The case for devolving research funding to England’s regions

Almost all political parties run for office on the promise to give power away. But there are signs that Keir Starmer’s Labour Party is more serious about it than most.

An English Devolution Bill featured prominently in the King’s Speech, with a promise to make devolution the “default” option. And it’s surely significant that one of Starmer’s first acts after barely a week in office as Prime Minister was to invite 11 of England’s regional Mayors for a breakfast in Downing Street.

Perhaps more significantly, Starmer’s commitment to devolution does not come just from an abstract belief in local empowerment. He is clear that Labour’s big mission is to get economic growth going again, and he sees devolution as indispensable to that – the recently published Industrial Strategy green paper emphasises this point.

The argument here is simple – and seems to have broad, cross-party, expert support. The UK continues to have one of the most centralised systems of government. Yet it is empowered regional and local government, with strong and accountable local leaders, that is best positioned to unlock the development, build the housing and infrastructure, grow the cities and deliver the skills systems that the UK economy so badly requires.

Central government is simply too remote and too siloed to understand regional and local opportunities, and generate the vision, build the partnerships and attract the investors, on which regeneration and growth depend.

But what, then, are the powers that should be devolved to regional authorities? Labour is a little vague on this but has talked about giving further responsibility over strategic planning, transport, skills, and health and care services, among other things. In addition, mayors also want more powers to design and set taxes.

I, however, want to make the case for one important but largely overlooked candidate: research funding.

National assets, local impact

Everyone agrees that the UK’s universities are one of its greatest assets. They perform extraordinarily well on international league tables and are able to attract students and research specialists from all over the world. Investment in UK lags behind the Organisation for Economic Co-operation and Development standards – one of the main reasons the UK’s economy struggles. But government investment in academic research is comparatively high.

Many of the UK’s leading research and higher education institutions are in the South East of England, especially the “golden triangle” of London, Oxford and Cambridge. But the UK’s university assets are arguably more evenly spread across the country than, say, its great cultural institutions or leading businesses. And good regionally focused university policy can build in this.

We have also seen a growing appreciation of the role that universities can play in supporting regional economic renewal. Universities can power the UK’s increasingly research knowledge-intensive economy, generating innovative start-ups, supporting public and private sector research & development and developing future proof skills – especially when working in partnership with their local and regional authorities.

Yet academic research funding, as directed by central government and governed by UK Research & Investment (UKRI), remains remarkably centralised, at least in England (Scotland and to some extent in Wales and Northern Ireland who have devolved powers). UKRI spends more than £8 billion a year in England. London alone gets around £1.6 billion per annum. That’s 15 per cent of the budget of Transport for London. Or more than was spent every year on building the Elizabeth Line. Yet regional authorities have no voice in this at all.

Benefits of devolving research funding

There could be big benefits in giving the Mayor of London, metro mayors and other regional and local authorities more involvement in how regional academic funding is spent.

First, giving cities and regions more of a say in the direction of academic funding would enable them to harness research and innovation funding to solve their critical policy challenges. Despite many efforts to promote closer working between researchers and policy workers, they continue to struggle to break out of their silos – a greater role for regional authorities in academic funding could quickly change that, giving cities the resources to direct research to addressing their priorities.

Second, it would make it easier for academics and city government to co-design research and innovation programmes that use the city as a test best or proving ground – potentially generating commercial and other products and services that can be exported elsewhere. It’s not impossible to design, say, a city-university partnership to research and develop approaches to retrofitting homes or develop and test skills programmes for older low-paid workers. But it would be a lot easier if the city government had some research and innovation funding to invest in these ventures.

Third, it could boost regional and local economic growth, with cities able to use funding to broker relations between researchers and businesses and support research and innovation clusters.

To its credit, UKRI is increasingly using grants to promote closer working between researchers, regional authorities and business – not least through support for four Local Policy and Innovation Partnerships. But as things currently work, regional authorities play a marginal role at best.

Of course, careful thought would need to be directed to how to give city regions a greater say in the direction of academic funding. In the UK this funding is founded on the Haldane principle that politicians should not get directly involved in funding decisions and this, no doubt, should apply to regional government too. While larger regions like London could potentially justify individual funding councils on the model of Scotland, creating these for every combined authority is likely to be cumbersome and inefficient.

But it’s not hard to think of nimbler options: UKRI could, for example, allocate a proportion of its budget to be set in dialogue with Mayoral Combined Authorities. Or it could, more radically, set up a sub-committee for each Mayoral Combined Authorities, chaired by the respective Mayor.

The key point: universities, city regions and academic funding bodies need to be thinking hard about where academic funding fits with the “growth through devolution” position of our new government.

Have you as a researcher or policy professional, university or policy organisation in London started the deep thinking on this topic? If so the London Research and Policy Partnership would love to hear your thoughts and plans.