Our economic impact
In this section, we outline the findings of the economic impact modelling exercise for the University of Liverpool’s activities.
Direct impacts are assessed in the first instance, and are followed by individual reviews of capital spending, supplier spending, staff spending, student spending, tourist spending, and research and knowledge exchange.
The impact assessment is undertaken within the Multi-Regional Input Output (MRIO) framework. Input-Output (IO) tables provide a representation of economic interactions within an economy, detailing patterns of sales and purchases between sectors, sales for final use and profiles of related economic features such as GVA5. More details of the methodology adopted and modelling framework are contained in Appendix A (download the full report to view Appendix A).
The IO modelling reports GVA and full time equivalent (FTE) employment.
Research and Knowledge Exchange impacts
University of Liverpool research income amounted to £160.7 million in 2022/23. UK Research Councils contributed 30% of the total, whilst Research England research grants accounted for 27% of the total. Other contributions came from the UK government (16%), UK charities (9%), UK industry (3%) and from overseas (14%).
Table 3.1 reports modelled impacts showing that research and productivity spillovers:
- Contribute £183 million in GVA and supports 2,440 jobs in LCR
- Generates £808 million in GVA from total research impact and creates 9,378 jobs across the UK.
Table 3.1: University of Liverpool Research and Productivity Spillover Impacts | |||
---|---|---|---|
LCR Direct | LCR Indirect/Induced | Total LCR | |
Total Research GVA (£m) | 69 | 114 | 183 |
Total Research Jobs | 837 | 1,603 | 2,440 |
UK Direct | UK Indirect/Induced | Total UK | |
Total Research GVA (£m) | 270 | 538 | 808 |
Total Research Jobs | 2,976 | 6,402 | 9,378 |
In terms of Knowledge Exchange, Intellectual Property (IP):
- Licensing income is £4.9 million with associated costs of £1.1 million
- Turnover from spin outs is estimated at some £7.9 million, with consultancy turnover also reported at £14.9 million
- Income from business courses is reported at some £2 million, with facilities and equipment hire generating close to £4 million
- Contract research income is indicated to be £23.5 million.
Table 3.2 shows how this income delivers significant benefits at both the Liverpool City Region level and the UK level:
- Liverpool City Region (LCR) Knowledge Exchange impacts are £39 million and 592 jobs (when including direct, indirect, and induced impacts)
- At the UK level combined knowledge exchange impacts extend to £66 million and 772 jobs (with direct, indirect, and induced impacts).
Table 3.2: Research and Knowledge Exchange Impacts | ||||
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Impact area | LCR GVA (£m) | LCR Jobs | UK GVA (£m) | UK Jobs |
Contract research | £15m | 208 | £27m | 319 |
Courses and facilities | £6m | 120 | £8m | 96 |
Intellectual Property (IP) | £3m | 50 | £3m | 41 |
Spin outs | £5m | 77 | £9m | 111 |
Consultancy | £10m | 137 | £18m | 205 |
Total Knowledge Exchange | £39m | 592 | £66m | 772 |
Note: Table simplified for readability
Direct Impact
The direct impact of the University of Liverpool reflects the economic contribution made through everyday operations. The scale of direct economic impact is, like any other activity, conventionally measured in terms of GVA and employment and is evaluated using information from the 2022/23 ‘Review of the Year and Financial Statements’ published by the University.
This places staff costs at £373.9 million (setting aside the staff element to USS pensions). Adding operating surpluses, interest, and depreciation, this places a direct GVA estimate of some £456 million. The University employs 7,842 staff and the direct FTE employment is defined in the Statements at 6,001.
Capital expenditure impact
University of Liverpool 2022/23 capital expenditure is reported at £72.1 million, substantially higher than the previous three years where values dropped to around £50 million (the COVID period and aftermath) from some £70 to £80 million previously. In total, £300 million capital expenditure has been spent over the previous five year period (see Figure 3.1 in the downloadable report).
The University’s investment in capital purchases not only stimulates economic activity throughout the wider supply chain, but also contributes to the physical development and transformation of the city. Transformational projects over the last decade include the £37 million Materials Innovation Factory (MIF) – in partnership with Unilever and housing one of the highest-concentrations of Materials Science Robotics in the world – and the £12.7 million Digital Innovation Facility (DIF) - a new home for world-leading research dedicated to maximising the possibilities of emerging technologies, including artificial intelligence (AI), robotics and data visualisation.
In addition, significant investment has also gone into building and upgrading teaching facilities and student accommodation, including an extension of the Management School, upgrading of the School of Law and Social Justice, the Crown Place Student Residential Scheme, the Greenbank Student Village rebuild, and the state-of-the-art Yoko Ono Lennon Centre, home of the Tung Auditorium. The capital expenditure of these projects totals more than £200 million.
Details of the location of capital spend show that some 44% of expenditure flows to suppliers in the LCR, from which we infer a direct output impact of £31.7 million. Direct outputs are assigned across IO sectors in relation to the nature of the reported activity.
Taking these as the basis of activity in the IO models, analysis (see Table 3.3) defines:
- A direct GVA impact of £12 million for the LCR and £29 million for the UK, with respective employment impacts of 138 and 283 jobs
- Indirect and induced impacts of £20 million GVA with 280 jobs within LCR and £56 million with 689 jobs within the UK
- A combined GVA impact of £32 million and 418 jobs for the LCR economy. These rise to £86 million and 972 jobs at UK level.
Table 3.3: University of Liverpool Capital Expenditure Impacts | |||
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LCR Direct | LCR Indirect/Direct | Total LCR | |
GVA (£m) Impacts | £12m | £20m | £32m |
Jobs Impacts | 138 | 280 | 418 |
UK Direct | UK Indirect/Induced | Total UK | |
GVA (£m) Impacts | £29m | £56m | £86m |
Jobs Impacts | 283 | 689 | 972 |
Supplier spending impacts
Supplier spend profiles reflect the pattern of goods and services purchased by the University of Liverpool to enable its operations. The spending of the University extends through its supply chain, contributing to further GVA growth and job creation.
By analysing detailed profiles of the University’s supplier purchasing by location, we have been able to assess the proportion of spend sourced within the LCR area and the UK at industry sector level.
With total 2022/23 purchasing reported at £240 million, scrutiny of the supplier database indicates that some 18% of total spend was placed in the LCR economy with 86% placed in the UK as a whole. In effect, supplier-related output in the LCR/UK amounted to £42.5 million / £206.8 million respectively.
With spend allocated across IO sectors in relation to the nature of the activities reported, model outcomes suggest (see Table 3.4):
- A direct GVA impact of some £22 million and 390 jobs for LCR, rising to £96 million and 1,348 jobs for the UK. The differential reflects the variation in initial spend distribution between areas
- Indirect and induced impacts of £23 million and 336 jobs in the case of LCR and £124 million and 1,575 jobs for the UK
- Total GVA/Jobs LCR impact is modelled at £45 million / 726 rising to £220 million / 2,923 jobs at the UK level.
Table 3.4: University of Liverpool Supplier Spending Impacts | |||
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LCR Direct | LCR Indirect/Induced | Total LCR | |
GVA (£m) Impacts | £22m | £23m | £45m |
Jobs Impacts | 390 | 336 | 726 |
UK Direct | UK Indirect/Induced | Total UK | |
GVA (£m) Impacts | £96m | £124m | £220m |
Jobs Impacts | 1,348 | 1,575 | 2,923 |
Staff spending impacts
Defining the economic impacts associated with University’s staffing makes it necessary to determine the extent to which staff reside in the LCR and might be presumed to spend from their wages and salaries in the LCR area. Anonymised data defining the spatial distribution of staff by salary bands are analysed against ONS ‘Living Costs and Food Survey’ profiles to determine typical patterns of consumption in the light of tax/social security deductions by
salary band.
With 74% of University staff living in LCR, it is estimated that annual staff spend equates to some £105 million for purposes of analysis. Modelling defines the impacts as (as shown in Table 3.5):
- Direct LCR/UK GVA impacts of £45 million /£61 million and employment impacts of 588/741 jobs
- Indirect and induced LCR/UK GVA impacts of £66 million/£120 million along with 964/1,459 LCR/UK jobs
- Combined impacts of £111 million of GVA with 1,552 jobs rising to £182 million of GVA and employment of 2,200 at UK level.
Table 3.5: University of Liverpool Staff Impacts | |||
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LCR Direct | LCR Indirect/Induced | Total LCR | |
Staff GVA (£m) Impacts | £45m | £66m | £111m |
Staff Jobs Impacts | 588 | 964 | 1,552 |
UK Direct | UK Indirect/Induced | Total UK | |
Staff GVA (£m) Impacts | £61m | £120m | £182m |
Staff Jobs Impacts | 741 | 1,459 | 2,200 |
Student impacts
Beyond core operations, the University generates a range of additional impacts through the attraction of domestic and international students, associated visits/tourism, and research activities.
Students contribute significantly to the University’s economic impact through their spending on goods and services during term-time. This spending boosts local businesses by increasing their revenue and supporting jobs, providing positive effects on the wider supply chains, the vast majority of which would not have relocated to the LCR for study in the absence of the University, further enhancing its economic influence.
Table 3.6 summarises the results of our student survey in terms of average weekly expenditure. In total, students spent on average £280 per week, 46% of which on accommodation and household bills, 19% on shopping including food shopping, and 16% on leisure and nightlife.
Table 3.6: University of Liverpool Student average expenditure by area (2023/24) per week | ||||||
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Accommodation (and household bills) | Shopping including grocery shopping, household items, clothes and shoes, etc. | Leisure and socialising, including food and beverage | Entertainment and hobbies, including sporting activities, gym memberships, cultural events, theatre, concerts, etc. | Transport around Liverpool | Other | Total (per week) |
£129 | £53 | £45 | £17 | £16 | £18 | £280 |
Using an average 43 weeks’ residence attendance and distribution of spend we allocate to sectors via an economic matrix which provides the following estimates (see table below):
- Combined direct LCR/UK GVA and employment at £125 million/ £122 million and 1,281/1,392 jobs, respectively
- Indirect impacts as £187 million / £231 million GVA and 2,584/2,684 jobs, respectively
- Combined total impact of University’s students in LCR at £312 million GVA with 3,865 jobs rising to £352 million GVA and 4,076 jobs at UK level.
Table 3.7: University of Liverpool Domestic/Overseas Student Impacts | |||
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LCR Direct | LCR Indirect/Induced | Total LCR | |
Domestic Student GVA (£m) | £73m | £110m | £183m |
Domestic Student Jobs | 751 | 1,520 | 2,271 |
Overseas Student GVA (£m) | £52m | £77m | £130m |
Overseas Student Jobs | 530 | 1,064 | 1,594 |
Combined Student GVA (£m) | £125m | £187m | £312m |
Combined Student Jobs | 1,281 | 2,584 | 3,865 |
UK Direct | UK Indirect/Induced | Total UK | |
Domestic Student GVA (£m) | £69m | £134m | £203m |
Domestic Student Jobs | 782 | 1,545 | 2,327 |
Overseas Student GVA (£m) | £52m | £97m | £149m |
Overseas Student Jobs | 610 | 1,139 | 1,749 |
Combined Student GVA (£m) | £122m | £231m | £352m |
Combined Student Jobs | 1,392 | 2,684 | 4,076 |
Tourist impacts
The concentration of students provides opportunities for visitors to the LCR area. Using the student survey undertaken for this report, we identified that an average of three visitors per domestic student and one visitor per overseas student come to the area per academic year, with an average of one night per visitor. This is then assessed against average LCR tourism spend. This analysis shows a combined impacts of domestic and overseas students as (see Table 3.8):
- Direct GVA and employment estimates are defined as £9 million and 143 jobs for the LCR economy and £9 million / 151 jobs for the UK
- Indirect and induced LCR/UK impacts are subsequently defined as £8 million / £12 million GVA and as 132 / 156 jobs
- Total tourism related LCR/UK impacts sum to £17 million / £21 million GVA and 275 / 313 jobs.
Table 3.8: University of Liverpool Domestic/Overseas Tourist Impacts | |||
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LCR Direct | LCR Indirect/Induced | Total LCR | |
Domestic Tourist GVA (£m) | £7m | £6m | £13m |
Domestic Tourist Jobs | 106 | 93 | 199 |
Overseas Tourist GVA (£m) | £2m | £2m | £4m |
Overseas Tourist Jobs | 37 | 39 | 76 |
Combined Tourist GVA (£m) | £9m | £8m | £17m |
Combined Tourist Jobs | 143 | 132 | 275 |
UK Direct | UK Indirect/Induced | Total UK | |
Domestic Tourist GVA (£m) | £7m | £9m | £16m |
Domestic Tourist Jobs | 107 | 110 | 217 |
Overseas Tourist GVA (£m) | £2m | £3m | £5m |
Overseas Tourist Jobs | 44 | 46 | 96 |
Combined Tourist GVA (£m) | £9m | £12m | £21m |
Combined Tourist Jobs | 151 | 156 | 313 |
Total impacts
Taking all components together, Table 3.9 reports that the estimated total combined impact of the University’s related activities in 2022/23 is:
- LCR Impacts: Up to £1.2 billion GVA and 15,869 jobs in the LCR economy
- UK Impacts: Up to £2.1 billion GVA and 26,629 jobs in the UK economy.
Table 3.9: University of Liverpool Total Impacts (Differential Research Impacts) | |||
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LCR Direct | LCR Indirect/Induced | Total LCR | |
Total Impact GVA (£m) | 754 | 442 | 1,196 |
Total Impact Jobs | 9,590 | 6,279 | 15,869 |
UK Direct | UK Indirect/Induced | Total UK | |
Total Impact GVA (£m) | 1,065 | 1,125 | 2,190 |
Total Impact Jobs | 13,152 | 13,477 | 26,630 |