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The rebalancing-act of public research and development

  • 20 October 2021
  • By Connor Mckenzie

This blog was kindly contributed by Connor Mckenzie, Head of Policy and Research at MillionPlus. You can follow them on Twitter @million_plus.

The recent cabinet reshuffle has presented the university sector with challenges and opportunities in the run up to the Spending Review—challenges, as the commitments of previous minsters may now be under review, and opportunities, as the incoming Secretary of State or minister may be keen to listen to voices in the sector to shape their own vision going forward. Nowhere is this more apparent than in the Government’s commitment to raise the level of public research and development (R&D) funding to £22 billion by 2024-25.

Sarah Stevens’s recent HEPI blog emphasises the importance of a consistent rise in public R&D funding to reach this £22 billion figure over the coming years, demonstrating the ‘leveraging effect’ on private investment if a more linear model of investment is adopted. This is an ask that the whole sector can and should get behind and it is crucial that universities collectively argue for this funding target to be maintained. But it is just as important to consider how and where the money is spent. It is critical not to lose sight of how this investment will be distributed across the UK, and ultimately, the impact it will have at the local and regional level. 

The Government’s levelling up agenda has been accused by its critics of being nebulous, attempting to mean all things to all people. Although there is still much to be defined, we have started to see some Government ministers in the new Department for Levelling Up, Housing and Communities sketch out what this means.

Universities clearly have a direct role to play in this agenda if it is to be a success, as discussed at the MillionPlus event at Conservative party conference earlier this month. A common reference point at other conference events that focused on regional development and innovation was the Matthew effect – ‘For everyone who has more will be given’. We need to start thinking about how (and where) funding is spread across the country if levelling up is to mean anything.

Many point to the UK as an example of a highly centralised system of government, one that has given rise to historic concentrations of funding in certain geographic areas. One area in which this tendency is most evident is in public research and development. In 2019-20, just five institutions within the so-called ‘golden triangle’ received over a third of recurrent research funding in England, which equates to 3 per cent of institutions being given 35 per cent of the total funding pot. This level of concentration is almost mirrored in research council income, with the same five institutions receiving 31 per cent of all public investment. Levelling up may mean many things to many people, but it surely cannot mean this.

Simply scaling up the current R&D budget to £22 billion therefore risks perpetuating the same levels of concentration in our research and innovation system. If we are to take the term levelling up at face value, the implication is that the level of investment in certain areas needs to increase at a faster rate than in others. This is not about reducing or limiting the absolute level of investment in the golden triangle as no one would deny that the research output from these universities is world-leading. It is merely about the relative gains for different parts of the research and innovation system that have too often been neglected. The £22 billion commitment offers us a unique opportunity to do this.

In a recent policy briefing, MillionPlus has outlined a set of funding streams that should be prioritised in order to best support the spread of investment, opportunity and productivity through public R&D. We are not trying to reinvent the wheel. Some of the funding streams have been chosen because they have a strong track record of return on investment. Some are newer or yet to be established but can still learn from the strengths and weaknesses of what has gone before. MillionPlus has made four key recommendations.

  1. The Higher Education Innovation Fund is scaled up, so that knowledge exchange makes up a greater proportion of overall grant funding from Research England. We hope that equivalent schemes in the devolved administrations can also be given a greater proportional weighting in recurrent funding.
  2. Increase the number of Knowledge Transfer Partnerships funded across the UK. These are a ‘win-win-win’ for graduates, businesses and universities.
  3. Expand the Strength in Places Fund, the new place-based initiative administered by UKRI.
  4. Ensure that the Shared Prosperity Fund is devolved, based on long-term funding cycles and accessible to universities and local businesses. In our policy briefing on the Shared Prosperity Fund, we argue that this has the potential to be a new ‘Heineken’ fund, reaching parts of the UK that others cannot. But this will only be realised if it is structured in the right way and accessible to the research and innovation system.

Public investment in research and development is a key area in which the Government can contribute to levelling up the country by ensuring that opportunity and prosperity are spread more evenly across the UK. These key funding streams have the potential to support local economic development in the recovery from the pandemic, help solve the productivity puzzle and combat historic disparities in economic performance across the country, both within and between regions. This, surely, is the potential of levelling up.

The HEPI webinar, ‘The Road to 2.4%: Research spending and levelling up’ will take place on 21 October 2021. Sign up here:

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