FST JOURNAL
Devolving S&T budgets to English regions
Evidence of a link between R&D and economic output in different geographical areas, is clear. Increasingly, English regions are developing plans for economic development based on their own circumstances and the industries and skills in that area. Around two-thirds of R&D is funded by industry and one-third from the public purse, and private investment often follows public. Public investment in R&D is primarily funded at a UK-wide level, with UK Research and Innovation (UKRI) being the primary funding agency. UKRI has traditionally had a mission to fund the best research, regardless of location, and that focus has contributed to an incredibly strong UK research sector which feeds into economic output – but with significant differences across different regions.
The debate
There is a national opportunity to capitalise on globally-leading knowledge assets and by doing that, we can be better partners with leading institutions in the South. There is more that UKRI can do to drive that.
The number of streams for funding for innovation is quite small. We should put more money into these funds, but whether this is viable, remains unknown. The advantage of devolution is that if you have a variety of pots of money, you can piece them together quickly and successfully at a local level. We need decisive change.
All of the UKRI Councils are distinctive, so the levers are different. There is a balance of funding going into different streams such as manufacturing which traditionally will go to places outside of the South-East. There is not a straightforward answer to the balance of funding but UKRI are trying to get better at this. The council is developing a toolkit to move the whole of the UKRI ‘machine’ so that funding is more evenly distributed.
From a business perspective, there is something to be said for sustainable funding over the longer term, to build ecosystems across the UK. With the UK economy in mind, building long-term relationships with strong institutions in the UK is preferable to a boom-and-bust approach.
When you look at the current threats to the university sector such as the decline in international students, the scale of what is needed will be a challenge and should concern the Government. Areas such as Liverpool are not asking for charity, they are asking for a fair share. They collaborate across the country and internationally but still need appropriate investment. The starkest difference is in the bio-medical area. A lot of money still goes into the Greater South-East in this space and there are knock-on effects based on decisions made a long time ago. The major centralised version is not serving everyone properly. Devolved funding comes with low risk and should be trialled.
All of this is down to people and people making things work. If we are collaborative instead of competitive, then devolved funding will work. The UK needs to spend more on skills and education, otherwise the agenda will fail.
Awareness of the ‘place issue’ has gradually increased within UKRI. Some of the programmes that we discuss today (such as The Catapults and The UK Launchpad) were instruments developed some time ago and can still be used as resources for funding to support this issue.
Should geographically close metropolis areas such as Manchester and Liverpool receive separate funding or shared support? It was agreed that geopolitics should stay out of decision-making and that there are opportunities across regions and each area has strengths. There are obvious areas that they can partner on and if the two cities can get that right, it could be very powerful.
We do not have symmetric governments across the UK and we must make sure that rural communities are not left behind in this discussion. The Industrial Strategy should allow all regions to play their part, show sophistication and act with a consistent strategy to see what works and what does not.