International business students are being put off studying at UK universities in their droves because of stringent visa policies, a new report has claimed.

A third of international students at UK institutions study at business schools and they contribute £2.4 billion every year to universities and the UK economy, according to the Chartered Association of Business Schools (CABS), but last year the schools’ non-EU intake shrank by 8.6 per cent.

This represented a direct £133.5 million loss to universities and their local economies, CABS says, and also poses a further risk to universities because the income made in business schools often helps to subsidise other subjects and faculties.

The ��UK Business Schools and International Student Recruitment: Trends, Challenges and the Case for Changestates that members have often cited UK visa policy reforms since 2011 as reasons for the decline in numbers, because the changes made “it more difficult than previously for many international students to obtain a post-study work visa in the UK”.

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“Allowable visa application refusal rates falling to a maximum of 10% have also made the recruitment process more difficult, with fears that a further tightening may be considered,” the report states.

“At the same time a more open and relaxed approach to international study visas in other countries, especially Australia, Canada and New Zealand, are putting the UK at a competitive disadvantage.”

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One business school head of recruitment commented that the UK’s education brand was “beginning to look racist” to those abroad, while a dean said that anyone making forecasts of increased student recruitment to the UK was living in “la-la land”.

Simon Collinson, chair of CABS and dean of the University of Birmingham’s business school, said the report showed how “damaging” the situation is for business schools and the “universities that rely on their income”.

“In 2014-15 we experienced the sharpest decline of international students starting degree programmes in UK business schools,” he said. “Although our business schools remain competitive and our universities are amongst the best in world, international students are choosing other countries for their education because our immigration regulations make this country difficult, or unattractive, to enter.

“These skilled, entrepreneurial and globally mobile students are the leaders of tomorrow and the UK’s immigration policies should be designed to attract them so that our universities and our economy can benefit from the diversity and added value they bring.”

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john.elmes@tesglobal.com