Failing to improve low levels of social mobility will cost the UK economy up to £140 billion a year by 2050 – or an additional 4% of Gross Domestic Product – according to the latest report from the Sutton Trust.
The analysis, undertaken by the Boston Consulting Group (BCG), suggests that the UK’s economy would see cumulative losses of up to £1.3 trillion in GDP over the next 40 years if we fail to bring the educational outcomes of children from poorer homes up to the UK average. The Trust is proposing a series of policies to help address this which it is presenting in its ‘Mobility Manifesto’ for the General Election and beyond.
BCG has calculated that bringing below average students in the UK to the national average would add £14 billion a year to GDP by 2030 and £140 billion at today’s prices by 2050. This would add 0.7% to GDP by 2030; and 3.9% by 2050. The calculations are based on the increased lifetime earnings of students as they gain higher levels of qualifications.
The analysis formed the backdrop to a wider piece of work by BCG for the Trust which identified a number of innovative schemes from around the world which have the potential to improve educational achievement – and can be funded from existing budgets. BCG estimate that the average return for these policies is 6:1 – comparing the lifetime earnings benefits for the individuals on the schemes with the money spent on the programmes. Some programmes resulted in returns of over 20:1. The Trust is taking forward a number of these ideas, either by piloting new programmes in the UK or by advocating the policies to government and other funders (see notes).
Sir Peter Lampl, Chairman of the Trust, said: “The low level of social mobility in the UK is costing us vastly in financial terms and represents a tremendous waste of talent. This would matter less if the world around us was standing still. But it is not. Other countries are investing heavily in measures to boost school results and increase university participation. Their gains could be our loss – which is why this is such a crucial issue for all parties ahead of the General Election.
The BCG analysis makes clear that investing in measures to increase mobility and narrow the achievement gap make sound economic sense, even in these times of financial hardship. But the new Government, of whatever colour, will need to take a wider and longer term view, beyond a single Parliament or the budget of an individual department. The full rewards of a more mobile and socially just society will only be evident in decades to come.”