University investment zones ‘step in the right direction’

Jeremy Hunt uses spring budget aiming to harness potential of R&D to boost economic growth

March 15, 2023
Source: Houses of Parliament

The UK’s chancellor has announced plans to create 12 investment zones involving “bold and imaginative” partnerships between local governments and universities.

Jeremy Hunt confirmed the much-trailed policy in his spring budget speech, pledging that areas across England will host one of the new zones, with at least one in Scotland, Wales and Northern Ireland as well.

Up to £80 million in funding over five years will be available for each investment zone, “to be spent on interventions including skills, infrastructure, tax reliefs and business rates retention,” Mr Hunt told the House of Commons.

Universities have welcomed the plans and stressed that they can play a “pivotal role” in boosting economic growth in the country.

Mr Hunt said the following areas had been identified to host one of the zones: the West Midlands, Greater Manchester, the North East, South Yorkshire, West Yorkshire, East Midlands, Teesside and Liverpool.

“To be chosen each area must identify a location where they can offer a bold and imaginative partnership between local government and a university or research institute in a way that catalyses new innovation clusters,” he added.

Each cluster will be expected to drive growth in at least one key sector – green industries, digital technologies, life sciences, creative industries and advanced manufacturing – and bring investment into areas that have underperformed economically.

In other budget announcements, Mr Hunt promised:

  • To launch “returnerships”, the equivalent of an apprenticeship but aimed at reskilling those aged 50 and over, which will bring together existing skills programmes. It is supported by £63 million of additional funding.
  • A £1 million prize every year for the next 10 years to be awarded to researchers who drive progress in critical areas of artificial intelligence.
  • Further support for R&D-intensive small and medium-sized enterprises (SMEs), via an enhanced rate of tax relief for loss-making companies.
  • Efforts to speed up approval for new medicines and technologies.

Welcoming the announcement of the investment zones, Steve West, president of Universities UK, said: “Our universities are leading the way in supporting and working with SMEs across the country giving local businesses access to state-of-the-art facilities and support and skills, to grow and innovate, for example through University Enterprise Zones.

“This much needed investment will aid in deepening local ties between universities, SMEs, and support the upskilling of people in local communities. Universities UK is keen to work with government on implementing its plans for investment zones around higher education institutions and look forward to seeing what the future holds,” Professor West continued.

He said the announcement was a “step in the right direction” but urged the government to go further and “develop initiatives such as degree apprenticeships and the lifelong loan entitlement as we will need the skilled graduates to maximise the economic impact of the investment zones”.

Tim Bradshaw, chief executive of the Russell Group, said the government proposals would “allow our world-leading universities to draw on their talent and the UK’s excellence in research to revitalise regional economies”.

But, he said, collaboration would be “crucial to this ambition” and called for the UK’s association to Horizon Europe to be finalised. It was “disappointing” to see students again neglected in measures to support people with the cost of living, Dr Bradshaw added. 

Julia Black, president of the British Academy, said it was pleasing to see the chancellor reiterate his ambition for research and development to be a long-term source of UK prosperity. But, she added, “we would now like to see the government make real progress against its ambitious commitments, starting with the right level of investment in research and innovation and support for the UK’s long-term participation in global research networks”.

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