Universities remain a great success story, but...

At first glance, reports of the demise of the British higher education sector seem greatly exaggerated. Almost as excited as the young people discovering their A-level grades, the Universities and Colleges Admission Service (Ucas) breathlessly boasts that the 262,820 students who immediately found places on degree courses represents a record high — three per cent up on last year. The total enrolled, from all domiciles and including older entrants, is also up, to some 446,690, another record (excluding Scotland). The best part of half a million freshers heading for university sounds like cause for national celebration, according to The Independent.

Indeed, it is, as it also is for the individuals embarking on the next phase of their transition to adulthood. However, it is not the whole picture. A demographic bulge has played some part in boosting numbers, but the more grim countervailing story is the 58,000 18-year-olds whom the Department for Education estimates received no exam results at all, good or bad, because they have already dropped out of the entire education and training system.

Before long, they will be classified under the unlovely term “NEET” — not in education, employment or training. There they will join almost a million others aged 18 to 24 who are both economically and educationally inactive. That represents a calamitous waste of potential.

For the longer term, there are some more optimistic signs that those who might otherwise end up with no skills or qualifications can — and wish to — pursue apprenticeships and technical training, not as some second-best option but as a proud choice, and one that both avoids accumulating student debt and can lead to well-paid professional careers.

The “parity of esteem” between the academic and the technical long desired by successive governments may be slowly coming to pass. Certainly, there needs to be a better balance in the system, one that sees fewer graduates becoming unemployed, and thus later-entry NEETs, or finding themselves taking work far less intellectually demanding than the more traditional graduate paths (and on the road to permanent, spirit-destroying indebtedness). Factoring in the cost of accommodation, the deal society is giving its young people is much less rosy than the one painted by Ucas.

The third connected dimension of this story is the financial plight of the universities themselves. While in some respects student numbers are indeed high, and universities are competing hard for the brightest, and matriculating ever more, the flow of lucrative foreign students is slowing.

It is their high fees that crucially subsidise the home undergraduates and also the universities’ research programmes. Yet the political obsession with getting the immigration figures down has had the possibly unintended but certainly unwelcome consequence of depressing university revenues. Hence the scramble among the top institutions to recruit more British undergraduates to make up the shortfall in overseas students.

This has a major knock-on effect on institutions lower down the pecking order, especially those that could previously rely on the Ucas clearing system to fill the labs and the lecture halls. Many of the former polytechnics, and others, took on significant debt to finance expansion, typically in business and IT schools to entice Chinese and Indian students, but have now been left with the liabilities and with little chance of recruiting the necessary numbers because of restrictions on visa numbers.

It is a mess, but not an insoluble one. As has been on the agenda for almost two decades, student flows, which can badly distort the migration data, should be taken out of the mainstream immigration statistics, and recorded separately. Despite some gaming of the system, and a degree of fraud, most overseas students will return home sooner or later and not spend the rest of their lives on benefits in the UK.