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UUK-commissioned study estimates economic impact of teaching, research and innovation to be about £158bn
A report that aims to show the key role universities play in the UK’s growth and productivity estimates the annual economic impact of the sector’s activities to be more than £150 billion.
According to the study, conducted by consultancy London Economics and published by vice-chancellors group Universities UK during its annual conference, the total economic impact associated with higher education teaching, research and innovation in the 2021-22 academic year was about £157.62bn.
‘Full scope of impact’ revealed
Commenting on the findings, Sally Mapstone, principal and vice-chancellor of the University of St Andrews and UUK president, said: “Universities have always been a driving force for boosting growth and opportunity whether directly or indirectly. This latest report reveals for the first time the full scope of the impact of universities, and clearly demonstrates the importance of the sector to the economy and society at large.”
She added: “These figures make a strong case for viewing universities as another part of the UK’s growth infrastructure, and one which can deliver economic and social benefits more quickly and effectively than others.”
Benefits breakdown
The report estimated the value of the higher sector’s research activities to be £54.12bn (34 per cent of total impact); knowledge exchange activities to be £8.73bn (6 per cent); and the sector’s teaching and learning activities to be £94.78bn (60 per cent).
In addition to the £157.62bn impact, made up of the components above, the report estimates the combined economic impact across all of the HE sector’s core activities in 2021-22 to be £265.35bn. This includes a further £37.43bn of impact from the educational exports provided by UK HE providers, and £70.31bn from their institutional expenditures.
From the £265.35bn, London Economics finds a cost-to-benefit ratio of 14 to 1—for every £1 of public spending, £14 of economic benefit is generated, it estimates.
UUK said the report shows “huge positive returns” to the public purse from funding students’ higher education, with the Treasury seeing a benefit of £75,000 per graduate, even when considering the cost of subsidising their education through loans and grants.
Mapstone said: “It is clear we are at a fork in the road. We can choose to act to ensure our universities thrive, or we can allow them to slide into decline…The figures released today will inform work underway by a leading group of experts within and outside higher education, exploring how universities can address the UK’s greatest priorities and challenges, especially around growth, opportunity and supporting delivery of the government’s missions.
“Our blueprint, which will be published in the coming weeks, will set out plans for a ‘reset’ of the university sector, including a rebalancing of responsibility for funding in England to recognise the significant benefits to the Treasury generated by graduates.”