Universities and city-region development in crisis? – Cases of Manchester and Newcastle

Professor David Charles (University of Strathclyde), Dr. Fumi Kitagawa and Dr. Elvira Uyarra (Manchester Business School) have worked on the issues related to HEIs and local economic development over the decade. Here is their reflection on recent changes in two English  city-regions – Greater Manchester and Newcastle …

Universities have long been recognised for their important contributions to the long-term economic prosperity and wellbeing of cities and regions. In a recent special issue “Universities in Crisis” in the Cambridge Journal of Regions, Economy and Society, [http://cjres.oxfordjournals.org/content/early/2014/01/09/cjres.rst029.abstract] we examine the post-financial crisis challenges for the city-regions and higher education institutions (HEIs) in the UK by looking at the city-regions of Greater Manchester and Newcastle. The paper illustrates the recent changes in regional governance, higher education policies and changing expectations and pressures for universities to engage and work with local and regional agendas, before and throughout the financial crisis and the following economic downturn.

Manchester and Newcastle are two old industrial cities in the North of England, in the regions that have historically lagged behind the rest of England and the UK in economic terms. Both traditionally manufacturing regions (manufacturing still accounts for 20% of GDP in the North West), in the last 20 years they have diversified into higher value added activities such as biotechnology, aviation and energy. Economic growth has also been driven by a rapid expansion of the service sector, mainly professional and financial services, with public services still being an important component particularly in the North East. Both Newcastle and Manchester can be seen as having experienced something of an urban renaissance although significant pockets of deprivation remain. HEIs have been important actors embedded in such urban transformation.

Between the late 1990s throughout the 2000s, universities in Manchester and Newcastle took strong roles in the economic and social development of their respective regions, working collaboratively through their higher education regional associations, and the Regional Development Agencies (RDAs). This collaboration emphasised the complementarities between different types of institutions and the formation of ‘regional systems of innovation’. The ‘new regionalist’ model supported by the New Labour government was gradually accompanied and then overtaken by a new ‘localism’ – institutional partnership and governance models embedded in city-regions. Both Newcastle and Greater Manchester received designation as Science Cities since the mid 2000s, with a focus on city-level partnerships, which for Greater Manchester reflected a longer experience of city-region partnership models.

Since 2010, the economic development landscape has substantially changed under the Coalition government, with the abolition of the nine RDAs in England, replaced by 39 Local Enterprise Partnerships (LEPs) at a city-region level.[i] The recent shift to LEPs signals a more focused and strategic alignment between universities and city regions, with the higher education sector represented in the LEP board member. Further, this ‘scalar shift’ of the local governance mechanisms has coincided with the financial crisis and subsequent austerity measures, cuts in public funding and changes in the higher education funding mechanisms, including the increase in the home/EU students’ tuition fees. The drastic reduction of funding and supporting structures devoted to HEIs regional engagement from the loss of RDA funding and additional pressures placed upon universities have further brought institutional differences into sharp focus.

Under the new governance structures emerging during the 2010s, whilst universities have been enrolled in the new city-region strategic alignment, it has become clear that different types of institutions are forming and implementing different strategies. Regional level collaboration, meeting regional needs and demand, seems to have declined in terms of universities’ institutional priority and strategies. Policy infrastructure, resources and funding incentives at the regional level are no longer there, replaced by city-region/local partnerships. Increasingly, universities in both the North East and North West regions are finding little incentive to collaborate with each other at the regional scale. Tensions between the regional and the city-regional levels have always been more prominent in the North West region, where the Greater Manchester city-region had always had strong political identity. However, even in the North East, where the regional HE collaborative mechanisms had existed over the last three decades, the new local partnership model with LEPs seems to be overtaking the regional collaboration model.

Our findings resonate with Sir Andrew Witty’s recent review of “universities and growth” (published on 15 October 2013)[ii], which highlighted the heterogeneity of both universities and LEP strategies. The case studies of the two city-regions show how universities are part of the new city-region alignment where new strategic leadership roles are expected – however, under a post-crisis environment characterised by austerity, changing funding mechanisms and more pressure to compete, universities are facing challenges to meet these new expectations.

The political and institutional vacuum left by the recent local governance changes has led to practical issues such as management of EU funds. The time of austerity also provides new opportunities to realise new city-region and university collaboration by linking and managing resources available at multiple levels – local, national, European and global. Universities are partners in local governance, but are not simply bound within their city-regions. Universities seek to join up and integrate across missions and across spatial scales – local, national, European, and global. Both in Greater Manchester and in Newcastle, the new alignment seems to be still in a state of flux. It is imperative to develop strategic visions and plans rooted in a sound understanding of the city-region’s comparative advantage, by asking: How can universities and LEPs better work together for the benefit of the city region?

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