But, with non-EU enrolments flatlining, the increase in revenue reflects a rise in cost rather than an increase in actual students.

In its annual financial health of the sector report, the Higher Education Funding Council for England, issues a warning of the risks facing the sector if overseas student fees decline and continues to argue that universities are too optimistic about international student projections.

“A significant risk to the sector is the impact a decline in overseas students would have on associated fee income”

“A significant risk to the sector is the impact a decline in overseas students would have on associated fee income and the longer-term financial sustainability of institutions,” it reads.

“Areas of potential risk currently facing the sector include the tightening of UK immigration policy, a downturn in the global economy, including that of the UK, and increasing competition from worldwide markets for outwardly mobile students.”

The 6% increase in non-EU tuition equates to £222m more in universities’ balance sheets totalling £3,778m in 2015/16.

But, the report points out that, “Since 2008/9, although both overseas student numbers and overseas income have increased, the increase in overseas fee income is greater, indicating that the rise in overseas income is largely due to an increase in fees charged.”

Last year, non-EU enrolments to UK institutions dropped slightly continuing the supine growth trajectory the sector has seen since 2014. HEFCE notes that early predictions from the Higher Education Students Early Statistics Survey indicate a continued flatlining of overseas entrants for 2016/17, despite many institutions forecasting growth in overseas students.

“Early student numbers for 2016/17 show no increase in overseas undergraduate entrants compared with 2015/16. Although this pattern only relates to a small proportion of overseas applications, it is echoed by UCAS application data for 2017/18 entry, which indicates that overseas applications remain at the same level as at the same point in the previous year’s cycle.”

Non-EU fees accounted for 13% of total income across the sector, slightly more than the 12.7% reported in 2014/15, but in terms of tuition fee income specifically, the contribution of overseas fees to universities’ income dropped slightly to 25.5% from 26.3%.

The HE sector is particularly vulnerable to changes in the Chinese student market, it notes.

Institutions at the lower end of the price scale are more vulnerable to a drop in overseas tuition revenue than others it underlines.

There is a “growing disparity between institutions in relation to student recruitment”, the report argues. “Low tariff group institutions have so far experienced a decline in applicant numbers of 10% overall, and medium tariff institutions a decline of 5%, while higher tariff applications have increased by 1%.”

“There’s a growing disparity between institutions in relation to student recruitment”

High tariff institutions include Russell group and pre-1992 institutions.

The study also found universities continue to make substantial investments in infrastructure “to maintain and enhance the academic and student facilities”.

In 2015/16, capital expenditure totalled £3.8m, an increase of 14.5% compared with 2014/15. Again, HEFCE notes a significant variation between institutions, with 53 reporting a decline in capital expenditure over the year.

A recent Deloitte and Universities UK survey of financial directors and vice-chancellors reflects a sector-wide commitment to invest in infrastructure and technology in order to remain competitive.

The survey also found 62% of respondents feel less optimistic about institutional finances than they did last year as a result of Brexit, UK immigration and higher education regulatory overhauls.