UNIVERSITY graduates who studied in the North-East contribute £1.4bn a year to the region’s economy, a new study has found.

The report, Smarter Regions Smarter Britain, by the university think tank million+ examines the regional economic gap in the UK.

It claims that the return to growth in the national economy has not been reflected in regions outside London including the North-East.

The study also highlights the economic benefits arising from graduates who study and then work in the regions.

The report says that almost 80 per cent of graduates working in the North-East studied in the region and estimates that the economic impact of these graduates is worth nearly £1.4bn per year to the regional economy.

Professor Michael Gunn, vice-chancellor of Staffordshire University and chair of million+, said: “Local initiatives and a focus on core cities outside London will not in themselves tackle the sharp differences in regional growth in the UK.

“In the run-up to the election, political parties need to be much more ambitious. Universities have long been recognised as key economic, social and cultural powerhouses in their localities and they should be centre-stage in a new strategy for the regions.”

million+ is urging the Government to use receipts from the sale of the student loan book to set regional targets to boost the number of people with high level qualifications.

The think tank also wants to see a Small Business Agency established modelled on an agency created by the Obama administration in the US.