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Universities UK: International students now worth £25 billion to UK economy

10 April 2017

International students coming to the UK to study now generate more than £25 billion for the economy and provide a significant boost to regional jobs and local businesses, according to new figures published Friday by Universities UK. The research into the economic impact of international students – conducted for 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. In total, the analysis found that, in 2014–15, on-and off-campus spending by international students and their visitors generated a knock-on impact of £25.8 billion in gross output in the UK. The spending of international students is additional to that of UK residents so provides an export boost to the UK. In 2014–15 they were responsible for £10.8 billion of UK export earnings. As well as tuition fee payments, international students spend money off-campus on a wide range of goods, services, and activities. This amounted to £5.4bn in 2014­–15. The transport and retail sectors are significant beneficiaries of international students’ spending. Their off-campus spending added £750 million to the UK transport industry and £690 million to the retail industry.

International students also attract a significant number of overseas visitors during their time studying in the UK. The expenditure of these friends and relatives, at hotels, restaurants, and attractions also makes a significant contribution to the economy.

The UK is currently the second most popular destination for international students after the United States and attracts a substantial number of overseas students each year. In 2014-15 the 437,000 international students studying in the UK (EU and non-EU) made up 19% of all students registered at UK universities.

This UK-wide impact is mirrored at a regional and local level. For example, in the North West of England, international students’ off-campus expenditure was £458 million in 2014–15, generating a £281 million contribution to local GDP and 3,995 full-time jobs. The analysis includes figures for all nine regions in England.

 The research found that, in 2014-15:

  • International students paid an estimated £4.8 billion in tuition fees to UK universities. This accounts for over 14% of total university income. Some 88% – £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
  • Spending by international students supported 206,600 jobs all over the UK
  • Visitors to international students in the UK spent an estimated £520 million – benefitting in particular the transport, hotels, hospitality, cultural, recreational and sports attraction sectors – generating an estimated knock-on impact of £1 billion 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
  • International students were responsible for £10.8 billion of UK export earnings
  • The economic activity and employment sustained by international students’ off campus spending generated £1 billion tax revenues. This is the equivalent to the salaries of 31,700 nurses or 25,000 police officers

Dame Julia Goodfellow, President of Universities UK, said: “These figures highlight the enormous economic contribution international students now make to UK plc and to jobs and communities in every region of the UK.

“The spending of international students and their visitors now provides a major export boost for the UK economy. This is not something limited to London or to one or two big cities, but to towns and cities across the UK.

“While this report focuses on economic impact, it is important to remember that international students also enrich our campuses and the experience of UK students, both academically and culturally. Many return home having built strong professional and personal links here that provide long-term, ‘soft power’ benefits for the UK.

“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.”

Download the full report from Universities UK 

Source: Universities UK, April 2017