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Decentralise innovation funding, government told

The government needs to reverse the centralisation of innovation funding, urges a report by the vice-chancellors’ group, Universities UK, and the think tank Institute for Public Policy Research North.

The report, ‘Beyond bricks and mortar boards: Universities and the future of regional economic development’, was published on 13 February. It investigates universities’ contribution to regional economies in the context of recent changes to regional structures.

The report argues that there have been sharp reductions in funding for economic development. The funding, it adds, has been centralised under the current government, with regional development agencies replaced by a centrally managed £2.4 billion Regional Growth Fund.

It says decisions on bids are taken more centrally and bids do not require involvement with local enterprise partnerships (LEPs).

The report argues that universities seem to be adapting to the new economic development landscape and are well-represented on the boards of the LEPs. However, it warns, the LEPs are so far not seeing the full value of universities to the regional economy, viewing them more as skills providers than drivers of innovation and investment.

To maximise innovation, it says, funding should be decentralised.

“Funding should be devolved down to the sub-national level to allow areas to be agile in reacting to new opportunities, to encourage spatial specialisation and to support local innovation ‘ecosystems’,” reads the report. “As the main vehicle for driving economic growth at the sub-national level, this could be a future role for LEPs.”

The government should be aware of the risks posed by the reduction in university funding to local economies, it adds. This could affect some regional economies differently, depending on the type of universities in the region. Newer institutions, it argues, often interact more with business.

The report recommends universities to expand collaboration with business, particularly by “marketing themselves more effectively”.

They should also strive to create more spin-out firms. This is especially important in fields other than science and technology, such as the service sector, as they are more likely to create jobs.

In addition, it says, the Department for Business, Innovation and Skills should promote university involvement in RGF bids among potential bidders.