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Huge economic contribution of universities must not be forgotten

29 September 2021

Universities in the North East of England contribute £3.7 billion to the economy and support 32,000 jobs across the region, new findings by Frontier E

In terms of GDP, the higher education sector in the North East has contributed £2.1 billion, over five years.

As well as direct employment, universities support these jobs through their purchases of services and goods from other sectors and through employee spending power. Universities also attract substantial numbers of international students, and visitor spending associated with international students runs in the hundreds of millions.

This significant economic impact runs alongside the huge contribution universities make to the economy through life-changing research and educating tomorrow’s workforce, including public sector workers. A predicted 191,000 nurses, 84,000 medical specialists and 188,000 teachers will train at UK universities over the next five years.

Professor Chris Day, Vice-Chancellor and President of Newcastle University said:

“We are proud to play our role in the civic life of the North East and of our record in creating jobs and driving investment into our region. Newcastle is a globally recognised city of innovation. Newcastle Helix is an exemplar of a sustainable urban innovation dedicated to helping us all live better lives and where we base three of the UK’s National Innovation Centres – Ageing, Data and Rural Economy. The dynamic and flourishing community is proof of what close working partnerships can achieve, bringing universities together with industry, the public sector and local communities. By backing universities and investing in schemes that have a proven track record of success, such as Newcastle’s Campus for Ageing and Vitality, the Government could make a real difference to people’s lives in the North East.”

The new research by Frontier Economics, commissioned by Universities UK, falls just ahead of the official deadline for submitting evidence to the government’s Comprehensive Spending Review [CSR] on 30 September.

Shining a light on the powerful impact of universities in those regions that the government is targeting in its “levelling up” programme, figures show that from the jobs universities support in the North East (32,000) to the South West (85,000), to the overall contribution universities make to the economy in the West Midlands (£8.6 billion) to the East of England (£9.4 billion), the positive impact of universities is felt in every region.

The dynamic and flourishing community is proof of what close working partnerships can achieve

Professor Chris Day, Vice-Chancellor, Newcastle University


UUK’s submission to the CSR will include the following recommendations to government:

  • Sustainable funding: maintain the available spend per student to make sure the quality of education is not compromised and ensure the premium for supporting those from disadvantaged backgrounds is maintained.
  • Research: maintain the UK’s position as a global research and development superpower, recommitting to spending 2.4% of GDP on research and development alongside the associated commitment to £22 billion in public investment in research and development by 2024/25.
  • Developing the Lifelong Loan Entitlement: support a broader group of people to benefit from higher education by growing new initiatives such as pilots offering access to modular “bite-size” learning opportunities, and removing the qualification rules which can be a barrier for mature learners, those in work and those looking to upskill.
  • Supporting transformation: providing targeted funding for the most innovative projects aiming to achieve sector-led change, such as supporting collaborations which increase course provision to better meet local skills needs and support levelling-up.

Professor Steve West, President of Universities UK and Vice-Chancellor of UWE Bristol, said:

“Universities have been celebrated for being front and centre in the fight against coronavirus, but it is also important to recognise the livelihoods they support through creating and supporting jobs and businesses across the country. The economic and cultural contribution of our universities is vast and benefits communities across all parts of the UK. Universities can be central to speeding up the UK’s recovery from the pandemic. Now is the time for government to capitalise on the strength of our world-class universities, working with us to ensure universities have the right funding environment to drive economic growth, create new jobs and improve opportunities for people of all ages and backgrounds.”

Economic contribution - case studies

Newcastle Helix is a £350m sustainable urban innovation site in the centre of Newcastle has continued to grow even during the pandemic. This innovative partnership between Newcastle University, Newcastle City Council and Legal & General, is a 24 acre testbed which delivers opportunities for innovation and collaboration. A landmark location for science, technology and business, living and leisure, there are more than 2600 jobs now on site in 65 different organisations. Helix has led to a true coming together of academia, business, the public sector and more.

Situated on the former Newcastle General Hospital site, the Campus for Ageing and Vitality is being redeveloped to become the world’s premier centre for healthy ageing and living. Newcastle University is working with partners including the Newcastle upon Tyne Hospitals NHS Foundation Trust and Newcastle City Council on a vision which will see the city’s West End become nationally and internationally-renowned as a leader in ageing and health. The 29-acre site will encompass a range of uses to allow for healthy ageing innovation, research and development to be carried out at one location.


£3.7 billion - This is a measure which refers to the revenue generated in the economy including intermediate inputs from other industries used in the process of producing the gross output.

32,000 jobs - Frontier Economics has updated previous estimates with the most up to date information on university employment, revenue and spending, which at the time of the analysis was carried out was HESA data from 2018-2019.