5 May 2011
The steep rise in student tuition fees will have a negative impact on the economic activity of UK university towns and cities, according to a report published today.
Starter for ten, published by think-tank Centre for Cities, shows that student spending accounts for up to 10% of total economic activity in some cities. As a consequence, these areas could be badly hit by the rise in tuition fees to up to £9,000 from 2012.
Commenting on the findings, Paul Swinney, an analyst at Centre for Cities, said: ‘Universities, and the cities they are based in, face some challenging times ahead.’
He added: ‘It is likely that places like Oxford and Cambridge will fare better than others. Demand for places is unlikely to slip, so the large contribution that students make to the economies of these cities through their spending habits is unlikely to change significantly. But other universities are likely to find it more difficult to attract students. And this is likely to have a negative impact not just on the university itself but on the wider city economy.’
Analysing data from the Higher Education Statistics Authority and the Higher Education Funding Council for England, the research shows that by far the biggest impact that a university has on its city economy is through its local employment and the spending of its students rather than the interaction that it has with the local business base.
The top five cities with the highest proportion of undergraduate spending compared to total output are Cambridge, Plymouth, Coventry, Oxford and Dundee.
