UK market worth £10 billion

UK education and training is worth more than £10 billion a year in the global marketplace - putting its export value on a par with the financial services sector, a study has concluded.

Higher education accounts for more than £4 billion of this, while further education's share adds up to £620 million, a report on the study's findings says.

But there are fears that the activities of rogue private providers in the UK could cause British universities and colleges to lose their grip on this market.

Research by Geraint Johnes, professor of economics at Lancaster University, commissioned by the British Council shows that the value of international higher and further education has more than doubled since the last estimates were made six years ago.

Professor Johnes said UK education and training ranked among the top five sectors for export income, ahead of insurance and just behind transport.

Professor Johnes' analysis shows that fee income from overseas students in the UK is worth more than £1.2 billion a year, while the amount the students spend on other goods and services brings in more than £1.8 billion.

Franchise agreements, twinning arrangements, joint programmes, validation and distance learning add £99 million. Visiting students, research grants, contracts from overseas agents, the expenditure of academic visitors and private higher education institutions contribute about £796 million a year.

Overseas students on UK further education courses spend about £40 million annually on fees and £303 million on other goods and services, while franchised and private further education adds £7 million.

Another report, published simultaneously by the British Council, predicts that demand from overseas students for UK higher education has the potential to rocket from 440,000 to more than 1.6 million applicationsby 2020.

An analysis by the British Council and IDP Australia forecasts that the number of applications for courses in the UK could grow from 250,000 to 870,000by 2020, while demand for UK courses delivered overseas could increase to 800,000 from 190,000.

But the report also warns that if the UK were to lose its reputation for high-quality courses, its share of the market could slide from 24 per cent to 10 per cent.

In this "pessimistic scenario", demand for places could fall by 30 per cent to 158,000 in 2010, before rising to 254,000 by 2020, it says.

Neil Kemp, promotions director for the British Council, said the unscrupulous recruiting activities of hundreds of rogue private colleges threatened to cause such a loss in reputation. He said: "We are very worried about rogue operators. Anything like that will have a tremendous negative impact on perceptions of quality."

Some private colleges are believed to be responsible for recruiting "bogus" overseas students who use the offer of a place purely to gain entry to the UK.

David Blunkett, the home secretary, and other ministers met at Downing Street on Wednesday to consider the problem as part of discussions on a package of new immigration measures.

Mr Kemp said Home Office officials were taking the British Council report into account. He said a kitemarking system or some other form of quality control was needed to keep private operators in check.

Ivor Crewe, president of Universities UK, said universities were relying on income from overseas student fees to make up for inadequate funds brought in from home students. But he warned that institutions could not afford to sacrifice quality.

He said: "We cannot compete with the Australian climate or US scholarships.

The quality of UK courses is, therefore, a priceless asset that we must not squander in any short-term scramble for greater market share."

The British Council report says that the UK could increase its market share even if it increased overseas student fees as long as quality was maintained. The addition of ten new states to the European Union could lead to an increase in the number of EU students from 110,000 to 170,000 by 2020, it says.

• More than 2,300 students, representing 145 nationalities, have entered this year's International Student Awards - a British Council scheme supported by The Times Higher .

Entries were received from students at universities, colleges of further and higher education, schools and English-language institutions. Each student had to write a letter home describing their experiences of student life.

Twelve finalists will be invited to a ceremony on April at the Kensington Roof Gardens, London. The winner will receive £2,000, with prizes of £1,000 going to the other 11 finalists.

tony.tysome@thes.co.uk