The Economic Impact Of The UK’s Higher Education Sector

In their latest report, London Economics analysed the impact of the UK higher education (HE) sector’s teaching, research, and innovation activities on the UK economy, focusing on the 2021-22 academic year. The latest figures show the UK higher education sector’s teaching, research and innovation activities had an economic impact of £158 billion. When combined with previous London Economics analysis of the direct spending by the sector and the economic benefit of international students, the total impact across UK HE in 2021/22 was £265 billion. Comparing against the public cost of these activities, London Economics found a cost to benefit ratio of 14 to 1. This means for every £1 of public money invested into UK universities, £14 of economic benefit is generated.

Commissioned by Universities UK, which represents 141 universities, the report focuses on the just under one million (906,000) domestic students who started higher education in 2021-22.

It also shows huge positive returns to the public purse of 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.