Weaker UK regions most dependent on universities

Universities in the UK are under threat from a funding crisis: domestic tuition fees have been frozen since 2012, the number of international students coming to the UK is falling, and less research funding is available. Looking at the economic footprint of universities, it is clear that regions with weaker economies—particularly Wales and the North East—are the most exposed to the pressures on the university sector.

• Using the Oxford Economics Local Economic Impact Model, we find that the footprint of universities supported 1.2 million jobs in the UK and added £80 billion of gross value added (GVA) to national GDP in 2024. London and the South East saw the largest share of the regional impact in absolute terms, with universities representing more than £25 billion of GVA. Inner London, as well as the UK’s major cities and university-centred towns—including Oxford and Cambridge—experienced the greatest impacts.
• However, the regions most exposed were those with less economic diversity and a larger share of local economic activity tied to the university sector. Lower productivity regions, such as the North East and Wales, relied more heavily on the relatively high-wage, high-productivity university jobs and their associated multiplier effects.
• A decline in the UK’s university sector is therefore a risk to all regions and sectors across the UK. However, there is scope for reforms around apprenticeships and improvements to local policies to increase the economic value of UK universities, as well as the post-16 education system more broadly.

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