Pots of gold at the end of regional rainbows

Rich rewards are waiting for higher education institutions that plug into industry and play their part fully in regional development, says Richard Brown

Involving higher education more in local economic development is very much on the agenda. Although the government did not specifically endorse the Dearing recommendation that universities should be represented on all regional development authorities, the reality appears to be that the voice of higher and further education will be well heard. Their influence will depend, however, on how well they have their act together and are networked with other relevant players.

In the North-east, Higher Education in Support of Industry in the North and other forums have acted as catalysts, while in Yorkshire and the Humber, the West Midlands and the North West (where a Council for Industry in Higher Education initiative was started by BNFL) forums have drawn together institutions, industry and intermediaries. Less has happened in other regions, such as the East Midlands and the South-east, which do not have a particular identity or coherence and where major EU Structural Fund or similar opportunities have not provided the catalyst for cohesion.

CIHE embryonic forums involving higher and further education, industrialists, Training and Enterprise Councils and the Government Office in the East Midlands and south coast (Bournemouth to Portsmouth) aim to facilitate the development of such partnerships. A failure to find a common agenda in the Thames Valley sub-region suggests that there has to be some basis on which to build. Our agenda includes identifying skill needs, improving the marketing to employers of the capabilities of institutions, plus encouraging closer links with local employers to inform the curriculum better and encourage work placements. A forum now known as Learning in London has made considerable progress in co-ordinating a marketing approach especially for potential investors.

But there is no clear framework and no mapping of developments. The Department for Education and Employment, the Department of Trade and Industry, the Higher Education Funding Council, the Committee of Vice-Chancellors and Principals and the CIHE are funding a study that we hope will develop a useful framework. It builds on a DFEE National Development Project undertaken in 1997 by the Centre for Education and Industry at the University of Warwick, led by John Woolhouse.

However, there will need to be funding incentives if institutions are to rebalance their missions and priorities away from a focus on research, currently the only significant form of additional funding available. While a fund to enhance the quality of learning and teaching will no doubt emerge, in some instances this might reinforce the funding focus on those institutions that gain from the research assessment exercise (given the links between excellence in research and teaching). A third funding stream is therefore needed that supports those institutions whose mission it is to focus on local economic development in all its many aspects.

CIHE's task force on institutional relationships with small and medium businesses and our report on widening participation argued for that. Both suggested that an element of funding should be devolved and administered regionally in liaison with the development agencies and in support of local learning and wider participation. The Dearing committee hinted at such an approach and the Kennedy report was even more positive. Over recent months HEFCE has grown more positive. Whitehall has also appreciated the desirability of better coordinating its funding in this area to create a worthwhile pot of money.

The CIHE work suggested that long-term regional funds of Pounds 10-15 million per annum for each English region (ie Pounds 90 million to Pounds 135 million in total) would be needed to change or meaningfully reinforce institutional missions in this area. Our vice-chancellors were also prepared to support any element of HEFCE top-slicing only if that was the necessary price for more co-ordinated Whitehall funding.

Negotiations suggest that the lower end of this funding bracket is being approached, but the comprehensive spending review provides an opportunity to argue for additional funds to support local wealth and job creation and the lifelong learning objectives set out in the government's consultation paper The Learning Age. Equally, while the centre has always been reluctant to release its hold on funding and while competition rather than cooperation has until recently been the order of the day, this administration's agenda is different. The development of regional development agencies with their responsibilities for co-ordinating and setting local economic development strategies and the trend to greater cooperation, especially at local level suggests that the time has come to devolve some power and funding. As the chancellor said in the recent economic and fiscal strategy report, government should be "enabling and empowering, not centralising and controlling".

The prospect of significant funding might be the catalyst to bring partners together in places where little has happened so far.

Richard Brown is director of the Council for Industry and Higher Education.