It has been five years since Lord Kerslake’s Civic University Commission report provided a blueprint for strengthening connections between universities and their places. Today, the sector is operating in a very different landscape.
The financial challenges facing the UK’s universities are well documented, with nearly three quarters heading for a deficit this year if predictions from the Office for Students come to pass. Faced with stark choices, it could be tempting for universities to focus their resources on what they perceive to be core business – teaching and research. To do so misses the point, part of the reason we find ourselves in this predicament.
We know that universities are drivers of economic growth and social mobility. We only need to look at the recent analysis from London Economics highlighting that every £1 of public funding for higher education generates a remarkable £14 return. The Government understands this, but most taxpayers do not.
Despite their economic contributions, public perception of universities remains lukewarm. Polls conducted before the last election placed universities near the bottom of funding priorities. A third of adults believe the quality of higher education has declined over the past decade, highlighting a disconnect that universities must address.
If we take a step back and consider the purpose of universities, historically the focus was on knowledge creation. The concept of a ‘civic university’ introduced the idea of knowledge sharing. As we move into a new era, we’re seeing a shift towards prioritising societal value, skills generation aligned to workforce needs, and collaboration in every sense within broader ecosystems. Much of this was outlined in Lord Kerslake’s report, but how does it work in practice, five years on? A Lloyds/PwC report published today offers some key insights.
Drivers of growth: the role of universities at the heart of national prosperity is the outcome of a series of roundtables held across the UK in the latter half of 2024, one of which I was privileged to attend. These sessions explored how universities can strengthen their financial sustainability while supporting their regions to thrive, with input from businesses, local authorities and regional leaders across the UK.
A key focus of these discussions was an exploration of the fresh opportunities to strengthen ties with regional partners offered by devolution. By listening to their communities and aligning with local needs, universities can serve as indispensable partners in Local Growth Plans, which in turn will contribute to national prosperity. Indeed, the UK Research and Innovation strategy emphasises the importance of ‘place’ for achieving a world-class research and innovation system, recognising the unique strengths of different regions across the UK. It outlines how UKRI will prioritise funding to encourage partnerships that drive innovation tailored to regional needs and opportunities, thereby maximising the impact of research and development efforts.
This capability to help shape the future economy through research and innovation must go hand in hand with the provision of education and skills needed in the workforce of the future if we are to achieve the Government’s central mission of growth which benefits all. That can only be achieved through close collaboration between employers, regional providers – including colleges – and emerging national bodies, such as Skills England.
At my own institution, Newcastle University, civic engagement is absolutely core to our existence and purpose. We were founded to address critical societal needs for the region during the industrial revolution. Today, we continue to lead by example, responding to complex challenges locally and globally by providing a hub for co-creation that connects academia with industry, government, and civil society.
While industry partnerships often take centre stage, universities’ collaboration with a diverse range of partners – spanning culture, sports, and the voluntary sectors – plays a vital role in enriching the heritage and identity of our communities. It is this broader engagement that makes our universities – and the towns and cities we call home – such vibrant and attractive places to live, work, study and visit.
Collaboration between universities across regions is equally important. Initiatives like Universities for North East England exemplify how institutions can make higher education more accessible for study, business and innovation. Working together can help to grow inward investment, by offering a more strategic approach aligned to strengths and showcasing the region on a national and international stage. By collaborating rather than competing, we can deliver impact at scale and in turn benefit our own bottom lines.
To truly embed this approach and to maximise value creation for both institutions and places we will need to develop new models – a new generation of value-creating, collaborative universities. To do so we will need to:
- Avoid the spatial dichotomy – a key strength of universities is our ability to connect the local and the global. As anchor organisations with global reach, we add value to our places and the wider world.
- Make the most of devolution – although we still have a patchwork of regional governance, the opportunity for a more joined-place, placed-based approach is significant. Reinforcing the role of universities in the forthcoming Devolution White Paper will be key.
- Articulate value creation, rather than value capture. For example, not just the equity value of a spin-out, but the benefit to individuals who benefit from its products.
- Develop new capabilities – we will need to support a growing cadre of boundary-spanning leaders, who have experience in different sectors and an ability to build meaningful collaboration benefitting both institutions and the communities they serve.
The recent letter from Education Secretary, Bridget Phillipson, made it clear that any future fee rises are contingent on demonstrating this wider value creation and a more collaborative approach to sector sustainability. So, the challenge is clear.
As the spending review approaches, universities must highlight their societal value, and develop new models of collaboration. Doing so will not only secure more sustainable funding but also cement their role as indispensable drivers of inclusive growth.
