Chartered ABS statement on the Budget

The Government has announced further details about the International Student Levy in the Budget. A £925 levy fee per international student will be applied to all English higher education providers registered with the Office for Students from the academic year 2028/29. The income raised from the levy will be used to fund maintenance grants for disadvantaged students studying priority courses that support the Government’s missions and the Industrial Strategy.

The Government also announced support for scale-ups in the form of widening eligibility for enterprise schemes, increased investment, tax reliefs, and R&D.  

Professor Stewart Robinson, Chair of the Chartered Association of Business Schools, responds:

“After months of speculation, we welcome the clarity on the International Student Levy which will enable universities to plan for its implementation. However, at a time when universities and business schools are already under intense financial pressure we are not convinced the sector will be in a stronger financial position by the time the levy is implemented, particularly without support now to address the widespread financial sustainability challenges.

“The Office for Students expects 45% of universities in England to report deficits in the current academic year, with 41% expected to face deficits in 2026-2027. Our members are facing declining enrolments and income, and increased budget cuts with 48% of our members reporting a fall in income in 2024/25. We believe that the small CPI-linked increase in tuition fees will not remedy the financial sustainability for universities in the following years so that they can weather the levy in August 2028.

“We want to see students from disadvantaged backgrounds in higher education and reintroducing maintenance grants is the right call. Yet UK business students will be excluded from receiving these grants as their courses are not recognised as priority subjects by the Government. This contradicts Skills England’s own analysis, which shows that transferable high-level skills such as leadership and management are critical to growth and productivity in the priority sectors.

“Business schools recruit the largest share of international students and will therefore be the largest contributors to the levy from August 2028 but they will not get access to this funding to continue their work to widen participation. Instead, the burden of the extra cost of the levy risks diverting vital resources away from investments in teaching quality, innovation, and widening participation.

“We welcome the Government’s investment in skills, however, a dynamic growing economy needs a skills system that supports development from lower level skills into higher level skills.  Higher level leadership and management skills, and other business skills such as marketing, HR, and finance are foundational to improving business productivity and will underpin the success of the industrial strategy. We urge the Government to include these skills in the Growth and Skills Levy package and include business and management degrees in the list of priority subjects eligible for maintenance grants.

“In other positive announcements, we are pleased to see the Government’s support for scale-ups and ambition to incentivise investment into high growth firms. Business schools have a critical role in supporting SME growth and productivity through programmes such as the Help to Grow: Management course, knowledge transfer partnerships, and executive education. Our members will continue to work with SMEs, scale-ups, and high growth firms to unlock economic growth and productivity. We believe there is more that business schools can do, and the Government should continue to recognise business schools as key centres of excellence for small businesses, scale-ups, and high growth firms in their regions.”

Notes to editors:

• Approximately one in three of all international students in UK universities study in a business school. There are 237,035 international business school students from outside the EU studying in the UK. (HESA data 2024/2025)

• Analysis by the Office for Students shows that 45% of universities are set to report a deficit this year, with 41% expecting to report deficits in 2026-27.

• Our Annual Membership Survey in 2025 found that business schools are facing a challenging financial situation:
  

  • 14% of schools reported lower enrolments for international undergraduate students

  • 39% of schools reported lower enrolments for international postgraduate students.

  • An increasing number of schools (48%) reported a fall in income for the prior academic year of 2024/25.

  • The decision to reduce the Graduate Route has already impacted schools, with 60% of schools reporting the change has already had a negative impact.

  • Meanwhile, the uplift in the tuition fee cap for domestic students will have a limited impact on business school finances, with 62% of responding deans saying this increase would help with the financial sustainability of their institution to at least a moderate extent, and 26% saying it would help to a very limited extent.