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Student visa revocation decision presents funding problems for London Met, says expert

The London Metropolitan University (London Met) could face financial difficulties due to the decision by the UK Border Agency (UKBA) to withdraw its licence to allow non-EU students to study at the institution, an expert has said.31 Aug 2012

Universities law specialist Nicola Hart of Pinsent Masons, the law firm behind, said that many universities in the UK were entirely reliant on the money they can generate from non-EU students coming to study. She said that the London Met's loss of these sums as a result of UKBA's decision could have a "catastrophic" effect on the ability of the higher education body to stay financially viable.

"The decision will have horrified the sector, and is a blow to the PR campaign to persuade Government that students should not be counted in the immigration figures," Hart said. "The UK university sector is completely dependent on non-EU overseas students for financial survival.  London Met has 2000 such students out of its total of 30,000 (6.6%), but they bring in £27 million out of its £157m turnover (17%). When the university has a surplus of only £4m, the effect of removing them looks catastrophic."

Hart said that London Met had already outlined plans to outsource all of its operations other than teaching and the vice chancellor’s office and had also "radically cut back on the number of courses offered and made many academics redundant". The cuts were initiated after the organisation was forced to repay £36.5m of funding it received from the Higher Education Funding Council for England after it had over-counted the number of students being taught at the institution, she added.

Hart said that London Met could face claims from students for breach of contract "for terminating their courses mid-stream, or failing to honour offers made". She said that whilst "rival UK universities will be only too keen to snap up genuine overseas students" that had been studying at London Met, the future of the institution itself was "less certain".

UKBA announced that it was revoking London Met's Highly Trusted Sponsor status earlier this week. The move followed concerns that non-EU immigrants were using the organisation to obtain UK visas without being genuine students.

"These are problems with one university, not the whole sector," a UKBA spokesperson said in a statement. "British universities are among the best in the world - and Britain remains a top-class destination for top-class international students."

The Government has set up a "taskforce" to help "genuine" overseas students who had been studying at London Met to find alternative UK universities to study at.

"This decision was made following a period of suspension and audits of the University’s student records by UKBA which identified a number of serious breaches of their sponsor duties," a statement issued by the Department for Business, Innovation and Skills (BIS) said.

"We welcome all genuine and legitimate students, and there is no cap on the number of international students who can be accepted to study in the UK. We fully appreciate the economic benefits and wider enrichment these students bring to the UK. We want to encourage students to come and study at our world-class academic institutions," it said.

Malcolm Gillies, vice-chancellor of London Met, said that the licensing decision has "implications" that are "hugely significant and far-reaching" and that the university would "meet all its obligations" to both current and prospective students.