cutting edge of AI.

Part of the problem with British universities has been government inaction amounting to self-harm.

Broadly put, British universities generally make a loss on British students. They cost more than they pay. But British universities, because of their standards of excellence, attract thousands of foreign students who pay what might be called the market rate. In the academic year 2021-22, there were more than 600,000 foreign students in the UK, and in effect they subsidised British students.

Brexit has made life more difficult in attracting to the UK students from the EU. International students are also – bizarrely – counted in UK migration figures. As the Migration Observatory, at the University of Oxford, reported last month, “international students and their dependants accounted for a further 39 per cent of the increase in non-EU immigration”, while “the UK has an explicit strategy of increasing and diversifying foreign student recruitment”.

This is not joined-up thinking. International students are not generally immigrants. They enrich the UK during their stay and enrich their homelands by studying in the UK then returning home.

First, the government should stop pretending foreign students are immigrants. Second, a thriving university sector is vital to an advanced economy in the 21st century, and EU students should be actively encouraged. Third, while some mergers may be inevitable even in these harsh economic times, an investment in universities, in British culture, is – to be crude – a no-brainer.

It is investment in the UK’s future as a cultural superpower.