As the party manifestos emerged ahead of the general election on December 12th, NCUB has held them accountable to a range of asks we set out, which placed collaboration at the heart of the knowledge-led economy the parties are pledging to support.
This is already, inevitably, a Brexit election. Recommendations must be made through that lens. But however hard to imagine this may be at present, the UK will eventually move through the Brexit cycle to one end or another. Our challenge to the parties is this: to set out a clear vision for a future knowledge economy which fully leverages the strengths and capabilities of our research base and innovative businesses and helps collaboration flourish. When the dust finally settles on Brexit – whatever its outcome – the UK must be fit and ready to deliver on the promise of that advanced economy. And academic and industry partnership must be at the heart of it.
With this borne in mind, NCUB recommends that the next government:
Our challenge to the parties is this: to set out a clear vision for a future knowledge economy which fully leverages the strengths and capabilities of our research base and innovative businesses and helps collaboration flourish.
- Deliver the future skills needs of industry by ensuring a financially sustainable higher education sector
- Set out means to increase the diversity of higher education provision and uptake across the UK
- Protect the international strength of the UK as an attractive place to learn and work
- Establish clear plans for an R&D-rich economy and ease the commercialisation of great ideas
- Maintain and increase investment in research and innovation – through association with Horizon Europe or other, creative means – to capture emerging opportunities
- Harness innovation to drive productivity and better outcomes across the country
NCUB recognises that in an election cycle, many priorities compete for attention. Politics dictates that funding be committed and promises made across a range of areas, from health to infrastructure. But we believe in the ability of university-business partnership to deliver transformational change: to improve social outcomes; to raise productivity; and to spread the benefits of innovation to all corners of the economy. What’s more, collaboration delivers more skilled people and leading-edge technology into those priority areas that often get more political attention. We call on all the parties to take leadership here; to show an understanding of the benefits of academic/industry partnership; and to articulate a vision for delivering on its promise.
Would the manifestos deliver the future skills needs of industry by ensuring a financially sustainable higher education sector?
If we expect universities to support UK ambitions to increase the number of highly-skilled workers demanded by employers, then we must be realistic about the system required to grow and nurture talent. Quality higher education pathways and provision ensure that a UK degree remains a marker of proficiency and work readiness, recognised internationally for its quality. While the Liberal Democrats would like to raise standards by strengthening the powers of the Office for Students, we believe that quality will be best protected by a commitment to defend funding on a per-student basis. No real-term reductions to current levels and the option to increase student funding in line with inflation as numbers expand would allow for universities to make long-term, strategic teaching decisions.
Whilst we are relieved to see that no major party manifesto hints of reductions to come, the funding promises to not provide a coherent picture. Both the Green Party and the Labour party have pledged to remove tuition fees in their entirety, with the former also offering to write off unpaid loans for students who studied under the £9k cap. Removing fees raises the vehemently pertinent question of exactly how this loss of income will be replaced, and we do not feel that the Labour pledge to ‘ensure all public HE institutions have adequate funding for teaching and research’ provides enough detail for reassurance.
Delivering value for all students, allowing institutions to appropriately plan the delivery of long term, sustainable teaching excellence, requires the next government to refrain from placing a cap on student numbers. Keeping higher education open across the country will ensure that skilling, upskilling and reskilling needs can be universally met through financially healthy institutions prioritising quality and value for money. While we acknowledge that this is the intention of the Green Party in their pledge of ‘education for education’s sake’, we disagree. Higher education is not an end, but a valuable, robust, quality-assured process of preparing students for highly-skills roles in the economy. Wearing away the link between higher education and workforce development would be determinantal to university-business relations and the development of a advanced knowledge economy.
Will the parties increase the diversity of higher education provision and uptake across the UK?
The proportion of 18-year-olds entering higher education has reached now 50% as an average across the UK. But in some areas, this proportion is much lower and risks increasing regional economic gaps due to a combination of geographic variance in education provision and recent changes to the student funding system impacting participation. A funding commitment to combat these cold spots of provision and uptake would ensure that regional and national industries can access and develop the talent they need both now and in the future. The Liberal Democrats, Labour and the Conservative party have all made pledges to better unite regional employer needs with skills provision, including a Conservative commitment of £3bn strategic investment for SME skills matching. And, we are particularly encouraged to see a pledge from the Labour party to strengthen relations between education providers and employers through the co-design and co-delivery of qualifications.
By tackling areas of poor higher education provision and the variance in further education options – alongside a reintroduction of maintenance grants and the removal of student loan interest before graduation – the next government can reverse decisions which are locking talented young people out of education pathways to both technical and academic careers. Whilst no major party has indicated any concrete changes to the how that loans (should they still exist) would be treated while accrued, we are delighted to see both Labour and the Liberal Democrats pledging to reinstate maintenance grants for students from low-income households in order to prevent living costs from being a barrier to higher-education.
For those who don’t progress straight to university at 18, or who go on to change career, and for employers who need to upskill or reskill employees, we ask for greater flexibility. The ability to accrue and transfer higher education credit, the creation of better stop-off points on qualifications and greater recognition of prior attainment would all support the changing dynamics of a workforce in which the average employee can expect multiple careers during their working life.
The concept of lifelong learning appears to have been adopted with earnest by the major parties. In their manifesto, the Green party pledged to increase adult education funding across England and Wales and give local authorities more power in spending choices to match local economic skills needs. Similarly, the Conservatives promise to invest in local adult education and require the Office for Students to monitor university success in increasing access to mature learners.
Both the Liberal Democrats and the Labour party have pledged an assortment of learning entitlement. The Liberal Democrats have dubbed theirs a ‘Skills Wallet’, which contains a lifetime entitlement of £10,000 for education and training. It’s hard to know how effective this would be without any indication from the party on their approach to tuition fees. In contrast, the Labour party are offering a free lifelong entitlement to Level 3 (A Level, BTEC, T Level age), and up to six years of training at Levels 4-6 (up to bachelor’s degree).
For NCUB, the first step in achieving flexibility and supporting employers in their desire to continually develop their workforce is in evolving the Apprenticeship Levy to a broader Skills Levy – a change which both the Liberal Democrats and Labour have committed to making. By reviewing the scope of the Levy – and its finances – any future government would be sending a clear message that they are listening to the voices of employers and providers. As such, we would remain opposed to any attempts by a governing party to dictate the spending of this Levy, as indicated in some party manifestos, and ask that a recommitment be made to this being an employer-led system where demand can be allowed to drive supply without intervention.
Can the next government protect the international strength of the UK as an attractive place to learn and work?
The UK has built a robust international reputation both for teaching excellence in attracting international students, and for innovative, high-quality research advanced by the flexible movement of talented researchers. The attraction of international students and researchers benefit the UK economy in giving both universities and business access to world-leading talent.
As we move ever closer to a formal separation from the European Union, this value is at risk. Yet there is much that the next government could do to defend the UK’s reputation as great place to study and work. Firstly, the proposed changes to the two-year post study work visa must be implemented immediately to ensure that the UK remains an attractive place to study. Both the Conservative party and the Liberal Democrats have committed to the return of the two-year post-study visa.
Undermining this commitment is a focus on net migration, which is misleading and risks reducing the UK’s ability to attract highly skilled people. The Conservative party is holding steadfast in its target to reduce net migration, while the Liberal Democrats would see work permits and student visas moved out of the jurisdiction of the Home Office to sit with the Department of Business, Energy and Industrial Strategy, to better align the policy with economic need. NCUB would like to see the target to reduce net migration scrapped while calling for a reform to the visa process for researchers and scientists, including lowering the salary required for the highly skilled visa. The currently level of £30,000 is prohibitive and must be reduced in order to be sustainable, although we recognise that institutions still have the responsibility to remunerate to a level which offers recognition of value and security of prospects. The Conservatives are pledging to prioritise workers under new, bespoke labour market visa schemes which includes a process for STEM leaders, and more detail on this would be welcomed.
In addition, the Conservative party are pledging a new ‘start-up visa’ for the entrepreneurs of the future. Increasing the number of highly-skilled migrants – specifically with innovation skills – will support the UK’s strong R&D ecosystem in its endeavour to evolve as part of a broader knowledge economy. To meet the needs of a R&D economy with 2.4% or 3% of GDP spending, the UK must be able to attract or develop the required innovation knowledge, skills and behaviours across the workforce. Achieving this will involve greater collaboration between universities and employers, working in partnership to meet common goals and produce benefits to all.
Do the manifestos set out clear ambitions for an R&D-rich economy and plans to ease the commercialisation of great ideas?
The UK enjoys a robust reputation as a great place to collaborate. Great research, innovative firms and regulatory support makes this an attractive place for great ideas to flourish. A place for global firms to partner with global institutions. And a place for new innovations to be nurtured. But gaps and inefficiencies exist which need to be addressed; pair that with Brexit paralysis, and we risk slipping back into the pack. The world around us is moving fast.
NCUB agrees increasing investment in R&D is important – but it is just an input towards creating an advanced knowledge economy. Clear-sighted understanding of what that economy looks like is vital. And we cannot lose sight of the importance of collaboration in delivering not just increased investment, but also the lasting economic impact that must go with it. The parties have variously committed to R&D pledges: the Liberal Democrat approach is redolent in both structure and language of Conservative commitments in 2017, with 2.4% by 2027 the target and 3% the longer-term aim; Labour adheres to its pitch of 3% by 2030; and the Conservatives have stuck with 2.4% but place more emphasis on the discovery-led high-risk research embodied by the ARPA-alike proposed in the Queen’s Speech.
But this is about more than a simple GDP-percentage bidding war. In all cases there is less clarity on what a 2.4% (or 3%) economy might look like – an articulation of that future advanced knowledge economy – than would be helpful. A coherent vision (beyond the creation of new Catapults or innovation centres, welcome though they might be) would help everyone better understand what in the system needs to change to leverage the input of increased investment. There is also less on how the quantum of public funding required to hit such targets will attract the critical business double match. Pulling in private investment may need a stronger pitch than offering to back business involvement in specific fashionable sectors. The parties must recognise what assurances business needs to play its role here to the full.
And those businesses are making their own hard choices on R&D spend, often because it does not secure the short-term returns of other activity. There is little acknowledgement of these drivers and the behaviours that underpin relationships, or indeed plans to catalyse them to both protect and support large scale strategic collaborations and create fertile soil for the next generation of potentially game-changing deep science spinouts.
Understanding those behaviours would increase the efficacy of direct and indirect incentives for collaborative R&D, including more creative and wide-ranging tax relief which takes into account the evolving diversity of R&D activity, a favourable overall tax environment, and public funding coherently directed are part of the mix. The major parties have set out significantly different visions here. The Conservatives have pledged to raise R&D tax credits to 13% from 12%; little assessment of the additional investment this could incentivise has seemingly been made. Labour have posited phasing out tax credits for large corporations with an emphasis more on support for smaller players. Amongst other ideas, the Lib Dems suggest allowing companies to claim tax credits against the cost of purchasing datasets and cloud computing. This hints at a wider-ranging approach to and understanding of tax credits and incentives which move them beyond the preserve of engineering and manufacturing into other parts of the economy. With the changing nature of R&D such a progressive approach is to be encouraged; though the implications of an increase in corporation tax to 20%, posited in the same manifesto, could be its own behavioural driver.
But we think one opportunity is being missed. A holistic, complementary and diverse commercialisation environment, building on the recommendations of Mike Rees’ review of university-investor relations and aligning government, British Business Bank and Innovate UK interventions (and Patient Capital Review recommendations) would help to sustain a pipeline of investable propositions and encourage a healthy and virtuous circle of idea generation and commercialisation amongst innovative, scalable firms. This in turn would help to capture more of the great ideas emerging from our universities in the UK; build dynamic value chains which are attractive to global firms – including their corporate venture arms; and position the nation firmly in the front rank of global discovery and translation. The Liberal Democrats do set out an idea to reform the British Business Bank’s support for VC funds, and plan to expand its role in the economy to offer greater access to capital for small and medium sized firms where commercial lending is unavailable. These are interesting ideas which could be more explicitly tied to the capture and support of ideas emerging from the research base.
Do the parties commit to maintaining association with European funding programmes; and should this prove impossible, do they set out ambitions to maintain and increase investment through other means?
Failure to associate with Horizon programmes would likely go hand in hand with a severe Brexit or absence of a transition period, and that in these circumstances many priorities will compete for attention and resource. But regardless of these outcomes, the UK should be seeking ever more opportunities for global leadership. Only by taking a bold approach can we place the nation at the leading edge of discovery and reap the benefits in productivity and growth this can realise. Fittingly, each of the main parties offer an appreciation of the critical role globally-ranked science and research play in the economy.
The UK enjoys disproportionate success in accessing Horizon funding. We also know how valuable the collaborations it seeds can be for both universities and a range of business partners. And the European Research Council supports activity of enviable quality. Adrian Smith and Graeme Reid’s review of frameworks for international collaborations, Changes and Choices, recognises the urgent need to maintain the flow of funding for quality research and ensure continuity. But it also encourages a fleet-of-foot approach to emerging opportunities and a greater focus on incentivising the sort of activity that attracts corporate FDI from wherever in the world it might originate.
Labour pledge to maintain association with European programmes; the Conservative position is of a piece with its perspective in Government, which was to seek to maintain association as a first option. Whilst manifestos cannot be expected to speculate on what-ifs, should the UK fail to secure association a new Government will need to move quickly to implement measures to shore up confidence and commit significant resource to truly global and agile activities which can capture unexpected opportunities. In the absence of manifesto commitments we would challenge a new administration to go even further, and seek to proactively curate even more ambitious collaborations with world-leading partners both west and east. And similarly, should the UK remain associated to framework programmes, we would ask: are Horizon participation, and adopting and supporting the international outlook posited by Smith and Reid, necessarily mutually exclusive positions?
Do the parties offer clear visions on how to harness innovation to drive productivity and better outcomes across the country?
Innovation potential exists across the UK in many forms and places – but too often its richness goes untapped due to issues of absorptive capacity, uncertain leadership and lack of supportive funding structures. This issue is as political as it is economic, and we would expect the major parties to set out clear-sighted plans in this space.
In recent years, through the SIAs and Local Industrial Strategies we have seen attempts to build a better understanding of where innovative capability lies; and a better sense of rooted ownership through LEPs and Combined Authorities. But this is of reduced value if funding and policy interventions do not align to back up this deeper intelligence with action to diffuse innovation across the country. Similarly, whilst universities are pursuing civic engagement more fully, this work should not take place away from centres of local decision-making or independently of regional economic priorities. And businesses with deep roots in localities must be brought to the table and given shared ownership of those places’ priorities – like universities, they are both place-makers and place-shapers.
Through UKRI’s Strength in Places Fund pilot we have seen a more interesting approach to the diffusion of excellence to meet real productivity and economic goals, and building on research and corporate critical mass to drive change. This is an encouraging start. The Liberal Democrats have pledged an increase in that Fund, which we could reasonably expect to come to pass under another Tory Government.
The Conservatives have committed to delivering the long-awaited Shared Prosperity Fund to ameliorate the loss of European Structural Funds. Unfortunately there remains an absence of detail as to how this Fund will achieve its goals. Therefore we would urge any new Government to deliver a UKSPF or equivalent (and Labour suggests a Local Transformation Fund in each English region and in each of the devolved administrations, to deliver key infrastructure projects) which is streamlined, offers appropriate latitude to place leaders to steer its distribution, and has an innovation support element which provides adequate support to SMEs and complements excellence-based funding. To fail to do this is to let the absorptive capacity that does exist across the UK wither away, and to weaken the ties which bind global firms to their research partners and supply chains.
There is little explicit on supporting or developing the makeup of economic geographies and governance. The Liberal Democrats suggest continued support for the Midlands Engine and Northern Powerhouse, and using Local Industrial Strategies to incentivise clustering against local specialisms. These are continuity proposals and consistency in local economic support is to be encouraged. However, we would suggest that opportunities remain to reflect on the efficacy of the current makeup of UK economic geographies, with a particular focus on England’s LEPs and Combined Authorities, without tearing everything up and starting again. The LEP Review drove towards a more explicitly codified role for LEPs – but more options could be considered to ensure greater consistency of coverage. Universities and businesses can lead the way in using collaboration to shape not just local agendas, but also the means of their delivery.
Finally, we would encourage future Governments to devolve a greater degree of responsibility for the place agenda to UKRI, which should possess the nuanced understanding of local and regional capability necessary to effectively support it. But this must take place with the support of strong political leadership from Government itself – a firm direction that the benefits of innovation be spread across the country.