Tag: industrial

It’s up to universities to make the industrial strategy a success

The industrial strategy is not only an economic document it is also a roadmap for how the country will be governed.

At its heart is a simple premise. Places know what is best for people locally and power should be devolved to them. Not all powers, because some things like defence have to be coordinated at a national level, and certainly not lots of fiscal policy like taxation, but powers over things like spatial planning (where the government allows it), investment, and some parts of the R&D ecosystem.

The ideal body for distributing these powers is the Mayoral Combined Authority (MCA). These are the collection of councils in one area, usually a city, that work together to achieve more than they could alone. The Liverpool City Region Combined Authority and the West Midlands Combined Authority are just two examples

Process not an event

In 1997 then Secretary of State for Wales Rob Davies called devolution “a process not an event”, and he was right. Powers are not spread evenly through the UK, London has quite a lot and a local town council has very few. And the propensity for government to operate through pots of money that local government bid for to do stuff is unusual by international comparisons. This level of financial control limits many places to being the delivery arm of government more so than independent decision makers in their own right.

This patchwork approach also means higher education providers have a mixed relationship with the devolution story.

Solely through an academic lens research intensive universities have done well out of (even if they do not like it) how centralised the UK is. The REF just isn’t interested in geography. It follows quality, impact, and environments wherever they may be. Previous research pots like the Regional Innovation Fund which apply a funding multiplier to places underserved by research funding are the exception not the norm.

The industrial strategy is different in that it at least attempts some kinds of rebalancing in acknowledging that if the government funds the same things in the same places the same kinds of research outputs will be produced. The fact there is some money behind it is even better. As DK noted in his review of research in the industrial strategy:

The £500m Local Innovation Partnerships Fund is intended to generate a further £1bn of additional investment and £700m of value to local economies, and there are wider plans to get academia and industry working together: a massive expansion in supercomputer resources (the AI research resource, inevitably) and a new Missions Accelerator programme supported by £500m of funding. And there’s the Sovereign AI Unit within government (that’s another £500m of industry investments) in “frontier AI”. On direct university allocation we get the welcome news that the Higher Education Innovation Fund (HEIF) is here to stay.

The places that are located outside of major cities without large research portfolios have more reason to be sceptical about devolution. Deputy prime minister Angela Rayner has called for local leaders to “fill in the map” of devolution but this is easier said than done. Places have distinct histories, geographies, and can’t as easily be accommodated into MCAs as places like Greater Manchester.

While there has been interest in towns from time to time, the Towns Fund provided some funding to some places on some research projects, they risk being left behind within a devolution system that prioritises larger conurbations.

The universities problem

Let’s take the government’s proposals at face value and assume it is going to implement the full version of the devolution agenda it is proposing. This would mean local government has more funding to buy land, freeports and investment zones will be streamlined to provide even more business incentives, the British Business Bank (among other funders) will release and coordinate capital aligned to regions and the eight industrial strategy priorities, a further £200m will be spent on further education in England, and a series of growth funds will run directly through mayors.There are more announcements to come on skills, local economic regulation and infrastructure.

Universities are not losers in any of these measures but nor are they inevitably complementary to everything the governments wants to do. Former universities minister David Willetts, who had some reservations about the draft strategy, has softened his tone writing:

Most of the key industries set out in that visual [the one explaining the industrial strategy priorities] are heavy users of higher education. Universities will play a crucial role in the strategy. One of the biggest risks to delivering it is the financial fragility of these core institutions. It is good to see them getting a vivid illustration as well – on page 73. But the Government has not yet taken the decisions needed to ensure they can thrive and continue to be such a national asset.

This is the core problem. It is possible to imagine how industries may rely on universities but it is more difficult work out how universities, specifically, can deploy their capacity in the most effective ways. Universities cannot expect government money for everything they do but it is also true that if they fall over the industrial strategy will fall with them.

Philosophically, the industrial strategy neither supports enormous state intervention nor is it a hands off document of supply-side reform. It sees the state as an enabling force which can reduce risks to business, catalyse investment, and reconfigure the public sector. The industrial strategy does not tell universities what to do, or even what they might do in great detail, because that is not what it is designed to do. It gives an approach and it is for universities to choose whether and how they follow it.

Adapt or perish

This suggests a significant period of adaptation for universities. If more investment and political attention is flowing through their places then being involved in their places becomes significantly more important. Fundamentally, the industrial strategy is not an instruction manual but it is a guide to the things that the government will and will not fund.

There are lots of devolved things that universities would generally find unpalatable like top-slicing QR funds to MCAs. There are lots of things that universities could do and are doing to set an example which might one day be backed up by legislation. Organising regional bodies to coordinate the provision of education to meet local labour market needs. Forming joint research programmes and investment vehicles to form one front door for research in their area. Using their own research capacity to interrogate the best forms of devolution and devolved structures. And, perhaps most importantly, being embedded in the important but unglamorous business of transport and spatial planning.

The bigger mental shift is that the industrial strategy has two core centres of control. Its eight priority industries and regions and clusters within them. The challenge for universities, if they want to see sustained government support for their work, is to answer how what they do supports those two agendas. This is not a PR exercise but a careful interrogation of the limits and approaches of universities in their places and within those core industries.

In some places this might mean tweaking existing work, in others it might mean new partners or new projects, and in some it might mean a more fundamental reimagining of the shape of the education sector in a region. Given the perilous state of university finances it is the institutions that look like they have solutions that will do well in the era of uncertainty.

The industrial strategy does not leave universities behind, but it might. The opportunity is for universities to shape the settlement they want through being proactive in shaping their regions. This is not about another civic strategy but about creating the governance apparatus to support economic growth. Anything short of this risks an economic agenda which is done to universities rather than with them.

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June 30, 2025
Podcast: Industrial strategy, cashpoint colleges, social mobility

This week on the podcast we examine the government’s new industrial strategy and what it really means for higher education – from regional clusters and research funding to skills bootcamps and spin-out support.

Will the plans finally integrate universities into the UK’s economic future, or is this another case of policy promises outpacing delivery?

Plus we discuss the franchising scandal and the damning case for urgent reform, and ask whether new research on social mobility challenges the sector’s claims about access, aspiration, and advancement.

With Katie Normington, Vice Chancellor at De Montfort University, Johnny Rich, Chief Executive at the Engineering Professors’ Council and Push, James Coe, Associate Editor at Wonkhe and presented by Mark Leach, Editor-in-Chief at Wonkhe.

Higher education and the industrial strategy priority areas

The cashpoint campus comeback franchising, fraud, and the failure to learn from the FE experience

On the move: how young people’s mobility responds to and reinforces geographical inequalities

Inequalities in Access to Professional Occupations

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June 26, 2025
Higher education and the industrial strategy priority areas
There have been industrial strategies before, but the extent to which they have shaped the provision of higher education is questionable.

Past exercises of selecting scientific or technological priorities have undoubtedly had effects on the national research ecosystem, though constant chopping and changing of policy over the last decade and more has hindered this from reaching its fullest extent. But in terms of influencing what educational provision exists, and what qualifications are achieved – and where – it would not be unduly controversial to say that industrial strategy and the longer-term graduate pipeline have never really meshed.

Could this time be different? This government has certainly wanted to present its different policy agendas – on industrial strategy and skills, but also on migration, and devolution – as complementary and cohesive. And there are plenty of reasons to think that the industrial strategy will be Labour’s key reforming principle for higher education and its position within the wider tertiary sphere.

How HE shows up

Let’s begin with what has already emerged. Government guidance to the Office for Students has set out the fact that high cost subject funding in England (via the Strategic Priorities Grant, or SPG) will be refocused towards the industrial strategy from 2026–27 – a review is underway behind the scenes.

And even in the current year, the (rather meagre) £84m in SPG capital funding available in England includes £72.75m in a bidding process, where one of the two criteria to assess bids will be the extent to which the project supports Skills England’s priorities, or local economic needs. Skills England’s priority areas are the eight industrial strategy “growth-driving sectors” (which we are now expected to refer to as the IS-8) plus health and social care as well as construction.

Whether these two pots of money remain significant enough to really drive changes to HE provision – as opposed to rhetorical game-playing where the words “industrial” and “strategy” get appended to everything that institutions were already planning to do – remains an open question. The size of both recurrent and capital SPG in future years remains to be seen, but you wouldn’t bet on substantial increases.

If this were the end of it, you might think the industrial strategy’s impact on higher education would remain restricted to research and innovation – with lip service to government priorities in how the (shrinking) state contribution to teaching gets doled out. But with today’s publication of the industrial strategy in full, various other agendas begin to come into focus.

First up, the Lifelong Learning Entitlement. A more substantive announcement on the policy and legislative details is still pending, but there’s a rather significant detail in today’s strategy:

From January 2027 we will launch the Lifelong Learning Entitlement which will enable individuals to learn, upskill and retrain across their working lives. The first modular courses for approval will support progression into the IS-8.

It’s been on the cards for a while – since being re-written under Labour, the current LLE policy paper has anticipated that Skills England and the government’s skills priorities would form an important part of the LLE’s development – but here we get confirmation that the module approval process will be guided by the industrial strategy priority areas. The professional services sector plan also references a role for the LLE in helping learners take up courses relevant to that specific sector.

And it’s a similar story for the LLE’s awkward doppelganger, the growth and skills levy, which will allow employers to spend levy contributions on short courses rather than apprenticeships.

These levy reforms, which were a key pillar of Labour’s approach to skills while it was in opposition, have gone a bit quiet since, with changes at lower and foundation levels prioritised. The fact that the spending review gave the defunding of most level 7 apprenticeships as an example of DfE savings and efficiencies, rather than a way of freeing up cash for short courses, was a little ominous.

But the industrial strategy policy paper makes a link with the IS-8 sectors, giving examples of short courses in digital, AI, and engineering. April 2026 is floated as the date for rollout, though there is more to be done in development:

We will work with Skills England to determine the courses which will be prioritised in the first wave of rollout and subsequent waves, and how those sit alongside apprenticeships and other training routes. We will work with Skills England to introduce these short courses and consider how to prioritise investment across the programme.

Universities with expertise in professional and executive education – and those who are rethinking apprenticeship provision in light of changes to level 7 – will be keeping a careful eye on how this comes together.

Finally, the forthcoming post-16 education and skills strategy, including its plans for reforming the higher education sector, is described within one of the sector plans as setting out a framework “for how the skills system will support growth-driving sectors” – that is, the IS-8.

So, while all the details may not have come into focus yet, there’s a strong case to be made for the industrial strategy playing a key role in all kinds of areas crucial to higher education: the LLE, levy-funded short courses, high-cost subject funding in HE – plus such capital funding as still exists – and potentially the post-16 strategy as whole. It’s therefore worth the sector looking in detail at what the government, and Skills England, have said so far about the eight specific industrial strategy areas, in terms of skills needs, priority industries, and place.

New frontiers

The industrial strategy green paper in the autumn identified eight high-level sectors:
- Advanced manufacturing
- Clean energy industries
- Creative industries
- Defence
- Digital and technologies
- Financial services
- Life sciences
- Professional and business services.
These were the areas where the government saw the greatest potential for growth – the “picking of winners” that has characterised industrial strategies over the years. The eight that were chosen were less STEM-heavy than previous iterations of the strategy.

Over the consultation period that followed, the government sought input on what subsectors should feature in the finalised plan, and in what places – “all economic activity occurs somewhere,” as the technical annex puts it. These subsectors have now been rebranded as “frontier industries” within each sector – “those parts of each sector that best met the Industrial Strategy’s goal of long-term, sustainable, regionally balanced, and resilient growth.”

There’s much more in the annex on what respondents said, and how the frontier industries were identified – but at the end of the day, it’s more picking of winners, and plenty of areas will feel they have been unfairly overlooked. The results of the process can be seen on page 22 – for example, for the creative industries, the chosen “frontier” areas are advertising and marketing, film and TV, music, performing and visual arts, and video games.

Data definition fans will also be keen to see that this has all been mapped to Standard Industrial Classification (SIC) codes, to the extent that it is possible to do so. The technical annex highlights further revisions and improvements to occupational classifications in the future.

What’s the plan?

For each of the IS-8, there is a sector plan going deeper into what’s being proposed. We get five of them today – the financial services one is due on 15 July, the defence sector plan (also badged as the defence industrial strategy) is forthcoming, as is the life sciences plan.

Each of the published sector plans has a helpful map, usually towards the end, which tracks the specific frontier industries onto the city regions and clusters which the government has identified. For example, advanced manufacturing has ten areas selected – see page 55 on. So in the northeast England region, the focus is on automotive, batteries, and space, whereas in Wrexham and Flintshire, it’s concentrated on aerospace, automotive, advanced materials, and agri-tech. Each identified geographical area has its own specific strengths – or areas for potential growth – picked for it by the government.

Six city regions are identified for professional and business services (page 55). For the creative industries (pages 61 to 62), Dundee is spotlighted for video games and design, while for Greater Manchester it’s film and TV, music, advertising, and market research. And so on.

Each sector plan also has some more specifics on workforce and skills planning. These largely draw together things we already knew were in train – so for the creative industries for example, this encompasses everything from the ongoing curriculum and assessment review to a refreshed creative careers service.

Earlier this month, Skills England published sector skills needs assessments for each of the IS-8, along with construction and health. The new skills quango was clear – perhaps concerningly so – that at the time of writing it wasn’t privy to what exactly the industrial strategy would stipulate in each area. But the data analysis and accounts of employer engagement for each sector give us an indication of what kind of interventions might be welcomed in each.

For one thing, in many of the sectors it’s clear that there are higher-level skills needs. Clean energy industries, the quango found, will need more civil, mechanical, electrical, chemical, and environmental engineers – roles which require qualifications at level 6 and above – as well as managerial roles from levels 3 to 8. The creative industries stakeholder engagement saw a demand for more mid-career training, with the current training system “felt to overemphasise entry-level positions.” Life sciences is another “highly qualified sector.” For professional and business services, we get a direct rejection of DfE’s focus on foundation-level apprenticeships, which “do not align with the roles employers want to recruit or develop.”

In more or less all of the Skills England assessments, employers are said to want more flexible and modular training – a reiteration of the oft-expressed desire for more freedom to spend the levy on shorter courses rather than apprenticeships. The needs of the current workforce, as opposed to the pipeline, are prominent.

The upshot

It’s clear that higher education provision is vital to the success of many if not most of the industrial strategy frontier industries – but the immediate interventions and funding announcements packaged up within the industrial strategy are largely focused at lower levels. It’s well rehearsed by this point that the higher education sector’s ongoing financial turmoil is risking the loss of expertise and capacity in subject areas which the government surely wants to prioritise.

The strategy makes specific calls about what industries should be supported and in which places – but it doesn’t appear that this mapping has extended to thinking about what provision is available currently in each, and what is at risk. This might be a job for the sector in making its case.

We can see indications in the policy document, and in the background work that Skills England has been conducting, that the government will press ahead with its plans for short courses for upskilling and reskilling, whether through the levy or the LLE. Unpicking that tangle – the question of which courses are funded by which means, and why, and how to make employer or learner demand actually crystallise – is another area for universities and colleges to be coming up with concrete proposals for. Having specific industries linked to specific places should be an enormously helpful starting point.

The specificity on offer in the finalised plan ought to be a clear indication that, for higher education institutions, demonstrating a link to the industrial strategy in one’s provision will not just be a case of talking up the volume of one’s life sciences provision, for example, and its international renown. There’s a need for – and now scope to provide – much more granular detail.

The ambitions of the strategy, were they to be realised, include a recipe for a more differentiated sector, with concrete choices made around engagement with key local industries and contribution to their associated workforce pipelines. A read-across can be made to UKRI chief executive Ottoline Leyser’s comments last week about the future shape of the research landscape, with the need for “consolidation” and playing to one’s local strengths – you could make the same argument for educational provision.

There’s a question about how much such change in the landscape of provision would be either desirable or practical, given the sector’s closely guarded autonomy, the fact that graduates are mobile and may change plans, the transferability of many if not most higher level skills, and the extremely short lifespan that previous industrial strategies have had. Another issue is how those institutions which do not find themselves in, near, or otherwise connected to the anointed clusters and growth regions should respond.

But it remains a crucial agenda for higher education, even if a large-scale reorganisation of provision is problematic to pull off at a time of great financial strain. Some tweaks to how the Strategic Priorities Grant works in England are unlikely to make much headway by themselves, and it remains to be seen to what extent the devolved nations are up for steering their university sectors to better align with Westminster’s chosen priorities. For higher education, the question remains whether the government actually has the levers in place to incentivise this shift to happen – to say nothing of the political appetite to invest time and resources – or whether the subject choices of UK 17 year olds and international postgrads will continue to be the main determinant of the sector’s size and shape.
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June 23, 2025
Research and innovation in the industrial strategy

The UK needs a plan for growth and innovation – an industrial strategy is a way of picking winners in terms of sector investments and prioritisation.

Today’s iteration (the fourth in recent times, with Theresa May’s government providing the previous one) chooses eight high-potential sectors to prioritise funding and skills interventions, with the overall intention of encouraging private investment over the long term.

Picking winners for the long term

The choices are the important bit – as the strategy itself notes

Past UK industrial strategies have not lasted because they have either refused to make choices or have failed to back their choices up by reallocating resources and driving genuine behaviour change in both government and industry.

And there are clear commonalities between previous choices and the new ones. Successive governments have prioritised “clean growth”, data and technology, and health – based both on the potential for growth and the impact that investment could have.

What is different this time is the time scales on which the government is thinking – much of the spending discussed today is locked in to the next five years of departmental spending via the spending review, and of course we have those infamous 10-year research and development plans in some areas: the Aerospace Technology Institute (linked to Cranfield), the National Quantum Computing Centre (at the Harwell STFC campus), the Laboratory of Molecular Biology (MRC supported at Cambridge), and the new DRIVE35 automotive programme are the first to be announced.

The headlines

My colleague Michael Salmon has analysed the skills end of the strategy elsewhere, here we are looking at investments in research and innovation – both in the industrial strategy itself and the five (of eight) IS-8 sector plans published alongside it (Advanced manufacturing, Creative industries, Clean energy, Digital and technologies, Professional and business services – with defence, financial services, and life sciences pending)

Government funded innovation programmes will prioritise the IS-8, within a wider goal to focus all of research and development funding on long term economic growth. This explicitly does not freeze out curiosity delivered research – but it is clear that there will be a focus on the other end of the innovation pipeline.

At a macro level UKRI will be pivoting financial support towards the IS-8 sectors – getting new objectives around innovation, commercialisation, and scale-up. If you are thinking that this sounds very Innovate UK you would be right, the Catapult Network will also get tweaks to refocus.

The £500m Local Innovation Partnerships Fund is intended to generate a further £1bn of additional investment and £700m of value to local economies, and there are wider plans to get academia and industry working together: a massive expansion in supercomputer resources (the AI research resource, inevitably) and a new Missions Accelerator programme supported by £500m of funding. And there’s the Sovereign AI Unit within government (that’s another £500m of industry investments) in “frontier AI”. On direct university allocation we get the welcome news that the Higher Education Innovation Fund (HEIF) is here to stay.

There’s an impressively hefty chunk of plans for getting the most out of public sector data – specifically the way in which government (“administrative”) data can be used by research and industry. Nerds like me will have access to a wider range of data under a wider range of licenses – the government will also get better at valuing data in order to maximise returns for the bits it does sell, and there will be ARDN-like approaches available to more businesses to access public data in a safe and controlled way (if parliamentary time allows, legislation will be brought forward) – plus money (£12m) for data sharing infrastructure and the (£100m) national data library.

By sector

The sector plans themselves have a slant towards technology adoption (yes even the creative sector – “createch” is absolutely a thing). But there’s plenty of examples throughout of specific funding to support university-based research, innovation, and bringing discoveries to market – alongside (as you’ll see from Michael’s piece) plenty on skills.

Clearly the focus varies between sectors. For example, there will be a specific UKRI professional and business services innovation programme; while digital and technologies work is more widely focused on the entirety of the UK’s research architecture: there we get promises of “significant” investment via multiple UKRI and ARIA programmes alongside a £240m focus on advanced communication technologies (ACT). The more research-focused sectors also get the ten-year infrastructure-style investments like the £1bn on AI research resources.

Somewhat surprisingly clean energy is not one of the big research funding winners – there’s just £20m over 7 years for the sustainable industrial futures programme (compare the £1bn energy programme in the last spending review). With sustainability also being a mission it also gets a share of the missions accelerator programme (£500m), but for such a research-intensive field that doesn’t feel like a lot.

The creative industries, on the other hand, get £100m via UKRI over the spending review period – there’s a specific creative industries research and development plan coming later this year, alongside (£500m) creative clusters, and further work on measuring the output of the sector. And “createch” (the increasingly technical underpinnings of the creative industries) is a priority too.

It’s also worth mentioning advanced manufacturing as a sector where business and industry are major funders. Here the government is committing “up to £4.3bn” for the sector, with £2.8bn of this going to research and development. Key priorities include work on SME technology adoption, and advanced automotive technologies – the focus is very much on commercialisation, and there is recognition that private finance needs to be a big part of this.

Choice cuts?

The IS-8 are broadly drawn – it is difficult to think of an academic research sector that doesn’t get a slice. But there will be a shaking out of sub-specialisms, and the fact that one of the big spenders (health and medicine) is currently lacking detail doesn’t help understand how the profile of research within that area will shift during the spending review period.

Industrial policy has always been a means of picking winners – focusing necessarily limited investment on the places it will drive benefits. The nearly flat settlement for UKRI in the spending review was encouraging, but it is starting to feel like new announcements like these need to be seen both as net benefits (for the lucky sectors) and funding cuts (for the others).

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June 23, 2025
The centrality of university research to the industrial strategy cannot be underestimated

Blue-sky research is the basis for the successful development of future technologies. The evidence that UK universities are global leaders in this is clear – the Australian Strategic Policy Institute (ASPI) ranks the UK university system as third in the world on this basis.

Yet it has often been said the UK has not capitalised enough on its world-leading research to drive economic growth. Now though, the UK has, at last, a coherent and comprehensive industrial strategy that can realise the huge potential of this global advantage.

Previous industrial strategies identified some of the right industries, but the new strategy has a far more comprehensive approach. It recognises the breadth of sectors that are likely to be at the forefront of global technology-led growth, not just the fashionable few like AI or pharmaceuticals. Crucially, place has now taken a central role. A myriad of global growth “hot spots” show us that this is key to understanding the detailed collaborations that will deliver growth in different UK regions, cities and innovation districts.

In that sense this industrial strategy is the welcome and long needed economic policy that the UK economy has been lacking. Universities and their research are an essential core component, but all stakeholders across higher education, industry and government need to engage in a step-change in joined-up working if the UK is to translate the real advantage its research system has into a new level of growth and prosperity. There will need to be effective partnerships and collective momentum between universities, industry and government at both national and local levels.

Yet risks remain in successfully translating this strategy into the growth the government wants – particularly in the persistence of certain myths about university research.

Busting myths

A key myth is that blue sky research only equates to growth in the long term, when the government wants growth sooner. In fact, it does not work like that. Blue sky research delivers growth both now and later. Long term gains may be greater overall, but even in the short term research brings in highly skilled global scientists, attracts leading global firms, and is a draw to medium-sized firms who want to be at the forefront of the next innovation wave.

Research also builds place-based specialised skills that are essential for other industries and sectors, as can be seen in the Oxbridge Arc, Imperial’s White City innovation district, Manchester’s Sister district or Glasgow City Innovation District. Fostering research excellence across the UK’s places is an effective short and long-term growth strategy.

A second myth is about the breadth of impact of university research on growth. It is natural for policymakers to focus on university spin-outs and commercialisation, but in many ways these are a small, if important, part of the story. The lesson from successful university-based growth ecosystems around the world is that the role of large global firms and their relationship with university research and innovation is much more important.

There is understandable and laudable excitement at the prospect of nurturing UK-born unicorns, but in a globally competitive economy around future technologies it is large global firms that very often have substantial research and innovation capability. They employ global leading talent, have great market reach and also can absorb some of the risk necessary for success in future technology-based growth. They also have the interest in, and capacity and capability to partner with universities around research – as we see with Microsoft in Cambridge, Novartis in Imperial’s White City campus, Cranfield’s industry research with Airbus, AstraZeneca in Glasgow or Legal & General’s partnerships with Edinburgh and Newcastle.

In my own university, Brunel, we have long standing research relationships with Jaguar Land Rover and Constellium, one of Europe’s largest aluminium alloy firms. Yet there needs to be much more focus on increasing the number and deepening these relationships. These are near and long term relationships that will lock in longer term growth.

Third, is the misconception that university research exists in any freestanding way in just a small number of universities. It is certainly true that the UK’s leading research universities are absolutely key, but the research system operates in a much more complex, distributed and symbiotic way. Different types of universities play different but equally important roles, and they can and will contribute to the industrial strategy. Whether that is applied research, skills development in the workforce or building entrepreneurial capacity in a region, the university research and innovation system as a whole is key to making sure the benefits of cutting edge technology research are realised for the UK.

The government must not underestimate the centrality of university research and its contribution to future technology-led growth to any industrial strategy worldwide, let alone the UK’s. The industrial strategy is bold and ambitious, and UK universities are well positioned to propel its implementation. However, global competition in the development of future technologies is fierce. The UK cannot afford to underplay or misapply one of its core strategic assets. The opportunity with this strategy is greater than at any time for decades, but it is not going to succeed without harnessing the power of university research.

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June 9, 2025
Balls to left, Willetts to the right, creates an industrial strategy with a gaping hole for universities

Denizens of public service reform former Shadow Chancellor, Ed Balls, and former Universities Minister, David Willetts, have reignited the debates of 00s with new arguments on when government should intervene in the economy.

In two recent papers, one authored by Willetts alone, and one by Dan Turner, Huw Spencer, Julia Pamilih, Vidit Doshi, and Ed Balls, two different versions of industrial strategies emerge. For Willetts, taking on the industrial strategy directly, there is a world of gently incentivising universities to align their fundamentals with an industrial strategy which picks some good areas to invest in if not winners . For Balls, addressing the industrial strategy via Bidenomics, there is a bazooka of more funding, support, and investment, to break the economy from its malaise, with far more far-reaching consequences for universities.

Survivor

Balls and Willetts are interesting messengers for new industrial policy. Back in 2014 Balls delivered a speech to London Business School entitled Beyond the Third Way. In it he argued that

After the debacle of British Leyland in the 1970s, ‘industrial policy’ have been dirty words in Britain. Some remain cautious about the politics of ‘picking winners’ – but that misses the lesson of the 1970s. Back then, it was the industrial losers who did the picking and good money was poured after bad.

His argument, albeit oddly worded, was that industrial strategies had focussed on the industries that were already in terminal decline. For him, industrial strategies had not been maps to the future but buckets to bailout the important but failing industries of the past.

Willetts was even more pugnacious still. Back in 2013 he was not willing to cede that the government should back winners, that would be too much like the economic blunders of the 1980s, but that

Focusing on R&D and on particular technologies is not the same as picking winners, which notoriously became losers picking the pockets of tax payers. It is not backing particular businesses. Instead we are focusing on big general purpose technologies. Each one has implications potentially so significant that they stretch way beyond any one particular industrial sector. Information Technology has transformed retailing for example. Satellite services could deliver precision agriculture.

At the time, Balls gave barely a mention to universities beyond noting that the UK’s educated workforce struggled to find jobs to meet their qualifications. Willetts, in a style familiar to anyone following industrial policy, mentioned universities mostly (albeit not exclusively) as tools to promote wider policy objectives not instruments in their own right.

Fast forward a decade or so and a lot has changed.

Frosted tips

In his latest piece for the Resolution Foundation, How to do industrial strategy, Willetts has a clear view of what an industrial strategy is. It’s not about picking winners but about picking some obvious areas of strength for investment while freeing up some capacity to allow industries to strike their own sector deals. The strategy should not necessarily be about new money but about marshalling resources around industries for example opening up supply chains, easing procurement routes, and management training.

It is in Willetts’ views of the relationships between industrial strategy and higher education where things get really interesting. He is cognisant of the sometime disconnect between university education and skills needs and writes that

The University of Sunderland runs automotive engineering course directly serving the automotive facilities nearby. Some universities include in their degree programmes elements specifically designed with local business requirements in mind. The Government’s new entity, Skills England, should help promote these.

The Vice Chancellor of the University of Sunderland is now of course the Vice Chair of Skills England. However, it is interesting that for all of the fanfare of skills England the level of intervention he proposes is to promote these industrial links. He does not advocate for greater interventions by government nor employers. He promotes the idea of kitemarks for programmes aligned to industrial priorities, more funding competitions for business schools, and Centres for Doctoral Training co-funded with business.

It is not surprising that the man who invented much of the current higher education architecture does not call for its complete reform but his proposals seem modest given the ongoing economic collapse the country is enduring.

However, Willetts is perturbed by absence of universities from the industrial strategy green paper which he describes as “very odd”. His advice here is to encourage greater incubation of university start-ups, remove the numbers of spin-outs as a measure of success to discourage their premature release, and get universities to reduce their stakes in spin-outs. Again, all entirely sensible but not very large for the enormous challenges ahead. His more radical idea, innovation vouchers to support businesses to use university expertise, is a rehash of ideas that have been used across the UK including in Dundee to bring together businesses and academics around gaming. The trick is not to issue these vouchers generally but to target them at businesses with latent potential, where there are regional strengths, and commensurate university expertise.

Destiny’s Child

And this opens up a fundamental tension which Balls’ paper tries to address. Whether an industrial strategy is primarily about economic growth of the country or regions, investment in leading or latent assets, and how far the government should intervene. In a co authored paper, What should the UK learn from Bidenomics, Balls et al imagine the forthcoming industrial strategy as an opportunity to ruthlessly focus on the things that are strategic for the future of the UK’s economy. As they conclude in their paper

With clear goals in place, the toolkit of the Industrial Strategy should then seek to minimise the risk of capture by incumbent firms. That means using rules-based mechanisms like tax credits to realise clear growth objectives, crowding in private investment through public incentives, while resisting the pressure to reduce competition or favour incumbents.

Their view is the goal is not to ease the path for winners but to pick a few priority areas and support them with general levers of support that would benefit a range of firms. One of the lessons from Bidenomics is that their industrial policy succeeded on the basis that it was massive with $108bn of investment in energy deals alone. Balls and his co-authors highlight the need to support and expand areas of existing economic strength, this includes universities and spending outside of the golden triangle.

On the face of it the Balls proposition is more appealing. The basis of his argument would seem to be that if the government simultaneously invests in its leading assets while encouraging competition it can grab the best of both worlds. A more dynamic economy with more funding for the leading assets. The challenge is, as the paper acknowledges, the economic success of Bidenomics was also predicated on an appetite to allow creative destruction. Allowing zombie firms to die and workers to be made redundant and moved to more productive parts of the economy in order for the economy to grow. The paper refers to labour market churn and new business formation as the secret sauce “which appears to have contributed to higher productivity, stronger job creation, and faster growth.”

Blockbuster

Any decision ever to make any public investment implies winners and losers. The real debate is the extent to which the government should back those winners.

The Willetts view of the world would see universities broadly fulfilling the same role they do now with a bit of new funding for collaboration. The more challenging view by Balls and his colleagues is that economic dynamism is inherently linked to creating and destroying more business and labour market churn. This would not only mean that universities would have to adapt more rapidly in their kinds of labour market work, skills training, CPD, KTPs and so on. It would also mean that they may also find themselves in urgent need of yet another political narrative, levelling up, securonomics, whatever next, in an ever changing policy landscape.

The challenge that has yet to be fixed in any industrial strategy is regional inequality. Even America with all of its economic levers to pull still has many places that have been “hollowed out” with a mixed record of turning things round through public investment. Any university that can play a distinct role in this puzzle is likely not only to win the favour of the government but solve one of the biggest impediments to the UK’s productivity, and by proxy the quality of life of its people.

The Balls view of industrial strategy as a tool for economic dynamism, the Willetts view of industrial strategy as a tool for reorientating government and reorganising bits of the economy, may both lose out to a Chancellor who may feel she has little fiscal headroom to make dramatic economic interventions. For universities, the opportunity is to define their role in the government’s central economic policy, if they do not their role will be defined for them.

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April 25, 2025
Communicate, repeat and compensate – OfS issues principles over industrial action
University and College Union (UCU) staged a national marking and assessment boycott (MAB) – delaying graduations, job starts, and transitions to postgraduate study.

UCU members took the action to tackle disputes including headline pay, gender and minority ethnic pay gaps, staff workload and the casualisation across the sector.

Whenever there’s industrial action, the hope in Carlow St is that students will see the bigger picture – but this time around, at least for some students in some universities, the impact was significant. At the time, UCU estimated that 30,000 students were unable to graduate on time or were affected in some other way.

In the aftermath, the Commons Education Committee held a mini inquiry to investigate the impact – it wrote to the then Conservative government to raise concerns about the lack of data, the role of the Office for Students (OfS) and the lack of clarity over students’ rights, and the eventual (post election) reply was predictably weak.

Now, two years on, OfS has published research that was commissioned to develop an understanding of what the impacts were from a student perspective – along with guidance for institutions on protecting the interests of students during industrial action, and a webinar event planned for mid-May on the regulator’s expectations on how providers should support students before, during and after industrial action.

OfS first ran a text-based focus group via YouGov in July 2024 that discussed short- and long-term impacts, what information they got from their institutions, and how those institutions handled the situation. A quantitative survey followed that gathered 763 responses (279 undergrads, 284 postgrads, and 200 graduates) that had been studying at impacted institutions during the boycott. You’d not be diving into demographic splits on that sample size.

The polling drilled into how the industrial action affected their academic lives – immediately and over time – along with the comms they received from their universities, and how they viewed their rights as students.

On the top line

In a “topline” results report and associated student insights brief, we learn that the industrial action caused delayed or unmarked coursework (53 per cent) and exams (46 per cent), reduced lecture time (68 per cent), and decreased contact with staff.

Most impacted students reported negative effects on academic work quality (49 per cent) and grades (42 per cent). The MAB’s psychological impact was significant – with 41 per cent reporting increased stress, 32 per cent experiencing poorer mental health, and 15-18 per cent noting negative effects on their social lives.

One student is quoted as follows:

I was waiting for the result of a resit that the progression of my masters’ depended upon but it was delayed so much I had to pay for the next module and would not get the results until halfway through.

International students faced particular challenges, with visa uncertainties arising from delayed results and qualifications. Some students couldn’t attend graduation ceremonies because their results came too late:

I didn’t manage to get graduation tickets in time due to how late results were, so I didn’t have a graduation ceremony.

Communication varied considerably across institutions – with most updates coming through emails (65 per cent) rather than during lectures (22 per cent). Students rated information from individual lecturers (78 per cent satisfaction) more highly than university-wide communications (64 per cent satisfaction).

Many students in the focus group:

…were not told which of their modules would be affected, or when they would get their marks and feedback.

OfS says that the institutional response was inconsistent across the higher education sector. Students directly affected by the MAB expressed significantly higher dissatisfaction (54 per cent) with their university’s handling of the situation compared to unaffected students (18 per cent). Just 46 per cent of affected students received alternatives or compensation, primarily through “no detriment” policies adapted from those developed during the Covid era (26 per cent).

Financial compensation and rights awareness was low – with only 30 per cent knowing they could request it, and a mere 9 per cent successfully receiving any. The boycott also negatively impacted perceptions of education quality (38 per cent reporting a decrease) and value for money (41 per cent reporting a decrease), with one student noting:

I ended up with a [postgraduate diploma] instead of my MSc, and I came out with a merit instead of a distinction.

The brief does note that universities employed various mitigation strategies, including awarding interim degree classifications, guaranteeing minimum classifications, improving mental health support, reallocating marking responsibilities, and engaging with employers to request flexibility for affected graduates.

Were they OK? Some students felt their institutions responded well, others reported that the experience contributed to decisions not to pursue further studies or work in higher education, with 42 per cent reporting decreased trust in their universities.

Behind the screams

Much of that won’t come as a surprise – although the sheer scale of the suggested impacts, as well as their depth and breadth on individual students (esp rer mental health and international students) ought to invigorate debates about the morality of the tactic, and how universities handled it to limit legal or financial exposure.

Arguably of more interest is the letter and “regulatory statement” that accompanies the publication from John Blake, Director for Fair Access and Participation.

Re-stressing that it’s not OfS’ role to intervene in labour disputes, Blake expresses concern about how strikes and the MAB disrupted students’ academic experiences, notes inconsistencies in institutional responses, sets out an aim to establish clearer expectations for fair treatment for all students in any similar future scenarios.

And there’s a fascinating section on compensation:

We want to be clear that we don’t see compensation as a substitute for the holistic experience of intellectual, professional and personal development that a student should expect from their higher education. Institutions should continue to focus their efforts during industrial action on delivering the education that students expect. The inclusion of an expectation in relation to compensation does, though, reflect the rights students have under the Consumer Rights Act 2015.

Given that many students got neither, the clear implication is that a large number of students should have received both.

Six principles

The core of the guidance letter then manifests in six principles:
1. Providers must remove contractual terms that inappropriately limit liability to students during staff industrial action or other circumstances within the provider’s control, as these breach consumer protection law.
2. Effective contingency plans must be developed to minimise disruption to students during industrial action, ensuring plans are actionable, timely, and protect qualification integrity.
3. When implementing contingency plans, providers should prioritise education delivery by: first avoiding impacts on students; if not possible, making minimal changes; and if necessary, providing timely repeat performance of missed teaching or assessment.
4. Fair compensation must be paid when contingency plans fail to deliver promised aspects of student experience, particularly for missed teaching without timely replacement, delayed assessment marking, or delayed progression decisions affecting jobs or visa status.
5. Clear communication with students is essential, including transparent information about rescheduled activities or compensation, with proactive identification of eligible students rather than requiring them to submit claims.
6. Providers must submit reportable events about industrial action to the Office for Students (OfS) in accordance with established regulatory requirements.
It’s an interesting list. The first one on the inclusion of industrial action in so-called “force majeure” clauses in student contracts – which limit liability for events that are outside of the predictability or control of of providers – is a long-running passive-aggressive row between the Competition and Markets Authority (CMA) and OfS on one side, and providers on the other.

OfS has previously published a referral to National Trading Standards involving the University of Manchester’s contract – but my spreadsheet suggests that there’s a large number of providers that either haven’t seen that, or are digging in for a battle over it.

That may be partly because those sorts of clauses – and CMA’s advice on them (which OfS requires providers to pay “due regard to”) – are a key point of dispute in the ongoing Student Group Claim, the UCL portion of which won’t get to court until early 2026.

From a student point of view, if those clauses shouldn’t exist, the snail’s pace of enforcement on this is as baffling as it is frustrating.

There won’t be many providers that weren’t developing contingency plans, notwithstanding that they can always be improved – and the one-two-three-four punch of avoid, adjust, repeat or compensate reflects (and translates) the position under consumer law.

Of course some will argue that a legal duty to undertake any/all of those steps under consumer law depends on those force majeure clauses not existing or being unlawful – and as it stands there’s a major silent standoff that’s unhelpful.

Even if you just look at compensation, the survey fails to differentiate between compensation paid for breach of contract, and “goodwill” payments where no such breach has been accepted by providers. As far as I’m aware, the former was vanishingly rare.

The other issue, of course, is with punch three of four – where university managements satisfy themselves that once a dispute is over, teaching or support is rescheduled “because we told them to”, despite the fact that most heads of department find it hard to actually implement those instructions with UCU members.

The “proactive identification of eligible students” for “repeat performance” or compensation is interesting too – especially over the latter, providers have long relied on students having to make complaints in order to get redress. This not only depends on the breach of contract or not issue being resolved, it also raises questions for universities’ legal advisors and insurers about the relative risks of doing as John Blake says, or waiting for students to raise concerns.

But as well as all of that, there’s three things we ought to be surprised not to see.

What’s missing?

For a set of documents seeped in the translation of consumer protection to a higher education setting, there’s nothing on the extent to which any alternative arrangements in a MAB – especially alternative arrangements over marking – should still be carried out with reasonable skill and care. Academic judgement can’t be challenged, but only if that judgement has been carried out in the way we might expect it to be by people who know their onions. That was a major issue in the dispute for plenty of students, even if it wasn’t a big issue in the polling.

The second is the lack of answer to the questions raised both in the polling and by the Commons Education Committee – which concern students’ understanding of what their rights are. If OfS thinks that it can vaguely pressure providers into proactively identifying students entitled to wads of cash, it’s misunderstanding the countervailing pressures on providers in similar ways to those identified by Mills and Reeve over provider collapse. And as I often say on the site, good regulatory design considers how individuals come to understand (or access information) on their rights should they need to use them without having to access a regulator or complaints adjudicator – there’s nothing on any of that here.

But the third is the lack of a clear link to the regulatory framework, and the lack of any enforcement carried out over what must amount to failings. If the guidance is grounded in OfS’ rules, students might well say “well what action have you taken given that the problems were widespread?”

If it’s not grounded in OfS’ powers, providers might well say “well notwithstanding that we like to look nice, why would we magnify the efficacy of an industrial action tactic if we don’t really have to”.

It’s all very well for OfS to be “give them guidance” mode, but over this set of issues the financial impacts of compliance with something that sounds contested, and partly voluntary, could be huge both in an individual dispute and in the long-term. That all (still) needs bringing to a head.
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April 10, 2025