11 October 2017
ColegauCymru / CollegesWales has released a new report which demonstrates the major financial impact that the FE sector has on the Welsh economy, estimated to be worth an additional £4 billion every year.
The independent report, commissioned by ColegauCymru and carried out by Economic Modelling Specialists International (Emsi), is the first report to look in depth at the financial benefits of the FE sector to their key stakeholders. The results have emphasised that the extra £20 million earmarked for Further Education in the recently announced Welsh Budget will be money well spent.
In 2014-15 Learners paid a total of £66.9 million to cover the costs of their tuition fees, books and supplies, forgoing earnings of £732.7 million while working instead of earning. However, in return they will have increased earning potential of more than £5.5 billion over the course of their working lives. That means that for every £1 earners put towards their education at FE colleges in Wales, they can expect to yield £6.90 in higher future wages.
While the increased earning potential of college students has been well-documented, what has been less well recognised is the impact that FE colleges in Wales have on their economy. As well as supporting a range of sectors in Wales by supplying them with skilled workers, the expenditure of FE colleges in Wales, along with the spending of their staff and learners, further supports the local economy through the output and employment generated by local suppliers.
It has been calculated that society invested £1.7 billion in FE colleges in Wales through direct outlays and the loss of potential earnings from students while they learn. However, in return for that commitment, society will receive a return on investment of £13.3 billion from those learners over the course of their working lives. This translates to a return of £7.90 for every £1 spent, an average annual return on investment of 24%.
Iestyn Davies, Chief Executive Officer ColegauCymru said: “This independent report conclusively shows the value and contribution made by FE colleges to Wales, not just in terms of the benefits to individual learners, but also to the economy and society more broadly. For every pound learners invest in their future, the rate of return is £6.90, while for every pound society invests, the return is £7.90.
The robust research provides factual evidence and recognition of all the hard work of the staff and leaders in the sector who, despite challenging times, continued to deliver for learners, which really made a difference, as this report shows. They should be extremely proud.”
Alun Davies Minister for Lifelong Learning and the Welsh Language, said: “While it would have been hard to doubt the incredible contribution made by FE colleges to the Welsh economy, I’m pleased to see this contribution laid out in black and white.
“The impact these colleges have on their students’ lives however is huge. The experiences learners receive in college shape the rest of their lives and put them on the path to becoming happy and productive members of the Welsh community. This study more than justifies that the money earmarked for FE in the most recent Welsh Government Budget is an investment, not just in those individual students, but the Welsh economy as a whole.”
Ian Price, CBI Wales Director said: “This report suggests that FE colleges in Wales contribute roughly 183,530 average wage jobs, an incredible contribution by anyone’s standards.
“Colleges employ staff, supply our workforce with qualified, trained workers, benefit local businesses with patronage and generate increased tax receipts. I’m pleased that this invaluable contribution has been recognised and hope to see future emphasis placed on the importance of supporting our FE sector to allow it to continue to thrive.”
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