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The Kerslake Collection | Local economies and politics

Making the most of devolution 

As former US president John F Kennedy once said: ’Ask not what your devo deal can do for you, but what you can do for your devo deal.’ OK, not quite – but the misquote implies an important logic: devolution is intrinsic to the future of the UK. Universities are central to the success of devolution. But this success can only be realised if everyone leans in and plays a role. 

The North East of England will be the next significant test case for this argument. The region will elect a North East mayor in May 2024 to preside – alongside his or her Cabinet – over the largest per-head devolution deal in the country, across the largest (and arguably most diverse) geography. The mayor will chair a cross-party Cabinet of political leaders who have collaborated consistently and impressively at a scale hitherto unknown in the region. 

This has the potential to change the trajectory of a region with a strong collaborative culture but a recent history of thwarted attempts to deliver devolution at scale. In 2004, Labour deputy prime minister John Prescott’s North East Assembly was rejected following a ‘no’ vote in a local referendum. A 2016 devolution deal part-agreed with George Osborne, then Chancellor of the Exchequer, was not followed to completion. When a devolution deal was finalised in 2018, it covered half of the region – a construct known as the North of Tyne Combined Authority. 

The proof of concept provided by the North of Tyne, the strength of cross-agency working through the Covid pandemic, and a Government open to the possibility of wider English devolution has created the conditions for North East devolution in its latest guise. The agency of regional stakeholders – its combined authorities, local authorities and elected leaders, Local Enterprise Partnerships, businesses, education providers and voluntary sector – provided the drive to take advantage of this operating environment. It is surely true that the collaborative way of working that took root during this period will need to be deepened and extended to make the new arrangements a success. 

The region now has every reason to be more hopeful about its economic and social future. It is the right scale to innovate, it has a history of testing and trialling new policy, and it has an openness to change and the agility to translate new research, ideas and innovation into practice within the business and public-service sectors. Strong partnership between government and universities is critical to this. 

The role of universities in devolution 

The higher-education sector has an important role to play in devolved areas and is fundamental to the success of the economic model. Universities are anchor institutions that contribute hugely to the economy, benefitting thousands of people through education, research, global connections and the way they operate within a place. It is unthinkable that a credible economic narrative for an area could be developed without universities at its heart – and equally implausible that sustainable growth could be achieved over time without universities playing a deep and meaningful role in delivery. 

The development of a civic-university narrative suggests that the breadth of this role has not always been recognised or prioritised from within and outside university leadership. At times, universities have cared too little about their responsibilities to and importance for place. And, equally, other local and national actors have sometimes misunderstood or under-utilised the expertise and economic heft that universities can bring to bear. This is changing, thanks to a combination of design, circumstance and the opportunity provided by a closer-knit regional settlement in which civic collaboration can make a bigger and more visible difference. 

Lord Kerslake sometimes reflected on the value of ’enlightened self-interest’ – a sense that civic universities are guided by a business – as well as a moral – imperative. As the funding model for higher education looks increasingly unsustainable, existential questions about the role and value of universities are imperative. The holy trinity of REF (Research Excellence Framework), TEF (Teaching Excellence Framework) and now KEF (Knowledge Exchange Framework) are increasingly reflecting a policy focus on place and impact. It seems timely, therefore, to be modelling the contribution universities can make in the context of devolution across the country.

The North East – as defined by the new devolution deal – is home to four excellent universities: Durham, Newcastle, Northumbria and Sunderland. They are different in nature, scope, focus and expertise, providing complementarity and the potential to add value to the economic agenda unilaterally and as a collective. Together, they contribute more than £2.2 billion per annum to the economy, support 35,000 jobs, educate around 100,000 students and contribute 25 per cent of the region’s overall research and development spend. 

In the context of the devolution deal, the North East universities are working with regional partners in a more focused and intentional way than ever before. They understand the necessity of bringing university expertise to what are long-term and structural challenges for the region – such as low productivity, a fragile labour market and skills base, and poor health outcomes. But they also recognise the opportunities: strong inward investment performance; exciting emerging economic sectors, such as offshore wind and green manufacturing; collaborative anchor institutions; and natural, cultural and sporting assets. 

The potential of stronger collaboration is already exemplified in several projects. For example, the North East Investment Zone will leverage the research capability of universities in clean energy, electrification and advanced manufacturing sectors. It will draw on research expertise in the Electrification Process Innovation Centre and the Innovate UK-funded Institute of Sustainable Advanced Manufacturing, which is developing the curriculum to support skills pathways from levels 2 to 7 in partnership with FE colleges and employers, such as Nissan. 

The region’s Culture and Creative Zones programme utilises the expertise of the region’s universities in developing creative content and a future workforce, and in convening a diverse cultural sector. Our North East Screen programme – a collaboration across 12 local authorities, the BBC and the film and TV sectors – is building a platform for growing the region’s production sector, supported by our universities. Working together, the region has accessed Shared Prosperity Funding to expand successful programmes, such as ARROW, which links small and medium-sized enterprises with university facilities and expertise in order to increase their productivity, and Northern Accelerator, which has increased university spinouts eightfold since 2021.

Every region can point to projects and programmes. The real added value over the long term will come from moving beyond transactional relationships and into the realms of deep partnership that is intellectual and practical in nature, and which goes beyond specific funding opportunities. This means thinking about joint leadership and shared resources, and utilising the flexibilities of devolution to ensure that universities weigh in on a truly joined up human-capital strategy for the region. It means putting knowledge and content creation at the top of the economic agenda, and a degree of risk taking (for example around the spinout and commercialisation agenda) that creates added economic value. 

Five levers for success 

We need to keep driving this agenda forwards, because the challenges and opportunities we face are complex and cross-sector. They require multi-agency working and ways of unlocking resource and practice that challenge the established business model of the higher-education and public sectors. 

Based on our experience so far, there are five levers

for success that we need: 

1. Translational research
Bridging the gap between high-end research and commercial practice is both economically critical and difficult to do. The national landscape is littered with efforts to support knowledge transfer that have not quite landed. It is vital that we support the best examples of knowledge-driven cluster growth to develop business models that are sustained by cross-sector support, such as: the North East Electrification Process Innovation Centre; National Innovation Centres for Ageing and Data; Warwick Manufacturing Group; AMRC Rotherham. All these organisations combine the strengths of academia with people who can work hand-in-glove with industry to translate research into new products, services and markets. Growing this capability will be key. 

2. Writing the story of the future of our regions
Areas with devolution deals need to start writing the future of their regions – looking 30 years ahead to develop place-based plans that are underpinned by evidence and insight. As colleagues in Greater Manchester have shown, this can open up space for new policy through good-quality business case development and confident propositions. We in the North East and places across the country – particularly with new local policy-in-place partnerships, such as YPERN – have an opportunity to build granular, multidimensional evidence that will allow mayoral combined authorities to target investment and understand what works at a local level over time. Key to this is shifting the paradigm from universities ‘throwing research over the wall’ to a more co-produced approach to evidence and place-based policymaking. Insights North East aspires to this way of working – developing research programmes that embed policy leadership into governance and project design and delivery. 

3. Supporting Inclusive Innovation
The North East devolution deal contains a commitment to establishing an inclusive innovation deal alongside the region’s universities. This is specific and deliberate, recognising the innovation potential of our communities and the need to lower the barriers to participate in and benefit from innovation-driven growth in the region. We know that the North East has the lowest higher-education participation rates in the country. Initiatives such as the North East Raising Aspiration Partnership have made a difference, but we need to get better at connecting innovation that drives the future economy with skills pathways that enable local people (of all ages) to benefit from those high-value jobs – otherwise innovation will simply increase inequality. That requires collaboration between employers and education providers at all levels (primary to PhD), combined with a more benign regulatory and funding regime. Devolution brings opportunities to lower barriers to access through transport, skills and wider economic interventions. 

4. Working together to grow and leverage research and innovation fundingRichard Jones and Tom Forth’s NESTA report estimates that many parts of the UK have missed out on government research and development spending, to the tune of £4 billion each year, and that this money could have leveraged a further £8 billion from the private sector. The North East is a relative cold spot for research and development and ‘at-risk’ capital. This undermines the whole innovation ecosystem, translating into poor access to finance, a base of small and medium-sized enterprises that struggle to scale, and a bleeding of talent out of the region. But it is not irreversible. Research funding councils – which have historically been too ’place blind’ – are engaging with universities and local partners. But they need to continue growing and re-balancing research and development investment outside the ‘golden triangle’, if we are to achieve the ambitions set out by the government to increase domestic public investment in research and development by 40 per cent outside the greater South East by 2030.

5. Leaning into place-based regenerationUniversities may (rightly) not see themselves as developers or agents of regeneration. But if we look across the country, they play a huge role in the physical development of their places – and, arguably, what better way to demonstrate their contribution? Examples include: Newcastle Helix, a former pithead and brewery and now an international exemplar of urban sustainability, employing 4,000 through a partnership between Newcastle City Council and Legal and General; and Blyth Energy Central, putting South East Northumberland town at the heart of a green revolution, connecting universities, colleges, industry and local government to benefit local communities. Each of our universities has plans in place that will support the transformation of our urban centres and bring in substantial private-sector capital. 

The common theme of all these examples is collaboration. Universities can and must play their part, building on some of the themes developed above. But universities are only part of the jigsaw puzzle, and it can only be truly put together with collaborative leadership that brings together public, private and social sectors with a clear, long-term narrative for place. The theory of the quadruple helix – bringing together public, private, education and civil communities – has been well articulated over many years. To see it translated it into practice is rare – but deeper devolution provides an opportunity to do this. 

The challenges, of course, are real. The fiscal context remains tight, and the UK is one of the most centralised decision-making structures within the OECD. Policies, business models and culture will be challenged on all sides. And yet, if we follow JFK’s edict and Lord Kerslake’s wise counsel, we have an opportunity ensure that ‘place’ really matters. By working together, building trust and planning for the long term, we can make a difference that will benefit mayoral combines authorities, the localities they represent, universities and, above all, the communities they all serve. 

Dr Henry Kippin and Professor Jane Robinson

Estimated Read time: 11 Mins

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