Written evidence submitted by GuildHE (PEG0178)

About GuildHE 

GuildHE is an officially recognised representative body for UK Higher Education. Our members are universities, university colleges and other institutions, each with a distinctive mission and priorities. They work closely with industries and professions and include major providers in technical and professional subject areas such as art, design and media, music and the performing arts; agriculture, food and the natural environment; the built environment; education; law; health and sports. Many are global organisations engaged in significant partnerships and producing locally relevant and world-leading research.

Summary

We respond to this consultation on behalf of our member universities, university colleges and higher education providers so that their role in the socioeconomic recovery of all parts of the UK can be realised.

1. We strongly argue that smaller and specialist universities have a major role to play in the recovery of the UK by providing skills, talent, business innovation and support.
2. We suggest that regional investment funds, especially those with a research and development focus, could stimulate the diverse mix of small SMEs, microbusinesses and freelancers.
3. We suggest that placements and internships for graduates will help the economic recovery of the UK and that all universities and higher education providers, regardless of size, should be enabled to support such schemes for their regions and professions.

Smaller and specialist universities and colleges

4. Our members are resilient, agile and entrepreneurial by their nature. They are dedicated to the professions that they serve and well-positioned to stimulate the growth of key priority economies, such as the creative, health and agriculture.
5. We are the part of the higher education sector particularly dedicated to and good at placemaking. Many of our members have supported  their communities for over 100 years. They are often located in smaller towns, on the edge of cities, or in rural or coastal locations. They are locally significant as employers and community anchors and active partners in Local Enterprise Partnerships.
6. Regional specialist universities, in particular, are agile, industry experts that carry out high impact, practical research and knowledge exchange to grow the UK’s world-leading agricultural sector and creative industries. They have both import and export strength potential.

What core/guiding principles should the Government adopt/prioritise in its recovery package, and why?

7. Government has been quick to provide a wide range of interventions which have been extremely useful and needed.
8. However, to enable recovery, government needs to acknowledge that one size will not fit all. Fixes for one sector or part of society are likely to be similar but different from other parts.
9. A bespoke solution also helps when government is addressing challenges within sectors - for example, a smaller, rural, university working with a range of SMEs needs different support from a large, urban, research intensive university with a wide range of economic partners needs. This could be access to innovation funding for the smaller university to assist SMEs recover while the large university needs resource to fill the gap in international student numbers.
10. Locally-led recovery should be another key principle. Further devolution will allow local partners to identify the solutions at a local level that will allow them to recover. Local conversations, involving the full diversity of society, should be convened, as sustainable solutions may arise from unexpected places.
11. Government should also consider economic, social and cultural recovery in the round. Each element of recovery is closely interlinked, particularly at local levels.

How can the Government borrow and/or invest to help the UK deliver on these principles?

12. N/A

What measures and support will businesses need to rebuild consumer confidence and stimulate growth that is sustainable, both economically and environmentally?

13. Support for innovation and research and development is key to the long term recovery and growth of the UK. We support the direction of travel outlined in the R&D Roadmap. We suggest a few initial initiatives below.
14. A research and innovation recovery and growth fund for smaller and micro companies, similar to Innovate UK funding, should be considered. Levels of funding should not be large. This might make it more likely for funding to be leveraged from other sources (the need to match fund often being a major barrier for smaller organisations).
15. For example, flexible proof of concept small-scale funding such as Business Innovation Vouchers (eg £5k-£10k) have been successful in allowing collaborations with business to start and test potential innovations. This was particularly helpful in enabling SME and micro business to develop ideas and partnerships with regional universities in order to increase their productivity.
16. We also support the Creative Industries Federation’s recommendation in A Plan to Reimagine on R&D Tax Credits:
1. “Discussion of R+D tax credits for the creative industries is not new but, so far, has not been fruitful. The present crisis calls for exceptional measures. We propose a speedy, even if temporary, adoption of the international definition of R+D that would be open to the creative sector. A trial period would help drive innovation at a time when it’s needed the most, ensuring our worldleading sector remains at the cutting edge, but also unlocking its potential to help tackle local and global challenges, from the regeneration of our high streets to sustainability and climate change.”

Whether the government should give a higher priority to environmental goals in future support?

17. Yes, the government must give a higher priority to environmental goals. Looking at long term sustainability and resilience makes this essential for all parts of economy and society.

Whether the Government should prioritise certain sectors within its recovery package, and if so, what criteria should it use when making such decisions? What conditions, if any, should it attach to future support?

Enable the higher education sector to support the recovery of all parts of the UK

18. The higher education sector has much to offer in order to drive the economic, social and cultural recovery of the UK through teaching, research and knowledge exchange.
19. Universities are key anchors and hubs for their local economies providing expertise, graduates etc. They are also engaged with the different sectors of the economy. They are tied into the ecosystems so can channel intelligence about particular sectors back to local and national government.
20. This could take the form of regional growth hubs/ investment zones that link academia, business, civil society, LEPs (where applicable) and local authorities together. Such hubs could be organised around particular sectors (eg creative; allied health; agriculutre) to drive innovation and to offer job opportunities to graduates so that they remain in their place of study. The role of Knowledge Quarters and Innovation Districts should also be considered in this light.

Reform the Higher Education Innovation Fund to support regional business recovery and growth

21. Existing university funding could be expanded to do this. For example, the highly effective Higher Education Innovation Fund should be reformed by adding a regional weighting and removing the lower thresholds in the Fund (we can provide further, specific evidence on HEIF).
22. This would enable smaller, innovative universities in poorer parts of the country to drive growth through jobs creation and knowledge exchange.
1. Smaller and specialist universities are agile and do not require as much funding - they can do more with less. Amending the HEIF distribution would give them the potential to drive long term socioeconomic growth in a way that they have been hindered from doing in a sustainable way previously.
2. Those smaller HEIs that have HEIF have been able to drive growth for their towns (eg Worcester) or industries (eg agriculture) but have had to sacrifice other promising research initiatives and knowledge brokerage resources in order to continue to secure HEIF due to being so near the meaningless minimal threshold. Removing this minimal threshold would enable smaller and specialist institutions to unleash their untapped potential.

Reform the distribution of quality-related (QR) research funding to drive local growth

23. The HoC Science and Technology Committee endorsed our recommendation to gear the QR formula for institutions with relatively low QR allocations[1].
24. This would address the time lag between assessment exercises combined with the rate of change of smaller universities’ research activities that results in their QR allocation quickly becoming out of kilter with their actual circumstances.
25. This represents a ‘capacity-gap’ for small institutions in receipt of QR that constrains their pace of development and potential for delivering wider socioeconomic benefits in the interim period between assessment exercises.
26. There is an opportunity to introduce a year on year uplift of QR, via a ‘gearing’ formula providing at maximum 10% increase in funding, for institutions with relatively low QR allocations.This would be expressly to support emerging research environments to establish infrastructure and capacity.
27. We acknowledge that such investment would need to be monitored to ensure the additional funds are used for expressed purposes. We suggest institutions provide strategies for the additional investments, and also provide monitoring data at reasonable intervals.
28. This would, in our view, truly help to support excellent research, wherever it is found at a time when the UK needs a very strong R&D system to support recovery from Covid-19 and longer-term economic, social and cultural growth.

Support for the creative sector

29. Many parts of the creative industry are interconnected - for example, the hospitality and tourism sub-sectors are reliant on arts, heritage and cultural institutions reopening so as to attract business. Without careful planning that reflects this interrelated nature, there is a strong risk that the wider economy will fail to restart (bearing in mind that services make up about 80% of UK GDP[2]) resulting in a spiral of decline.
30. For example, work has paused for other parts of the creative economy.  Regions that were in the process of establishing creative clusters in rapidly growing sub-sectors such as screen and VR.
31. Creative focussed, specialist universities have been playing a central role in driving the development of such clusters through both business support and the supply of talented graduates, encouraging them to remain in their regions of study.
32. There is a real risk that a contracting economy will lead to market failures as these clusters fail to develop and graduates and recent employees move away to more prosperous areas because there is not as much socioeconomic resilience built into poorer regions of the UK. This would entrench existing inequalities between regions This would miss an opportunity to support the rebalancing of the economy and to mitigate the social and economic impact of Covid-19 outside London.
33. We recommend that government considers the recommendations and actions within the Creative Industries Federation’s A Plan to Reimagine[3].

How can the Government best retain key skills and reskill and upskill the UK workforce to support the recovery and sustainable growth?

34. It is important that the talent pipelines for key industries such as the creative economy, agriculture and allied health are considered as well as traditional STEM professions.
35. Specialist, creative higher education providers help fulfill current skills gaps due to their close-to-industry courses. The education sector (from primary to tertiary) should not invest only in STEM-only subjects as that risks removing the supply of  the crucial creative skills required by all parts of the UK’s economy.
36. Agricultural specialists deliver absolutely essential roles. They drive the development of the agri-tech and food sector in sustainable recovery, and are crucial in meeting and surpassing environmental targets. They do so through innovative knowledge exchange and delivering high level skills in improving productivity and efficiency of the sector. However government does not recognise the importance of the fact that agriculture related subjects are high cost, STEM type subjects, crucial to the UK’s socioeconomic development. Investment in training and research for the sector must be made to address the workforce shortage.

Resilience and bite-size support (eg MOOCs)

37. Many specialists are already engaged in supporting students to set up their own businesses. This work should not stop and could include additional online elements such as online MOOC style activities for graduates. These would be to help support their career goals and ongoing wellbeing - for example in starting your own business, goal setting, skills development (CPD lite) dealing with having to take a non-graduate job whilst waiting it out and how to keep motivated.
38. These programmes could be expanded to include existing businesses (perhaps through an innovation voucher scheme) that allows people to access relevant, practical support and training on how to build resilience and take advantage of new opportunities in the Covid-19 recovery world.

Placements & internships for graduates

39. In addition to the recently announced £2bn scheme to create thousands of job placements for young people, specific schemes for graduates should be developed.
40. Larger universities in cities have been able to repurpose HEIF to support placements for graduates at local businesses - graduates receive a bursary and the business receives some extra capacity. This is not possible for smaller universities that do not receive HEIF. Introducing a form of KE capacity enabling funding would allow similar schemes to be developed for key economic sectors, such as those allied to health, agricultural and the creative and cultural, who will need talented employees as they start to recover in poorer parts of the country. It will help improve the stickiness of regions and would be particularly valuable in places reliant on SMEs to drive the economy.
41. Follow on placement support through schemes such as Santander Universities. Currently very few specialist universities are involved in the scheme. A joined-up, facilitated national approach could be developed for the regions - ie by acting together, smaller institutions could access the scheme to support their graduates at local levels in order to restart the local economy.

Importance of part-time education

42. Many smaller universities and colleges offer part-time programmes at all levels. However, demand for part-time has decreased. This is largely due to funding and support, either from government or business, decreasing. As a result, it makes it harder for people to upskill whilst they are working.Part time higher education needs a different, tailored package of support because mature students are more price-sensitive  and more debt-averse. This should include grant subsidies to higher education providers to reduce the cost of part-time study. 
43. Specific support for part-time doctoral students should be considered as part of the BEIS R&D Roadmap. Part-time study allows students to bring their research into their professions and take it back into academia. This means that stronger practice is developed as well as theory, providing immediate benefits to employers as well as longer term benefits. A funding model similar to a KTP could be considered, where funding is available for practical, part-time PhDs. The subject scope should be broad - STEM only subjects will not enable the full economic, social and cultural recovery and growth of the UK.
1. GuildHE Research members have ability and experience in delivering part-time doctorates. Over 60% of our PGR students are part-time, compared to a sector average of 23%. We would be happy to work with government on initiatives in this area.

Is the Industrial Strategy still a relevant and appropriate vehicle through which to deliver post pandemic growth?

44. Yes. The Industrial Strategy’s five foundations and broad themes are still very relevant - especially the focus on Ideas, People and Place. These are clearly seen in the BEIS R&D Roadmap. That said, the strategy, like any good strategy, should evolve and deliver on some of the commitments outlined. The UK Shared Prosperity Fund, for example, is only going to become more important to roll out and get right. 

How should regional and local government in England, (including the role of powerhouses, LEPs and growth hubs, mayoralties, and councils) be reformed and better equipped to deliver growth locally?

45. There are LEP inconsistencies. Some LEPs are really good and act as stimuli for the regions - for example through bringing together business, universities, colleges and civil society. Others are however ineffectual and default to pursuing the same strategies as neighbouring LEPs even if they have different strengths. LEPs should be the place to drive local growth, collaboration and innovation but need to take account of all their assets.
46. Universities and HE providers can help cross barriers between different industries and professions.
47. For small and micro industries there is often an inability to invest in the development of their staff to the same extent as larger companies and so the point that we make below (Q4) about extending the apprenticeship levy could play a key role here.
48. The UK Shared Prosperity Fund or a long-term replacement for the EU Regional Development Funding must be introduced. This would enable collaboration and socioeconomic growth in some of the poorest parts of the UK.

What opportunities does this provide to reset the economy to drive forward progress on broader Government priorities, including (but not limited to) Net Zero, the UK outside of the EU and the ‘levelling up’ agenda? What should the Government do to ensure that delivering on these priorities does not exacerbate the vulnerability of businesses, consumers and communities/workers that have been impacted by COVID-19?

Levelling up & R&D

49. Major national assets, especially the large, research intensive universities, are concentrated in the South East. Public investment and business investment is concentrated here which suggests that when you invest more public money, more private money follows.
50. The Nesta report, The Missing £4 Billion[4], goes into much further depth and is worth reading as it suggests several barriers. We believe that many of the recommendations made will support the economic, social and cultural recovery and growth of the UK.
51. As part of the levelling up agenda, it is important to consider the attractiveness of place. The physical and cultural assets of places are often overlooked. You need to develop places where people want to live and work otherwise big investments will result in commuter communities. Many regional smaller universities and higher education providers are deeply invested in their communities, often co-investing with local authorities in building repurposing, business hubs and public libraries. They are well positioned to drive the economic, cultural and social recovery throughout the UK.

Levelling up & Net Zero

52. Net Zero should be at the heat of the levelling up initiative. Good design - both in thinking and physical design - is crucial. There should be an emphasis on green initiatives enabling local universities and local businesses to collaborate on new homes/ refit/ redevelopment of high streets.
53. This could also be linked to increased taxes on carbon emissions, including transport, so that there are both push and pull factors.
54. There should be greater emphasis on encouraging greener city and town centres through better walking and cycling only areas. This should be coupled with local campaigns to encourage greater cycling.
55. However, at the same time, it is important to consider EDI so that certain groups, including those with disabilities, are not disadvantaged.
56. Funding competitions should focus on green initiatives. These should include the social and cultural change required. Funding for creative economy and social science projects will be as important as funding for developing the technology.

Work with the Climate Commission for UK Higher and Further Education Students & Leaders

57. Government should consider the recommendations and actions being developed by the Climate Commission for UK Higher and Further Education Students & Leaders.
58. The Climate Commission has identified five areas that the sector needs focused support on to ensure there is a clear and feasible pathway to reach targets. The top five priorities the Climate Commission will focus on and develop enablers for are:
1. Mobilising the Further and Higher Education voice for influence and impact
2. Research and innovation– the funding and scope of research and innovation and maximising its impact
3. Measuring and Reporting - Scope 1, 2 & 3 – profiling work underway, developing sector understanding of Scope 3 emissions, and supporting the sector to make significant progress in addressing these emissions
4. Deep adaptation – including governance, risk, mitigation and adaptation for the future of our campuses and operations
5. Education and the student experience – curriculum development and the climate emergency.

What lessons should the Government learn from the pandemic about actions required to improve the UK’s resilience to future external shocks (including – but not limited to – health, financial, domestic and global supply chains and climate crises)?

59. N/A

What opportunities exist for the UK economy post Brexit and the pandemic for export growth?

60. We have outlined some recommendations in answer to the questions posed elsewhere in this response.

What role might Government play as a shareholder or investor in businesses post-pandemic and how this should be governed, actioned and held to account?

61. It is already hard to encourage smaller firms to invest in R&D. This is likely to become harder in the immediate future when companies will be focusing on how to survive from one day to the next. However, investing in R&D will help long term economic recovery.
62. There should be easy to access funding for smaller, experiential ideas. This would encourage businesses and others to try out new ideas without the risk and stigma associated with failing. Small scale, experimental funding for ideas with potential could help encourage growth across the UK.
63. There needs to be greater support for freelancers and entrepreneurs. This could involve looking again at how the Future Jobs Fund and Enterprise Fund could work together and be tied in with apprenticeships to help start ups.
64. Government could encourage regional angel investment in sectors such as the creative economy in order to help companies, businesses and others with potential to grow. This could involve liaising with specialist universities who are experts in entrepreneurship and already nurture creative talent. The institutions could act as coordinators for other actors in the local area.

August 2020