We need to reverse the regional brain drain to level up

Is there a case for carefully designed regional fee cap incentives to move the sector's centre of gravity away from London, asks Nick Isles

Nick Isles is the chief executive officer at Condé Nast College of Fashion & Design.

Michael Gove’s Levelling Up plans are a missed opportunity for making our nation more equal.

The Treasury is also culpable. Gove was given a huge job to do and very little money with which to do it.

If he needed to prove that more cash could have been purposefully spent, he only had to look to the higher education sector for that evidence.

What the data says

The regions and principalities, not least the great north-western cities of Liverpool and Manchester, of the nation have long suffered a brain drain towards London. According to the Office for National Statistics, in 2017, 52 per cent of research and development spending took place in the capital and the South East, dragging with it many of the brightest and best from areas starved of such innovation funding. However much the government proclaims that levelling up some areas won’t mean taking away from others, the undeniable reality is that this polarity needs to be reversed if the UK is to be more equal.

There is some disagreement among academics about the impact of HE spending on a nation’s economy. Does prosperity give rise to higher academic participation including R&D, or does the work create the wealth? Intuition suggests the answer is probably “yes” in both directions. One of the most comprehensive attempts to answer this question comes from the Centre for Economic Growth at the London School of Economics. In their paper, The Economic Impact of Universities: Evidence from Across the Globe, Anna Valero and John Van Reenen say, “that a 10 per cent increase in a region’s number of universities per capita is associated with 0.4 per cent higher future GDP per capita in that region,” which seems like a pretty good return on investment. The question is, how do we reverse the flow of research funding away from the bottom right-hand corner of the country to everywhere else?

Regional fee caps?

Speaking from my own position, leading a private specialist niche provider of higher education located in the centre of London, you might suggest that my next argument would be about how the private sector will ride to the rescue. But that is exactly the point. Private sector provision is as focused on London as are other areas of investment. The rise of branded education is not going to help answer this conundrum. All the other companies of which I am aware that are considering establishing a presence in education, all see London as their destination of choice, notwithstanding those investigating online provision.

So one area worthy of investigation would be a differential fee system. If universities away from the centre were able to discount fees to certain groups of students through expanding scholarship funds underwritten by government grants they could simultaneously upgrade their entry requirements, helping to draw the more able to their courses. This isn’t about creating “pile it high, sell it cheap” business strategies but about recognising that many universities outside the Russell Group have centres of excellence that need nurturing and encouragement. That means in turn attracting the best students.

The universities beyond the environs of the M25 can do more to help themselves. The model of the existing N8 Research Partnership would be a good one to follow to increase collaboration between institutions at no cost to the government. Take into such a group institutions in other HE “cold spots” as identified by the Higher Education Funding Council for England map of 2014 around the north, coastal areas, the south west, East Anglia and the Welsh Marshes and you not only have a strong collaboration for research but also a powerful lobbying voice for the regions.

A skewed map

That there are areas lacking local coverage in terms of HE is clear. The UCAS map of universities and colleges is highly instructive. The north east is served by a total of five universities. The north west looks more replete, unless of course you happen to live some distance away from the Liverpool/Manchester conurbation (for example in rural Cumbria) where the pickings are somewhat slimmer. And 44 per cent of the institutions listed are in London and the south east. What greater case could be argued for the opening of new universities in the places where they are most lacking?

Now it can be argued that if the universities really wanted to do this they would have already. However investing in any form of expansion or start up is risky and governing bodies of universities are like most governing bodies – risk averse. Incentives need to be given. Back to the levelling up funds.

If we take Valero and Van Reenen at their word and are serious about levelling up, these anchor institutions are instrumental for attracting investment as they increase the skills supply. It’s not as if the government doesn’t already realise this. The Institutes for Technology are designed to do precisely this, and it’s interesting to note that of the twelve IoTs approved in the first wave of establishment, only three of the twelve are in London and the south east. Of those listed by DfE as being “In Development,” only two from nine are in that region. All that is being suggested here is that the same logic should apply with HE.

Relocating research

A word here for Dominic Cummings (no, really) who had the fascinating idea of creating a UK version of DARPA, the US Defense Advanced Research Projects Agency which coordinates and supports research in the public and private sectors. These ideas have been partially captured in the ARIA legislation. So let’s base the institution in an area in need of economic development and expect it to find constructive ways of steering funding away from the south east. A researcher with a passion for a great idea would surely be tempted to relocate if they were told it would make the difference between receiving a grant for their project or not?

If Mr Gove is successful in rebalancing the nation’s economy it is inevitable that expansion of HE into previously poorly-served areas will follow. How much better to use it as a lever for achieving his goals?

One response to “We need to reverse the regional brain drain to level up

  1. All the evidence I have seen shows that student demand is not influenced by different fee levels backed by well designed income contingent loans. So I doubt that lower fees would attract students to any region, institution, or discipline.

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