Brexit: Are the UK Universities and the research sector the biggest casualty?

Ryan Randall plays the bagpipes outside a polling station in Edinburgh, Scotland, in this Reuters picture. Brexit was fought on emotional grounds rather than on hard core economics or political realities

 British voters choosing for leaving EU

In the recently-held referendum, the British people decided by 52 to 48 that Britain should leave the European Union. In popular jargon, this was a choice in favour of Brexit or Britain’s Exit from EU. However, Brexit was fought on emotional grounds rather than on hard core economics or political realities. 

Given the track record of British voters in the past, many had expected that they would go for a rational choice. That rational choice required them to compare the costs and benefits of Brexit before making their choice. The material placed before the voters by campaigners for remaining in EU too had urged them to make their choice considering the enormous economic costs of Brexit. 

However, it was only the voters of Scotland, Northern Ireland and a section of London who had acceded to that request. The rest of the voters had chosen Brexit and, accordingly, Britain will leave EU formally within a timeframe of two years. 

Bank of England’s 

undented reputation reverses market decline

When the results were pouring in and it was clear that Brexit would be carried, the Sterling Pound came under pressure in international markets. It immediately fell from $ 1.45 per Sterling Pound to $ 1.33 or by about 10%. Analysts who had relied on a prediction of George Soros, International Fund Management Guru, forewarned that it would fall to as low as $ 1.20, the parity with Euro. But it did not happen. 

That was because, when the markets were open on Friday morning, Bank of England Governor, Mark Carney, appeared before the press and gave an assurance. He told the markets throughout the globe that the Bank, along with the U.K. Treasury, would take necessary action to restore normalcy. Markets believed Governor Carney more than Soros. Why? Governor Carney had an undented reputation as a tough central banker, a reputation which he had earned while he was the Governor of the Bank of Canada. 

Besides, the Cameron administration had, through unpopular fiscal measures, tamed the uncontrollable British Budget allowing space for the government to intervene in the economy without building inflationary pressures. Hence, though there are economic costs, the economic fallout is expected to be corrected over the next few years.

UK Universities and research programmes are unintended casualties

But there is an unexpected casualty of Brexit. That is the UK Universities and their scientific foundation which had heavily relied on EU funding and collaborative projects with EU research centres. Knowing that Brexit would dent this otherwise smooth operation, UK Universities had actively campaigned for remaining in EU canvassing specifically with young people. In a report published on 8 April, the UK Universities, a body representing all the universities in the country since 1919, had highlighted that EU students contribute about £ 3.7 billion annually to the UK economy creating some 34,000 jobs in all corners of the country (available at: http://www.universitiesuk.ac.uk/news/Pages/eu-students-vital-to-regional-economies.aspx). 

According to the report, there are about 125,000 EU students in UK universities representing about 5% of UK university student population. The top five senders of students to UK universities have been Germany, France, Ireland, Italy and Greece in that order. 

Campaign by UK academics for remaining in EU

This is something which UK universities in particular and the U.K. Voters in general cannot ignore. It prompted Dame Julia Goodfellow, President of Universities UK and Vice-Chancellor of the University of Kent, to openly declare as follows: “EU students make an enormous contribution to British university life and local communities. The figures show clearly that EU students spend money and create jobs in all regions and corners of the UK. EU students also make a very important academic and cultural contribution to university life, creating an international, outward-looking culture on campuses which, in turn, benefits UK students. Leaving the EU and putting up barriers to work and study makes it more likely that European students and researchers will choose to go elsewhere, strengthening our competitors and weakening the UK’s universities.”

EU students cross-fertilise intelligent minds

One important secret of promoting academic excellence is the assembly of bright students in an academic institution and promotion of competition among them. It helps to cross-fertilise the minds and allow students coming from different parts of the globe to benefit from each other. The U.K and the US universities had resorted to this strategy for centuries and the result had been the elevation of their universities to the global top class universities. 

Thus, UK’s Universities and Science State Minster Jo Johnson who is having two postgraduate degrees from continental Europe is reported to have emphasised as follows: “Our success as a knowledge economy hinges on our ability to collaborate with the best minds from across Europe and the world. It would be reckless to cut ourselves off from the rich sources of EU funding, the access to valuable shared research facilities and the close institutional ties that provide so many opportunities to British students and academics. UK students benefit from their ability to study across the EU, while EU students generate billions for the UK economy, support thousands of jobs and enrich university life. I share the clear view of my predecessors and the majority of university leaders that our world-class universities and our scientific prowess will be much better off inside the EU.”

Plea from the VC of Sheffield Hallam University to young people

When it was apparent that young people had not got themselves into the voting register, Vice Chancellor of Sheffield Hallam University, Chris Husbands, appealed to young people to get registered in time and vote at the referendum. 

In a blog, he said: “One striking thing about the 2016 referendum debate is that, so far, it has by and large been an argument amongst middle aged and elderly people. And that’s wrong. The decision we make on 23 June will shape everyone’s lives in one way or another, but it will shape the lives of young people far more decisively than the lives of (and imagine the pain I feel in writing the next few words) old men like me. All the evidence we have is that older people are more likely to vote than younger people. And that also has to be wrong. The referendum vote on June 23rd will – it has to – be a moment of national decision making. It’s more important than a general election: we get the opportunity to vote on our government every five years, but this is a decision which will shape decades. And it will be decisive” (available at: http://www.universitiesuk.ac.uk/blog/Pages/why-its-vital-that-students-vote-in-the-eu-referendum.aspx). 

Observing that 50.1% for Brexit would mean a completely different trajectory from a vote of 50.1% for remaining in EU, he appealed to students through his blog site: “And so this blog is really addressed to students, wherever they may be. It’s really important that you vote. This is about your future – about the sort of country and world you are going to live in.”

Nottingham University VC upholds the need for having EU students

Just on the eve of the referendum on 22 June 2016, Vice Chancellor of the University of Nottingham, Professor David Greenway, made one final appeal to British voters to consider what it would mean to them as well as to universities if Britain voted for Brexit (available at: http://www.universitiesuk.ac.uk/blog/Pages/in-or-out-only-one-answer-makes-sense-for-higher-education.aspx ). 

According to him, though the single currency in Euro area had not worked well, the single market and the single Euro area education had delivered beneficial results to all the EU members. He has said that the UK universities have immensely benefited from the ERASMUS programmes – European Region Action Scheme for the Mobility of University Students – a programme introduced by EU to facilitate the exchange of students among European countries. 

Vice Chancellor Greenway has specially commented as follows: “We live in a highly globalised world, and that brings many benefits, including to higher education. Greater movement of ideas and people across borders is to be welcomed. Exposing students to new cultures, new ways of doing things and new ways of thinking not only enriches personal development; it enhances employability. The number of students studying outside their country of domicile has more than doubled to four million in about a generation, for several reasons. One is mobility schemes that just make it easier. Erasmus programmes have done that, and Nottingham has almost 500 students benefitting from them – the most of any UK institution. Of course, were we outside the EU, we might find other ways of giving these students a mobility opportunity, but it would require new vehicles and new funding sources. We want our young people to have these experiences to expand their cultural horizons, but also because it supports them in the labour market. Specifically, students who did an Erasmus placement have been shown to be 50% less likely to experience long-term unemployment.”

Research side is also a loser

This is only one side of the benefits which the UK had been getting from being a member of EU. The more important side had been the research grants received by UK universities from EU and the collaboration which they have with European research centres to undertake new research. The European science and technology foundation has, therefore, been a solidly interconnected one. Any denial of access of the U.K. Universities to that interconnected network will result in the UK lagging behind its competitors, especially those in the US and other European countries. 

A research report completed by Viewforth Consulting for the UK Universities and released before the referendum had quantified the research support given to UK universities by EU (available at: http://www.universitiesuk.ac.uk/policy-and-analysis/reports/Documents/2016/economic-impact-of-eu-research-funding-in-uk-universities.pdf). 

According to this report, of the total research expenditure incurred by UK universities during 2014/15 amounting to £ 5.9 billion, £ 836 million or 14% had come from EU sources. These direct funding had generated secondary benefits in the form of using research outputs in industry and commerce in the UK. The report had estimated that in addition to 19,000 jobs which the EU research grants had created, it has contributed to UK economy to the tune of £ 1.8 billion per annum. Now that EU support for research is no more there, the British government or domestic sources have to fill the gap in a competitive manner. This is a very big challenge which the new administration in UK has to tackle under Brexit. 

Statement by UK Universities

After the outcome of the referendum was known, the UK Universities had issued a statement taking stock of the current situation and urging the Government to take suitable action (available at: http://www.universitiesuk.ac.uk/news/Pages/statement-on-eu-referendum-outcome.aspx). 

While respecting the choice of the UK voters and taking note of the two year window available for Britain to exit EU, the statement emphasised the following: “Throughout the transition period our focus will be on securing support that allows our universities to continue to be global in their outlook, internationally networked and an attractive destination for talented people from across Europe. These features are central to ensuring that British universities continue to be the best in the world. ‘Our first priority will be to convince the UK Government to take steps to ensure that staff and students from EU countries can continue to work and study at British universities in the long term, and to promote the UK as a welcoming destination for the brightest and best minds. They make a powerful contribution to university research and teaching and have a positive impact on the British economy and society. We will also prioritise securing opportunities for our researchers and students to access vital pan-European programmes and build new global networks.”

Accordingly, UK Universities are obviously down, but not out. They plan to make a comeback by building research partnerships with EU centres through non formal channels.

Northumbria University’s VC Andrew Wathey’s forward looking risk management strategy

Meanwhile the Vice Chancellor of the Newcastle’s Northumbria University, Professor Andrew Wathey made a firm reassurance in a statement issued after Britain decision to Brexit. He said: “The decision to leave the EU will pose significant challenges for universities, and of course for the whole of the UK.  However, I want to reassure you that, barring any unilateral action by Government, nothing will change immediately as a result of the referendum. There will be at least a two-year window for exiting the EU, allowing universities time to reflect and organisations like Universities UK to negotiate on behalf of the sector.”

He had also revealed that during the run up to the referendum, he had with his senior staff, strategised the course of action which his university would take in the event of a victory for Brexit. Says Wathey: “In the run up to this referendum I have been working with my senior leadership team to develop a strategy in response to just such a scenario and we are in a strong position to meet this new challenge. The decision has been made and we now need to work with that decision to ensure the University is in the best possible position. Over the coming weeks we will keep you informed of developments as they become clearer both for us and for the UK as a whole.”

What Vice Chancellor Wathey had done is what central bankers call ‘forward looking risk management’. It is an eye opener for every business, government and individual how they should map out their strategies when they are faced with uncertain choices.

(W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at [email protected].)