International students are worth 25bn to UK economy

Published on:

11 Apr 2017, 12:00 am

As the number of Indian students coming to study at UK universities continues to register a drop, a new report reveals just what Britain stands to lose. International students coming to study at UK universities are worth over 25 billion pounds to the British economy, found new research released today. The latest analysis titled 'The Economic Impact of International Students', conducted for representative organisation Universities UK by Oxford Economics, shows that in 2014-15 spending by international students supported 206,600 jobs in university towns and cities across the UK. “International students paid an estimated £4.8 billion in tuition fees to UK universities. This accounts for over 14 per cent of total university income. Some 88 per cent - £4.2 billion - of this fee income was paid by students from outside the EU. As well as university fees and accommodation, international students spent £5.4 billion off-campus on goods and services,” the research found.

“Visitors to international students in the UK spent an estimated 520 million pounds - benefitting in particular the transport, hotels, hospitality, cultural, recreational and sports attraction sectors - generating an estimated knock-on impact of 1 billion pounds in gross output. Taking their university payments, off-campus spending, and the spending of their visitors together, international students generated £25.8 billion in gross output,” it adds. The data will add pressure on the UK Home Office to ease restrictions on international students in the face of significantly declining student numbers from India, a concern repeatedly highlighted by the Indian government. “They [the UK] have to realise that when international students come here [Britain] they subsidise the educational costs here. We already have a reality where the quantum of students coming into the UK is declining and other jurisdictions are available. The UK also is a part of the competitive market in that area,” Indian finance minister Arun Jaitley had said during his recent visit to London.

The spending of international students and their visitors 2014-2015 now provides a major export boost for the UK economy. - Dame Julia Goodfellow, President, Universities UK

The Higher Education Statistics Agency (HESA), the UK's official agency for the collection, analysis and dissemination of quantitative information about higher education the country, had revealed earlier this year that while Indians remain the third-largest category of students from outside the European Union they registered a decrease of 9 per cent in 2015-16 over the previous year. “India saw the largest percentage decrease, at 44 per cent between 2011/12 and 2015/16. In numbers, this meant that in 2015/16, the number of student enrolments domiciled from India was 13,150 less than in 2011/12. It is worth noting however, that the decline in student enrolments domiciled from India began a year earlier, in 2010/11,” the HESA said in its analysis. The Universities UK briefing launched in March urges the UK government to ensure that its strategies in a post-Brexit economy should recognise the “fundamental importance” of international students. The UK is currently the second most popular destination for international students after the US. Dame Julia Goodfellow, president of Universities UK, called for a "welcoming climate" for the UK to maintain its lead as a destination for international students. She said: "The spending of international students and their visitors now provides a major export boost for the UK economy. "Our world-class higher education sector is one of the UK′s outstanding success stories. We have the second largest share of the global market, behind only the USA. This is a potential growth area and there is scope for the UK to welcome more qualified international students and build on this success. “To do this, we must present a welcoming climate for genuine international students and ensure that visa and immigration rules are proportionate and communicated appropriately. This will be even more important as the UK looks to enhance its place in the world post-Brexit." The briefing pointed out that friends and relatives will often visit international students studying at UK universities, such as parents travelling to drop off or collect their children, or visit while on holiday. As the expenditure they undertake in the UK is additional to that spent by UK residents, it creates extra economic activity in the country.

UK Campus Snapshot 2014-2015

On- and off-campus spending by international students and their visitors generated £25.8 billion in gross output for the UK economy.
This activity contributed £13.8 billion gross value added (GVA) to UK GDP.
On- and off-campus spending by international students and their visitors supports jobs all over Britain, supporting 206,600 full-time equivalent (FTE) jobs nationally.
International students are good for the British economy as a whole, being responsible for £10.8 billion of UK export earnings.
Spending by international students outside of university fees and accommodation (ie 'off-campus' spending) amounted to £5.4 billion.
International students also boost other British industries, for example adding £750 million to the UK transport industry and £690 million to the retail industry.
The economic activity and employment sustained by international students' off-campus spending generated £1 billion in tax revenues. This is the equivalent to the salaries of 31,700 nurses or 25,000 police officers.

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