College managers, staff and students have long championed the educational value of Scottish further education but now research shows there’s a real financial benefit, too.
A report published last night by Colleges Scotland reveals that Scotland’s 20 FE institutions contribute £14.9 billion annually to the Scottish economy – almost 9 per cent of the country’s total economic output.
The research, carried out by Economic Modeling Specialists International (EMSI), says: “Every £1 that learners pay for their education at Scotland’s colleges [mostly by forgoing income they would receive if they were working] yields £6.30 in higher future wages. This translates to a 14.8 per cent annual rate of return on their investment.”
EMSI estimates that the 267,266 students participating in Scottish FE during 2013-14 will earn an extra £7.4 billion over their working lives.
And learners are not the only ones to benefit from the work of colleges, because society as a whole can expect a £19.9 billion return over the course of learners’ working lives through taxes and social benefits, as well as lower unemployment rates and increased health and wellbeing.
Dr Kjell Christophersen, co-founder and senior economist at EMSI, said his organisation had been “able to build a picture which demonstrates that the Scottish economy is a major net gainer from the investment made in the college sector”.
Colleges Scotland, as well as student and staff representatives, said the figures proved that the FE sector required renewed investment. The sector experienced a real-terms funding drop of 12.3 per cent between 2011-12 and 2013-14, according to an Audit Scotland report published earlier this year.
Colleges Scotland’s chief executive Shona Struthers said that FE institutions played “a huge role in creating our future workforce”.
The fact that the sector’s economic productivity was “equivalent to 8.8 per cent of the total economic output of Scotland highlights the scale of its importance to the nation”, she said, adding: “For this to be sustained, it is vital that investment into the sector continues and that both society and businesses recognise the benefits that colleges bring.”
Vonnie Sandlan, president of NUS Scotland and herself a beneficiary of an FE education, said the social and economic benefits of colleges had long been known, and the findings of the report provided “further proof”.
“Our colleges provide immense benefits, not just for the country as a whole but, crucially, for the local communities they serve and are an integral part of,” Ms Sandlan said.
“However, while our colleges are an undoubted success story, and one we should celebrate more and more loudly, there’s still much more we can do to build on that.
“To ensure we meet the full range of students who rely on a college place, we need to look at the funding available for part-time courses, which are vital for older students who want to return to education to retrain or upskill, and those with caring responsibilities. And, more pressingly, we need to see additional funding, and substantial reform, of FE student support.”
A spokesman for the Scottish government said the report underlined its commitment to placing colleges “at the heart of our economic growth”, and that the government had “invested significantly in colleges since 2007”.
He added that colleges were “vitally important in building students’ skills and record numbers are graduating with recognised qualifications, significantly enhancing their career prospects.
“This research reinforces what we already knew – our investment in employability is improving the contribution people make to society, the workplace and the economy.”