Universities in the north east support more jobs than car industry, report warns government

Report commissioned by University and College Union warns many cities are dependent on HE employers

Universities typically support tens of thousands of jobs in their local area, often accounting for around one additional job for every person they employ, a new study for the University and College Union has suggested. 

The report by Hatch Regeneris, which was commissioned by the union, was a warning to government that universities cannot be allowed to fail because of the health crisis, the UCU general secretary said.

Data compiled by the economic consultants suggests 19 institutions in the UK directly employ more than 5,000 people, with 10 of these individually accounting for at least 5% of all jobs in their local authority area.

In the north-east, where car manufacturing has historically been a symbolic employer for region, there are not more jobs in higher education (20,000) than in automobile plants (9,000). Those jobs also tend to be better-paid and more skilled than the average for the north east – the average salary at the University of Sunderland, for example, is more than a third higher than the average for all jobs in the city.

Analysis suggests 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.

The review modelled 96 universities in 25 cities and looked at the number of jobs they support and their economic impact on local economies. It considers goods and services produced locally through universities’ supply chains and the money spent by employees and students in its analysis. The figures show how universities are often among the single largest contributors to the local economy.

UCU commissioned the report because it is lobbying the government for a higher education sector bailout package – the report’s authors warn the loss of higher education institutions could undermine the government’s ‘levelling up’ agenda.

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 
Dr Jo Grady, UCU

Universities in the north east support more jobs than car industry, report warns government
The two universities in Bristol account for nearly 24,000 indirect jobs in the city.

The economies of some cities analysed in the report appear to be more dependent on HE than others. The two universities in Bristol, for example, collectively employ around 9,800 people, generate around £1.32m in gross value added (GVA) for the local economy and support nearly 2.5 jobs in the city for every full-time, university-paid post.

In Cambridge, the two universities there indirectly support the jobs of more than twice the number of people they employ directly. Stoke-on-Trent’s two universities – Keele and Staffordshire – employ nearly 3,000 people and generate another 6,170 jobs for the city in the wider economy. In Plymouth, Middlesbrough, Stoke and Swansea, at least 5% of local jobs are linked in one way or another to the local institution.

UCU general secretary Jo Grady 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: “The evidence from this review implies that areas hosting institutions that are vulnerable to contraction could be exposed to a wider economic shock  – even before we consider the effect on access to university, local labour markets, and research and innovation.

“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.”


Read more: UCU calls on government to end ‘huge financial uncertainty’ for universities

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