Huge return on investment in Maple Group colleges

In 2014, the member colleges of the Maple Group, consisting of many of England’s leading sixth form colleges, commissioned EMSI (Economic Modelling Specialist International) to study the benefit produced by the colleges, for students, taxpayers, employers and the community as a whole, relative to the investment made in the colleges, both in cash and in time.

The outcome of the EMSI analysis provides compelling evidence of the enormous value investment in Maple Group colleges represents. The messages is clear: Maple Group colleges have a significant positive impact on major stakeholders – on learners, society, taxpayers and the regional business communities. This is a particularly powerful message at a time when expenditure in the public sector is under close scrutiny and Government seeks high quality, value for money providers of education in the 21st century.

Whilst the full reports can be viewed here, the highlights of the findings include:

• Society as a whole will receive £9 for every £1 invested in Maple Group colleges, with an average annual return of 23.3%. (cf HM Treasury discount rate of 3.5%).

‘Investment’ includes direct outlay in state funding for MG colleges and the potential loss of earnings from learners being at college rather than in paid employment. In return for this £547.1 million, the UK will receive a present value of £4.9 billion in the form of expanded tax base, lower unemployment, increased health and well-being, and even reduced crime.

• Tax-payers see an annual average return of 22.7% on their investment of £100.9 million – in other words, £8.30 for every £1 invested.

The net present value of the added tax revenue for learners’ higher lifetime incomes and the increased output of businesses amounts to £712.2 million. There will also be a reduction of £129.3 million in state expenditure due to reduced demand for government-funded social services.

• Learners themselves will receive £6.20 for every £1 they invest in direct costs or potential earnings they forego in order to study at Maple Group colleges.

With most students at Maple Group colleges being 16-18, and only a minority liable to pay fees, the taxpayer pays the bulk of direct costs and learners only pay a total of £14.6 million in direct costs. In 2012/3 they also forwent £238.1 million in earnings they would have received had they been in paid employment. In return, Maple Group learners receive a present value of £1.6 billion in increased earnings over their working lives.

Economic Impact

• The accumulated impact of former Maple Group college learners currently in employment amounts to £1.9 billion added income in England’s economy each year.
• Staffing costs and other expenditure amounts to around £127.1 million added income in the economy each year.
• The above, along with the relatively small additional effect of Maple Group college learners who have relocated to England from elsewhere, means that the total economic impact of Maple Group member colleges to the business community in England is £2.1 billion each year.
• Total added income created by Maple Group member college learners is equal to 0.2% of the total economic output of England, equating to roughly 72,704 average wage jobs.