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January 21, 2013 12:00 am

International students shun UK MBAs

Business people sitting in mostly empty auditorium©Getty

Empty chairs: UK business school enrolment is falling

The number of students enrolling on the UK’s prestigious MBA programmes has fallen dramatically in the past year as changes in work visa regulations, a lack of student funding and the failing economy continue to bite.

Business schools have traditionally been a strong earner for the UK economy, but even the leading full-time MBA programmes have been unable to attract overseas students in the latest enrolment cycle, according to data supplied to the Financial Times Global MBA rankings, to be published on January 28.

Student numbers on the 18 MBA programmes regularly ranked by the FT in the world’s top 100 – there are about 150 UK MBA programmes in total – show that overall enrolment figures are at their lowest for the past eight years and 21 per cent lower than at their height in 2010.

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Steven Haberman, dean of the Cass Business School at City University, says the UK is simply less attractive: “The package we can put to a student from India and China is difficult. The big thing that is missing is allowing students to work for one or two years [after graduating].”

What do the numbers look like?

● Last year only four of the top 18 UK schools admitted more than 100 students, compared with nine out of 18 in 2010. In 2012 half the schools – nine out of 18 – enrolled fewer than 50 students compared with one in 2010.

● Just three of the 18 schools – London, Cass and Warwick – enrolled more students in 2012 than in 2010.

● Those schools that have withstood the pressures most effectively are those that are most highly ranked: London, Oxford, Cambridge, Manchester and Warwick. These top five have seen a decrease in enrolment of 6 per cent over the past two years; the remaining 13 programmes have seen an average decrease of 35 per cent.

● The fall is because of a decline in international students – 86 per cent of all MBA students studying in the UK are from outside the country.

Why is this happening now?

Business schools blame the UK Border Agency visa restrictions – especially work visas. Even at LBS employment in the UK has fallen. It was not uncommon a few years ago for three quarters of the LBS class to be employed in the UK on graduation; these days it is less than half.

And as well as continued uncertainty about the economic outlook, there are additional factors. The collapse of the student loan market in the UK means overseas students have to secure funding before applying for a student visa. Some of the top schools have been able to help students get funding throug a tie-up with Prodigy Finance, the London-based start-up that specialises in loans for MBA students. The loans are financed through a bond that is bought by alumni, the school itself and outside investors. Between 200 and 300 students took advantage of the scheme in this academic year.

Additionally there has been a growth in reputable business schools in countries such as China, India and Singapore, meaning that many Asian students are studying at home.

Finally there is a fragmentation of the business eduction market with a growing number of competing degrees – different formats of the MBA and different degrees altogether, such as masters degrees in finance or entrepreneurship. For example, Bradford University School of Management, which has seen the sharpest decline in numbers – down from 103 in 2010 to 20 in 2012 – has seen a 20 per cent rise in applicants for its distance learning MBA, says Jon Reast, its acting dean.

What are the effects?

As well as affecting UK business schools, there is also an impact on the economy, says Paul Marshall, chief executive of the UK’s Association of Business Schools. “[Previously] we have been able to attract some of the most aspirational and talented business people to the UK to study for an MBA. If we lose those contacts, that is a real problem.”

Can the process be reversed?

Theresa May, UK home secretary, last month announced there would be a new visa stream of 1,000 places a year for MBA graduates who want to stay in Britain and start businesses or work for start-ups after their courses have finished. Business schools are cautious. “There has to be a good PR push,” says Conrad Chua, head of MBA recruitment and admissions at the Judge in Cambridge. “One or two years in the UK gives people a great grounding in UK business. That’s a story that needs to get out there.”

Many UK schools have now decided that if their students cannot come to the UK, they will go to the students. Sue Cox, dean of Lancaster University Management School says the challenge in teaching overseas is connecting MBA students in different locations.

“Unless you work really hard you don’t get the network that MBAs want.”

Others are resigned. Peter Moizer, dean of Leeds University Business School believes UK schools have to cut their cloth to fit the new circumstances.

“We have learnt that we are going to be a small programme with 40 students. The days of 100 plus students are gone.”

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