UCU: letting universities fail will mean towns and cities fail

Analysis for union shows universities are often among largest local employers and have ‘huge impact’ on town and city economies

July 31, 2020

UK universities typically support up to one additional job in the local economy for every person they employ, and are often among the largest local employers, according to a University and College Union report highlighting institutions’ “huge impact” on local economies.

The UCU released the report amid fears that the Covid crisis could lead to collapse for some universities and to back up its Fund the Future campaign, which calls on the Westminster government to provide emergency support for universities to cover income lost due to the pandemic.

The analysis, by Hatch Regeneris for the UCU, is based on 74 existing studies of institutions’ local impact along with modelling of a further 90. It also produced analysis of 25 cities, highlighting the number of jobs universities support and measuring their economic contribution. It “looks at goods and services produced locally through universities’ supply chains and the money spent by employees and students”, according to the UCU.

The analysis found that 19 UK institutions directly employ more than 5,000 people, with 10 of these individually accounting for at least 5 per cent of all jobs in their local authority area. 

More widely, the analysis estimates that 22,000 jobs in Manchester, 150,000 in London, 18,000 in Birmingham, 22,000 in Glasgow, 29,000 in Edinburgh and 15,000 in Cardiff are dependent directly or indirectly on their universities.

“Universities bring relatively high wages to these areas as well as associated skilled jobs across a range of occupations including construction, engineering and entertainment,” the UCU said of the analysis. “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, more people are directly employed in higher education (20,000) than in car manufacturing (9,000), the analysis highlights. The average salary at the University of Sunderland is more than a third higher than the average for all jobs in the city, it says.

Jo Grady, UCU general secretary, said: “This review shows that universities are a very significant factor in many local economies. Allowing universities to fail because of the health crisis will mean the economies of many of our towns and cities will also fail. Universities are vital in providing educational opportunities, but they also have a huge impact in creating local jobs, supporting local businesses, and attracting business to the area.

“With every university job leading to another job in the local area, it is now vital that instead of talking our universities down the government protects them. The Welsh government has led the way and the Westminster government now needs to come up with a comprehensive financial support package to ensure that no institution will fail.”

Hatch Regeneris director Tim Fanning said: “From the point of view of the government’s levelling up agenda, the data also shows that places that are lagging behind economically are sometimes especially dependent on their local university.”

The government has outlined a “restructuring regime” for universities at risk of failure as a result of the Covid crisis, but it involves extensive conditions in return for a repayable loan, such a realigning course provision to the government’s priority areas.

Sir David Bell, Sunderland vice-chancellor, previously said 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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Reader's comments (1)

The positive economic impact a University has on its local community can exceed the educational and social benefit it provides but to argue they should all be supported and none fail, for the sake of the local economy, is simply silly. These Universities are where they are but each individually must justify its existence as those that are not viable might be shut down or cut back and the funding saved could then be spent elsewhere to greater advantage. Productivity in many Universities is very poor and the sector as a whole has been slow to modernise itself and invest sensibly to achieve greater efficiency. In my opinion we already have too many Universities and too many students.