Huge economic contribution of universities in South West revealed in new research

Universities in the South West of England contribute £9.2 billion* to the economy and support 85,000 jobs** across the region, new findings by Frontier Economics have revealed.

In terms of GDP, the higher education sector in the South West has contributed £5.3 billion over five years.

The research was commissioned by Universities UK (UUK), which represents 140 universities in England, Scotland, Wales and Northern Ireland and is led by UWE Bristol Vice-Chancellor Professor Steve West.

The publication of the research findings falls just ahead of the official deadline for submitting evidence to the government’s Comprehensive Spending Review [CSR] on 30 September.

As well as direct employment, the research found that universities support jobs through their purchases of services and goods from other sectors and through employee spending power. Universities also attract substantial numbers of international students, and visitor spending associated with international students runs in the hundreds of millions.

This significant economic impact runs alongside the huge contribution universities make to the economy through life-changing research and educating tomorrow’s workforce, including public sector workers. A predicted 191,000 nurses, 84,000 medical specialists and 188,000 teachers will train at UK universities over the next five years, the research findings showed.

Shining a light on the powerful impact of universities in those regions that the government is targeting in its “levelling up” programme, figures show that from the jobs universities support in the North East (32,000) to the overall contribution universities make to the economy in the West Midlands (£8.6 billion) to the East of England (£9.4 billion), the positive impact of universities is felt in every region.

UUK’s submission to the CSR will include the following recommendations to government:

• Sustainable funding: maintain the available spend per student to make sure the quality of education is not compromised and ensure the premium for supporting those from disadvantaged backgrounds is maintained.
• Research: maintain the UK’s position as a global research and development superpower, recommitting to spending 2.4% of GDP on research and development alongside the associated commitment to £22 billion in public investment in research and development by 2024/25.
• Developing the Lifelong Loan Entitlement: support a broader group of people to benefit from higher education by growing new initiatives such as pilots offering access to modular “bite-size” learning opportunities, and removing the qualification rules which can be a barrier for mature learners, those in work and those looking to upskill.
• Supporting transformation: providing targeted funding for the most innovative projects aiming to achieve sector-led change, such as supporting collaborations which increase course provision to better meet local skills needs and support levelling-up.

Professor West was elected as President of UUK following a ballot of its members in March. He took up the role in August and will hold the post for two years.

Professor West said: “Universities have been celebrated for being front and centre in the fight against coronavirus, but it is also important to recognise the livelihoods they support through creating and supporting jobs and businesses across the country.

“The economic and cultural contribution of our universities is vast and benefits communities across all parts of the UK. Universities can be central to speeding up the UK’s recovery from the pandemic.

“Now is the time for government to capitalise on the strength of our world-class universities, working with us to ensure universities have the right funding environment to drive economic growth, create new jobs and improve opportunities for people of all ages and backgrounds.”

*This is a measure which refers to the revenue generated in the economy including intermediate inputs from other industries used in the process of producing the gross output.

**Frontier Economics has updated previous estimates with the most up to date information on university employment, revenue and spending, which at the time of the analysis was carried out was HESA data from 2018-2019.