I've been interviewing graduates in the UK for many years now from a very broad range of universities, all focused on CS or stem degrees.
In my experience, I've yet to interview an oxbridge graduate who wasn't at least great academically, and this is speaking as someone who went to a lesser university. Clearly whatever standards they have for teaching and entry selection criteria really work.
That said, graduates from other universities are easily on par with oxbridge, just that there were some total morons amongst their peers as well.
In my opinion, the problem is not that the UK fetishes oxbridge candidates, the problem is politics is dominated by arts and ppe graduates which does not offer the problem solving skills stem degrees do. I genuinely think we'd be in a much better place if our leaders weren't trained just in communication, but instead on actually logically thinking through problems and resolving them.