UK: Government policies hamper efforts to woo talent

A significant aspect of Oxford's graduate student body is its international character. Three-quarters of our applicants come from outside the UK. Oxford currently has students from more than 140 countries, many of whom will use the knowledge and skills they have gained here to make significant contributions back home.

But competition for the most able graduate students is intensifying in what is increasingly a global market for talent. Our competitors are not only in the Ivy League, but in places like China and India. China now attracts 265,000 foreign students every year. That is a greater number than the 180,000 Chinese students who study outside China annually.

And the competition can be very well heeled. A growing number of US universities provide full five-year funding packages for almost all of their doctoral students. By contrast, at Oxford just over one in two doctoral students are on full scholarships; for the social sciences and humanities the figure is less than one in three.

Even fewer taught graduate students are funded from public sources. This is a particular issue in the humanities and social sciences, for while many students read for these degrees as a stand-alone, professional qualification, they also form the first step towards a doctoral degree. Without funding for taught courses, the masters degree becomes a broken bridge to the doctorate.

Against this rapidly evolving and increasingly challenging international backdrop, it is both noteworthy and regrettable that the recent UK government white paper on higher education gave graduate studies scant attention. In Oxford's response to the white paper we called for further work to be done on this now-crucial aspect of higher education.

Last year Professor Sir Adrian Smith produced a review for the government titled One Step Beyond: Making the most of postgraduate education in the sector. In its response the government stated that it planned "no further changes to postgraduate funding", though it would keep the matter under review.

In reflecting on this unsatisfactory state of affairs, I have to confess I was reminded that One Step Beyond is the signature tune of a group of musicians rejoicing in the name of Madness. How fitting.

But this is really not a joking matter. It is hard to escape the logic of the argument: if this competitive disadvantage in funding is not addressed, the UK higher education sector will increasingly lose out to its international competitors on the recruitment of the best students and the best academics.

There are sadly too many examples of Oxford losing bright graduate students to overseas universities because of the funding gap. It is the single biggest reason why those to whom we make offers turn us down.

And there is another aspect to the problem, which relates directly to the continuing UK debate about equality of opportunity and enhanced social mobility. One of the reasons that students now go on to seek higher degrees is that it is an advantage or even a requirement for future career prospects - and not just in academia.

It has often been argued in the past that graduate study is more akin to a lifestyle choice: something you can do if you wish to and can find the funds. But that argument rings increasingly hollow. If part of the point and benefit of higher education is to enhance individual life and career prospects, then major funding barriers to the kind of study that can do a great deal to enhance those prospects is hardly equitable, or likely to promote the social mobility that is such an important part of the current higher education debate.

As a 2009 government report stated: "Postgraduate qualifications, both from taught and research courses, are increasingly a necessity for careers in the public and private sectors alike."

It is surely time, as we have urged, for a fresh look by policy-makers. It is striking, for example, that there is nothing in the UK to compare with the US government's federal loans scheme, to enable graduate students to finance their study.

Meanwhile graduate scholarship funding from government sources in the UK is declining. In July, the Higher Education Funding Council for England's Overseas Research Students Award Scheme came to an end, a scheme that at its peak provided £1.5 million (US$2.4 million) annually to support overseas graduate students at Oxford.

In addition, research council scholarship funds for UK and European Union students are diminishing, although an initiative by all seven research councils to match-fund their graduate scholarships does at least offer some new options.

Politicians, not unreasonably, often like to turn the question around and ask: What are you doing about it? The answer at Oxford is: a great deal. Increasing support for graduate scholarships is a major priority of the Oxford Thinking fundraising campaign, which has proved such an outstanding success and which is now fast approaching the initial target of £1.25 billion.

In the long term, we aim to offer needs-blind admission to attract the most talented graduate applicants from around the globe. Our strategic objective is to provide full funding packages covering all fees and living costs to the majority of students studying for doctorates and steppingstone masters degrees.

Already we invest significant and increasing collegiate university resources in graduate scholarships. Oxford University Press now provides £7.5 million each year to support Clarendon Scholars, generously supplemented by £1 million from some two dozen colleges working in partnership, and £1 million from external donors. Across our departments and colleges, a further £13 million in graduate scholarships is given out each year.

We are also fortunate in having highly prestigious externally funded graduate scholarship schemes at Oxford. Rhodes is of course the most famous. Much more recent but also visionary is the Weidenfeld Scholarships and Leadership Programme, which aims to cultivate the leaders of tomorrow from transitional and emerging economies.

As one recent corporate donor of graduate scholarships observed: "In universities are our future prime ministers, our future directors of large companies, our politicians. They are studying in our universities now so there is no better investment than in higher education."

As I have already signalled, the significance of philanthropy in supporting ground-breaking research at Oxford is hard to overestimate. If one looks at recent major developments around the university, the generosity of our donors has been, and remains, key.

The Oxford Martin School, the Saïd Business School, the Blavatnik School of Government and the Smith School of Enterprise and the Environment are all potent examples of how philanthropy, in association with rigorous academic values, can shape and inspire research that changes how we understand the world and how we respond to its complex challenges.

We must and will continue to work hard to attract still greater philanthropic support for our world-leading research. But the sometimes highly targeted nature of major giving means that it will also be vital to go on developing the diversity of our research funding base. Noteworthy in that context is the rapid growth of overseas support.

But for all the drive towards greater diversity, government support for research remains crucial.

Governments can bring resources to bear on a scale that dwarfs every other funding stream. And that is true not just here but also in the United States, where universities are often thought to have to fend for themselves in the market. In reality most research income for US universities flows from government. At Harvard it is a whopping 80%; for Oxford last year it amounted to just over 40%. You can see why we attach such importance to future UK government intentions.

But the wider world is not only a major source of research funding. It is also a vital source of academic talent. I have described the challenging financial context in which we are competing to attract that talent.

But the obstacles, sadly, are not just financial. There are also constraints on the free movement of students and staff. Across the globe the number of students studying abroad has risen by more than 3.5 million, an increase of three-quarters in a little over a decade. In economic terms, the UK higher education sector earns more than £5 billion per annum for the UK economy.

Restricting the free flow of the brightest and best academics and students is an area where heeding the experience of the US may serve us well.

The numbers of international students in the US dropped after 9/11 following a tightening of student visa regulations. Economic recession and currency exchange rates played a significant part, but it was widely accepted that visa regulations were a key factor in a 20% drop in student visas in 2002. The total enrolment of foreign students declined in 2003 (for the first time in two decades) and again in 2004. It was not until 2005, when there was investment to speed up the procedures and some rules were relaxed, that student numbers began to rebound.

In the UK, new lower limits on the numbers of international academics we can recruit or retain poses serious risks - both scholarly and economic. Difficulties over visa applications as a result of current regulations and restrictions threaten if unchecked to affect adversely the academic health of the university.

And while I am pleased at the recent assurances given by ministers over their willingness to work with the higher education sector and with the UK Border Agency to remove what have been described as "obstacles to the essential business of global intellectual exchange", nevertheless I feel bound to point out, in rather more home-spun fashion, that the proof of the pudding is in the eating.

* Professor Andrew Hamilton is vice-chancellor of the University of Oxford. This is an edited extract from the vice-chancellor's annual oration given in October 2011.