Six ways that higher education benefits the UK economy
The UK chancellor’s budget was met with mixed reactions from the higher education sector. While university leaders welcomed the decision to allow those universities that provide excellent teaching to increase tuition fees in line with inflation, prospective students condemned the move to scrap maintenance grants, saying it sends the message that only the rich can go to university.
As universities ponder their economic future, we highlight some interesting facts to show how lucrative the higher education sector is to the UK economy.
1) Universities contribute four times more to GDP than agriculture
A report by Universities UK says universities contributed around £39.9bn to GDP in 2011-12. This accounted for 2.8% of GDP – more than four times as much as agriculture, which contributed 0.6%.
2) Students give the economy an £80bn boost
According to a report commissioned by the National Union of Students in 2013, student expenditure supports some £80bn of the UK’s economic output. Meanwhile, the University of Birmingham brings in £530m to the city’s economy, which is 2.2% of the local wealth generated – double the amount that the region’s eight largest football clubs bring in together. In Wales, student cash supports 2.6% of GDP and 35,000 jobs. And in Scotland it counts towards 1.26% of GDP and supports 109,000 jobs.
3) International students studying in London bring in far more money than they use in public services
Students coming to study in UK universities from outside the EU pay an average of £12,000 a year for an undergraduate degree. A 2015 report from London First, an organisation representing London businesses, showed that international students in the capital used £540m of public services such as the NHS, but brought in over £2.8bn to the economy through tuition fees, spending and hosting family and friends coming to visit – a net contribution of £2.3bn.
4) Four in 10 young adults have a degree – and they can earn £9,000 more than those without one
The 2011 census found that around four in 10 people aged 25-34 had a degree-level qualification or above. The government’s latest statistics show the employment rate for working-age graduates is 87.5% – the highest level since the end of 2007. At £31,000, the average earnings of full-time working-age graduates is £9,000 higher than the average non-graduate salary.
5) More than 93% of students who graduated in 2014 went on to further study or found employment within six months
The universities of Lancaster, Derby, West London, De Montfort and Leeds Trinity University were among the 40 institutions that had fewer than 5% of graduates out of work or study six months after finishing their degree. They outperformed some major Russell Group universities, including the universities of Manchester, Exeter and Birmingham as well as the London School of Economics.
6) Research collaborations between UK universities and business are worth more than £3.5bn
There are currently 12,240 collaborative research projects between universities and businesses, including 368 in the arts and humanities, and 6,260 in engineering. The Dowling review, published earlier this month, said that according to the World Economic Forum, the UK ranks fourth in the world for university-industry collaboration in research and development.
