Post 62 – 06/05/24 Economics Part 2 – Winners & Losers (5 Minute Read: Gin Rating; Triple.)
Some supporters of RHUL will often argue that RHUL is of great economic importance to the local economy. Today, we have a scratch at that statement: who does in fact benefit from having RHUL on our doorstep?
So let’s break this down:
Employment
RHUL is a big employer. It employs 1739 Full Time staff according to its YE2023 accounts. And we need to remember the subsidiary workforce too.
And though some of the workforce has been disgruntled of late, due to pay and conditions, many will live in the local community and will support the local economy – and no doubt many will travel in from further afield (the car parks suggest this) and the economic gain will be more widely dispersed.
For those hardliners that are strongly opposed to RHUL’s presence: we do acknowledge that there is a counter argument that recognises that employment would be backfilled when an employer leaves the market. (The south-east has an overheated economy after all.) But we don’t want RHUL to leave the market – we just want the local social demographics to be more balanced. But for roundness it is worth a mention.
Winner: The local and wider economy
Accommodation Providers:
When I was a student, my biggest outgoing by far was my rent, and that remains true today. On average £439/ month is what a student pays today on rent – the second highest cost is food at £133/ per month. But that is the national average, in Egham & Englefield Green, as a student you can expect to pay £750-£1050 for a room in a HMO.
There are three main types of accommodation provider: RHUL-owned Halls, Private Purpose-Built Student Accommodation and HMO Landlords.
RHUL Halls
If I were the CFO at RHUL (this role is currently vacant BTW) and I could afford to (which it appears RHUL can’t) I would be inclined to build and house as many of my students as I could as I would want as much of the student pound as I could get my hands on.
RHUL today has 3000 bed spaces across 12 Halls of Residence. (They prioritise applications from new undergraduate and new postgraduate students joining the university.)
I couldn’t find an exact figure for RHUL’s income from student accommodation only so I did some crude maths. George Eliot Halls (self catered) prices for an undergraduate for 2024/25 are £8,199.10 for 38 weeks. (That is £215.77pw btw.) If we use £8,199.00 as average for a bed and multiply by 3,000 that equates to £24,597,000. A figure in RHUL’s financial statement for the year ending 2023 specifics income from ‘Residences, Catering and Conferences’ was £27,294,000 so I think my calculation is close enough for this argument.
Winner: RHUL
Private Purpose-Built Student Accommodation (PBSA)
But if I couldn’t afford to build any more accommodation for my students, but I wanted to get my student numbers up, I would have to reluctantly let the Private Sector pick up my slack – education should be my speciality after all.
As you may be aware there are a number of PBSA facilities that have been built in recent years to cater for the demand. But many of these are not local businesses: Parish Hall is operated by Derwent Students based in Derby. Hox Park is operated by Here! Students which is a trademark of Arrow Investments SARL which is a company registered in Luxembourg. The Pad is operated by iQ Student Accommodation, a subsidiary of Blackstone Europe LLP, one of the world’s largest real estate investment firms.
Again, there is an economic gain for sure, but perhaps not for the benefit of the local community. And in the case of Hox Park, and I speculate here, the taxman may not see much in the way of corporation tax either.
Winner: PBSA Shareholders
HMO Landlords
You may recall, Egham is the third most profitable place to be a student landlord in the country. (This wouldn’t have anything to do with a shortage of supply and a high demand per chance? Thinking emoji)
I went into a number of local businesses in Englefield Green last week to introduce WNTT and to answer any questions businesses had. This included meeting one of the estate agents….
From that visit I gathered some further insight into the state of the student rental market. One observation was that students are in a panic more than ever to secure their accommodation as there is just not enough of it.
RHUL’s Student Union advises its students not to rush into signing a contract and that there is a surplus of accommodation available. But this appears not to be the case. The agent reported that they had let out a record number of properties before the Christmas break and that they often receive desperate calls from students trying to find accommodation. The agent then went on to say that some landlords that traditionally accommodated families/ professionals were changing their property configurations to capitalise on the student demand. And as a landlord, why would you not – it makes complete commercial sense.
This conversation further clarified my view that RHUL is acting irresponsibly with its growth plans. If you claim to care for the wellbeing of your students and you also consider yourself a good neighbour, would you be planning to grow your numbers without having considered this aspect fully?
RHUL is single handedly changing the makeup of our community whilst simultaneously allowing their students to pay inflated prices by not providing enough accommodation themselves. Yes, we know that students wish to live in the community as part of their university experience but to me this is quite scandalous. If I knew this (and didn’t live locally) I think I would be advising my children to think twice before applying for a place at RHUL.
And this is a problem too for prospective RHUL staff: they will probably struggle to find affordable family accommodation locally. As taken from Royal Holloway’s UCU website, one of the grievances is that there is an acknowledged extreme shortage of high quality teaching accommodation.
Winner: HMO Landlords (And their agents.)
Losers: Students, Young Families, RHUL staff.
***Intermission*** Apologies for the length and dryness of these last couple of posts. We thought of spreading them out over a couple of weeks but in the end thought getting them over and done with was the best way to go. Next week we will be looking at the impact RHUL is possibly having on our schools – slightly less dry but possibly more depressing mind. You are at the halfway point BTW. Ready for the home straight? ***End of Intermission***
What else? Well, often supporters of RHUL expansion will cite that without the student population Egham and Englefield Green would be dead. But is this claim really the case?
Local Businesses
The majority of students reside at RHUL for approximately 6 months of the year. (The majority go home for the Christmas, Easter and the Summer holidays, reading weeks and many go home for the weekends. (RHUL undergraduate teaching is structured over two terms, each featuring a ‘Study Week’. The summer term is reserved for examinations.)
This absence for the remainder of the year has a significant impact on local businesses creating an ‘economic desert’. That is to say that the local economy is relatively buoyant when the students are around and pretty dead when they are not.
In the same vein, there are approximately 727 student HMOs in Egham & Englefield Green. What if these households were filled with permanent residents? What would the impact be on the local economy then? Well I would imagine that the spend in the local economy would be greater: it would definitely be more consistent.
But there is another level to this too…
From a survey conducted by the Englefield Green Village Forum Steering Committee when developing its Neighbourhood Plan, respondents wanted to see students use the shopping facilities in the village rather than on the campus. 61%.
But RHUL and Royal Holloway’s Students’ Union provide many of the things students want on campus. I’ll continue, when doing a recce of one of RHUL’s Open Days last year, I joined one of their tours – one of the stops on the route was the campus shop. The guide advised pointedly, ‘This shop has pretty much everything you need and it is by far the cheapest in the area.’
As a side note, at the time I was curious as to why she underlined her statement so strongly. Well it transpires that there is a fee for that convenience and I missed her large dollop of sarcasm when the guide delivered her line. (Look at the reviews here of the Student Shop on Google. I particularly liked Armando’s Wotsit photo.)
But the services are there and they are convenient, albeit pricey. And on site you have the following facilities: 11 places to eat and drink, clubs and societies, a cash point, the student shop (I’m normally so good with sarcasm too) and a sports centre with world class facilities.
Winner: RHUL & RHUL’s Student Union
–
The topic of university economics is not really our fight. It is a big subject with many studies written on the topic including one produced for RHUL.
But when you pose the binary question as a conversation starter: ‘RHUL asset or liability?’ inevitably the economic arguments will form part of the debate.
We recognise that RHUL is a big beast and there are economic benefits both locally and further afield, it would be churlish not to. But the questions I think are the most interesting here are: who benefits and what are the opportunity costs.
What is for sure is that it is necessary to challenge some of the sweeping comments that have been made by some of our past and present community leaders about the economic benefits. It is of course more nuanced. I will sign off this post with another question: do you directly benefit economically from having RHUL on your doorstep?
Best wishes,
We Need To Talk About Royal Holloway
Notices
- Election Results: I forgot to mention yesterday that the Runnymede Conservatives received a thumping on Thursday. Not only did they lose Englefield Green West but they also lost a further 6 seats and with it, a lot of power. Smiley face. This we believe is a great result for residents that care about the RHUL issue.
- Save the date. Only 32 sleeps until Saturday 8th June. More details to follow.
- Time to book a night away? The Summer Ball is at the end of this month, Friday 31st May.
- For the benefit of people that have recently joined this group:
https://weneedtotalkaboutroyalholloway.com/timeline/ - Home Page:
https://weneedtotalkaboutroyalholloway.com/ - To discuss the problems surrounding RHUL, consider joining the WNTT Forum Whatsapp group:
https://chat.whatsapp.com/BQmFKEHSa6gLsU55FU8QxN - Next Weekend’s Post: The Impact Of HMOs On Our Schools