At the Centre for Towns we have been wrestling with how to rebalance the economic geography of the UK for a long time, certainly before “levelling up” became a thing. It is welcome given how challenging we have found it to devise solutions that will have the desired effect, that the greater focus on the issue has simulated a large number of new contributions to the cause.
The latest such effort by MPs Bim Afolami and Laura Trott, developed after a recent discussion between themselves, could in their words:
“be summed up thus — why aren’t more places outside London like Cambridge?
Indeed, why not? On first pass, it may be because Cambridge has the benefit of a world class university with the resources to operate without major concerns over the degree of public support it receives although as part of the “Golden Triangle” with London and Oxford, it does according to the Government receive a disproportionate share of state R&D spending.
“UK R&D intensity and funding is concentrated in some regions. Regions outside of the ‘Golden Triangle’ of London, the South East and the East of England, lag behind our competitors in Northern Europe and some of our cities underperform.”
Afolami and Trott’s proposed creation of “Accelerator Zones” for university towns appears to have a different view of the drivers of Cambridge’s success. Based on this, they appear to believe that foreign direct investment is the key to Cambridge’s success. Hence the need is for unlimited access to foreign skills, generous capital gains relief, planning reform and the creation of innovation networks.
It is not clear what analysis the proposals are based on but our research, conducted alongside EY, an acknowledged expert organisation in the FDI arena, leads us to a different view of how to stimulate activity in university towns. Skills are mentioned by investors as a key factor in investment decision-making, however this tends to be locally available skills, international investors have the capability to deploy their own specialist resources.
On innovation regimes, tax policy and property supply commercial, research over time consistently finds the UK is very competitive. This is consistent with the UK being the most successful country in Europe for attracting FDI over the last decade, leading the continent in R&D projects in 2019.
If the solution to the issues facing university towns is FDI then Afolami and Trott would be better advised speaking to their colleague Rishi Sunak and persuading him to support technology, transport and social infrastructure development in towns, provide more R&D funding to universities and invest In local skills development – as opposed to their vague proposal for:
“a clear plan to at least match the number of visas with additional jobs or apprenticeships in the local labour market.”
However, rather than developing vague proposals such as this or focussing solely on FDI, an even better approach would be to consider the full set of policies required to improve economic performance in university towns. This would though require a knowledge of such places.
While high end technology and medical research may be Cambridge’s strength, the Centre for Towns analysis unsurprisingly found different attributes in other places. While the Oxbridge educated MPs may see university towns as places with dreamy spires, many are industrial centres. CFT/ET research found University towns were the second most successful place type in attracting FDI to the UK over the last decade, behind only Core Cities, with manufacturing projects a key growth driver.
If we want to improve the economic performance of our university towns, we need an industrial strategy, tax and other incentives to support capital investment not capital gains, a major transport and technology infrastructure programme, increased funding for our universities across the country, investment in skills development appropriate to local market conditions and adequate resources for local authorities, health and social care providers and the cultural sector to create the social infrastructure required to support an attractive quality of life likely to attract domestic and international investors. Ideally within a framework that gives the resources and decision-making power to allocate them to locally representative bodies.
It would be ideal if as Afolami and Trott claim, change could be achieved at “minimal cost to the Exchequer”. In reality, after 40 years or more of increasing centralisation of power and resources in the South East, more than a decade of austerity and a failed industrial strategy, change will be difficult, resource intensive and time consuming. Stand alone, point solutions based on little analysis will not address major imbalances in economic and social conditions and attempts to claim they will are unhelpful.
And let's not forget Cambridge itself is the most unequal city in Britain. If this is a "model" for anything, it's a model for a type of growth which benefits those best placed to adapt whilst leaving everyone else to fend for themselves.We can do so much better. How about, for starters, we throw models in the bin and trust people in towns with the power and resources to forge their own identity?