It’s long been recognised that universities play a key role in local and regional economies. Work by the Organisation for Economic Co-operation and Development (OECD) has shown how, across Europe, regional Gross Domestic Product (GDP) is driven by urban universities providing a highly skilled workforce, transferring valuable knowledge into the private and public sectors and through their purchasing power in local economies. Work by Newcastle University’s Centre for Urban and Regional Development Studies, our own Centre for Sustainable Urban and Regional Futures (SURF) and other research and policy centres has resulted in numerous detailed studies that show how universities are integral to the economic growth of city regions.

How does the Coalition’s White Paper, Local Growth: realising every place’s potential, published on 28 October, shape up against this body of readily available knowledge about what works best?

The key intention is that, in the future, the private sector will replace public investment as the primary driver of local economic development. Here’s the key paragraph:

“The Government recognises that it cannot create private sector growth, but it can create the conditions that enable UK businesses to be successful. We have good reason to be confident that the private sector can lead the recovery. When general government employment fell by more than 0.5 million after the 1990s recession, following a period of transition, private sector employment added almost 1.5 million jobs in four years. From the end of the 1990s recession to the last quarter of 1999, whole economy employment rose by 1.5 million; this was entirely driven by a 2.2 million increase in private sector employment. However, between the first quarter of 2000 and the start of the recession, more than a fifth of all job creations came from the public sector.”

The recent White Paper considers economic growth

To work, this will require the success of the eight core city-regions outside London: Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield. Each of these will need to attract and enable knowledge-intensive private sector investment in sectors such as construction, media and the creative industries, specialised manufacturing and the low-carbon economy. To be successful, these investments will require a suitably skilled workforce and effective knowledge exchange with research and development centres. And this, of course, is precisely what universities should contribute.

The White Paper nods twice in the direction of universities, both times in the context of the newly established Local Enterprise Partnerships (of which Greater Manchester’s is one). This is how the Coalition sees universities playing a role:

“to secure effective business engagement and ensure a strong focus on the needs of the local economy, it is vital that business and civic leaders work together. The Government will normally expect to see business representatives form half the board, with a prominent business leader in the chair. Partnerships will want to work closely with universities, further education colleges and other key economic stakeholders. This includes social and community enterprises, which play an important role in creating local economic growth through providing jobs and training, delivering services and helping create community wealth in some of the most deprived parts of the country.”

And, a little later, the White Paper encourages those bidding for support from the Regional Growth Fund to include universities in their consortia.

This is pretty disappointing, given how much we know about the role universities play in their local economies, and the ways in which they contribute to what the White Paper terms the “agglomeration effects” that follow from the concentration of key resources in defined areas. A common and defining feature of all eight of the significant regions outside London is that each and every one of them has more than one university, including a flagship research-intensive university. Together, this represents a huge existing asset and a continuing, major source of public investment. It is very odd that the Department of Business Industry and Skills, which has been responsible for producing this White Paper on local growth, seems so unaware of the literature on the local and regional role of the universities for which it is also responsible.

But rather than complaining further (and universities have done a lot of complaining lately), it would be better to protest by example, and work with Local Enterprise Partnerships and others in bidding persuasively for new funding. Here’s how the White Paper issues the invitation:

“bids are invited from the private sector (including social enterprises) and also from public/private partnerships. Bidding partnerships may come together that include a combination of large companies, SMEs, and/or social enterprises, working with public partners including local authorities, universities and colleges, and local trusts and agencies (to give but a few examples).”

£1.4bn is available, and the first round of bidding closes in just over two months, on 21 January next year. Will any universities succeed in making the point about their local importance, by being part of successful consortia?

Comments have been closed for this post.