Labour’s first budget can help universities deliver regional impact

What is the true value of universities? It’s a question that has been thrown into sharp relief recently as many media articles have described the financial concerns becoming increasingly common across UK higher education.

These are coupled with pleas for more funding and suggestions about how the funding regime could be “fixed”. The first budget by the new Labour government today will, therefore, have university leaders looking closely for details that could tip the scales on the sector’s inflation-hit balance sheets.

Most solutions advocated publicly during the past year involve some combination of upping the undergraduate student tuition fee and increasing public funding. Wide acceptance of any solution by the public means that universities must articulate their value in a way that resonates with all interested parties.

Arguments about value often focus on economic ratios or lofty statements about the world-class standing of the sector. Yet these do not land well with the people whom universities really serve: aspirational families, ambitious businesses, civic-minded leaders. Can the fact that the region’s universities put back £14 into the economy for every £1 of public money invested, or that someone’s nearest university is in the world top 100, be translated into the impact it has on their day-to-day lives?

Universities such as my own, Lincoln, can point to real impact. It may be easier for us because we are young (we will soon celebrate our 30th anniversary) and many local residents can remember a time when the university wasn’t here. Our campus was opened on a former railway yard in the heart of one of England’s great historic, but economically declining, cities. It was the product of the aspirations of local people, businesses and regional leaders determined to stop a slide into post-industrial decay.

Jump forward three decades and Lincoln is a thriving city, one of the UK’s innovation hotspots – placed among the UK top five for graduate start-ups and for fostering AI enterprises. Our role in delivering prosperity across Greater Lincolnshire through the strength of businesses and public and third sector links was reflected in the latest Knowledge Exchange Framework (KEF) results. This is real evidence of impact and validation of the vision of those local people who raised more than £30 million to put the first spades in the ground.

How do we continue to have impact in the context of squeezed funding?

Ahead of the new chancellor’s first budget, growth continues to be the stated “first mission” of the UK government. Since its election, the government has started the process of introducing policies and legislation to support this mission. Of relevance to universities such as Lincoln are: the desire for more devolution; the introduction of Skills England; and the publication of the industrial strategy green paper. Initial discourse is encouraging in that these three strands cross-reference and connect to the growth mission. However, they are also disappointing in that reference to universities of any shape and size and regions such as Lincolnshire are sparse.

Higher education provision in Greater Lincolnshire (England’s second-largest county) is concentrated in Lincoln. Greater Lincolnshire’s rural and coastal areas contain some of the UK’s most deprived communities, where health, life expectancy household incomes and educational outcomes are low. People’s lives are hard. We are growing activity outside Lincoln, but this comes at a cost when core campus finances are tight.

Greater Lincolnshire is expected to create a mayoral combined authority (MCA) in 2025. With the creation of the MCA comes the expectation of plans for growth and skills. The growth plan will focus on attracting and supporting emerging industries that align with local strengths. In Lincolnshire, this is primarily the green energy transition, ports and logistics, and agri-food technology. Only green energy maps on to one of the eight growth-driving sectors identified in the industrial strategy green paper.

The green paper also references city regions 16 times (Lincolnshire doesn’t have any mentions), and the words “coastal” and “rural” do not appear at all. Given that the green paper is looking at the major levers for improving economic output, that may be fine; but where does it leave the people of Lincolnshire, and what is the plan to create growth in the hinterland outside the major conurbations?

Northern Lincolnshire, part of the Humber region, is Britain’s biggest industrial emitter of greenhouse gases. Decarbonising the region is a huge but vital task if we are to achieve net zero: from producing the skilled workforce nascent industries such as carbon capture and storage will need, to delivering the applied R&D that can deliver breakthrough technologies or efficiency gains throughout the supply chain. Our agri-tech research institute is working with the UK’s £110 billion food industry to deliver innovations that can underpin food security and sustainability, applying technologies such as robotics, machine learning and AI. The countryside might not enjoy the agglomeration effects of big cities, but in some key sectors – such as producing food or green energy – land mass matters.

Devolution includes centralising the adult education budget under the mayor. Currently in Lincoln, we are working with further education and the NHS to help address local healthcare workforce needs across education levels 3 to 7. Most of this provision doesn’t qualify for funding under the current adult skills budget. Our first cohort of medical graduates joined the NHS in Lincolnshire this year, and we provide pharmacy, nursing and other allied health profession courses.

Provision is shaped to regional needs, aimed at retaining professionals locally, and much is provided away from the main campus. This comes with additional costs, but the current university funding model does not incentivise or even adequately support this approach. The proposed skills and growth levy expected to replace the apprenticeship levy might enable a change in emphasis to enable delivery of higher skills. The recent Skills England report on driving growth and widening opportunities states that the levy might be used to ensure “a comprehensive suite of apprenticeships, training and technical qualifications…aligned with skills gaps and what employers need”, but we will need to wait and see.

This week’s budget will signal how the new government’s growth plans will be activated. All regions and universities will be attempting to divine what the budget means for them. They will be hoping to see recognition that growth is influenced by practical matters of geography and infrastructure. Economic potential, and success, should be viewed in a regional context, not only to tackle the UK’s shocking regional inequalities, but also to back some of the dark horses that could change the status quo.

Universities can have a pivotal role in achieving the government’s growth mission if regions had more control in the direction of a proportion of national funding intended for investment in skills and R&D. This would enable regional policy challenges to be supported by research and innovation funding, helping universities and industry partners to better meet local needs.

Devolving some higher education teaching funding to mayors would also help address the additional costs associated with delivery of higher level skills to local students, who might not be able to travel to campus. This will help to boost local growth industries, drive economic growth and lead to more prosperous lives of local citizens.

This in turn will show the real value of universities, and we will be looking for signals in the budget on how the government sees our place in supporting the growth mission.

Neal Juster is vice-chancellor of the University of Lincoln.