Despite the size and importance of the service sector to the UK economy, historically, it has proved difficult to accurately measure the value of services, and generally more difficult than for manufactured goods.
The Department for Education (DfE) has published for the first time a Statistical First Release (ie. potentially subject to revision) estimating the value of education related exports and transnational (TNE).
Accompanying the statistical release is a technical note on how the statistics have been compiled.
The statistics are experimental as they are still under development and need to be rigorously tested to ensure they meet the required standards before being adopted as national statistics. The methodology employed also means the statistics are not necessarily directly comparable with the data used to estimated the UK's balance of payments (detailed in the 'pink' book).
While further work on the estimates is to be expected, the data does nevertheless give an indication of the magnitude of activities and the associated direction of travel.
Table 1 summarises the figures for export and TNE activity for the years 2010 and 2016, together with the change in the magniture of the activities as well as the percentage change over the six years.
Exports are defined as transactions between UK residents and non-residents. For most the transactions reported in the DfE report, these comprise of non-residents traveling to the UK to procure their education-related services.
Higher education export earnings are calculated by adding together the fee income paid by international students together with an estimate of their living expenses. For non-EU students the value of scholarships is then subtracted from this number and in the case of EU the cost of tuition fees paid by government that are not expected to be repaid are subtracted. These calculations estimate that the export earnings of non-EU students was £9,140 billion and EU-students £2,770 billion.
As Table 1 shows, higher education is the large source of export earnings, with activity having grown by 41% between 2010 and 2016 to reach £13.4 billion at the end of the period.
Table 1. Breakdown of activity, 2010 and 2016 at current prices(£m)
|Exports||2010 £m||2016 £m||Chge £m||Chge %|
|Further Education (non-EU)||920||300||-620||-67%|
|English language training||2,230||1,550||-680||-31%|
|Education products and services||1,510||1,880||+372||+25%|
|Total education related exports||14,810||18,080||+3,272||+22%|
TNE activity reflects the fact that some UK-based organisations have subsidiaries or long-term bases outside the UK from where they sell their services. Unlike exports where the full value of the transaction is counted, the DfE only counts the proportion of the revenue that is repatriated to the UK.
For TNE, Schools (£1,100m, 2016) followed by Higher Education (£610m) are the largests providers. Although of a small magniture than exports, TNE activity has also grown by 73% over the period 2010-16.
The statistical release is not accompanied by any analysis of the figures or trends. However, the differential movements in activity between different categories of supplier raises the question as to why some segments of the market have declined, while others have expanded rapidly.
As the statistics are currently experimental, DfE is interested in receiving feedback on the methodology and definitions used. To offer feedback, interested parties are invited to contact Luke Came, Higher Education Analysis Team, Department for Education.
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