The Economic Value of the Heritage Sector
Part of the Heritage Counts series. 5 minute read.
The heritage sector is an integral part of England’s national economy. The sector is deeply embedded in local property markets, local supply chains and employment markets. The economic value of heritage stems from various sectors and subsectors; from archaeology and conservation, to hospitality, construction, and public services.
Each year, Historic England commissions a detailed economic study that aims to capture the economic ‘footprint’ of the heritage sector using national statistics disaggregated into subsectors, occupations and local geographies.
Using the latest available national statistics (2022), England’s heritage sector is estimated to have contributed £44.9 billion in Gross Value Added (GVA) to the UK economy in 2022 and supported the employment of over 523,000 workers (CEBR, 2024).
Producing the heritage sector economic estimates
In 2024, Historic England commissioned the Centre for Economics and Business Research (CEBR) to undertake a detailed economic assessment of England’s Heritage sector.
The direct economic impact of the heritage sector is calculated via a mapping process where occupations are mapped to industries. From this, it is possible to observe workers in the heritage sector classified into non-heritage industries.
CEBR’s input-output models are used to calculate bespoke multiplier impacts for the heritage sector. These multipliers are calculated using a 2019 structure of the economy, using the most contemporary and granular domestic use data available, published by the Office for National Statistics. The analysis considers England’s heritage sector by Government Office Region (GOR) and the sector’s contributions that spill over into the wider UK economy. Structural changes in the economy since 2019 are not captured within the standard model since historically there has been a 2-year lag in the availability of national economic statistics. To address this, the CEBR study has produced a ‘nowcast’, reducing this lag time to 1 year. As the data underpinning this is less detailed, the forecast inherently comes with more uncertainty. Thus, a combined approach is taken to minimise any possible forecast error, and a range of estimates is presented.
The CEBR analysis estimates the direct, indirect, and induced impact of the heritage sector:
- Direct Impacts: Measured by the total value of goods and services produced by individuals working in a specific sector
- Indirect Impacts: Occurs when positive economic conditions, such as salary increases or enhanced job security, influence employees in a specific sector. These conditions prompt individuals to engage in discretionary spending, meaning they have more money available for non-essential purchases. The increased discretionary spending creates a ripple effect, boosting demand for goods and services across various industries
- Induced Impacts: Results from the subsequent increase in demand for goods and services. The increase in demand leads to increased production in response to consumer needs. This, in turn, creates job opportunities in other industries
- Supply Chain Dynamics: As businesses and employees in a sector source raw materials, components, and services from a wide array of suppliers, the sector's expansion generates a substantial demand ripple throughout the supply chain. These suppliers, in turn, experience increased orders, leading to their growth and potential job creation
The Gross Value Added (GVA) of England’s heritage sector
Gross value added (GVA) measures the contribution made to an economy by one individual producer, industry, sector or region. The figure is a quantitative assessment of the value of goods and services produced minus the cost of inputs and materials used in the production process. It is used in the calculation of gross domestic product (GDP).
England’s heritage sector’s direct contribution to the UK’s GVA in 2022 stood at £15.3 billion. This is equivalent to 0.80% of England’s total Gross Value Added (GVA).
- England’s heritage sector supported £44.9 billion in 2022 when considering the combined effects of the direct GVA (£15.3 billion), indirect GVA (£14.9 billion) and induced GVA (£14.7 billion) contributions
- Overall, for every £1 of GVA that the sector directly generates, an additional £1.93 is added into the wider economy. This is driven by indirect and induced spending impacts (from the supply chain), which occur when sector employees, visitors and businesses spend in the wider economy
Heritage sub-sectors
- The construction industry remains the largest constituent heritage sub-sector in 2022, generating £7.42 billion GVA. The next largest industry - Libraries, archives, museums and other cultural activities -continue to contribute less than half the GVA of the construction industry at almost £3.34 billion
- The top three constituent sub-sectors (construction; libraries, archives and museums; and architectural and engineering activities) combined form over 80% of the total GVA of England’s heritage sector
The regional contribution of the heritage sector (direct, indirect, and induced GVA)
- The heritage sector in London alone supported a total of £7.8 billion in GVA in 2022, through direct, indirect and induced contributions
- Conversely, the heritage sector in the North East contributed £928 million to the Gross Value Added (GVA) in 2022. The North East registered the lowest 'in-region' multiplier effects in England, indicating that the region’s heritage sector is contributing comparatively less to the intermediate demands of the local economy
Employment in the heritage sector
In 2022, the heritage sector directly employed approximately 201,000 workers, constituting 0.72% of England's workforce.
- For every worker directly employed in the heritage sector in 2022, a further 1.60 workers is supported in the wider UK
- There are around 169,000 people supported indirectly, employed in the supply chain industries catering to the heritage sector. Further, around 153,000 additional jobs are supported by the heritage sector via spending in the wider economy. In total, 523,000 jobs are supported by the heritage sector in the wider UK economy
The regional distribution of heritage employment (direct, indirect and induced)
- The heritage sector in the South East supported the largest number of workers in 2022, with 33,000 directly employed (78,000 directly and indirectly) in the sector
- The North East with 7,000 workers directly employed (14,000 workers directly and indirectly) had the lowest aggregate number of employees supported by the heritage sector
The heritage sector displays strong future growth prospects
Like many sectors, the heritage sector has faced extraordinary challenges since 2020 due to macro-economic shocks, including the COVID-19 pandemic, the cost-of-living and escalating global energy costs.
The post-pandemic evidence demonstrates a resilient and recovering heritage sector:
- Between 2011 and 2019, heritage GVA grew 34.7% from £12 to £16.1 billion in 2022 prices. This growth trajectory was disrupted in 2020 during the pandemic, which led to a GVA contraction of 18%
- A strong rebound saw heritage sector reaching the highest all-time GVA in 2021 (£16.2 billion), which dropped by 5.3% in 2022, similar to the fall in the GVA of the construction sub-sector
- After adding 15,100 roles in 2021, the sector saw a decline in 2022, with the loss of nearly 5,800 jobs. This is attributed to the end of the government’s pandemic support, particularly the Culture Recovery Fund (CEBR, 2024)
- 2023 nowcasts (estimates based on less granular data) suggest that the heritage sector is likely to see a 2.6% fall in total GVA and a small reduction in employment numbers
- Despite recent declines, the heritage sector holds significant potential for future economic growth. The sectoral downturn is likely temporary, with untapped opportunities that could drive future expansion. As the UK moves towards net-zero, the built environment—UK's second highest emitting sector—will face significant changes. Given that historic buildings account for about one-fifth of the UK's residential stock, there is substantial scope for targeted heritage led interventions
- Strategic investments reusing historic buildings, technological advancements in heritage specialist construction services could be key to achieving environmental goals while preserving cultural heritage. Such efforts could also stimulate economic growth, create skilled jobs, enhance community resilience, and promote innovation, positioning the heritage sector as a driver for future sustainable transition towards a low carbon UK economy
In conclusion, beyond preserving our rich history, England's heritage sector significantly contributes to the economy. The sector's GVA figures, direct and indirect job opportunities, and resilience, especially during challenging times, highlight its continuing importance to the UK economy.
References
- CEBR (2024). ‘The heritage sector in England and its impact on the economy: An updated report for Historic England.’ (Accessed: 13.11.23)
- Deloitte (2023). 'Estimating economic multipliers for the screen industries in four Latin American countries'. Available at: https://www2.deloitte.com/content/dam/Deloitte/br/Documents/strategy/Deloitte%20-Estimating%20economic%20multipliers%20for%20the%20screen%20industries%20in%20four%20Latin%20American%20countries-%20EN.pdf (Accessed: 17.11.2023)
- DCMS (2022). ‘Evaluation of the Culture Recovery Fund Final Report.’ Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1146922/GOV.UK_17.3_CRF_Final_Report_accessible_v3.pdf (Accessed: 05.10.23)
- Lemma, A.F (2014). ‘Tourism Impacts: Evidence of Impacts on employment, gender, income’ Available at: https://assets.publishing.service.gov.uk/media/57a089f2ed915d622c000495/Tourism_Impacts_employment_gender_income_A_Lemma.pdf. (Accessed: 20.08.23)
