september 10, 2015 economic impact of scotland’s colleges

September 10, 2015

Economic Impact of Scotland’s Colleges

Background to set the stage: our “credentials”11

on the agenda…

22 Differences in economic impact studies—understand the context for the economic impact results and what they mean

33 Results: A broad overview of the results followed by Q & A

“Colleges Scotland is the collective voice of the college sector in Scotland; striving to create cohesive and sustainable partnerships, demonstrate positive impact, acting as representatives, and campaigning for the sector”

Colleges Scotland mission statement

background

Economic impact studies:

•1,500 + US, UK, Canada, Australia

•UK: 130 studies, of which 22 colleges have refreshed more than once, 1 university study + regional aggregates

differences in impact studies

introduction to results

22

11

33

44

Total revenue: £658 million

Served approximately 270,000 learners 2013/14

Aggregate study, 26 FE colleges

Demographics: 48% male, 52% female, 85% white, 15% minority, average age 17 years

the EMSI study

added workforce

skills

College and staffexpenditures

learner taxpayersociety

Scottish impact (region)

Stakeholder investment

Two components

Scotland’s GDP £ 170 billion

Objective: measure how much of GDP is attributable to the colleges

NET LEARNER

SPENDINGADDED

WORKFORCE SKILLS

STAFF AND COLLEGE

EXPENDITURES

impacts of Scotland’s Colleges measured against GDP

results: total impact

Staff and college expenditure impacts

£ 700.8M

Added workforce skills impacts

£ 14.2B

8.8% of all Scottish income + 593K average wage jobs£14.9B/yeartotal £14.9B/year

++++++++

Average income at career midpoint and unemployment rates

£17,000£18,000

£20,000£23,000

Entry SVQ 1 SVQ 2 SVQ 3

results: learner perspective

>SVQ 3

£34,000

15%

12%

11%

8%

5%

results: investment analysis

IRR = 14.8%

learner perspective• tally up higher earnings

• tally up tuition + opportunity cost of time

social perspective (broad)• tally up higher earnings + avoided costs

• tally up all costs to society

B/C = 6.3

IRR = 16.4%

B/C = 6.3

taxpayer perspective (narrow)• tally up increased tax collections + avoided costs

• tally up taxpayer investments

B/C = 5.7

IRR = 15.6%

create new income and jobs in the country by stimulating regional economies directly and indirectly through added workforce skills

in summary… Scotland’s Colleges collectively…

✓

✓✓✓ generate economic benefits far beyond taxpayer costs

save £ millions in social costs every year and improve the quality of life

greatly increase the lifetime earnings of learners

Moving the needle in the future….Moving the needle in the future….

? Kjell Christophersen, Founder and Chief Economist, EMSIkjell@economicmodeling.com, +1 208.882.3567

Q & A