Universities’ increasing impact on regional jobs and growth should not be ‘taken for granted’, warn university leaders

UK universities now generate a knock-on impact of nearly £100bn (£95bn) for the UK economy and support almost a million (940,000) jobs throughout the UK, according to new figures published today [Monday].

According to Universities UK's (UUK) latest study on the impact of the higher education sector on the economy – produced for UUK by Oxford Economics – universities now support more than 940,000 jobs in all parts of the UK, equivalent to three percent of all employment. In total, UK universities, together with their international students and visitors, generated £95 billion of gross output in the economy in 2014-15.

The gross value added contribution of universities’ own operations to Gross Domestic Product (GDP), at £21.5 billion, is larger than that made by a number of sizeable industries. It is 22 percent greater than that produced by the whole accountancy sector and almost 50 percent more than the contribution of the advertising and market research industry.

In terms of annual turnover, universities now generate larger turnover than the UK’s legal sector, the advertising and marketing sector and air and spacecraft manufacturing.

University leaders have, however, warned that this contribution to the economy and jobs should not be 'taken for granted', as UK universities face increased global competition and uncertainty over Brexit negotiations, and government policy on immigration and tuition fees in England.

The report finds that in 2014-15, the UK university sector:

• Generated over £95bn of gross output, an increase of 15 percent in real terms between 2011-12 and 2014-15

• Employed large numbers of people across all the UK’s nations and regions. They supported more than 940,000 jobs in the UK, equivalent to three percent of all employment in the UK

• Contributed £21.5bn to GDP, representing 1.2 percent of the UK’s GDP

• International students (on and off-campus spending and that of their visitors) generated a total of £25.8bn in gross output, and supported 250,000 jobs. Put another way, every international student generated £22k-35k Gross Value Added (GVA) and £5k-£9k in tax revenue

• Received less funding from UK public sources; less than one third (31 percent) of income came from the UK public sector.

Professor Janet Beer, President of Universities UK and Vice-Chancellor of the University of Liverpool, said: “This study highlights the huge and increasingly significant impact that universities have on the UK economy and jobs. This puts the UK's university sector above many other established sectors in terms of economic impact and regional job creation.

“Universities are often the largest employers in their area and, through links with businesses and in attracting students from overseas, they bring in significant investment from around the world to all the UK’s nations and regions. The knock-on impact of universities on local businesses and jobs has supported the regeneration of many deprived towns and cities. 

“While the influence on jobs and the economy is important, universities are fundamentally about transforming students’ lives through education and skills and the production of life-changing research. They also enrich communities by giving local people the chance to take part in arts, music, and sports activities on campuses.

“There are few sectors in the UK that can be described as truly world-leading, so it is important that the success of higher education is not taken for granted. Universities face many challenges, including increased global competition, uncertainty over student funding and the potential impact of Brexit. This report is a timely reminder to policymakers of the increasing economic, social and cultural impact of universities on their local communities.”

ENDS

Notes

1. For more information, please contact the Universities UK press office on 0207 4195407 or pressoffice@universitiesuk.ac.uk If calling out-of-hours, please use 07766 997091. This report (attached) is the latest in a series of studies commissioned by Universities UK looking at the impact of universities on the UK economy, the first undertaken by Oxford Economics. The study quantifies the contribution universities makes to the UK economy, using an analytical method called an Economic Impact Assessment. The results presented are for the academic year ended July 2015, reflecting the latest year for which HESA data were available.

1. The report examines three channels of expenditure which stimulate economic activity: Universities’ direct impact reflects the operational expenditure they undertake to supply the teaching and research, residence and catering, sport and other activities; The indirect impact occurs as a result of universities’ expenditure on inputs of goods and services from UK suppliers. Additionally, international students’ subsistence expenditure and the spending of their visitors; The induced impact arises as universities and the firms in their supply chains, and firms in the supply chains of businesses providing the consumer goods purchased by international students and visitors pay their staff wages. These workers spend a proportion of this income in the consumer economy, mainly at retail and leisure outlets. These impacts then ripple out across these outlets’ UK-based supply chains.

1. The economic impacts measured in this study are quantified using four metrics:  Gross output is the value of an industry’s sales or receipts. It includes the value of the inputs of goods and services it buys in plus the value added by the industry itself; Gross value added contribution to Gross Domestic Product (GDP) is a measure of net output. It is most easily thought of as the value of an industry’s sales minus the value of inputs of goods and services used up in their production. It is the measure the Office for National Statistics (ONS) use to quantify the contribution to the economy of each individual producer, industry or sector; Employment, measured on a headcount basis to facilitate comparison with employment data for other industrial sectors sourced from the ONS; and Tax revenues.

1. For more information on the specific impact of international students on the economy and jobs in nine regions of England (East Midlands; East of England; London; North East; North West; South East; South West; West Midlands; Yorkshire and the Humber), please see the separate report from Oxford Economics based on data from this same, overall study. Separate studies have been produced looking at the economic impact of universities in Wales and Scotland.