Written evidence submitted by GuildHE (IGR0053)
About GuildHE
GuildHE is an officially recognised representative body for UK higher education, championing distinction and diversity in the sector. In this role, GuildHE works alongside Universities UK as joint guardians of the sector to advocate for institutions within our memberships and on behalf of the entire system.
GuildHE is the most diverse representative body in the UK, serving 67 institutions across the nations and comprising universities, university colleges, further education colleges and specialist institutions. Our members are small and large, rural and urban, practice-based and online, publicly and privately funded– the diversity of our membership enables us a unique and valuable perspective into the challenges and opportunities within and for the sector at any given time. Members are principally focused on vocational and technical higher education and include major providers of professional programmes in education and community service; healthcare; agriculture, food, and the built environment; business and law; and the creative arts.
As a formal representative body, the government, regulators and key sector bodies consult GuildHE on higher education policies during their development and implementation. Because of this, we lead efforts to persuade the government, politicians and official groups on matters of concern to our members and on issues key to ensuring a distinctive, equitable, inclusive and internationally successful higher education sector, articulating its benefits to students, employers and wider society.
We thank the Select Committee for the opportunity to respond to this inquiry on Innovation, growth and the regions on behalf of our members.
1. How does the Government drive research and innovation in our regions?
The research and innovation ecosystem in the UK should provide the foundational environment for regional growth to be stimulated across the whole country. Currently, the funding system provides the main incentives that drive research and innovation culture and behaviours at Higher Education Providers (HEPs) and businesses. The system has inherent bias baked into the foundations due to the allocation formula in the Higher Education Innovation Fund (HEIF). The allocation methodology of this fund, the sole flexible and longer-term funding for innovation in the HE sector, is biased towards large research-intensive universities due to the metrics used. Income generation for the institution is used as a proxy for impact in the formula methodology which therefore favours activities with wealthier partners, in more prosperous areas of the country, and in sectors that have high levels of return on their investment.
This methodology disadvantages vocational and specialist HEPs, and small and micro businesses which make up 99% of the business community, as well as sectors such as health and social care, education and community services, construction and the built environment, and the creative industries. This sectoral divide is due to other factors such as lower levels of investment in public services, as well as lower market rates of pay which subsequently drive down the levels of income generation that are possible for such innovation projects. This is currently constraining the potential of university-business interactions in regions that have low productivity, low public investment, and low levels of regional wealth. Despite these challenges, vocational and specialist institutions are punching above their weight. Our Expertise in Action report illustrates the higher levels of impact these institutions have on their economies when their size and capacity is applied. For example, if the R&I capacity of the Royal Academy of Dramatic Art was taken into account in the rankings for HEIF, it would rank 2nd in the country for consultancy services: in the current system, it ranks 75th. We therefore advocate for a recalibration of HEIF to enable a larger diversity of recipients, and champion the potential this change would have for regional growth.
Due to this inherent uneven foundation in the way the sector is resourced, we are concerned that further inequalities may arise if the proposals in the English Devolution White Paper are implemented without modification. For example, Foundation Strategic Authorities are left out of research and innovation policy development in the proposed approach. Many of the areas that are not currently served by a Mayoral Combined Authority are also areas where research and innovation has not been prioritised due to local council resourcing, funding challenges and pressures from other socioeconomic difficulties. Some MCAs/local authorities across the UK will be able to prioritise innovation and others will need to focus on other priorities due to their existing levels of wealth being restricted by austerity and further barriers to regeneration, experienced over decades. In the case of Worcester, this area has demonstrable effective partnerships between the local authority and the single University in the county, such as the joint public-university library. The layout of the proposals for devolution will potentially leave areas like Worcester on the back foot, an issue recognised by the councils’ calls to delay elections in order to align to new arrangements. The outputs of research and innovation can be directly linked to economic growth and devolution will need to play an inclusive role in developing the UK if it aims to avoid further wealth disparities. To start, the government needs to adjust plans to improve engagement between UKRI and the most Established Strategic Authorities as this is further reinforcing existing inequity in the system.
Finally, there are many plans emerging for devolution concerning most spheres of society. Education, skills and welfare in the Get Britain Working paper and the introduction of Skills England; Business, trade and growth in the Industrial Strategy; Health and social care in the NHS 10-year Health Plan as well as the English Devolution paper. All of these strategies require reform to the responsibilities of MCAs and local authorities. We are concerned that there are risks to further economic disparities between the regions due to the levels of empowerment not matching resources available. Research and innovation leads the way for the development of new products, services, social engagement, regional development and the empowerment of communities. Devolution must harness this for areas that are currently underserved by innovation funding, the R&D system and wider public investment.
2. How does research and innovation in our regions drive growth and prosperity in those regions?
Collaboration is at the heart of clusters. This should be easier to achieve with a Mayoral Combined Authority to use a springboard to partnerships across the region. We agree that regional innovation clusters are effective at knowledge sharing, diffusion and implementation. An example of effective regional innovation is Falmouth University’s Launchpad Futures supported by Cornwall Council and the Council of the Isles of Scilly. This programme drives growth in Cornwall’s regional economy and beyond by sharing expertise and facilities with local businesses. It harnesses the educational and research strengths of the institution to deliver regional growth through business incubation, acceleration, and partnership. The programme drives the growth of existing businesses in a region with low levels of wider public investment and is currently at risk due to the lack of replacement for European Development Funding (ERDF) since Brexit.
Another similar innovation hub is Hartpury University’s Agri-Tech Centre which is a state-of-the-art complex, connecting research, knowledge, data, and people in a real-world and applied setting. Providing industry-led services for the advancement of agricultural technologies and delivering proven solutions and services to farms and suppliers locally and across the UK. This hub provides a path for innovative tech businesses to grow within the agricultural industry to trial new products and services to modernise and sustain British farming. Due to the rural nature of this institution, innovation outcomes like these will be difficult to capture in clusters that focus growth efforts in the cities. There are also comparatively lower levels of innovation in rural and coastal areas than in the UK’s cities and urban areas. For inclusive growth across the regions, we recommend that there are region-specific growth policies that focus on supporting local government to prioritise innovation strategies.
In the most recent Knowledge Exchange Framework (KEF4) exercise, 50% of GuildHE institutions performed exceedingly well for local growth and regeneration. This is compared to much lower results for large research-intensive providers with only five institutions from the Russell Group, the mission group for research intensive universities, making the same impact. Proportionally, this shows that there are around twice as many vocational and specialist institutions performing highly in this metric. These institutions are embedded in their places, regions and communities with strong relationships with local government, businesses and partners.
Institutions that performed well are across creative arts and design, technology and engineering, teacher training, music and performance, agriculture and food security, health, social care, policing and sport. These results show that this excellent practice is having a demonstrable impact on a diversity of sectors, industries and professions. Unlocking the potential of these collaborations, could scale the impact of vocational diversity and high-quality regional development activity.
Additionally, a third of GuildHE members achieved high engagement results for the metric on graduate start-ups and continuing professional development. This evidence of good practice in delivering innovative new business, lifelong learning and a diversity of skills to regions across the UK, shows the capability of these providers to quickly and effectively engage with their local communities to deliver the government’s aim to tackle regional inequalities and inclusively grow the economy. We strongly recommend that specialist, vocational and smaller institutions do not continue to be excluded from regional funding systems, regional growth plans and strategies, or discussions with UKRI due to their place.
Whilst all HEPs have the potential to contribute to national growth, it is vital that to achieve regional growth, specialist, vocational, technical and smaller universities are utilised in the strategic planning and implementation of ‘cluster’ growth development. We recommend that there is additional consideration of regional knowledge, expertise and partnership when formulating cluster activity in the Industrial Strategy, and other government-led regional interventions. We also recommend that analysis is commissioned to ascertain better data and evidence on the impact of R&D on regional economies. Whilst it is clear that innovation partnerships boost and support local business, it is not clear to what extent and in which regions. This analysis could support further government devolution strategy.
3. How is research and innovation diffused or supported to drive productivity and growth in the regions, wherever it may come from?
Specialist and technical institutions are adept at university-business collaborations, and these are often embedded in the delivery of their teaching, research, and knowledge exchange offer. However, processes and funding structures that enable commercialisation activities at HEPs are not always designed with the full diversity of institutions in mind, and this can limit the potential reach of those schemes. For example, Innovate UK’s successful Knowledge Transfer Partnerships (KTPs) scheme enables researchers to apply their knowledge to real-world, industrial challenges and create novel solutions. Specialist and vocational institutions are keen to host these partnerships, with the potential to connect research in sports science, health sciences, and creative arts with industrial applications. 18 of the 126 ‘knowledge bases’ available to potential applicants are found amongst our members, although more than two thirds of our members are not registered with the scheme. Institutions that have recently applied have reported to us that the scheme’s application process is over-complex and assumes that applicant institutions will have a management structure similar to research intensive settings, and that such details, such as the absence of a particular senior management job role, can slow applications down considerably or result in them being initially rejected out of hand. Importantly, KTPs currently require a level of matched, upfront investment, adjusted only for charity and third sector partners. Smaller institutions and the SMEs they are most likely to work with struggle to afford this level of investment, particularly so in the creative disciplines. We would welcome a review of the KTP structures to identify these pinch points, and recommend that in general more flexible funding approaches be considered to unleash the potential of these proven schemes for the SHAPE disciplines, and in particular the creative sector.
UKRI should review its grant processes and structures to consider the full diversity of the higher education sector in order to grow opportunities for innovation in vocational education serving high-growth sectors and in rural, coastal and suburban regions. We identify KTPs as a useful tool that could connect early career / stage researchers with the objectives of this scheme, but one that requires modernisation to keep step with the diversity of potential applicants and sectors it could serve. A similar call for modernisation applies to the range of advice and training materials on commercialisation developed and used by Innovate UK, particularly in its delivery for the creative sector.
The focus on spin-outs tends to miss out the valuable contribution of arts and humanities to innovation, as they tend to arise from STEM subjects either more readily or at a greater scale. Here we recommend that funders encourage and incentivise collaboration between research organisations of differing scales and specialisms to achieve growth via spin-out capabilities. The recent inclusion of Bath Spa University in SpinOutWest, the latest programme from the hugely successful SETSquared partnership in the South West region, is an example of where the expertise, capabilities, and risk appetite of large research intensive institutions can be effectively leveraged to expand the potential of spin outs drawing on the expertise found in specialist institutions - in this case the SHAPE disciplines. The programme has been funded through the RED-CCF-TTO call and is an excellent example of Research England incentivising collaboration. There is great potential for interdisciplinary working and creative use of specialist institutions’ expertise, but it requires funders to encourage new and different partnerships that are more inclusive of the full diversity of R&D, wherever it is based.
The characterisation of clusters in the Industrial Strategy is based around city regions. This will have implications on rural, coastal and ‘left-behind’ areas that have not received systematic investment for decades. Economic growth plans in the Industrial Strategy must be geographically inclusive to effectively meet the government’s ambitions to drive up living standards and nurture the right environment for economic stability and security. Many vocational institutions are located in these regions. Capability and success should not go unnoticed due to scale, or when analysing high levels of productivity and innovation because they are located outside of cities, or because the outputs are lower in relation to large universities or cities. It is vital that potential for growth is not conflated with scale. Smaller scale innovations are having big impacts on the areas that need investment and growth the most. The research and innovation system needs to support these impacts to grow, scale-up and have meaningful impacts on areas with the most deprivation.
23 January 2025