Higher education boosts economy

July 11, 1997

HIGHER education had a Pounds 1.3 billion balance of trade surplus in 1995/96, according to a new report that confirms universities' status as vital players in the economy, writes Chris Johnston.

The Impact of UK Universities and Colleges on the UK Economy, the first study of its kind, also reveals that institutions directly employed 318,000 people, or 256,000 on a full-time equivalent basis in 1995/96. The sector provided 715,000 full-time equivalent jobs, directly and indirectly, representing more than 3 per cent of the UK workforce.

The report estimates that higher education generated business worth Pounds 43.19 billion - Pounds 11.43 billion by institutions and Pounds 31.76 billion in other sectors. Higher education accounted for an estimated 3.7 per cent, or Pounds 21.88 billion, of the UK gross domestic product in 1995. The sector spent Pounds 12.58 billion, or 2.1 per cent of GDP, on goods and services produced in the UK.

Principal author of the Committee of Vice Chancellors and Principals' study, Iain McNicoll, of Strathclyde University, said it showed that public funding for universities "does not go into a black hole".

"On the contrary, a very large fraction of higher education sector income is respent within the UK on goods and services," he said.

Only 56 per cent of higher education's Pounds 11.3 billion revenue came from public sector core funding. "Other" public income, such as research grants and contracts, comprised 17 per cent, with 19 per cent coming from the private sector and 8 per cent from overseas.

Professor McNicoll found that far from being "ivory towers", the 182 universities and colleges studied employed people in a wide variety of jobs. Teaching and research professionals accounted for only 43.3 per cent of the workforce.

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