How universities must seize the devolution dividend to power regeneration

This blog was kindly authored by Dominic Swift, Partner in the higher education team at Browne Jacobson.

There is a common thread running through some of the most remarkable economic turnarounds of the modern era. In Pittsburgh, Carnegie Mellon and the University of Pittsburgh helped transform a city defined by declining steel into a thriving technology hub. Hazelwood Green, for example, is the largest brownfield redevelopment site in the city’s history, with the 19^th century, 178-acre steel mill now home to a laboratory used by academics to test robots operating from deep sea to space.  

Meanwhile, in Germany’s Ruhr Valley – formerly Europe’s powerhouse of coal and steel – the North Rhine-Westphalia state government has invested €75m in the Research Alliance Ruhr, a collaboration between three regional universities focused on hydrogen, digital security, sustainability and health, with the explicit ambition that the university system becomes a ‘nucleus of transformation’ within the region.

At a time when British universities are undergoing some soul-searching for their place in the modern economy, these international examples illustrate why they remain vital anchors of industrial regeneration. They must now ask whether they’re ready to play the same role here and are paying close enough attention to the funding mechanisms that could make it possible. In a political climate in which former Greater Manchester Mayor Andy Burnham looks set to become the next Prime Minister with an aggressive programme of devolution, this presents a generational opportunity.  

The scale of devolution funding

The multi-year funding packages given to mayoral combined authorities, known as integrated settlements, consolidate more than 30 Whitehall budget streams spanning economic development and regeneration, skills, and employment support. The government has confirmed £13bn over the 2026/27 to 2029/30 period for seven established authorities covering 40% of England’s population. A further £900m was pledged for creating a local growth fund for 11 mayoral city regions in the North and Midlands, along with a £500m mayoral revolving growth fund to finance growth projects and attract private investment. These are substantial sums. Crucially, mayors will have discretion over allocation – meaning they can direct meaningful investment into exactly the kinds of projects in which universities can be genuine partners by providing talent, research capability and long-term civic credibility.

The uncomfortable financial reality

Here lies the tension. Many UK universities are facing serious financial constraints, with Universities UK forecasting a £3.7bn reduction in funding from 2024-25 to 2029-30. The prospect of a university leading a major regeneration scheme through its own capital – as has occasionally been attempted – is largely gone. Universities that can’t fund regeneration themselves are, however, precisely the partners that mayors, developers and government programmes need. These institutions boast intellectual capital, research infrastructure and talent pipelines, but require external investment to unlock those assets.

The devolution agenda is designed, in part, to channel exactly this kind of investment into regional economies. Civic agreements – formal partnerships between universities, local authorities and businesses – can provide the vehicle. The challenge is to ensure these agreements move beyond statements of intent to unlock multiple funding streams in combination – a civic agreement bringing together a university’s research capacity, mayor’s integrated settlement funds, and private sector co-investment can achieve what none of those parties could deliver alone.

The international template

The Brookings Institution has described universities as ‘regional economic anchors’ in areas like the US Rust Belt, central to the revival of major cities – including Pittsburgh (University of Pittsburgh and Carnegie Mellon), Cleveland (Cleveland State and Case Western), and Columbus (Ohio State) – after the collapse of heavy industry. With 31% of the national population, Rust Belt states produce 35% of the country’s bachelor’s degree holders and 33% of its STEM graduates – demonstrating the outsized role universities play in building the talent pipelines that make economic transformation possible.

The Ruhr’s turn to a new future has attracted international attention. Mayor of Greater Manchester, Andy Burnham, signed the Innovation Bridge strategic partnership with Ruhr counterparts focused on areas including hydrogen, cyber security and digital health. Earlier this year, Burnham said they “share a common industrial heritage as well as a determination to reinvent our futures”.

Early devolution success stories for higher education

England is beginning to generate compelling examples of its own. In February, Liverpool City Region Mayor Steve Rotheram signed a memorandum of understanding with the University of Liverpool and the University of Oxford, enabling Oxford’s overspill of tech spin-outs and scale-ups to be accommodated in Liverpool. Rotheram says this arrangement will contribute to his ambition to double annual R&D investment in the city region to £2bn by 2030 and could create 40,000 high-wage jobs.

The East Midlands Combined County Authority, meanwhile, was cited as being a key part of the jigsaw that led to the East Midlands Freeport investing £5m into the Zero Carbon Innovation Centre. Located at the University of Nottingham’s Jubilee Campus and featuring Loughborough University and Research England as other partners, it aims to position the region as a global leader in transport technology, green hydrogen production and power solutions for industry.

In this example, devolution structures can accelerate and de-risk partnerships framed around a very clear goal of creating a pathway from academic R&D to full-scale operations located within the freeport, where nationally important growth sectors like electric battery manufacturing and hydrogen heat pumps are being developed.

Identifying the next opportunity

The question every university leadership team should now be asking is: where is our equivalent of the Zero Carbon Innovation Centre or the Liverpool-Oxford partnership?

Four-year terms for mayors mean they’re eager to start allocating their integrated settlements on exciting projects, while working closely with freeports and other local investment zones.

For universities, they should be identifying the regeneration projects in their city region aligned with their research strengths, talent and convening power that make them a compelling partner.

Direct engagement with mayoral strategies and an ability to demonstrate the concrete economic value they bring will ensure they are well positioned to secure the partnerships and investment that define their offer to students, communities and the wider economy for the next generation.