Higher education is an indispensable part of the national economy. But many universities also play a hugely important role within local economies, as major employers and consumers of local goods. Universities attract tomorrow’s highly skilled workforce to local economies, and act as magnets for exogenous private investment.
In ‘The Real Deal: Pushing the Parameters of Devolution Deals’, researchers from the Sheffield Political Economy Research Institute and the Centre for Local Economic Strategies argue that higher education funding and powers should be partially devolved as part of a more ambitious and progressive approach to decentralisation. Devolution can therefore help to ensure that universities’ role in supporting local economic development and resilience is realised in full.
As it stands, there are two main barriers to enhancing the role of universities in local economies. Firstly, higher education funding is skewed towards London and the surrounding areas. In 2013 research council funding in London, the South East and Eastern region was £74, £72 and £68 per person respectively. Funding in every other English region was below £30 per person. This bias is partly due to the greater concentration of research-led universities in the south.
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