How does society benefit from a university education?

The debate around tuition fees has led many to question the value of higher education. But the broader public benefit of universities is bigger than expected, says Faiza Shaheen.

By understanding the public return of universities we can make better-informed decisions about the balance between public and individual investment. The New Economics Foundation (Nef) was commissioned by Universities UK (UUK), the umbrella body representing 133 universities in the UK, to consider this question. We found that the public value was much bigger than most would expect.

Public value includes the economic, social and environmental benefits. Both the economic benefits from growth in human capital and from university-based research and innovation have been discussed.

Occasionally, there is some recognition of the role that universities play in regional economies. For example, a report commissioned by UUK found that through direct and secondary multiplier affects the sector generated over £59bn of output.

Our report, Degrees of Value: How universities benefit society, is the first step towards a broader evaluation of UK universities. We explored the non-economic benefits produced by universities and used best-practice social accounting techniques to put a monetary value on some of the outcomes we found.

The OECD has shown that three social outcomes – higher interpersonal trust, greater political interest and better self-reported health – are all associated with higher education, even when controlling for income.

These individual social outcomes have a benefit for society. For example, greater political interest has been linked to greater civic engagement and stronger democracies – something that everyone benefits from. We found that the value of just these three outcomes alone resulted in a social impact of £1.31bn in the UK.

A second stand of social impact is related to the impressive array of community engagement activities that universities are involved in – from encouraging students to mentor local pupils to opening up university cultural facilities for everyone in the community to enjoy.

We found that just one local mentoring programme, led by the University of Warwick, was generated benefits of over £950,000 through improving reading fluency, raising aspirations and increasing cultural understanding. Many universities are engaged in similar mentoring programmes, suggesting that this group of activities is generated millions in social value across the country.

The final strand that we were able to factor into our work was the benefits delivered by universities facilitating social mobility. Social mobility, rather the lack of it, has been high on the government agenda.

Nick Clegg, the deputy prime minister, has been keen to stress his personal commitment to increasing social mobility, as demonstrated in his foreword to recent released social mobility strategy. Getting more individuals from low income households go to university is seen as an effective way to achieve this goal.

Our own research found that Manchester Metropolitan University (MMU) was delivering considerable public value by being an accessible place for local people, often from deprived communities, to go to university. A staggering 44% of their students are from households with incomes below £25,000.

While not all universities would be able to match this statistic, the £147m generated in public value from only MMU’s contribution serves as a further reminder of how universities can play an important role in making the UK a more fair and meritocratic society.

Overall, once you start adding up the numbers the public returns – both economic and social – look significant. However, our research uncovered the difficulty of auditing all the activities universities do and their impact.

This valuation exercise does not suggest that universities are perfect. One of the recommendations we made was that they maximise their social impact, for instance by opening up more of their cultural facilities for local communities to use. During economically stringent times and in the context of a push for a Big Society, universities would be doing themselves a favour by doing more and being more vocal about how they are already contributing to the greater good.