Study reveals “huge impact” universities have on local economies

A new study commissioned by the University and College Union (UCU) and analysed by social and economic research consultancy Hatch Regeneris has revealed that universities are frequently the biggest local employers in the UK.

The report highlights the “huge impact” that higher education institutions have on local economies.

The analysis found that universities support one additional job locally for every person they employ and play an important part in the government’s efforts to ‘level up’ social inequalities.

The report shows that over 5,000 people in Britain are directly employed by just 19 universities, with 10 of them accounting for 5% of all paid local roles.

The beneficial effects on local employment are multiplied in cities with more than one HE institution.

The study comes at a moment when fears are rising that the government’s ‘lockdown’ efforts to contain the spread of COVID-19 may result in bankruptcy and closure for some universities.

The UCU hopes that the research will lend empirical substance to its Fund the Future initiative, which urges the government to make emergency financial support available to British universities to plug the deficits in income that the pandemic response has caused.

The analysis reviewed 74 existing studies exploring the impact of HE institutions on local economies.

It also included modelling of an additional 90 and encompassed 25 UK cities.

The report finds that city by city, universities are directly or indirectly responsible for 15,000 jobs in Cardiff, 18,000 in Birmingham, 22,000 in both Glasgow and Birmingham, 29,000 in Glasgow and 150,000 in London.

The report states: “Universities bring relatively high wages to these areas as well as associated skilled jobs across a range of occupations including construction, engineering and entertainment.

“This includes places such as Plymouth, Middlesbrough, Stoke and Swansea, where at least 5 per cent of local jobs are linked in one way or another to the local institution.”

In the North East, HE establishments are directly responsible for hiring more people (20,000) than the car manufacturing industry (9,000).

At the University of Sunderland, the average salary is over a third greater than the city’s average for all jobs.

UCU general secretary Jo Grady emphasised the review’s conclusion that universities play a major part in the employment numbers in many local economies.

If they are allowed to fail in the wake of the pandemic, she noted, a large proportion of Britain’s towns and cities will fail with them.

Universities are not only essential for opening up educational opportunities, Grady continued, but they also have an immensely positive impact on local employment opportunities.

They support existing local businesses and attract other businesses into the areas in which they are located, she said.

She called on the government to follow the Welsh government’s example and provide “comprehensive financial support” to ensure that no institution will succumb to bankruptcy.

So far, the government has proposed a “restructuring” policy for the most financially at-risk universities in the wake of the pandemic.

This entails a raft of conditions in return for a repayable loan, and requires them to realign their courses to the government’s own priority areas.

Sunderland University’s vice-chancellor Sir David Bell has already dismissed this proposal, saying that “given the punitive nature of what is proposed, you would have to be running on fumes to seek such intervention”.

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