If you want to hire for low level understanding go to universities like Cambridge, Warwick, Bristol, Imperial, York. Look at Aero Engineers and Physicists as well as CS students.
Kings College has maybe a third or forth tier CS department, it's not surprising he's not finding great candidates from there. It also seems like he's relying on the mainstream recruitment boards, most talented graduate developers don't even look there. Most are recruited either through university events or dedicated graduate recruitment boards.
Also there's a reason it's hard to find talented graduate developers willing to do VBA, because money isn't everything. Sure you might make an extra thousand pounds a year doing it, but that doesn't make worthwhile to do a job you hate. Most talented developers would rather get a job that pays less and is enjoyable.
Admittedly I didn't really take advantage of what was available, but my interest is basically in building cool things during my day job. I don't really code for fun and I'm not particularly interesting in computer science theory except where I need it to make my work better.
I've managed to do pretty well because I can balance above average programming skills with a fairly good sense of user interface and design. But ask me about compiler design or operating systems and you'll just get a blank look.
I suppose my point is that I'm okay, but nothing exceptional and I don't have any real interest in the low levels of computer science. So to hold me in high regard just because I have a Masters from a top university is a massive mistake in my opinion. Heck, if I'd done more than just the coursework and a day's worth of revision per subject (I was also skipping about 3/4 of all lectures), my high 2.1 would have been a 1st fairly easily.
Apologies for the rant, and my experiences at Warwick may be out of date now and may be untrue of the other institutes you've mentioned.
I have my own issues with my time there, but for giving a good, detailed, low-level understanding of computing, I can't fault them.
Exactly, look outside of traditional CS. Econometrics produces very good quantitative people, for example. Teaching them C++ is the easy part (relatively speaking).