More ambitious R&D and skills policies crucial to levelling up – report

The Institute for Government urges ministers to shift a greater share of R&D funding out of the southeast and double adult training targets

The government must “increase the ambition” of its skills agenda and R&D spending targets to achieve its levelling-up mission.

That is the assessment of the Institute for Government (IfG), an influential thinktank, as Rishi Sunak and Liz Truss set out competing visions for Conservative governments they hope to lead.

Current levelling-up plans have generally omitted much of a role for universities, an oversight the report urges the next cabinet to rectify.

The report said levelling up disparate regions has been a “persistent” challenge for governments around the developed world for decades, warning examples of successful regeneration on the scale faced by the UK are “few and far between”. Most importantly, the report says, policies will only succeed if “coordinated and… more long-lasting than has historically been the case in the UK”.

Chief among the recommendations, the IfG said the government must aim to increase the numbers in non-degree adult training to “at least 2014/15 levels”, adding: “Necessary funding from the Treasury should accompany this.” To illustrate the scale of ambition necessary, the IoG says the government must more than double its current target: “to have 200,000 more adults a year completing skills training is around 300,000 short of where it would need to be”. Skills Bootcamps could be a vital mode of training delivery, the IfG says, noting that the lifelong learning entitlement, although “generous”, is “geared towards formal learning in a way that may benefit those who are already well educated or have positive attitudes towards learning”.

The report also said the UK government should boost the number of graduates but only after “improving evidence on which programmes and qualifications yield the highest returns in terms of wages and productivity”. These increases should be disproportionately skewed towards regions like the northeast of England, where graduate levels are far below those in the capital. The report predicts the new Unit for Future Skills within the Department for Education could support these aspirations with “data-driven evaluation”.

On innovation, the report says the share of public R&D spending should grow in percentage and real-terms outside the greater southeast, increasing the percentage share from 39% to 45%. Funding would be best distributed, the report says, via competitive grants. With spending likely to be limited in the coming years, the report says the government could hope for the best results if it prioritised “places that have high productivity potential”, and funding, therefore, “more narrowly targeted”. It proposes Birmingham, Manchester and other large cities as targets.

The report says training alone cannot transform economic fortunes: towns and cities need better urban transport, affordable housing, public services and cultural and social advancements to attract business and high-skilled people and reap the rewards of agglomeration.

The IfG report comes as the sector published an open letter calling for higher R&D targets. The open letter signed by the British Academy and Royal Societies, the UK BioIndustry Association and the Institute of Cancer Research said the current investment target level – of 2.4% of GDP by 2027 – should increase to 3%.

Read more: New paper highlights best practice in levelling up HE access

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