|Sector:||Education and Labour Markets|
|Client:||University and College Union|
|Published:||23 April, 2020|
|Document type:||LE publication|
|Tagged:||analysis of economic developments economics of education education EU forecasting higher education impact assessment international quantitative analysis UK|
London Economics were commissioned by the University and College Union to consider the potential impact of the Covid-19 pandemic on UK higher education institutions’ enrolments and finances.
- Combining the impact of the economic downturn with the expected deferral rate due to the uncertainty caused by the pandemic, compared to 2018-19 first year enrolments, approximately 232,000 students will no longer enrol in higher education in 2020-21 – equivalent to a 24% decline compared to the baseline (2018-19) cohort.
- In terms of the financial impact associated with this loss in first-year students, the total decline in just tuition fee and teaching grant income experienced across the sector was estimated to be £2.472 billion.
- Although the average loss in income per higher education institution stands at approximately £20 million, given the differences in the reliance on international students by different institutions, this varies significantly. Some institutions might expect to lose more than £100 million.
- If university expenditure declines to the same extent as the expected decline in income, this would result in approximately 30,000 job losses across the higher education sector.
- Combining the direct reduction in university income and expenditure with the subsequent indirect and induced ‘ripple effects’ throughout university supply chains and the wider economy, the pandemic would be expected to result in a decline in UK economic output of approximately £6.1 billion, as well as a total of 63,000 job losses.
The full report is available through the link above.