Great idea, but what's in it for us?

November 19, 1999

The government says regional development agencies will be the engines of enterprise. However, as Tony Tysome explains, the advantages for higher education are unclear and rather unexciting Chancellor Gordon Brown and trade and industry secretary Stephen Byers see them as a cornerstone of Britain's fledgling enterprise culture, but the new regional development agencies have yet to prove their worth to higher education.

In his pre-budget statement last Tuesday, Mr Brown announced new locally based venture capital funds to be set up in every region through the RDAs and went on immediately to refer to the regionally based enterprise centres that are to be attached to universities. The following day, Mr Byers said the government would invest Pounds 50 million in the venture funds, with the expectation that this would lever another Pounds 250 million from the private sector.

There is an implication that universities should be prepared to reach for the rewards of working with RDAs to take part in the regional economic regeneration ministers are hoping for. But even some of the most prominent RDA board members who are involved in higher education admit that the financial rewards, as they stand, are pretty unexciting.

While the total funding carrot the RDAs can dangle in front of prospective partners looks tempting, Pounds 772 million for 1999-2000, 87 per cent is earmarked for "regeneration programmes" that have no direct link with universities or colleges. Just Pounds 26 million of the money will go to the Skills Development Fund, while Pounds 2 million goes into the Competitiveness Fund. These sums are dwarfed by the Single Regeneration Budget, Pounds 517 million, money for land and property, Pounds 118 million, and even the administration costs for the RDAs and their projects, running at Pounds 62 million.

Vincent Watts, chairman of the Eastern RDA and vice-chancellor of the University of East Anglia, suggests that the lack of direct financial incentives for higher education to get involved in wealth creation is a problem that may need to be addressed by the

government, RDAs and funding councils.

He said: "From the RDAs' point of view, there are lots of things that higher education could do that would be enormously helpful with regard to the prosperity agenda. But higher education might say the RDAs have not got any money, so why should we be interested?

"What universities should be doing from an economic development point of view is not yet matched by the way they are funded. We need to look at the funding flows so that universities can work more effectively on the economic agenda."

One possible solution would be a significant cash boost for applied research by increasing the budget for the Higher Education Funding Council for England's "third leg of funding" and allocating the money through the RDAs. "RDAs could have a significant budget to spend on applied research that could be provided either by universities or private-sector institutions," Professor Watts said.

Howard Newby, president of the Committee of Vice-Chancellors and Principals, feels it is too early to judge whether, in

the absence of such a direct funding link, the RDAs will have an appreciable impact on higher education.

He said: "They have all produced their strategies in a great hurry, but we are still a long way from the implementation phase. We will have to wait to see how much influence they have."

Nevertheless, the CVCP is clearly taking the regional agenda seriously. It has set up a regional issues subcommittee under its new English Council to aid good communications between regional higher education associations set up by universities across the country, with secretariats supported by HEFCE pump-priming money. Tony Bruce, the CVCP's policy chief, promised a "national dialogue" on regional issues and publications tailored to address issues in each region.

"We have been encouraging our members to organise themselves to ensure that universities are placed in an optimal relationship with the RDAs. It would be a mistake to think that they are not important," he said.

Roderick Floud, chairman of the CVCP English Council and vice-chancellor of London Guildhall University, is optimistic that the RDAs will be upbeat and proactive in their relations with higher education. He believes they will be a powerful force in helping to coordinate the entrepreneurial efforts of institutions and firms that in the past have worked together only on a piecemeal basis.

He said: "All universities have contacts with business and industry. What the RDAs will do is bring that all together and hopefully make it more effective so that it is very much a cooperation between universities that, until recently, were encouraged to engage in cut-throat competition."

A fair sprinkling of RDA board members with higher education links should help ensure there is a genuine effort to involve the sector in the RDA agenda.

Christine King, vice-chancellor of the University of Staffordshire and a member of the West Midlands RDA, does not see any formal or financial relationships emerging between the RDAs and higher education. But she expects there will be one of "influence and partnership" that will lead to specific projects.

RDA board members are bound to consider both higher education and further education as essential elements in their strategic plans, she said.

"I am very clear that our regional economic strategy, which is very extensive in the West Midlands, cannot work without really tackling the skills base from low level through to postgraduate. In terms of the people who are going to turn the economy around, it is critical that we harness the FE and HE sectors," she said.

Some RDA board members would like a more radical and controversial approach. Alan Cherry, a member of the Eastern Region RDA and chairman of Anglia Polytechnic University, suggested that universities' assets should be sold to regional investment funds and then leased back to the institutions - releasing cash that could be used to boost higher education at a regional level.

He said: "It is the sort of idea I think we should be exploring with higher education institutions because there are not enough, and there never will be enough, funds to go round. We have to see some new higher education initiatives emerging that the RDAs could be in charge of."

Sal Brinton, a member of the same RDA and bursar at Selwyn College, Cambridge, thinks the RDAs will add value by helping institutions and organisations break through boundaries, such as the divide between further and higher education, which are hard to overcome at a national level.

According to Pat Morgan-Webb, a member of the East Midlands RDA and principal of New College, Nottingham, this is already happening. Her RDA is involved in the creation of a regional "University for Food", bringing together the food and drinks industry with further and higher education institutions to provide a centre for research and innovation to help develop products and services.

She said: "We are using our limited, focused budgets to establish exactly this kind of connectivity between institutions and industry. It would not happen without the RDAs."

Ted Cassidy, regional adviser for De Montfort University and a member of East Midlands RDA, says the RDA sees higher education institutions as key players in taking forward regional projects on learning and skills; enterprise and innovation; development of information technology; and developing communities. Universities and colleges will be involved in plans for a "regional observatory", which will pull together knowledge and information for regional planning.

"The RDAs will have to act as a catalyst to ensure that all the regional players work together on a common strategy to improve the economic fortunes of the region. The links between what we are doing economically and the new 'reach out' funding approach is very strong. That is taking universities more clearly in the direction of supporting economic development," he said.

But Mary Lord, education and training director for the Training and Enterprise Council National Council, suggested that RDAs might also want directly to influence regional higher education policy, such as the distribution of extra places emerging from the government's planned expansion of higher education.

She said: "I hope that is a challenge to which the RDAs will wish to rise. Whether the extra places go to traditional higher education or HE in FE, for instance, is something the RDAs may wish to take a view on. It all depends on the needs of the region."

Table of RDA budgets by region not available on database.

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