Developing HE provision in ‘cold spots’ to support economic growth

Introduction 

The UPP Foundation Civic University Commission’s final report, published in early 2019, highlighted the importance of universities’ engaging with local communities and collaborating with local authorities and businesses to address shared challenges and opportunities. Almost six years on, this essay explores the case for the strategic involvement of universities in their communities, in order to address place-based need. In particular, it makes a case for the expansion of higher-education provision in underrepresented areas. 

It provides evidence of the potential positive impact on economic growth, and ultimately the wider benefits to society. Additionally, it contextualises the current state of national planning in higher education, emphasising the absence of effective policy mechanisms to enable system leadership. The essay draws on a case study of a large-scale intervention that addresses market failure in a post-industrial environment. It uses this example to explore policy initiatives aimed at facilitating further innovations across England, designed to enable economic growth, and at enhancing social mobility through the expansion of higher-education provision.

The policy environment

Thinking about higher-education provision has been driven in recent years more by economic policy than by the wider societal benefit of universities in their communities. This approach is found in the Government’s industrial strategy and its 2021 plan for growth. The industrial strategy identified five foundations of productivity that would align to their vision for a transformed economy (see Image 1). 

A theme across the foundations was the desire to support the supply of higher technical skills and the need to fund interventions to address regional disadvantage. 

The plan for growth identifies that, ‘In the post-industrial era the distribution of opportunity has failed to match that distribution of talent,’ and reaffirms that productivity growth needs to be supported through high-quality skills. The strategy was to be backed up by funds to support regeneration in struggling towns. These funds included the UK Shared Prosperity Fund and the UK-wide Levelling Up Fund. It also highlighted that the ‘OECD found that the UK could improve its productivity by 5% or more if it reduced the level of skills mismatch to that of high performing international comparator.’ While both these plans identified that skills and innovation are important to growth and that stark regional inequalities exist, no infrastructure funding was targeted specifically at higher-education provision in areas lacking opportunities.

An empirical analysis from the Higher Education Statistics Agency (HESA) examined the association between education provision, the skill level of the local population and productivity. The study identified a group of post-industrial communities that have the lowest proportion of level 4 qualifications and low productivity. These areas had more graduates leave the area than were retained. HESA identified these locations as less likely to have university-delivered higher education – described as higher-education cold spots. 

An investigation of new universities, conducted by the Edge Foundation, provides an outline of new higher-education providers that they state were established at least in part as a result of the 2017 Higher Education and Research Act (HERA). The 2023 report sets out reasons for setting up six of the newest providers in England, which were most often established in cities with the capacity to appeal to students, and notably international students.

In addition, some of these institutions articulated a mission aimed at addressing deficiencies in existing provisions and a desire to develop new approaches to delivery.

Despite the commitment in HERA to diversify supply, the growth of new providers has been limited: much of the new provision has been for-profit in areas already served by existing provision. The providers in the Edge report shared a range of challenges in their establishment, including certain elements of the regulatory environment and structural barriers to entry to the sector, which hindered innovation. The report recognised that policy drivers have existed in the past to diversify higher-education provision, including from the 2017 Universities Minister. It was clear that the newest set of providers were not part of a national infrastructure plan to address underrepresentation, support regional inequalities or promote innovation in delivery. 

The concept of a national higher-education infrastructure with a place-based factor may not be present in current policy, but it was explicit in two key national reviews in the last century. The Robbins review and report, in 1963, had a specific term of reference to look at national planning of higher education: ‘whether any new types of institution are desirable and whether any modifications should be made in the present arrangements for planning and co-ordinating the development of various types of institution’. The Dearing Committee Report of 1997 also looked at the size and shape of the sector, as part of a 20-year plan. This plan recognised a changing economy and the pressures on universities: ‘In a global economy, the manufacturers of goods and providers of services can locate or relocate their operations wherever in the world gives them greatest competitive advantage.’

System leadership

Since the abolition of student number controls in 2015-16, and the abolition of the Higher Education Funding Council for England (HEFCE) in 2018, there has been no government body in England with responsibility for addressing cold spots in higher education. The regulator for higher education – the Office for Students – was established through the Higher Education and Research Act 2017, which outlines a set of general duties. There is no specific duty to have regard for the deficiency of higher-education provision within regions. It does require consideration of ‘the need to promote quality, and greater choice and opportunities for students, in the provision of higher education by English higher education providers’, however there is no legal provision or funding allocated to help new providers to enable choice in underserved regions. 

This contrasts with the previous designated governmental body for higher education in England, HEFCE. HEFCE provided funding to support new universities and new provision in underserved areas through a strategic development fund: £150 million during the comprehensive spending review period 2008-2011. 

An example of new provision 

As already identified, the absence of a national strategy hasn’t necessarily prevented the establishment of new providers of higher education. An example is the project to establish a new university for Peterborough: the outcome of a decades-long campaign for a university in that city. It is important to highlight there has been a previous attempt – a project by Loughborough University – which was supported by HEFCE. Loughborough eventually abandoned its plans for the development in 2003, as a result of low levels of growth in student numbers. The remaining places were transferred to the local further-education provider, which had franchise provision with Anglia Ruskin University. 

The overarching goals for this newly established university were to drive economic growth in the local area, boost productivity by offering degrees tailored to the requirements of employers, enhance gross value added, establish a seamless pathway for technical education and address the evolving market demands by providing opportunities for reskilling and upskilling the workforce. There were additional social and cultural benefits identified, with a particular focus on providing civic leadership. 

The core mission of the new university was to address the characteristics of a higher-education cold spot in the region outlined in Table 1 below. This demonstrates underperformance in higher-skills qualifications (NVQ at level 4 or higher) and within the Standard Occupational Classification groups 1–3: managerial, professional and technical occupations. Peterborough is also ranked 313 out of 331 English and Welsh local authorities (the bottom 20 per cent) using the Office for National Statistics composite education score, which includes underperformance in higher-education qualifications (level 4 and above), such as degrees or NVQ levels 4 and above.

Key labour-market indicators

The Social Mobility Index in 2016 placed Peterborough 191st and the adjoining area Fenland 319th out of 324 local-authority districts. This is further supported by the data outlined in Image 2 below, showing the inequality in the Cambridgeshire and Peterborough Combined Authority (CPCA) area, using the Index of Multiple Deprivation to highlight the areas with the highest levels of education depravation. 

The business case for the new university also identified that Peterborough was one of the largest cities in the UK without a university, and that the lack of higher skills was constraining economic growth in the region. 

The evidence provided a case for change and intervention at a regional level. The university development was therefore included as part of a range of local and regional strategies. Crucially, this included the Cambridgeshire and Peterborough Combined Authority (CPCA) devolution deal with Government, unlocking central government capital funding for the first phase. A wider set of policy documents also facilitated further capital funding and project staff. These included the CPCA Local Industrial Strategy, CPCA Employment and Skills strategy, Peterborough City Council’s Town Investment Plan and the Local Plan.

In 2019, the CPCA and Peterborough City Council funded and developed an initial outline business case and sought, through a competitive process, an academic partner. The procurement process resulted in the appointment of Anglia Ruskin University (ARU) to the partnership. ARU’s decision to submit a bid was supported by their 2017 strategic plan, which included a focus on the region and a desire to preserve a presence in Peterborough. The mobilisation of the new university, ARU Peterborough, has been delivered in phases. This includes an academic governance model, laid out in the shareholders’ agreement, which allows ARU Peterborough to register with the Office of Students, and to gain degree-awarding powers and a university title. It is envisaged that the new university will retain a long-term relationship with Anglia Ruskin University through a shared-services model and research partnerships.

Phase one of the project, developed during the Covid pandemic, opened on time to students in September 2022. The second phase, the Peterborough Innovation and Research Centre, was opened in early 2024. And the third phase, a second teaching building with specialist labs, will open in September 2024. A 10-year-programme business case and planning application is being developed to support further expansion across a large area of land identified in the Local Plan. This provides a vision for a large, publicly accessible campus with a range of key facilities, from specialist teaching to sport and leisure.

Despite widespread political support, there has been no single source of central government funding for the development. However, the business cases were all developed using the Government’s recommended framework for seeking funding for projects. The first three phases, totalling almost £80 million, have been supported by a diverse range of funding sources. These include the Local Growth Fund, the CPCA fund, Anglia Ruskin University (as part of their shareholder’s agreement to act as the academic partner) and the Levelling Up Fund. The land was provided by Peterborough City Council.

The third phase successfully secured £20 million of Levelling Up funding by demonstrating a track record of delivery and early-stage outcomes from phase one, University House. University House was delivered on budget and to schedule during and after the pandemic: a difficult period for the building industry. The building was designed to be inviting to the public and students, with teaching rooms visible throughout the building using glass partitions, and specialist facilities visible externally. The design supports the active-learning model of delivery, and encourages students to stay on campus by using the large atrium spaces as informal learning and social spaces. 

Key early-stage outcomes include the delivery of undergraduate courses (including degree apprenticeships and higher technical qualifications) to a student population almost half of whom come from PE postcodes, the target area for driving up higher skills. The university has sought to be employer-focused, co-creating the course portfolio with industry stakeholders and employer representatives, including the Confederation of British Industry, the Chamber of Commerce, and the Federation of Small Businesses. This collaborative effort aims to address skills shortages, align the curriculum with industry needs, and ultimately enhance graduate employability and regional growth. This has resulted in year-on-year growth to a focused portfolio of provision, including postgraduate and short courses. The curriculum reflects the current needs of industries and predicted growth areas, with a specific focus on technical and vocational courses. Examples include supply-chain management, construction, data analytics, manufacturing engineering and environmental management. 

The model used to develop the university in the Peterborough cold spot has attracted national awards and accolades. An important award for the university partners was University of the Year at the UK Social Mobility Awards, 

in recognition of the role ARU Peterborough is playing in advancing social mobility. In addition, the institution achieved recognition as a winner in the University Alliance (UK) Awards for collaboration and a nomination for the Outstanding Contribution to the Local Community award in the Times Higher Education Awards. And social mobility played a pivotal role in ARU’s securing the overall University of the Year title in the Times Higher Education Awards. In 2024, the project was also shortlisted in the Local Government Chronicle Awards for the model of partnership between the three organisations.

The success of the delivery approach in fulfilling a 40-year ambition for the city is characterised by a unique partnership, where the risks and responsibilities are shared and opportunities are identified and taken at regional level. With a clear mission for the region, it has secured local and national cross-party political support, as well as sector interest in replicating the model in other parts of the country. 

Conclusions and recommendations

Despite there being no national planning in England to address higher-education cold spots, new providers have entered the sector – but most do not meet regional needs. The risk to this unplanned approach is a persistent gap in provision in many regions and a limited impact on national growth. The national interest is likely not to be served when new providers primarily respond only to student demand, rather than addressing regional growth challenges by increasing the supply of graduates and higher-skilled employees. 

Drawing from the experiences in Peterborough, valuable insights for policy design and implementation can be identified, with relevance extending to other regions and beyond. To harness the potential for regeneration and social impact facilitated by universities, a set of recommendations are proposed at national, regional and institutional level.

A comprehensive national strategy is essential to support targeted interventions. The government should commission an independent review of the economic and social returns on investment made by English universities within their regions. This review should establish a standardised methodology for ongoing measurement of universities’ impact. The Department for Education should establish a strategic development fund to support the formulation of regionally led business cases for new higher-education providers. There should also be a review of the processes for allocating public funds, ensuring a stronger emphasis on the social value for money in public-spending proposals.

Policy and funding mechanisms should be decentralised to regional level to bolster a place-based approach. This would entail integrating requirements to address higher-education cold spots in future devolution deals. A flexible approach to funding should be adopted to facilitate the creation of localised interventions. Current combined authorities should be tasked with identifying shortages in higher-education provision, evaluating their economic impact and formulating authority-wide strategies to address concerns. Future guidance on Local Skills Improvement Plans should specifically outline requirements for degree-level provision and necessitate collaboration between universities and further-education providers to support bridging any gaps in provision.

It is important to recognise that existing universities have significant responsibilities in addressing the lack of higher-education provision across England. In their strategies, they should explicitly outline how they intend to address cold spots in their region, including access and participation plans and Civic University Agreements. Formal partnerships with local authorities and other providers should be sought to tackle the shortage of higher skills and to stimulate economic growth. Universities should actively seek collaboration from local and regional partners in the development of research and innovation plans aimed at fostering local economic growth and alleviating other societal challenges.

These recommendations facilitate a place-based response to higher-education demand and skills needs, supporting an economic growth ecosystem aligned with local and regional strategic plans. This approach also recognises the importance of national planning to prioritise and monitor core national skills needs. It is believed that this approach will also contribute to expanding the broader societal advantages offered by universities to their communities.