Universities in the UK’s “left-behind areas” glimpsed a potential surprise bonus as they were billed as central to radically reshaped investment zones, echoing recent US policy moves – but there is some uncertainty about the Westminster government’s new focus.
Liz Truss, in her fleeting time as prime minister, wanted to create up to 200 low-tax, deregulated investment zones to drive private sector growth.
But following concerns over costs, Jeremy Hunt, the chancellor, said there would be a “change of approach” on investment zones when he delivered spending cuts and tax rises in his autumn statement. The zones would now focus on “leveraging our research strengths by being centred on universities in left-behind areas to help build clusters for our new growth industries”, he explained.
The University Alliance, the group representing professional and technical universities, said the plan “could be truly transformational”.
Such a move would echo developments in the US, where the Brookings Institution, the nation’s leading thinktank, in 2020 urged the federal government to run a contest to select up-and-coming “growth centres” in “heartland” cities to receive new funding to shift the benefits of technology and innovation beyond the handful of coastal metropolitan areas that dominate the field.
In September, President Joe Biden announced 21 winners sharing $1 billion (£843 million) from the Build Back Better Regional Challenge, with universities often front and centre of the winning bids.
Andy Westwood, professor of government practice at the University of Manchester and a former government adviser on universities in the Labour government, said he would “suspect there’s a bit of the Brookings model” in the UK investment zones plan.
However, the published version of Mr Hunt’s speech was less clear-cut. It did not directly mention universities or “left-behind areas”, with Mr Hunt instead quoted as saying that he would “change our approach to investment zones, which will now focus on leveraging our research strengths, to help build clusters for our new growth industries”.
The Treasury’s autumn statement document similarly says the government “will use this programme to catalyse a limited number of the highest potential knowledge-intensive growth clusters, including through leveraging local research strengths”. The Department for Levelling Up, Housing and Communities “will work closely with mayors, devolved administrations, local authorities, businesses and other local partners to consider how best to identify and support these clusters”, with the first “to be announced in the coming months”.
Professor Westwood said the variation in wording could mean “a big difference for places and universities involved and potentially enables an emphasis on big regional cities”, rather than, or alongside, “left-behind places” and towns.
“It will be important to watch that as it rolls out,” he added.
The level of funding for the refocused investment zones was unclear.
The government previously faced criticism over the separate Levelling Up Fund when it directed money to a number of Conservative-held constituencies – so any direction of investment zone funding to marginal “red wall” seats would be closely watched ahead of a general election.
Diana Beech, chief executive of London Higher and a former adviser to Conservative universities ministers, highlighted that behind London’s prosperity “lies extreme pockets of poverty”.
She said she hoped the centring of investment zones “on universities in ‘left-behind areas’ will not mean that London is left without the investment it deserves. London universities are local universities, too, and levelling-up for the rest of the country should not mean levelling-down for London or switching off the power to the engine room of the nation.”
