Are universities the engines of regional prosperity?

George Osborne wants institutions to spur growth outside London, but not everyone thinks campuses can and should take on such a role

November 27, 2014

British train waiting at station platform

Source: PA

Fast track: Hitachi is moving its railway manufacturing operation to County Durham. The University of Sunderland hopes to collaborate with it on research and training projects

Unveiling his vision for the creation of a “Northern powerhouse” earlier this year, George Osborne called on universities to “rise to the challenge” of rebalancing the UK’s economy away from London.

“We want to see science here turned into products here – and into jobs and growth here,” the chancellor said. He highlighted planned developments such as the National Graphene Institute at the University of Manchester and promised more, such as a “Crick of the North” to rival the Francis Crick Institute, the interdisciplinary medical research consortium that will open in the capital next year.

Key announcements to advance this agenda are expected next week, when Mr Osborne delivers his Autumn Statement.

But are universities capable of taking on a central role in regional economic development – and should they be expected to?

Last year, the final report of the review into the issue led by Sir Andrew Witty, chief executive of GlaxoSmithKline and chancellor of the University of Nottingham, highlighted the “extraordinary potential” of university innovation to drive economic growth and called on higher education institutions to adopt this development role as a “third mission” alongside their research and education activities.

For Shirley Atkinson, the interim vice-chancellor of the University of Sunderland, the case for working with industry is straightforward.

The university has a close relationship with the city’s giant Nissan car plant and the extensive supply chain that supports it. Sunderland has collaborated on research and training projects that have involved thousands of workers and have generated millions of pounds’ worth of innovations and efficiencies.

The university hopes to replicate this success as Hitachi moves its European train manufacturing facilities to County Durham next year.

“If you have an institution that has a particular specialism in something and academic staff interested in an issue, they are so well placed to help develop that in a region that it is absolutely right that they should be involved in the discussion about how to bring that forward,” Ms Atkinson said.

In addition to attracting support from Nissan, the university has secured funding from the government’s Local Growth Fund and is seeking more resources from the Higher Education Funding Council for England to bolster its development role in the area.

Critical questions

Not everyone shares Sunderland’s enthusiasm. There are those who argue that the government’s efforts to boost regional economies have had mixed results for universities to date.

The abolition of regional development agencies and the imposition of cuts on local councils mean that higher education institutions have lost some traditional partners and funding sources. This has been a “disaster” for universities’ role in regional development, said John Goddard, emeritus professor of regional development studies at Newcastle University, who has served as deputy vice-chancellor with responsibility for regional relationships.

Although a large number of the local enterprise partnerships that have replaced regional development agencies have higher education leaders on their boards, many have been hampered by a lack of resources.

For Professor Goddard, who described local enterprise partnerships as “pretty weak and ineffectual organisations”, whether and to what extent universities assume a key economic role all comes down to money.

“Universities are in global competition for the marketplace for higher education,” he said. “To what extent will universities have the resources to undertake this public-good role where the benefits are very indirect?”

Many vice-chancellors, while acknowledging that the returns are not instant, believe that investing in the economic future of their region will be worth it in the long run.

These include the University of Salford’s Martin Hall, who oversaw the creation of a £30 million campus at the MediaCityUK development. There, students can undertake courses in subjects such as journalism, computer game development and wildlife-documentary making right next to the studios of the BBC and ITV.

The university, which enjoyed a leap in applications for its media courses when the site opened in 2011, offers students enviable opportunities for work placements.

But Professor Hall believes that the long-term benefits are only beginning to be realised, as small and medium-sized businesses are drawn to the area, providing attractive career options for Salford graduates and creating sustained demand for the university’s expertise.

He said that the political imperative to devolve funding and powers in the wake of the Scottish referendum would also result in more opportunities available locally.

“Our economy is so overcentralised, the potential for devolution is a real kick-start that could be critical for the country as a whole,” said Professor Hall. “It’s not just overdependency on London; it’s overdependency on the financial services sector.”

Nevertheless, the government will have to tread carefully, said Andy Westwood, the chief executive of the GuildHE group of specialist institutions. He pointed out that universities would be wary of anything that interfered with their autonomy.

“Most of them have been competing in a national or international game without being seen to be locally or regionally facing, with a few exceptions,” he said. “People don’t want to be allocated a mission that’s local or regional so I think that causes nervousness.

“The more government looks at it as the most important tool in the box, the more temptation there is to be prescriptive about what institutions do.”

Could it really happen?

Professor Goddard said that regional development required a longer-term solution and not the government’s “ad hoc” approach, which has involved individual bids to pots such as the Regional Growth Fund and locally negotiated arrangements such as city deals.

“Rather than saying we are going to give a few more beans to the northern cities that will benefit universities, there needs to be a more systematic, interdepartmental dialogue to come up with an agenda on universities and cities that will look at the various pots of money that are around and could be used.”

The appointment of Greg Clark as universities minister alongside his existing responsibility for cities offers the chance to make this a reality, some believe.

Professor Goddard is unsure, questioning whether Mr Clark has the political influence required to work effectively across departmental silos.

But Professor Hall said that politics can be “unpredictable” and that the backing of the Treasury could be vital for Mr Clark.

“He might suddenly have got an opportunity with the Cabinet portfolio to make [a difference],” Professor Hall said.

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